--- title: Michigan Legislature Enacts 1% Tax On Health Care Claims description: Michigan legislature enacts 1 percent tax on health care claims. A description of the tax and what's exempt. image: https://www.mbrbilling.com/hs-fs/file-16603916-jpg/images/imagescatr72ii-resized-600.jpg --- [![](https://www.mbrbilling.com/hs-fs/hubfs/MBR-Images/logo.png?width=340&name=logo.png)](https://www.mbrbilling.com/) - [Home](https://www.mbrbilling.com/) - [Client Login](http://clientlogin.mbrbilling.com/) - [Contact Us](https://www.mbrbilling.com/contact-us) SEARCH # Medical Billing Blog # Michigan Legislature Enacts 1% Tax On Health Care Claims Posted by [Barry Shatzman](https://www.mbrbilling.com/blog/author/barry-shatzman) on Tue, Nov, 01, 2011 @ 13:11 PM - [Tweet](https://twitter.com/share) ![Broken Piggy Bank with Bandaid over Break](https://www.mbrbilling.com/hs-fs/file-16603916-jpg/images/imagescatr72ii-resized-600.jpg)On September 20, 2011, Governor Rick Snyder signed into law a 1% tax on all health care claims paid in the state of Michiganfor the purpose of funding it’s Medicaid program.  Michigan will now be eligible for an additional $780 million in federal funding for Medicaid patients.  The new law, aptly called the Health Insurance Claims Assessment Act, or HICAA, is a blanket 1% tax on **all** payments expected to cover previous losses.  The law will be in effect for one calendar year, starting on January 1st, 2012 and ending on December 31st, 2012. Some exempt categories of claims from the new tax: - Medicare, Medicare Advantage, Medicare Part D claims - Medicare prescription drug plans - Claims paid under a federal employee health benefit program - Workers’ compensation claims - Health related claims for auto, home, long-term care, and disability income insurance - Services forMichiganresidents received outside of the state - Out of pocket medical expenses (co-pays and deductibles) The 1% tax will be an additional cost charged over premiums and annual increases for 2012.  The tax is capped at $400 million in state revenue.  Carriers are permitted to pass the costs onto subscribers and employers are permitted to pass on the tax to employees.  BCBS has announced that they will charge subscribers this tax on their monthly premiums through a separately identified line charge.  By law an individual can be charged a maximum of $10,000 per year.  The tax must be applied uniformly and without regard to health status or claim experience.  This law replaces the six-percent ‘use tax’ that was administered to claims billed under Medicaid managed care organizations. ### Subscribe via Email [![](https://www.mbrbilling.com/hs-fs/file-16642138-png/images/bg/facebook.png)](https://www.facebook.com/MedBillResources) [![](https://www.mbrbilling.com/hs-fs/file-16650079-png/images/bg/twitter.png)](https://twitter.com/#!/MedBillResource) [![](https://www.mbrbilling.com/hs-fs/file-16643229-png/images/bg/linkedin.png)](http://www.linkedin.com/company/medical-billing-resources) [![](https://www.mbrbilling.com/hs-fs/file-16646680-png/images/bg/rss.png)](https://www.mbrbilling.com/CMS/UI/Modules/BizBlogger/rss.aspx?tabid=484940&moduleid=1043750&maxcount=25&u=107101&t=BBE4D262E126601B3B04C3F46C38B13F) [![New Call-to-Action](https://no-cache.hubspot.com/cta/default/119723/112e1d48-db0d-4713-be81-8744e7438136.png)](https://cta-redirect.hubspot.com/cta/redirect/119723/112e1d48-db0d-4713-be81-8744e7438136) [![Click me](https://no-cache.hubspot.com/cta/default/119723/73857c0b-bb42-4989-9f2b-6f01b79dda8d.png)](https://cta-redirect.hubspot.com/cta/redirect/119723/73857c0b-bb42-4989-9f2b-6f01b79dda8d) [![worksheet](https://no-cache.hubspot.com/cta/default/119723/e4db838f-b08e-4fb6-bce4-c965b078dce1.png)](https://cta-redirect.hubspot.com/cta/redirect/119723/e4db838f-b08e-4fb6-bce4-c965b078dce1)     ### Latest Posts ### Browse by Tag - 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