Michigan health insurance claims tax estimator

On Sept. 20, 2011, the Michigan Legislature approved a new tax on certain health insurance claims. Called the Health Insurance Claims Assessment Tax, this legislation goes into effect on Jan.1, 2012.

What is this tax?

This new 1 percent tax replaces the current 6 percent use tax applied to Medicaid managed care plan services. While the tax will generate funds to support Michigan's Medicaid program, it will also ensure that Michigan continues to receive federal funds for its Medicaid program.

How it impacts groups

For groups, such as employers who sponsor health insurance for their employees, this means that they'll be responsible for paying this tax for their 2012 bills. The tax amount will be separately identified and added to the group's invoice. For premium billed groups, Blue Cross Blue Shield and Blue Care Network will apply a factor to your premium. The factors developed by Blue Cross Blue Shield and Blue Care Network have incorporated assumptions for residency and out-of-state claims. For groups with an ASC arrangement, groups will only be taxed on claims for services performed in Michigan and for Michigan residents.

How it impacts individuals

For individuals, Blue Cross Blue Shield of Michigan and Blue Care Network will apply a factor to your premium in January 2012 and will collect it for the entire year. The factor developed by Blue Cross Blue Shield and Blue Care Network have incorporated assumptions for residency and out-of-state claims. The tax amount will be identified separately and added to your bill.

What's my bottom line?

Knowing the bottom-line impact of this legislation can be challenging. To help our customers better understand this new tax liability, we've created an easy-to-use tax estimator. When you enter the cost of your premiums (and in some cases, claims), this tool can effectively estimate the amount of your annual tax.