State of Michigan (MI) Employment Laws

Special Updates

September 20, 2011: Health Insurance Claims Assessment Act Enacted

Governor Snyder has signed legislation creating the Health Insurance Claims Assessment Act (HICA). Beginning January 1, 2012 and effective through December 31, 2013, certain third party administrators, carriers (including group health plan sponsors) and self-insured entities are required to pay an assessment on certain paid health care claims. The assessment may not exceed $10,000 per insured individual or covered life annually. Claims that are exempt from the assessment include:

• Claims-related expenses
• Certain payments to qualifying providers under an incentive compensation arrangement 
• Claims paid for accident, accident-only coverage, credit, disability income, long-term care, health-related claims under automobile insurance, homeowners insurance, farm owners, commercial multi-peril, and worker's compensation, or coverage issued as a supplement to liability insurance 
• Claims paid for non-residents of Michigan 
• The proportionate share of claims paid for services rendered to a person covered under a health benefit plan for federal employees 
• Claims paid for a Michigan resident for services rendered outside of the state 
• Claims paid under Medicare, Medicare advantage, Medicare part D, Tricare, Veterans Administration, and Patient Protection and Affordable Care Act high risk pools 
• Health reimbursement to individuals as authorized under federal law, such as under a FSA or HSA 
• Health costs paid by an individual's cost sharing requirements, including deductibles, coinsurance, or copays

For group health plans that use the services of a third party administrator, the paid claim assessment under HICA will generally be the responsibility of the third party administrator and not the group health plan sponsor. Carriers and third party administrators are required to develop and implement a methodology by which they will collect the assessment from an individual, employer, or group health plan, subject to certain requirements set forth in the law.

Click here for more information regarding this new requirement.

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