Reducing Taxes on Health Insurance Claims

The Issue:

Legislation was signed into law in 2018 to repeal Michigan’s wholly unique and uncompetitive Health Insurance Claims Assessment (“HICA Tax”).

This legislation was a key priority for Michigan Chamber because the HICA Tax has long served as a disincentive to purchasing health insurance and has added over $1.5 billion to the cost of health insurance coverage since 2011. The legislation is a “win” for job providers because it:

  • Repeals the HICA Tax (a one percent tax on paid health insurance claims), saving job providers more than $300 million annually;
  • Replaces the costly HICA tax with a smaller and more stable revenue source in the Insurance Provider Assessment (IPA) tax;
  • Reduces health insurance costs; and
  • Provides stability to the state budget, including the state’s Medicaid budget.

Where We Stand:

The Michigan Chamber supported the repeal and replacement of the HICA Tax (SBs 992-94 of 2018). We will continue to work to identify ways to reduce the cost of employer-sponsored health insurance.

Staff Contact: 
Wendy Block
Vice President of Business Advocacy
(517) 371-7678
Legislative Proposals: 

Senate Bills 992, 993, 994

Resources: 

Michigan HICA Tax Repeal? Signs Point to Yes!, Miller Johnson Attorneys, June 14, 2018