HICA Tax Elimination Advances

HICA Tax Elimination Advances


An MMA-driven legislative package that will eliminate the anti-competitive Health Insurance Claims Assessment (HICA) tax and save manufacturers $332 million annually moved one step closer to completion after the full House approved the bills today.

MMA has been educating legislators on how the anti-competitive HICA tax impacts employers, leaving them holding the bag for a broken tax which has never produced the revenue its creators expected. This leaves Michigan in a constant struggle to come up with necessary matching funds to receive over $800 million for Medicaid from the federal government — and leaves job providers under constant threat of a tax increase to cover the shortfall.

Senate Bills 987-990 are a fiscally responsible plan to reduce health care costs in Michigan and get our traditional Medicaid financing in compliance with federal regulations.

SBs 987-990 would:

  • Set the HICA tax rate at 0.0% on 1/1/17 and repeal the tax 12/31/18. The HICA rate would return to 1% if the federal government disallows this new structure [SB 987, introduced by Senator Ken Horn (R-Frankenmuth)]
  • Dedicate Use Tax Revenues from Medicaid managed care organizations for Non-Medicaid Purposes [SB 988, introduced by Senator Jim Stamas (R-Midland)]
  • Reconfigure the Use Tax on Medicaid managed care organizations [SB 989, introduced by Senator Peter MacGregor (R-Rockford)]
  • Dedicate a Portion of Income Tax Revenues to Medicaid [SB 990, introduced by Senator Mike Shirkey (R-Clarklake)]

“The HICA tax has added over $1 billion to the cost of health care in Michigan,” said Delaney McKinley, MMA director of human resource policy and membership development. “Michigan manufacturers will save significantly and be better able to compete with their counterparts in other states once this toxic tax is off their backs.”

SBs 987-990 now go back to the Senate for concurrence with technical changes that were made in the House. While the Senate will return in October to consider the bills, discussion is ongoing with Governor Snyder and his administration over concerns they’ve raised about the bills.

Source: Michigan Manufacturers Association


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