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.