MMA Leads HICA Elimination Effort

MMA Leads HICA Elimination Effort

Rising health care costs are a top concern for Michigan manufacturers, which is why MMA has been actively engaged in the fight to eliminate the Health Insurance Claims Assessment (HICA) tax.  The Senate Michigan Competitiveness Committee unanimously approved legislation on Wednesday, 5/25/16, to end the anticompetitive HICA tax by 12/31/18 and save businesses over $250 million.  The bills now move to the Senate floor where we anticipate action as early as this week.

Find your Senator and tell them where you stand!

Senate Bills 987-990 will:

  • Set the effective HICA tax rate a 0 percent beginning 1/1/17
  • Repeal the HICA tax effective 12/31/18
  • Place the current use tax into a new Health Services Fund and restrict that money from being used to fund Medicaid programs
  • Amend the use tax and earmark all money to the new Health Services Fund
  • Allow revenue from the state income tax to be used for necessary Medicaid Matching funds

Since its inception, the HICA has never produced the revenue its creators expected, leaving Michigan in a constant struggle to come up with the necessary matching funds to receive $800 million for Medicaid from the federal government.  Additionally, a recent U.S. Supreme Court decision raised the real possibility that the HICA could be ruled illegal.

“We extend our appreciation to Senator Ken Horn (R-Frankenmuth), Senator Peter MacGregor (R-Rockford, Senator John Proos (R-St. Joseph), Senator Mike Shirkey (R-Clarklake) and Senator Jim Stamas (R-Midland) for their leadership in eliminating this truly uncompetitive tax on manufacturers,” said Mike Johnson, MMA vice president of government affairs.  “The creative solution dedicates revenues for the Medicaid match, while eliminating a substantial tax burden on manufacturers who must compete against companies in other states that do not pay this tax.  This is a great solution.”

Connect with the MMA Government Affairs team, at 517-487-8552, and participate in the MMA Health Care Policy Committee to stay informed.

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