Governor Snyder recently signed into law, Public Act 142. This law adds a 1% medical claims tax to our health insurance premiums starting in January 2012. Blue Cross and Blue Shield has put together a good FAQ regarding how this will work. This is a 1% tax on all medical, pharmacy and dental claims to a maximum of $10,000 in tax per insured for services received IN Michigan by a Michigan Resident. We won’t be taxed on claims that fall under our deductible, co-pays or co-insurance, costs we pay out-of-pocket or are reimbursed through HSA, HRA, Flexible Spending or other reimbursement arrangements. The tax is collected through the insurance company or third-party administrator and will be passed on to the consumers as a separate line item on the monthly premium invoices.

For Fully-Insured Groups and Individual Insureds the amount won’t be specific to your claims but will be an added cost based on all the claims for all the groups/individuals in your “risk pool” at your insurer.

For Self-Funded groups it looks like the insurer will figure the tax per client group based on actual claims paid the prior month. This could end up being a fairly large number if a group has a large claims month.

This new tax will be an additional cost over Premiums and Premium increases for 2012.