Michigan claims tax update
On September 20, 2011, Governor Snyder signed into law a new 1% claims tax to fund Medicaid services. This new tax is effective Jan. 1, 2012 and affects all group plans (both fully funded and self-funded), individual plans and Medicaid plans. The tax applies to eligible claims with dates of service on or after Jan. 1, 2012 (2011 claims are not included).
Priority Health is working to apply this new tax to all our groups in a manner that follows the regulation and is fully transparent to you. We’re updating our billing systems to accommodate the tax and you’ll see this tax as a separate line item on your invoice no later than the end of March (applied retroactively back to January 2012).
FULLY FUNDED GROUPS
Priority Health will apply a tax factor for each line of business to your monthly premium, and will calculate the tax factor based on that premium as follows:
| Plan type | Rate |
|---|
| HMO/POS |
0.72% |
| PPO |
0.59% |
The tax is lower than 1% in order to account for a number of factors, including out-of-state employees (the tax applies only to paid claims incurred in Michigan to Michigan residents) and other administrative costs.
SELF-FUNDED GROUPS
Priority Health will apply a 1% percent tax to your eligible claims on your weekly funding invoice beginning in January.
View the latest updates and further background information. Questions about your invoice? Contact your agent or your account manager.
Topics: Billing
