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HICA Elimination Package Introduced in the Senate

Senate Bill 992 (Senator Ken Horn, R-Frankenmuth), Senate Bill 993 (Senator Peter MacGregor, R-Rockford) and Senate Bill 994 (Senator Mike Shirkey, R-Clarklake) would:

  • Establish the IPA tax, which would, upon approval by the federal Centers for Medicare and Medicaid Services (CMS), assess a tax on health insurers on a per-member-per-month (PMPM) basis:
    • Commercial policies would be assessed a flat rate of $2.40 per member per month.
    • Self-insured and administrative services only plans would be exempt.
    • Dental, vision, prescription disability, long-term care, Medicare supplement, Medicare advantage and other limited policies would be exempt.
    • Health insurers would be taxed on a quarterly basis based on member month information provided in their annual financial statement filed with the Department of Insurance and Financial Services the prior year.
    • The tax assessment will unquestionably be passed on to the health care purchaser. However, we believe the IPA represents a savings from current HICA tax loads, although specific group savings will vary based on claims experience.
  • Repeal the HICA tax as soon as CMS approves the IPA tax, or on 10/1/18, whichever is later.

Based on member feedback and because it achieves our longstanding goals of eliminating the anti-competitive HICA tax and reducing health care costs, MMA supports SBs 992-994 and is scheduled to testify in support of the package when the Senate Committee on Michigan Competitiveness takes up the bills on Wednesday, 5/16/18, at 8:30 a.m. MMA expects the package to move swiftly through the Senate, as soon as Thursday, 5/17/18.

Contact your local Senator and Representative and urge them to support SBs 992-994.

This article originally appeared in the 5/14/18 issue of MFG Voice.

Contact Delaney McKinley

Delaney McKinleySenior Director of Government Affairs and Membership
Call 517-487-8530
E-mail mckinley@mimfg.org