Self-Insurance Institute of America, Inc.
Self-Insurance Institute of America, Inc.

Tax Could Rise Significantly on Michigan Self-Insured Employers

Washington, DC, November 21, 2012 --( The Self-Insurance Institute of America, Inc. (SIIA) today filed an appeal in the United States Court of Appeals as part of the association’s ongoing legal challenge to the Michigan Health Insurance Claims Assessment Act. SIIA contends that the law is preempted by the Employee Retirement Income Security Act (ERISA).

The Act imposes a one per cent assessment on “carriers” based on the amount of health benefit claims paid for medical services rendered to Michigan residents in the state of Michigan. “Carriers” are defined to include ERISA plan sponsors and administrators, as well as Taft-Hartley plans. The administrative obligations imposed on these payers in order to comply with the Act trigger the ERISA preemption challenge.

In related news, SIIA has learned that the Michigan legislature is now considering a proposal to significantly hike the health claims tax as it has been determined that the current one per cent rate is not coming even close to generating anticipated revenue of $400 million. For the first half of 2012, the tax has generated $109 million in revenue for the state. Budget officials have been unable to determine if the shortage is a result of how the tax is structured, or if there is a problem with collections.

SB 12359, introduced earlier this month, would allow for an unlimited and variable rate on the claims tax so that it would float up and down to ensure that the tax generates $400 million annually. The bill would also eliminate the proportional credit/refund provision should the tax collect more than the $400 million target amount.

The Self-Insurance Institute of America, Inc. (SIIA) is a member-based association dedicated to protecting and promoting the business interests of companies involved in the self-insurance/alternative risk transfer (ART) industry, both domestically and internationally. More information is available at
Self-Insurance Institute of America, Inc.
Erica Massey
David Kirby: 410-539-6888