Michigan's Health Insurance Claims Assessment Act (the
"Act") was approved by Governor Snyder on September 20,
2011 and given immediate effect. Pursuant to the Act, for
dates of service beginning on or after January 1, 2012, every
carrier, stop-loss insurer and third party administrator
("TPA"), as those terms are defined in the Act, will be
assessed a tax of 1% on "paid claims."
The term "paid claims" includes actual payments, net
of recoveries, made to a health and medical services provider or
reimbursement to an individual by a carrier, TPA, or stop-loss
insurer. If a carrier or TPA is contractually entitled to
withhold a certain amount from payments that are due to providers
of health and medical services in order to help ensure that the
providers can fulfill any financial obligations they may have under
a managed care risk arrangement, the full amounts due the providers
before that amount is withheld shall be included in paid
claims.
Casualty insurance payments, such as medical coverage for
automobile insurance and workers' compensation insurance, are
among those items exempt from the Act. Also exempt are
out-of-pocket medical expenses and reimbursements to individuals
under flexible spending accounts, health savings accounts, health
reimbursement arrangements and Archer medical savings
accounts. The Act contains additional exemptions.
Each carrier and TPA with paid claims must file with Michigan
Department of Treasury on April 30, July 30, October 30, and
January 30 of each year a return for the preceding calendar quarter
and must pay the required assessment at that time. If an
assessment paid in any given quarter later becomes inaccurate due
to subsequent claims adjustments or recoveries, subsequent filings
must be adjusted to accurately reflect the correct assessment based
on actual claims paid.
For a self-funded employer group health plan that utilizes the
services of a TPA or stop-loss insurer, the group health plan
sponsor is not responsible for an assessment under the Act for a
paid claim if the assessment on that claim has been paid by the TPA
or stop-loss insurer. The TPA is responsible for all
assessments on paid claims that were paid by the TPA. The
stop-loss insurer is responsible for all assessments on paid claims
paid by the stop-loss insurer. Self-funded and
self-administered employer group health plans are responsible for
their own compliance under the Act.
If you have specific questions regarding application of this
Act, please contact Attorney Johanna M. Novak.
Authored November 14, 2011. Published in
Foster Swift Employment, Labor & Benefits E-News and
Foster Swift Health Care Law E-News.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
Specific Questions relating to this article should be addressed directly to the author.
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