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    Monday
    Oct032011

    New Michigan Health Insurance Claims Tax – Applies to PIHPs

    The Michigan Governor signed into law a one percent (1%) tax on health insurance claims which will be levied upon and collected from specialty prepaid health plans, among other types of commercial and government third party payors. As a result, prepaid inpatient health plans that pay for services rendered to behavior health consumers will be subject to the new tax.

    Under the new law, the tax will be applied to services beginning on or after January 1, 2012 and the tax will be levied upon a “carrier’s” or “third party administrator’s”1 paid claims.

    The new law was signed in anticipation of action by the Centers for Medicare and Medicaid offices to disallow the current Use Tax on Medicaid contracted health plans and specialty prepaid health plan as a means to generate State revenue for purposes of obtaining federal matching funds for the Medicaid program. Thus, the new tax replaces the current six percent (6%) Use Tax levied upon Medicaid contracted health plans and specialty prepaid health plans.

    A copy of the new law is available online through the Michigan Legislature website at: http://www.legislature.mi.gov/(S(d2epzp45p2r4odfaqtuhrjff))/mileg.aspx?page=getObject&objectName=2011-SB-0348

    1Please see definitions set forth under the new law at: http://www.legislature.mi.gov/(S(d2epzp45p2r4odfaqtuhrjff))/mileg.aspx?page=getObject&objectName=2011-SB-0348

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