Michigan Tax Estimator
Estimate your health insurance claims tax
On Sept. 20, 2011, the Michigan Legislature approved a new tax on certain health insurance claims. Called the Health Insurance Claims Assessment Tax, this legislation went into effect on Jan. 1, 2012.
Knowing the impact of this legislation on your bottom line can be challenging. To help our customers better understand this tax liability, we've created an easy-to-use tax estimator. When you enter the cost of your premiums (and in some cases, claims), this tool can effectively estimate the amount of your annual tax.
This toolkit gives you instructions for using the tax estimator.
What is this tax?
The one percent tax replaces a six percent use tax that was applied to Medicaid managed care plan services. The tax generates funds to support Michigan's Medicaid program. It also ensures that Michigan continues to receive federal funds for its Medicaid program.
How it impacts groups
Employers who sponsor health insurance for their employees have to pay this tax. The tax amount is separately identified and added to the group's invoice. For premium billed groups, Blue Cross Blue Shield of Michigan and Blue Care Network applies a factor to your premium. The factors developed by Blue Cross Blue Shield of Michigan and Blue Care Network incorporated assumptions for residency and out-of-state claims. Groups with an ASC (Administrative Services Contract) arrangement can only be taxed on claims for services performed in Michigan and for Michigan residents.
How it impacts individuals
Blue Cross Blue Shield of Michigan and Blue Care Network apply a factor to your premium and collect it for the entire year. The factors developed by Blue Cross Blue Shield of Michigan and Blue Care Network incorporated assumptions for residency and out-of-state claims. The tax amount is identified separately and added to your bill.