Health Care Law Blog
The United States Court of Appeals for the Sixth Circuit has
upheld Michigan’s tax on paid health care claims in an opinion published on
August 4. The decision has very significant implications for the State of
Michigan, which uses the revenues to partially fund the Medicaid program, and
for employers, group health plans, and third-party administrators, which are
subject to the tax.
The Health Insurance Claims Assessment Act was challenged by
an organization representing self-insured group health plans and third-party
administrators. The group plans and TPAs argued that the Act was
preempted by ERISA. The federal appeals court held:
- Imposing the tax and related reporting obligations on group health plans and third-party administrators does not affect the decisions by employers and plans about who is eligible and what benefits are covered.
- The administrative obligations under the act (e.g., record-keeping, filing returns, determining beneficiary residency) do not interfere with uniform plan administration.
- The tax on claims does not result in ERISA preemption even though it increased the costs paid by insurers and plans.
Richard
Kraus from Foster, Swift, Collins & Smith, P.C. represented a number of
organizations supporting the Act, including the Michigan Health and Hospital
Association, Michigan State Medical Society, Small Business Association of
Michigan, Michigan Osteopathic Association, Health Care Association of Michigan,
and Michigan County Health Plan Association.
