### TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN

NO. 03
- 19
- 00864
- CV

Appellants, Glenn Hegar, Comptroller of Public Accounts of the State of Texas , and

Ken Paxton, Attorney General of the State of Texa s // Cross
- Appellant, Health Care Service Corpor a tio n, A Mutual Legal Reserve Company,

d/b/a Blue Cross and Blue Shield of Texas

v. Appellee, Health Care Service Corporation, A Mutual Legal Reserve Company,

d/b/a Blue Cross and Blue Shield of Texas // Cross
- Appellees, Glenn Hegar, Comptroller of Pu b lic Accounts of the State of Texas , and

Ken Paxton, Attorney General of the State of Texas

FROM THE 200TH DISTRICT COURT OF TRAVIS COUNTY NO. D
- 1
- GN
- 18
- 003105, THE HONORABLE AMY CLARK MEACHUM, JUDGE PRESIDING

M E M O R A N D U M O P I N I O N

A pp el lee and c ro ss - appellant Health Care Service Corporation, A Mutual Legal Reserve Company, d/b/a Blue Cross and Blue Shield of Texas (BCBS), sells “ s top

- loss ” policies
to businesses that self

- insure, meaning the bu si nesses provide their employees with h eal th insuran ce by directly funding the employee s ’ healthcare benefits. The stop

- loss policies in question here limit the self

- insured employer ’ s liability by providing coverage for emp loyee

health

- bene fit costs that exceed a ce rtain amou nt. In other wor ds, a s top

- lo ss polic y cap s the empl oyer ’ s healthcare costs at a set level, insur ing the employer against any unusually high hea lthcare costs in a particular year. A ppellant and cross

- appellee Glenn Hegar, Comptroller of2

Public Accounts of the State of Te xa s , conducted an audi t and determined that BCBS owed $3,005,270.13 in premium taxes and $68,691.89 in maintenance taxes on the stop

- loss policies it had sold to self

- insured employers in 2012

. See Te x. Ins. Code §§ 222.002, 257.003

. BCBS paid the tax e s under protes t and then filed the underlying tax payer suit against the Comptroller and K en Paxton, Attorney General of the State of Texas (collectively, the Comptroller). The Comptr oller filed a counterclaim arguing that if the stop

- loss p olicies are
not health or accident insurance, BCBS was not au thorized to write t h e polici es and was thus liable for dama ges . The parties filed competing motions for summary judgment, the trial court
g ran ted BCB S ’ s moti on and denied the Com ptroller ’ s , and the Comptroller then nonsuited his

coun terclaim

. The ques tion we must decide in this appeal is whether th e premiums BCBS collected on its stop

- loss policies were from a contract or policy covering risks on individuals or
groups and arising from the busine ss of health in s urance so as to be s ubject to premium taxes,

see id . § 222.002 , or from writing health insurance so as to be subject to maintenance taxes, see id . § 257.003

. A lternatively , the Comptrol ler argues that if BCBS would otherwise b e entitled to

a refund, it s u bmitted insufficient evidence to support its asserted refund ca l culations. In its

cross - appeal, BCBS argues that in granting summary judgment , the trial court al so granted summary judgment on BCBS ’ s sought amount of refu nd . We affirm the trial court ’ s o r der granting BCB S ’ s motion f or summary judgment and need not address BCBS ’ s cross - appeal

.
STANDARD OF REVIEW W hen , as here , both parties move for summary judgment and the court grants one motion and denies the othe r , we conduct a de novo review, conside r ing the evidence presented , determin ing all questions presented, and , if we determine that the trial court erred , render ing the3

judgment the trial court should have rendered. Valence Operating Co. v. Dorsett , 164 S. W.3d
6 56, 661 (Tex. 2005)

. The constru c tion of a statute is an issue we review de novo. Railroad
Comm ’ n v. Texas Citizens for a Safe Futur e & Clean Water , 336 S.W.3d 619, 624 (Tex. 2011)

. Our prima ry o bjective when c onstruing a statute is to determine and give effect to the Leg islature ’ s intent. Texas Dep ’ t of Ins. v. Am erican Nat ’ l Ins. Co. , 410 S.W.3d 843, 853 (Tex. 2012)

. We begin with th e words chosen by the Legislature and, if the statute is clea r and unambiguo us, apply the common meaning of t he sta t utory language unless a different meaning is apparent from context or the plain meaning leads to absurd results

. See i d

. (quoting First Am. Title Ins. Co. v. Combs , 258 S.W.3d 627, 63 1 (Tex. 2008) ) ; M arks v. St. Luk e ’ s Episcopal Hosp. , 319 S.W.3d 658, 663 (Tex. 2010)

. If a statute is ambiguous, w e consider the construction appl ied by the administrative agency charged with its enforcement , gi ving that construction serious consideration, as long as th at construction i s reasonable and does not cont radict the plain statutory language

. Am erican Nat ’ l Ins

. , 410 S.W.3d at 853 (quoting Tarrant Appraisal Dist. v.
Moore , 845 S.W.2d 820, 823 (Tex. 1993 ) ).

However, “ agency deference does not displace stri ct c onstruction ” wh en we are asked whether a tax statute ap p lies

. TracFone Wireless, Inc. v. Commission on State Emergency
Commc ’ ns , 397 S.W.3d 173, 182

- 83 (Tex. 2013)

. Instead, we apply “ an ancient p ro - taxpayer presumption: The reach of an ambiguous tax sta tute must be co nstrued ‘ strictly against the taxing
aut h ority and liberally for the taxpayer. ’ ” Id

. at 182 (quoting Morris v. Houston Indep. Sch.
Dist ., 388 S.W.3d 310, 313 (Tex. 2012) (per curiam) )

. “ In other words, a tax must apply unequivocally. ” Id

. Ambiguous or i mprecise tax statutes “ must be interpre t ed ‘ most strongly against the government, and in favor of the citizen , ’ ” and “ we will not extend the reach of an4

ambiguous tax by implication, nor perm it tax collectors to stretch the scope of tax atio n beyond its cl ear bounds. ” Id

. at 183 (quoting Gould v . Gould , 245 U.S. 151, 153 (1917) )

.
DISCUSSION Section 222.002 provides in relevant part that an annual tax is imposed on “ each insure r that receives gross premiums subject to taxation under thi s se ction , ” and tha t in deter minin g its taxable gro ss premi u ms, the insurer shall include all premiums received from

“ any kind of

. . . insurance policy or contract covering risks on individuals or grou ps loca ted in this state and arising from

. . . the bu sine ss of ” healt h i nsurance . Tex. Ins. Code § 22 2.002 (a), ( b)

. Section 257.003 imposes maintenance taxes on , as relevant to this case, “ gross premiums collected from writing life, health, and accident insurance in this state

. ” Id . § 257.003 (a)

. The Com ptro ller insists th at the premiums BCBS collected on its st o p - loss policies are subject to premium or maintenance taxes

.

BCBS has a certificate of authority , issued by the Texas Department of Insurance (TDI ) , allowing it to transact “ the business of Ac cident ; He alth ; Rein surance o n all lines authorized to be wri t te n on a direct basis; and the authority to transact b usiness as a Health Maint en ance Organization offering Ba sic Health Care Service Plan s . ” The Comp troller argues that the fac t that the certificate does no t list stop

- loss as a se p arate category, along w ith BCBS ’ s assertions in its summary judgment evidence that TDI does not offer separate certificates of authority for stop

- loss insurance and instead all ows for the issuance o f s uch policies “ under the
cate go ry of health ins urance, ” must mean that BCBS ’ s i ssuance of stop

- loss policies falls within

“ the business of health insurance. ” The Comptroller further notes tha t BCBS lists stop

- loss insurance and premiums on its Ann ual Statements under “ Health Business ” and sought an5

ex emption from certain insurance

- f orm re quirements that apply only to “ group and individual accident and /or health policies , ” argu ing that those facts show that BCBS itself considers s top

loss policies to be group policies arising from the bu siness of health in surance. Finally, the Compt r o ller contends that we “ should interpret the premium tax statutes in the Insurance Code to avoid gaps in covera ge. ”

DOES THE PREM IUM TAX APPLY? We begin by asking whether the premium tax , which is assessed agai nst premiums received from insurance that c o vers “ r is ks on ind ividuals or groups ” and that arise from the business of health insurance , applies to the stop

- loss policies in question

. Id

. § 222 .002(b)

. 1 The Co m ptroller argues that the stop

- loss polici es (1) should be viewed and treated as health

- i n surance policies that cover risks on groups , consistent with TDI ’ s treatment of such policies, 2 and (2) arise from the b usiness of health insurance

.

Chapter 1701 of the insurance code , titled “ Policy Forms , ” governs the f orms that insurers may use in t r ansa cting their business , explain ing how the forms are appro ved or disapproved and provid ing remedies against insurers who use misleading or noncomplying

1 Stop

- loss policies are men tioned in section 222.002 only in a provision expl aining that an insurer need not include in its taxab le gros s premiums amounts it receiv es for s top

- loss pol icies issued to health maintenance organizations. Tex. Ins. Code § 222.002(d) . Such policies are to be “ considered reinsurance, ” and reinsurance pr emiums are excluded from tax able gross premiums. Id . § 222 .002(c)(3), (d)

.

2 The Comp tr oller does not argu e tha t “ individuals ” should be read to encompass comp anies or corporate entities , and we note that t he word “ i ndi vidual ” general ly refer s to a human being, as opposed to “ person, ” which in legal usage often include s corp oratio ns or oth er such entities

. S e e , e.g . , Colorado C ounty v. Staff , 510 S.W.3d 435, 449 n.59 (Tex. 2017) ; First Cash, Ltd. v. JQ

- Parkdale, LLC , 538 S.W.3d 189, 19 6 (Tex. App.

— Corpus C hris ti

– Edinbu rg Jan. 11 2018 , no pet. ) ; Glob al Evang elism E duc. Ministries, In c. v. Cad dell , No. 04

- 08

- 006 86

- CV, 2009 WL 398255, at *1 (Tex. App.

— San Antonio Feb. 18, 2009 , no pet. ) (mem. op. ) ; City of Corinth v. NuRock Dev., Inc. , 293 S.W.3d 360, 370 (Tex . App.

— Fort Worth 2009 , no pet. )

.6

forms. See generally id

. §§ 1701.001

- .151. A form th at is subject to chapter 1701 must be filed wit h and approved by TDI , i d . § 1701.051 , and TD I is authorized to e xempt certain documents fr om the chapter ’ s requirements , id . § 1701.005(b)

. S ection 1701.002, “ Applicability of Chap ter to Forms of Certain Doc uments , ” pro v ide s that chapter 1701 applies to c er tai n enumerated documents, including “ a po licy, contract , or certificate ” of “ accident or health insurance, including g roup accident or health insurance. ” Id

. § 1701.002( 1)(A)

.

Acting under its chapter 1701 authority , TDI promulgated a rule requir in g “ [a] ll life and accident and sickness polic y forms and annu ity contract forms intended for use in this state, including application forms, rider or endorsement forms not specifically exempted by these sectio ns , ” to be appro ved before use . 28 Tex. Admin

. Code § 3.40 02 (2020) (Tex. Dep ’ t of Ins., Al l Forms To Be Fi led F or Review Unless Specifically Exempted ) . Another rule exempts from

re view and approval “ g ro up and individual accident and/or health policies, contracts, certi ficates, applications, enrollme n t for ms, riders, amendments, endorsements, a nd related forms (including but not limited to outlines of coverage, notices, rates, and conditional receipts) ap plicable thereto , ” that provide certain coverages , including “ group stop loss/excess loss policies
conta ining an attachment point of $5,000 or more . ” 3 Id . § 3 .4004 ( e ) (2)(J) (Tex. De p ’ t of Ins., Exempt Forms)

.

T he Comptroller asserts that those agency rules establish that TDI “ plain ly considers stop

- lo ss policies to b e ‘ group and individual acciden t and/or health p olicies

. ’ ” Additional l y , the Comptroller no tes, BCBS sought and obtained for its stop

- loss polic y forms an

3 An “ attachment p oint ” i s the threshold to which a s elf

- in sured em ploye r ’ s hea lthcare costs must rise before the stop

- loss policy will reimburse the employer for further cost s.7

exe mp tion from further re view that “ applies only to ‘ grou p and individual accident a nd/ or health pol icies, ’ ” thus c onfirming that t he po li cies arose from the b usiness of health insurance

.

T h e Comptroller also points to the Texas Supreme Court ’ s decision in American National fo r support in categoriz ing stop

- loss as health insurance subject to the premium ta x . H o wever, American Nationa l w as not decid ing what stop

- loss insurance was ; it was considering whether TDI could regulate stop

- loss insurance at all , m o re specifically , whether stop

- loss in surance sold to self

- insured e mployers was “ di rect health insu rance ”

— and thus subject to regul ati on by TDI and the impositi on of an assess ment paid to the no w - abolished Texas Health
Insurance Risk Pool

— or was instead “ reinsurance , ” which is not regulat ed by the state and was not subjec t to an assessme nt

. 410 S.W.3d at 845 . The court discussed the di fference between reinsuranc e and direct i nsurance, noting that self

- insured employers “ are clearly not insurance companies, ” although they “ perf orm a similar service. ” Id . at 848 . The cou rt further obser ved that TD I had for years cate gorized stop

- loss co verage as direct insurance subject to ass essment for the r isk p ool under former arti cle 3.77 , which defined an “ ins ur er ” subject to a n assessment

as “ [a]ny entity that p rovides health insuranc e in this state, including stop

- loss o r excess loss insurance

. ” Id . at 850 (quoting former T ex . Ins. Code a rt . 3.77, § 13(a), repealed by Act of June 21, 2003, 78th Leg., R.S., ch. 1274, § 26(a)(1), 2003 Tex. Gen. Laws 3611, 4138 ). The court

ex plained th at TDI , as the a gency charged with en forcement of the insuran ce code, had

“ concluded that sto p - loss insuranc e purchased by a plan does not involve two insurers and is therefore not reinsurance. It is instead direct insurance in the nature of health insura nce because the stop

- loss policies are purchased by the plans ul timately to cover claims asso ciated with the ir health

- care ex penses. ” Id . at 855

. B ecause th e agency ’ s interpret ation was reasonable, formally8

promulgated, and not expressly contradicted by the i nsurance c o de , the court deferred to TDI ’ s construction and held that st op - loss insuranc e was direct in surance subject to TDI regulation. Id

.

First, we n ote that article 3.77, which defi ned “ i nsurer ” to include an insu rer that issue d stop

- loss insu rance , has been re pealed

. 4 Further , American N ational asked whe ther stop

loss policies were subject to stat e regulation, a n inquiry that could appropriately consider and defer to the agen cy ’ s interpre tation , ra ther than whether pre miums on such policies c ould be subject to tax , a question that must be strictly cons tru ed in favor of the tax payer. Compare id . at 845 , with TracFone Wireless , 397 S.W.3d at 182 . Indeed, a ll of th e Comptroller ’ s arguments as
t o whether stop

- loss pol i cies cover risk s on groups require that we defer to TDI ’ s or the Com ptroller ’ s interpret ati on or infer a conclusi on bas ed on TDI ’ s adm i nistrative rules or on filings BCBS made with TDI to comply with such rules . In a ta x case, however, we cannot rely on such information and i nstead must look at th e plain statutory language and construe i t st ric tly in favor of BCBS , findin g in favor of ta xation on ly if t he tax applies “ unequivocally

. ” See TracFone Wireless , 397 S.W.3d at 182

.

4 Article 3.77 and th e Texas Health Insuranc e Risk Pool itself ha ve been abolishe d

. S ee Act of J une 21, 2003, 78th Leg., R.S., ch. 1274, § 26(a)(1), 2003 Te x. Gen. Laws 3611, 4138 ; Act of May 21 , 2013 , 83 d Leg., R.S., ch. 615, 2013 Tex. Gen. Laws 1640, 1640

- 42 . T he insurance c ode curre ntly mentio ns stop

- loss in surance a total of si xte en times , such as in all owing the administrator o f the Healthy Texas Small Em ployer Premium Stabili zation Fund to

“ purchase stop

- loss insurance or reinsurance ” as deemed ne cessary, Tex. I ns. Code § 15 08.261 ; providing ce rtain stop

- loss requirements for multiple employer we lfare a rrangements, id

. § § 846. 0 53 (h) , . 153, . 156; or allowi ng TDI ’ s commissioner to o btain stop

- loss coverag e for risk s incurred by the Temporary Health Insurance Risk Pool, id . § 15 10.005(b)

. In the c ontext of health

- insurance contracts with municipalit ies, th e insurance code defines a n “ in surer ” as “ an insuranc e company, including a company providing stop

- loss or e xcess loss insurance , ” and bar s an insurer that “ provi des st op - loss or other insurance c overage for health benefits ” to munic ipalities fr om excludi ng certain individuals

. I d

. § § 1550. 051 , . 05 3

. On th e other hand , i n the portion s of the code governing managed care , multiple employer wel fare arrangements, hea lth care quali ty i ns urance , and th e Health Insurance Portability and Availability Act, stop

- l oss insurance is s pecifical l y exc lude d from th e defini tion of “ health benefit plan

. ” Id

. § § 846.001(3)(M), 847.003(2)(J), 1274.001(2)(O) , 15 01.002(5)(M)

.9 Black ’ s defines a “ group policy ” as an “ insurance polic y that covers mu ltiple insureds under a group

- insurance plan

. ” G roup P o licy , Black ’ s Law Di ctionary (11th e d. 2019)

. The insurance code bears that out. For inst ance, i n the chapter per taining to “ Group and Blanket
H ealth I nsurance , ” “ g roup accident and health insurance ” i s de fined as “ accident, health, or acciden t an d health insurance coverin g a group ” of ind ividuals, Tex. Ins. Code § 1251.001 ( 2) , such as a poli cy obtained by an emp loye r f or its employees or an association for its members , id

. § § 125 1.051

- .056. 5 And sec tion 1252.003 states that “ health benefit pl an c overage is provided
on a gr oup - type basis ” if the plan provides coverage under an insurance policy to a class of employees or members of an association , determined by the individuals ’ employme nt or membership ; cov erage is not available to the general p ubli c and can only be obtained throu gh the covered in dividual ’ s employment or mem bership status ; the plan is sponsor ed by the employer or association; and premiums are paid to the ins urer on an ag gregate or bulk

- payme nt basis

. Id

. § 1252.003(a)

. Thus, th e in surance code , when it d iscusses “ group ” coverage or policies in the relevant context , refers to health insurance provided to indivi dual members of a group, whether through their employment or member ship in various kinds of associations

.

N o t ing that BCBS ’ s form s use language li ke “ employer grou p name , ” the Comptroller asserts that stop

- loss insurance is i nsuring risk on groups

. W e disagree. Stop

- loss insurance touches on and involves a group pol icy but does not cove r risk s to the individual members of the grou p

— in this case, the self

- insu red employer ’ s em ployees

— and is not an individual accident and health insurance policy . I nst ea d, i t covers the employe r ’ s risk , providing

5 C hapter 1201, title d “ Accident and Healt h Insurance, ” on the other hand , concerns individual policies and defin es an “ accident a nd h ealth insuran ce policy ” as “ any pol icy or contract that provides insurance against loss resulting from ” sickness or accidental b o dily i njury or d eath , specif

ying tha t the chapter applies “ only to an individual acciden t and health insur ance policy

. ” Id

. § § 1201. 001(1) , . 003(a), (b).10

a cap for the employer ’ s costs in paying f or it s employees ’ medical care

. In other word s, stop

loss insurance insure s the emp loyer ag ainst the ex cess risk the employer ass um es when it tak es responsibility for its group members ’ medical costs

— it does not insure the group of members agains t individual medical costs or losses

. Indeed, the Comp troller has taken this very position in admini strative proceedi ngs , asserting that a “ stop loss policy ’ s coverage is pr imarily for the employer/tru st that is seeking to limit its own financial risk and not to obtain health insu rance, which is provided unde r a separate policy. ” Tex. C omptroller of Pub

. Acc ts

. , Com ptro ller Docket Nos. 109, 354

- 355 , 2016 WL 3469269 , at *6 (Ma r. 8, 2016) . The Com ptroller ’ s staff noted that a stop

- loss policy protects the employer from economic loss

— the contract is between the in surer and the employer , not the employee gr oup members ; p lan participants rely on the ir employer, not the insurer, f or benefit payments ; and the insurer has no direct contractual obligation to the participa nts. Id

. (quoting White Paper: “ Stop Loss I nsur ance, Self Funding & the Affordable Care Act , ” National Associa tion of Insurance Commissioners (2015): 14

- 38, http://w ww.naic.org/documents/PRC

- ZS

- 15

- 02_Vol2.pdf )

. The Comptroller agreed that “ stop

loss poli cies should not be considered health insura n ce , ” point ing to case law that supported distingu ishing between sto p - loss insurance and the underlying group health policies to which they are anchored and noting that in American Nationa l , the Texas Supreme Cour t held that the
sto p - loss policies were dir e ct i nsurance “ in the nature of direct health insu rance ” but not tha t the policies were health insurance policies

. Id . at * 7

- 8 (quoti ng 410 S.W.3d at 8 54

- 55 )

.

T he Com ptroller also urges us to interpret the st atute to “ a void gap s in coverage , ”
not ing t h at th roughout much of the insurance code , the legislature used expa nsive language in imposing premium taxes

. S ee , e .g. , Tex. Ins. Code §§ 221.002 (b) , (c) ( property and casualty insurance premium tax asses sed agai nst premiums receiv ed “ from any kind of ins u rance written11

by the insurer on each kind of prop erty or risk locat ed in this state, ” except for certain enumerated premium s , including those received “ from the business of . . . health a nd accident insur ance ” ), 226.003(b) , (g) (un authorized insurance pre m ium t ax assessed against “ any premium for insuran ce on a subject re siden t, located, or to be p er for med in this state, ” except for

“ premiums on a contract of insurance written by an insurer that holds a cer tificat e of authority in
t his state and that is au t horiz ed to write the contract ” ). However, a s the supreme court has explained, “ Tax policy gap

- filling

— specifically, deciding who is taxed

— is best left to legislators, not courts or agencies. ” Trac Fone Wireless , 397 S.W.3d at 176

. And we cannot ignore t h e lan guage used in this particular statute, wh ich rather than si mp ly providing in broad
terms that the t ax sh ould be ass essed against any premiums from policies arising from the business of health insurance , add s a narrow ing provis ion lim iting the t ax to p remiu ms from insurance polic ies that “ cover [] risk s on individual s o r gro ups . ” Tex. Ins. Code § 222.002(b)

.

A fter a pply ing common meaning s of the statutory language within the context of the insurance code , we stric tly construe the language of sectio n 222.0 02(b) against taxation to conclude that a st op - l oss polic y issu ed to a self

- ins ured employer is not an “ insurance policy or
contract cov ering risks on individuals or groups . ” See i d

. § 222 .002(b)

. Beca u s e we so hold, we

n eed not consider whe ther t h e stop

- loss policies arise from the business of health insurance

— the

o ther requirem en t for a policy to be subject to the premium tax

. We overrule the Comptroller ’ s f i rst issue on appeal.

DOES THE MAINT ENANC E TAX APPLY? As for the maintenance tax, s ectio n 257. 003 imposes the tax on “ gross premiums collected from writing life, health, and accident ins urance in this state , ” except for exceptions not12

applicable here. Id . § 257.003(a)(1)

. The Comptroller argu es that the stop

- loss premiums should be con sider ed to be “ from writing health insurance ” and that such an interpret ation prom otes the
pur pose of t he maintenance tax

— ” to pay the expenses during the succeeding year of regulating life, health, and accident i nsurers. ” Id . § 257.003(b)

. He note s that every other type of insur ance is taxed to pay for these costs and that it would be unfair for stop

- loss policies to go without paying their fa ir sh are of maintenance taxes

. However, as e xpla ined earlier, we cannot a pply a

“ gap - filling ” interpretation that is not s upport ed by the plain lang uage of the sta tute , which we strictly construe in favor of the taxpayer. Trac Fone Wireless , 397 S.W.3d at 176 , 183

.

T he Comptroller also cites the c hapter 1201 de finition of “ accident and health insurance policy ” as “ any p ol ic y or c ontract that provides ins urance against loss resulting from ” sickness or accidental b o dily i njury or death. Id

. § 1201.001(1)

. Becau se stop

- loss policies insure self

- insu red employe rs against loss resulting from abnormally high healthcare costs , th e Co mp trol ler insists, those po licies should b e considered health in surance under th e chapter 12 01 definition. However, chapter 1201 , which is intended to standardize and sim pli f y “ terms and

cover ages in individual accident and health insurance polici es ” and pr omote public understanding of ins urance coverages, id

. § 1201. 002 , applies to “ an ac cident and health insurance polic y ” and, more specifically, “ only to an individual accident and health insurance policy , ” i d

. § 1201.003(a), (b)

. 6 Stop

- loss policies do not p rovide hea lth insurance to indiv idual insureds as contemplated by chapter 1201 and , t hus, the chapter 1201 definition of “ acci dent and health insurance policy ” cann ot be read as apply ing to the st op - loss po licies at issue in this case

.

6 To that end, c hapter 1201 imposes various requirements on what health insurance policies must co ve r , what such poli c ies must state, and who may be covered. S ee generally id. §§ 1201.001

- .702.13

S imilarly, st op - l oss pol icies do not fi t within the def inition of group health policies discussed earlier and found in chapter 1251

. See general l y id . §§ 1251.001

- .451. It is true that BCBS is a health

- insurance company and, therefore, many of the polici es it sells will be subject to t he maint en ance tax

. However, not every policy it sells is

ne cessarily subject to the tax

— only pol icies that fi t within section 257.003

. It would strain t he plain statut o ry language of section 257.003 to conclude t h at st op - loss prem ium s , w hic h are collected in ex change for insu r ing an emp loyer ’ s risk arising out of its employees ’ health care costs, are “ col lected from writing ” health in surance. Indeed, the stop

- loss pol icies in question protect an employer from risk incurred from decid i ng t o p ay its employees ’ he althcare costs

ra ther than obtain health insurance. In other words, BCBS sells the policies to employers who do not ask an ins urer to write health insurance

. The stop

- loss pre miums thus are not subject to t he section 257.003 ma inte nan ce tax

. We overrule the Comptrolle r ’ s second issue on appeal.

ISSUES RELATED TO THE REFUND AMOUNT T he Comptroller ’ s third issue and BCBS ’ s cross - appeal concern the amount of the refund and the sufficiency of the evidence prod uced by BCBS to estab lish th at amount. Th e Comptroller argues that even if BCBS is entitled to a r efund , it did not submit sufficient evidence to support its asserted re fund a mount. BCBS explai ns that it filed its notice of appeal “ to provide the initial cl ar ific ation to thi s Co urt , in that ‘ all parties and claims have been disposed of , ’ ” and that it “ seeks clarification that the summary judgm ent addresses the refund amount proven in ” its motion for summary judgment. It further argues that it produced suf ficient evidence to supp ort its requested refund and that in ordering that BCBS ’ s “ Mo tion for Summary Judgment is GRANTED and [the Compt roller ’ s] Motion for Summary Judgment is DENI ED , ” the trial court14

effectively order ed that BCBS was entitled to a refund totaling $3,072,232 .17 , as requested in BCBS ’ s moti on for summary judgment and accompanying evid ence .

A judgment is final “ if it disposes of all pending parties and claims in the record. ” Lehmann v. Har

- Con Corp. , 39 S.W.3d 191, 195 (Tex. 2001)

. A fina l order need not hav e a
par ticular form or language, and instead we determine whether an order is final from its language and , if necessary, the record in the case

. Id

. ; see Bella Palma, LLC v. Young, 601 S.W.3d 799, 801 (Tex. 2020) ( “ a clear and unequivocal statement of fin alit y m ust be ‘ given effect ’ even if review of the record would undermine finality ” ). I f the judgment or order is vague, the appellate record may be considered in determin ing finality. See M.O. Dental Lab v. Rape , 139 S.W.3d 671, 674

- 75 (Tex. 2004) (citi n g L ehm ann , 39 S.W.3d at 206 ). Thus, there must be some “ clear indication that the tri al court intended the order to completely dispose of the entire case. ” Lehmann , 39 S.W.3d at 205

. The certainty of a final judgment “ is not dissipated ” if a trial

- cour t cl erk must take some add it ional step determinable by minister ial act before a writ of exe cution may be prod uced

. International Sec. Life Ins. Co. v. Spray , 468 S.W.2d 347, 350 (Tex. 19 71)

.

In its motion for summary judgment, BCBS concluded , “ This cour t sh ould grant BCBS ’ s motion for summary judgment and rule that t he premiums re ceived from the sale of stop

- loss insurance are exempt from premium and maintenance taxes, and grant BCBS a refund of the taxes at issue

. ” BCBS stated that the “ [a] moun t of tax p ai d on stop

- loss premiums is $3,072,232.17 ” and referenc ed an af fidavit by Alfred Tro tter, BCB S ’ s Director of Corporat e Tax , w ho averred that BCBS sought a total refund of $3, 072,232.17 , explaining his cal culations in relevant part as follows:15

On Decemb er 3 0, 2 016, BCBS filed with the [ Comptroller ] an amended Texas Ann ual Insurance Premium Tax Report, the Computation of N on - Taxab le Premiums form, The Texas Annual Maintena nce, A ssessment and Retaliatory Report, the Retaliatory Worksheet, and a reconciliat ion of t he change from the original filed returns for tax year 2012

. The amended returns reflect a request for refund o f overpaid taxes based on the inclusion, for tax pu rposes , of BCBS ’ s contributions for its employee benefits plan, as well as premiums on s top

- loss insurance insuring legal entities.

The amendments to the 2012 returns resulted in refund requests of $3,005, 270.13 in premium taxes and $68,691.89 in maintenan ce tax es for a combined refund of $3,073,962.02.
The Comptroller allowed an adjustme nt b ased on the contributions for the e mployee benefit plan but disal lowed the adjustment for the stop

- loss premiums.

The disallowe d refunds total $3,072,232.17.

BCBS ’ s Tex as sto p - loss premiums for calendar year 2012 totaled $171,633,082

.
BCBS ’ s Corporate Tax Depa rtment calculated the tax refund due.
The starting point for the reporting of 2012 tax year premiums for tax purp oses began with the premium reported in the Annual Statem ent filed with the N ational Association of Insurance Commissioners ( “ NAIC ” ).

P remi ums received from group policies and individuals are allocated to Texas based on the residence of each subscriber.

. . . The st op - loss premiums were allocated to Texas on thi s same basis although the insured on such policies were not the subscribers bu t in stea d the employee benefit plan sponsors, with a situs at the hea dquarters of each employer.
After the filing and pay ment of ta xes, it was determined that the Texas ins urance tax statutes no longer include stop

- loss related premiums in the tax base. To ame nd t h e tax returns and request a refund of overpaid taxes, the pr emiums used on the original filing had to be adjuste d.16

To dete rmine the situs for each insured entity f or eac h stop

- loss policy, the address of the plan sponsor was identified, and the st op - l o ss ledger account was adjusted to reflect a premium amount for s top

- loss premiums for Texas tax purposes. Premiums received under stop

- loss contracts and originally includ ed as Texas accident & health premiums for tax purposes were the basis for the 201 2 r ef und request.

In his motion for summary judgment , arguing that the premium and main tenance taxes appl y, the Comptroller sta ted that if the court held that the taxes did not apply, “ the parties will litigat e the refund amount. ” T he trial court he ld a hear ing on the motions for summary judgment in January 2019 and in March signed an order stating , “ IT IS THEREFORE ORDERED, ADJU DGED, AND DECREED that Plaintiff ’ s Motion for Summ ary Judgment is GRANTED and Defen dants ’ Motion for Summary Judgment is DE NIE D . Th is is not a final judgment, be ca use Defendant s ’ counterclaim re mains pending. ”

BCBS next filed a motion to dismiss the C o mptroller ’ s counterclaim for lack of juris dict ion , t he parties filed several repl ies , and the trial court heard the motion i n late Ma y 2019. About two we eks later, BCBS filed a supplemental re ply brief stating that in th at May hearing, the Comptroller had “ claimed that Plaintiff has n ot proven the refu nd amount and that despite prevailing on the underlying suit on cross

- motion s for sum mary judgment and rega rdless of the outcome of this jurisdictional dispute, Plaintiff must still have a hearing or trial to prove the refund amount. Thi s is unsupported b y the evidence. ” 7 BCBS again referred to Trotter ’ s affid avit , his calculati ons , a nd his explanations of the source documents from which the sums were gathered. BCBS noted that i n his re s ponse to B CBS ’ s motion for summary j u dgment , the Comptroller did not dispute the sought refun d amount , and that the trial court ’ s order specifie d

7 The parties ha ve provi de d re porter ’ s reco rd s from t he January and October 2019 hearings but not from the May 2019 hearing

.17

furthe r proceedings only as to the Com ptroller ’ s counterclaims, not as to the refund amount. Thus, B CBS a sserted, the “ assertion that the re fund amount i s s till in dispute is not sup ported by the evidence

. ” About two months later , the Comptroller filed a notic e of nonsuit of its counterclaim and a motion for new trial, again arguing th at the prem ium and maintenance taxes applied. In the motion for new tr ial, t he Comptroller did not take issue w ith BCBS ’ s evidence related to the refund amoun t or with wh ether th e trial court had determine d the refund amount in the first place. I n his response to BCBS ’ s motion for entry of a final judg ment , filed in September 2019, however, the Com ptroller assert ed that BCBS had not satisf ied the requirements of section 1 12.151(f ) to produce contemporaneous records and supporting documentation to establish the amount of any refund , contendin g that the amoun t of any potential refund “ is still in question and must be litigated

. ” BCBS filed a reply, attaching a f ourth affida vit by T ro tter, which presented the same assertion s of refund amou nt s and attached the various source documents he had cited in h is earlier affidavit s .

I n October 2019, the tr ial court heard argument on BCBS ’ s motion to enter final judg ment . In that hea ring, BC BS argued that the only reason the ea rlier order on summary jud gment was not final was because “ we had to carve out the cou nterclaim. ” The Comptroller stated, “ You gran ted summary judgment. The outstanding

— an outstanding issue was unauthorized in surance , ” but then argued that the amount of the refund was still live, assert in g that the only issues argued in BCBS ’ s motion w ere whether the two taxes applied

. Th us, th e Com p troller c laimed , the trial court “ did not resolve the amount of the refund as a result o f your decision on those two issues, and so, Your Honor, the re is no s ummary judgment on that. ” BCBS disagreed, referrin g the trial court to i t s motion, in which it p le d the specific refund sought and asked for judgment on that amount , and notin g that t he Com ptroller ha d not dispute d the18

pled a mount in its summary judgment response. In February 2020, the trial court signed a n order granting the Comptroller ’ s nonsuit

. It did not sign further orders mentioning the refund amount

.

BCBS ’ s motion f

or summa ry judgment argued that the two tax statutes did not apply and specifica lly sought a refund of $3,072 ,232.17. Th e trial co urt ’ s order on summary judgm ent granted BCB S ’ s motion without reserv ing any issues or fact questions ra ised in the motion , explicitly stat ing tha t the ord er was not final only because of the Comptroller ’ s pending counterclaim

. The re porter ’ s record from the initial summary judgment hearing does not show that the parties di scu ssed the amount of refun d s ought by BCBS, although they did refer in passing to Trotter ’ s affida vit , which clearly stated the amount of refund BCBS requested, as did BCBS ’ s motion for summary judgment. I n hearings held after the trial court granted summar y judgment , the parties and the court discus sed whether the court had intended to award B CB S ’ s sought amount , and a fter tho se later hearings , th e trial court opted not to sig n any further orders other than on e granting the Comptroller ’ s non suit. The recor d s upports a conclusion that in granting BCBS ’ s motion for summary judgment in its enti re t y, the trial court intended to also grant BCBS ’ s request for a refund of $3,072,232.17

. See Lehmann , 39 S.W.3d at 205

. Further , although the summary j udg ment order does not recite a refund amount, the prayer of BCBS ’ s motion , which was g ranted in whole, states the specific refund amount sought , an amount that was not challenged by the Comptroller until mon ths later . I t would require a mere ministe ria l act for a trial

- cou rt clerk to refer to BCBS ’ s motion for the specific amount when proc eeding with a

wr it of execution. See In re Blanken hagen , 513 S.W.3d 97, 99 (Tex. App.

— Houston [14th Dist.] 20 1 6, or ig. proceeding ) ( holding that trial

- court judgm ent based on mediator ’ s decision was not f inal because amount of damages could not be ascert a ined from judgm ent or reference to19

mediator ’ s decision); 8 see also Spray , 468 S.W.2d at 350 ( “ So long as the judgmen t of the court makes the figure which the clerk is to place in the writ of execution determinable by ministerial act, the judgment cannot be said to lack de finiteness. ” )

. Thus, t he trial c ourt ’ s full granting of BCBS ’ s motion for summary judgment in its t axpayer refund suit , which clearly and

un equ ivocally specified the amount so u ght, must b e read as grant ing BCBS ’ s re quest fo r that

re fund a mount

. W h en the Com ptroller nonsuited its counterclaim an d the trial court signed its order granting nonsuit , the last pending issue was resolved, rendering the summary judgment order final

. 9

8 In In re Bla nken hagen , a construction contract p rovided that dispute s about defe ctive w ork would be submitted to an architect as the “ I nitial Decision Ma ker ” a nd t hen to th e t rial c ourt for entry of a judgmen t. 513 S.W.3d 97, 99 (Tex. App.

— Houston [14th Dist.] 20 1 6, orig. proceeding )

. A dispute arose , and t he homeowners obtained repair bids ranging from $366,6 36 to $513, 21 6 , claimed th eir entitle ment to $10,00 0 as a timely

- compl etion penalty , and then requested $523,316 in their “ Request for Initial Decision , ” stating that was “ the HIGHEST amount of the estimates. ” Id

. The architect issued a n Initial D ecision tha t stat ed , “ I approve the ow ner ’ s claim , ” but di d not state a damage s amount , and the homeowners brought the matter to th e trial court for entry of a declaratory judgment. Id

. The trial cou rt signed a judgment stating that the contractor owed the homeowners “ the amounts as set out in the Ini tial Decis io n entered b y the A rchitect ” and that the judgment was final and appealable. Id

. The court of appeals disagreed with the homeowners ’ asserti on that the a rchitect clearly i ntended to award them the full a mount they requested , looking to the languag e of t he Initial De cision , which incl uded a discussion of the homeowners ’ repair estimates , interpre ting it as “ generally approving the validity of

” the claim, not the amount of da mages . Id

. at 101

. Thus, the court concluded, the trial court ’ s judgment w as not final becaus e the amount of dama ges “ has not yet been determined and cannot be ascertained from ” the j udgment itself or Initial Decision. Id

.

9 In In re Educap, Inc. , on the other hand, the court of appeals determined that an order granting a moti on for summary judgm en t that included a request for attorney ’ s fees supported by the attorney ’ s aff

idavit was not final

. No. 01

- 12

- 00546

- CV, 2012 WL 3224110, at *1 (Tex. App.

— Housto n [1st Di st.] Aug. 7, 2012 , orig. proceeding) (mem. op. ) . In th at case, a ttorne y ’ s fee s were not pled as a speci fic counterclaim, although the court of appeals held that they were tried by consent by t heir inclusion in the defendant ’ s answer and motion fo r summary judgment , and the order granting summary judgment did not includ e lang uage fr om whic h the court of appe als could determine whether an award for attorney ’ s fees had been made. Id . at *2

- 3

. Further, even if the or der c ould be read as includ ing an award of attorney ’ s fees, the court stated that the amount of the a ward c ould n ot be d etermine d

. Id . at *3 . T h e op i nion does not explain20 We now consider the C o mptroller ’ s arguments relate d to t he suffici en cy of BCBS ’ s evidence supporting its claimed refund amount.

S ection 111.0 041 , which governs taxpayer records in general, provides that taxpayer s must keep records for certain periods of time and shall :

produce contemporaneous records an d supp orting doc umentation appropriate to the tax

. . . for the transactions in question to substantiate and ena ble verification of the taxpayer ’ s claim related to t he amount of tax , penalty, or interest to be assessed, collected, or refunded in an adminis trativ e or judic ial proceeding. Contemporaneous records and supporting document ation appropriate to the tax

. . . may include, for example, invoices, vouchers, ch ec ks, shipping re cords, contract s, or other equivalent records, such as electronically stored image s of such d ocuments, reflecting legal relationships and taxes collected o r paid.

Tex. Tax Code § 111.0041( c)

. I n a suit for a tax refund :

A taxpayer shall p ro duce contemporaneous records and supporting documentation appropriate to the tax or fee for the t ransactions in question to substantiate and enable verificatio n of a taxpayer ’ s claim relating to the amou n t of the tax, penalty, or interest that has been a ss esse d or collected or will be refunded, as required by Section 111.0041

.
Id. § 11 2.151(f)

.

Se veral month s a fter the tria l court signed its order granti ng summary judgment, the Comptroller argued at a heari ng that BCBS had not sufficiently established t he refund

a mount

. BCBS then filed multiple responsive documents , including a reply to the Comptr oller ’ s

res ponse to BCB S ’ s motion for entry of final summary judgment, attaching Tro tter ’ s four th affi davit . In Trotter ’ s fourth aff idavit, he re ferred to his earlier refund explanations and averred

whether the motion for summary judgment requested a specific amount or simply ref er red to the attorney ’ s affidavit , nor can we tell how specific the aff ida vit was . See id . at *1

- 3

.21

that BCBS had on several occ asions provided the Co mptrol ler with BC BS ’ s 2012 amended
p remium t ax r ep ort ; its 2012 n on - t axable p remiums worksheet ; a 201 2 Texas Annual Maintenance, Asses sment, and Retalia tory Report ; a 2012 Retaliatory Worksheet ; a tax return reconciliation ; and a “ 2012 BA RS Stop Loss Premi um Rec onciliation to Return ” form. 10 He
attac he d those reference d documents as exhibits , along with a letter from the Comptroller

— acknowledging BCBS ’ s r equest for a refund of $3,073,962.02 in pre mium tax and $68,6 91.89 for m aint en ance tax and requesting fu rther documentati on

— a nd a li st of 2012 Refund Clai m Accounts with names redacted

. T rotter averred th at th e documents “ are source documents for the refu nd calculatio n ” th at “ allow the Comptroller to verify the refund claim ” and then went through the variou s docu ments in so me d etail, explaining the document s ’ origin s, meaning s , and import and tracing BCB S ’ s refund calculations through the documentation. H e also stated that al though BCBS had sent the documents to the Comptroller , t he “ Comptrol ler ’ s auditor d id not schedule a n a ppointment with BCBS to review any of the tendered and available documentation

. ” The Comptroller h as not d ispute d that it received those documen ts.

On appeal, the Comptroller argues that the document s produced by BCBS were all create d by B CBS , “ no mo re than hearsay , ” and insufficient to establish the re fund amou nt

. However, althoug h Trotter referred to those d ocuments repeatedly in his first af fidavit , which specified the sought refun d amount, the Comptroller did n ot chall enge the do cument s ’ sufficien cy or veracity until Septe mber 2019 , when he r espon d ed to BCBS ’ s motion to enter a

10 T h at f orm is a nine

- page “ s chedule of every s top

- loss premium received during the relevant period that identifies each self

- funded employer plan by name an d account number, the dollar amou nt of health a ggregate stop

- loss premium received from each plan, the heal th spe cific stop

- loss premium, the tota l health stop

- loss premium, dental stop

- loss premium, stop

- loss premium adjustments and refunds, stop

- loss pre miu ms to other states, stop

- loss excess premium reclass, unbi lled premium, and net stop

- loss premiums. ”22

final s ummary judgment. 11 In that document, the Comptrolle r for the fir st time asserted that BCBS had not satisfied its section 112.151(f) burden because i t had not produced contemporaneous and supp orting documentation and tha t the amount of any potential refund was

“ still in question and must be litigated. ” The Comp troller said that there was “ a variety of potential evidence ” that might satisfy BCBS ’ s burden an d that “ generally, this evidence must b e records and documents, or equivalent records, showing the items and transactions taxed, the amounts at issue, and the taxes previou sly collected. ” The Comptroller also stated that although Trotter stated the amount BCBS “ believes it is entitled to , ” quoted “ several figures he believed establishes ” the refund amount, and “ mention[ ed ] some documents that possibly helped hi m to reach th at amount, ” “ [n]one of those documents were produced by [BCBS], and even if they

wer e, it is unclear i f those documents would sat isfy [BCBS ’ s] statutory burden. ” The Comptroller concluded, “ W ithout further evidence and records to support it, Mr. Trotter ’ s affidavit does not help [BCBS] overcome its burden or move it closer to prevailing on its claim. [BCB S] has produced n o other evidence to support its claimed refund amount. ” BCBS

r e sponded, not i ng that Trotter ’ s affidavit reference d several sp ecific documents that had been filed with the Comptroller multiple times starting in December 2016 12 a nd that the Comptroller had never d isputed BCBS ’ s calculations or reference documents

.

11 We not e t hat the C o mpt roller asserted in his motion for summary judgment that the refund amount would have to be litigated if the trial court determi ned that the t axes did not apply a nd that, i n a footnote in h is response to BCB S ’ s motion to dismiss his co unterc laim for want of jurisdiction , the Compt roller stated that BCBS ’ s motion for summary judgment “ was for partial summary judgment because BCBS wo uld need to prove up the refund am ount if the policies were not subject to the Chapter 222 premiums tax. ” Howeve r, the Comp troll er did not explain why BCBS ’ s evidence was insufficient or challenge its reliabili ty

.

12 Trotter averred t hat the documentatio n had been provided to the Comptro ller multiple times, in December 201 6, June 2017, July 2017, and October 2018.23 Th e Co mptroller d o es not dispute that BCBS sent the e numerated do cuments to the Comp troller multiple times before and after filing th is refund suit , a nd he has not ex plained, eith er here or below, how th os e source document s

— wh ich inclu de a list i ng of the sto p - loss policies, BCBS ’ s amended 2012 tax forms and worksheets, and its calculations of the taxes it had paid and the refund s it thus sought

— are not “ appropria te pro of ” to substa ntiate the requested refund amount

. The Co mptroller instead select s from the list of e xa mples set out in section 111. 0041(c) “ invoices .

. . checks . . . contracts, ” as if to argue that BCBS was required to produce c opies of each in divi dual i nvoice or con tract sent to each stop

- loss policy holder or canceled checks se n t by each pol icy hol de r . We disagree.

A s we have noted , “ T he plain langu age of [ sect ion 111.0041(c) ] sets out the taxpayer ’ s time period to prove its cla im ‘ for the tr ansact ions in questi on ’ as being during the administrative or ju dicial process , not at the outset of filing, and ex pressly allows flexibility as to the appropria te proof to support a given transaction. ” Hegar v. Ryan, LLC , No. 03

- 13

- 00400

- CV, 2015 WL 3393 917, a t *12 (Tex. Ap p.

— Austin May 20, 2015 , no pet.) (mem. op. ) (emphas e s added)

. Further, this is a tax case in w hich the controlling question is the applicati on of the tax statutes in the first place, not how the tax es should be calculated. BCBS either owes the taxes it p aid , as r ef

lected on its produced 2012 tax forms , which the Co mptrolle r has not challenged as incorrect or erron eous , or it does not . We hav e held that BCBS does not ow e the
taxes

. C on sistent with the trial court ’ s grant of summary ju dgment , i t is a s tra ightforward conclusion that BCBS is entitled to a refund of the premium and maintenance taxes it paid . We further hold that BCBS sufficien tly documented and supported the refund amount to which it is entitled

. We overr ule the Comptrol ler ’ s third i ssue on appeal.24 CONCLUSION We have o verruled the Comptroller ’ s issues on appeal. We thus affirm t he t rial
court ’ s order granting su mmary judgment , which determin ed that BCBS was entit led to a refund of $3,072,232.17

. Because we conclude th at th e trial court h as rendered a final judgment that d isposes of all claims and that BCBS presented suff icient eviden ce to support its refund clai m ,
we need not address BCBS ’ s cross - appeal , which seeks relief only in the event we were to conclude otherwis e . 13

_______________ ___________________________ Jeff Rose, Chief Justice Before C hief Justice Ro se, Justi ces Baker and Kelly Affirmed Fi led: December 11, 2020

13 BCBS ’ s cross - ap p eal d oes not see k more or different re lief than was awarded by the trial court . Instead, it was a n attempted safety net in the event we did not belie ve the trial court had signed a final order or determined BCBS ’ s evidence to be in suff ic ient or imp roper .