The Michigan Department of Revenue passed legislation on September 20, 2011 that created the Health Insurance Claims Assessment (HICA) Act. This Act was enacted to replace the current HMO Use Tax in that state.
The HICA Act applies to certain insurance carriers, third party administrators, and self-insured entities that pay health insurance claims for Michigan residents, for health-related services performed in Michigan. It provides for a 1% assessment that is levied upon "paid claims." Paid claims means "actual payments, net of recoveries, made to a health and medical service provider or reimbursed to an individual by a carrier, third party administrator, or excess loss carrier." It is effective for payments for services provided on or after January 1, 2012.
The State sent out notices in October 2011 to third party administrators, carriers, and self-insured entities that may be subject to the HICA Act. Additional information is available on its website, www.michigan.gov/taxes, under Michigan tax changes information.