Court Ruled ERISA Does Not Preempt the Michigan Healthcare Claims Tax

A dark brown wooden gavel with a gold band around the middle resting on a worn wooden banging disc on a wood desk

July 12, 2016

A dark brown wooden gavel with a gold band around the middle resting on a worn wooden banging disc on a wood desk

The Health Insurance Claims Assessment Act (Michigan Act) that imposed a .75 percent tax on all paid healthcare claims for Michigan self-insureds and other employers has been upheld by the 6th U.S. Circuit Court of Appeals in Cincinnati.

The Self-Insurance Institute of America (SIIA) had appealed the original 6th circuit ruling to the Supreme Court. SIIA contended the law was preempted by the Employee Retirement Income Security Act of 1974 (ERISA). The Supreme Court subsequently ordered the 6th circuit to review its prior decision.

In a July 8, 2016, ruling, the 6th circuit affirmed its 2014 decision that ERISA does not preempt the Michigan healthcare claims tax law.

The ruling could lead other states to move in the same direction. Self-insured pools and employers should be on guard to monitor legislation in their respective states.

July 12, 2016