HICA Sees Sunset Extension

On Tuesday, the House approved a bill to extend the state’s Health Insurance Claims Assessment (HICA) into 2025. The bill was passed with no discussion, but with opposition from outside groups including the Michigan Chamber of Commerce and the Michigan Manufacturers Association. HB 5105 passed on a vote of 83-23.

The 0.75 percent assessment fee is meant to reduce the impact on the General Fund, as the federal government ruled the state can no longer assess the use tax on Medicaid HMOs. Representative Al Pscholka (R-Stevensville), House Appropriations chair and bill sponsor, is continually challenging the federal government to continue the use tax, but commented the state will still need the 0.75 percent assessment fee.

The Michigan Chamber of Commerce referred to this extension as a $1.98 billion tax increase on businesses and individuals purchasing health insurance. Delaney McKinley, director of human resource policy and membership development at the Michigan Manufacturers Association, said Michigan is the only state to have such an assessment and in doing so makes the state uncompetitive.

HB 5105 would also strip a credit health care entities would receive if the General Fund and assessment revenues from the use tax exceed a revenue cap.

Under the current bill, the December 31, 2017 sunset would be extended to September 30, 2025.

posted by PAA Online , Friday, December 11, 2015 10:13 AM
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