Institute Files Suit Against Michigan Health Insurance Tax

December 23, 2011 ( – The Self-Insurance Institute of America, Inc. filed a suit challenging a new law to tax health insurance claims in Michigan. 

According to news reports, the new law, which is scheduled to begin January 1, 2012, will place a 1% tax on health insurance claims, to be paid by insurers, including self-insured employers, and health management organizations (HMOs). The suit claims the Michigan assessment violates the federal Employee Retirement Income Security Act (ERISA), and it seeks to stop the implementation and enforcement of the law.

The law was created to help fund state Medicaid programs. According to reports, the assessment is expected to raise approximately $400 million a year. The new law will replace a 6% tax on Medicaid HMOs and other plans providing Medicaid mental health services that was barred by the federal government.