In Michigan
6:12 pm
Thu December 22, 2011

Trade group sues over Michigan health claims tax

LANSING, MI –

A new Michigan law that will place a 1 percent tax on health insurance claims faces a court challenge.

The Self-Insurance Institute of America Inc. filed a suit challenging the law Thursday in federal court. The suit says the Michigan assessment is pre-empted by federal law.

The suit seeks to block the assessment related to self-insured group health plans.

The Michigan assessment is scheduled to begin Jan. 1 to help fund Medicaid programs. It would be paid to the state by insurers or HMOs.

It's expected to raise about $400 million a year, helping the state draw roughly $800 million in federal funds for Medicaid.

The new law eliminates a 6 percent use tax on Medicaid managed care organizations.

A message was left seeking comment with Gov. Rick Snyder's administration.