On June 30, 2011, the Michigan Senate voted 26 to 9 in passing SB 348, which if enacted would be known as the Michigan Health Insurance Claims Assessment Act. As reported in a prior edition of Insurance Legal News,1 SB 348 would replace the current health maintenance organization use tax with a 1% tax on most health care claims paid in Michigan. The proposed legislation, with an effective date of October 1, 2011, would place obligations for payment on a wide variety of insurance carriers, but also on third-party administrators and group health plan sponsors.
The proposed assessment would, together with federal matching dollars, replace $1.2 billion in funding for the state Medicaid program currently provided by the HMO use tax. On June 30, the Michigan Senate also passed tie-barred legislation, SB 347, which would repeal the current HMO use tax 90 days after the effective date of the assessment tax, creating a three-month period in which both assessments would apply simultaneously.
After passage in the Senate, SB 348 was sent to the House for review and referred to the Committee on Appropriations. No hearings on SB 348 have yet been scheduled.
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