New law imposes 1% tax on paid health care claims

On September 20, 2011, the Michigan legislature approved a new 1% claims tax to fund Medicaid services. It needed to replace funding for Medicaid, formerly collected through a 6% tax on Medicaid health plans that was no longer funded. The new tax affects all commercial groups, both fully funded and self-funded, individual plans and Medicaid plans. The tax goes into effect January 1, 2012.

We are working to ensure that the new tax, and how it's applied, is completely transparent to our customers. The tax will appear as a separate line item on monthly premium bills in 2012.

This information is based on our best understanding of the statute at this time. We expect that Michigan's Department of Treasury will be issuing regulations or other guidance that will provide additional information. We will keep you informed as further details emerge and we'll continue to post updates on the Employer Center.

Although most claims will be taxed, there are several exceptions. Read more in the employer manual.

Questions? Contact your agent or your account rep.

Topics: Billing