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HICA Elimination Package Introduced in the Senate

Legislation was introduced last week to implement the Snyder Administration’s proposal to eliminate the Health Insurance Claims Act (HICA) tax and replace it with a smaller Insurance Provider Assessment (IPA) tax.

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

Legislation was introduced last week to implement the Snyder Administration’s proposal to eliminate the Health Insurance Claims Act (HICA) tax and replace it with a smaller Insurance Provider Assessment (IPA) tax.

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
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