Michigan Chamber Urges State House to Reject $2.3 Billion Tax Increase

December 7, 2015

The Michigan Chamber is strongly opposed to House Bill 5105 (Pscholka). This unwise and unfair legislation would impose a $2.3 billion tax increase on individuals and business purchasing health insurance. No other state in the country imposes such a penalty tax. The Michigan Chamber is urging the State House to reject this untimely money grab! The sole purpose of this bill is to create a new pot of money for further expansion of social welfare spending.

Since 2011, Michigan’s Health Insurance Claims Assessment (HICA) tax has added nearly $1 billion to the already high cost of purchasing health insurance in Michigan. Passage of House Bill 5105 would discourage employers from purchasing health insurance for their employees. 

In addition, House Bill 5105 would drastically alter current law by extending the sunset of the HICA tax by seven years and nine months – from December 31, 2017 to September 30, 2025. This amounts to a $1.98 billion tax increase on businesses and individuals purchasing health insurance. Radically changing current law to breath life into a bad tax scheduled to die is both reckless and irresponsible.

Worse still, passage of HB 5105 would renege on promised tax refunds put into law just one year ago, meaning job providers and other health insurance purchasers would be stripped of $47 million in promised rebates in 2016 and 2017. This change alone creates a $280-$320 million windfall for state government through 2025, directly on the backs of health insurance purchasers.  

This $2.3 billion tax increase on Michigan job providers and individuals who purchase health insurance is a bad idea. HB 5105 is anti-taxpayer and anti-business and should be rejected. 

The Michigan Chamber of Commerce is extremely disappointed with the effort to rush this very costly and economically damaging legislation through the House. We are working hard to stop this unnecessary and unfair tax hike on Michigan's job providers.

Please contact Wendy Block if you have any questions at (517) 371-2100.