Medi-Cal Managed Care Plans

Overview

We have created this page to help sellers of Medi-Cal Managed Care Plans better understand how Revenue and Taxation Code sections 6174 through 6189, established by Senate Bill 78, (Chapter 33, statutes 2013) may affect you.

What are Revenue and Taxation Code sections 6174 through 6189?

Effective July 1, 2013 through June 30, 2016 sales tax is imposed on sellers of Medi-Cal Managed Care Plans for the privilege of selling Medi-Cal related health care services at retail in California.

For purposes of the bill, a “seller” is any person or entity, other than an insurer as define by Revenue and Taxation (RTC) Code 12003 or dental managed care plans as defined by RTC 14087.46, that enters into a contract with the State Department of Health Care Services (DHCS) to provide for health care services.

What amount is subject to tax?

You will owe tax on the total amount received (gross receipts) in premium or capitation payments for the coverage or provisions of all health care services, including but not limited to Medi-Cal services.

The amount subject to tax excludes amounts received pursuant to a subcontract with a Medi-Cal managed care plan to provide health care service to Medi-Cal beneficiaries.

What is the tax rate?

The sales tax is 3.9375 percent of your total gross receipts. The bill does not permit any county, city, or district to impose any additional sales or use tax on these gross receipts.

How do I report the tax?

Once necessary federal approvals are obtained, we will notify retailers of their filing basis and provide the necessary returns.

If you need help

If at any time you need assistance with this information feel free to contact our Compliance Policy Unit at 916-445-5167.  Representatives are available to assist you weekdays from,  8:00 a.m. to 5:00 p.m. Pacific time except state holidays. You may also visit our “Contact Us” section for more assistance information.