TRENTON, N.J., March 21 – A tax court judge refused to grant an injunction to stop the state from imposing a $36 million premium tax against Horizon Blue Cross Blue Shield, the states largest health insurance company.

The action was bared by Insurance Advocate, which has been following the case for nearly nine months when Horizon challenged the tax last July calling it unconstitutional and unfair.

In papers just released, the injunctive relief was denied by Judge Vito Bianco who set a hearing on the legality of the tax for September.

The injunctive denial occurred March 3 and was never announced by either the court, the Democrat administration of Jon Corzine, or by Horizon.

Horizon did comment after its spokesman was notified Insurance Advocate had the copy of the decision denying the injunction.

Tax Imposed

Horizon and the former Democrat administration of then acting Governor Richard Codey have been in bitter dispute over the tax.

A year ago in a special night session the Democrats imposed a full premium tax on Horizon without imposing that tax on other health care insurance companies.

The Democrats argued that Horizon had excessive surplus and could afford to pay the tax, and denied it was a personal fight between southern Democrats and Horizon about reimbursement of funds and accreditation of Cooper Hospital in Camden.

Whatever the cause, Horizon filed suit contending the tax was discriminatory and unconstitutional because Horizon was singled out for the tax while the other health care companies were spared and only had to pay the customary 12.5 percent tax on premiums.

The lawsuit originally was filed in Superior Court but was removed from that jurisdiction and placed in the less visible Tax Court, a part of the state court system.

The lawsuit lay dormant until Horizon moved in February of this year for the injunction arguing that it should not have to pay the tax while it was being challenged in court.

Judge Blanco in a brief order wrote the injunction was denied for the reasons set forth in the recordand for good cause shown.

The order did not elaborate.

Horizon Responds

Thomas Rubino, spokesman for Horizon, said Horizon is being forced to pay the tax even though it feels it will win the case later this year. He ventured that if Horizon does win, the company would have to get a tax credit or refund.

Rubino said he found it amazing that no one has reported that the same legislators that taxed health care are the same ones screaming about health care costs.

Wrote Rubino, Basically this is a tax on 3.2 million residents just because they have health insurance. This makes no sense and only raises health care costs and ultimately the number of uninsured.

Rubino also took the occasion to answer critics charging that Horizon has an excessive surplus and that that excess should be used to lower health care costs.

Rubino said Horizon has a $1.3 billion reserve, enough to cover a month and a half of medical payments. He said that total is 12 percent of the $9 billion in yearly medical claims for its 3.2 million customers.

He further noted that its reserve has been approved by the Insurance Department and meets normal and prudent levels recommended by national actuarial groups.

The size of the surplus was recently criticized by Senator Loretta Weinberg (D-Bergen), who said she plans to propose legislation to set a maximum of surplus for health insurers at $700 million a year.