What do I need to know about the taxes and fees included in my premium?

Who is this for?

Michigan Health Insurance – Customer Service – Learn More

For people who buy their own health insurance, this answers questions about the taxes and fees that are in your premium.

When you receive a bill from us or get a quote for a plan, these taxes and fees will be included in your premium. 

Where did those come from? They support either health care reform or the State of Michigan. Some of the taxes and fees:

  • Raise money to support the individual health insurance market
  • Help fund the state and federal insurance marketplaces
  • Assist research that compares how well different medical treatments work

The following information explains these taxes and fees. It'll also help you understand what you're looking at when you use our Health Insurance Taxes and Fees Estimator. This tool will show you an estimate of the taxes and fees that are in your premium rate. It works best if you only use your medical and prescription coverage. If you include dental or vision, the estimate might be higher than what's in your actual premium.

These federal and state taxes and fees don't apply to Medigap plans.

Which taxes and fees might be in my premium rate?

Federal taxes

  • The Federal Insurance Premium Tax. This annual tax helps to fund subsidies on the Health Insurance Marketplace.
  • The Comparative Effectiveness Fee. This annual fee funds the Patient-Centered Outcomes Research Institute. The institute compares how well different medical treatments work.
  • The Reinsurance Fee. Health care reform guarantees coverage regardless of a person’s health status. The reinsurance program works to reduce the need for insurance companies to charge higher premiums because of that guarantee. The goal is to stabilize premiums during the early years of market reform.
  • The Marketplace Fee. The Affordable Care Act created a new way to shop online for health insurance. It’s called the Health Insurance Marketplace. This fee pays to support the Marketplace and has made it self-sustaining.
  • The Risk Adjustment Fee. This fee funds the risk adjustment program. The program helps to keep the cost of health insurance more stable.

State taxes

  • The Michigan Claims Tax. This tax helps fund the State Medicaid program. It's paid on certain health care claims for Michigan residents. 
  • The State Insurance Premium Tax. This is a tax on Michigan-based health insurance premiums.

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