HB-5105, As Passed Senate, February 24, 2016

HOUSE BILL No. 5105

(As amended February 24, 2016)

December 1, 2015, Introduced by Rep. Pscholka and referred to the Committee on Appropriations.

A bill to amend 2011 PA 142, entitled

"Health insurance claims assessment act,"

by amending sections 3 and 7 (MCL 550.1733 and 550.1737), section 3

as amended by 2014 PA 162; and to repeal acts and parts of acts.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

Sec. 3. (1) For dates of service beginning on or after January

1, 2012 and ending on June 30, 2014, subject to subsections (2),

(3), and (4), there is levied upon and there shall be collected

from every carrier and third party administrator an assessment of

1% on that carrier's or third party administrator's paid claims.

For dates of service beginning on or after July 1, 2014 and ending

on ~~December 31, 2017,~~ <<July 1, 2020,>> subject to this

subsection and subsections (2), (3), and (4), there is levied upon

and there shall be collected from every carrier and third party

administrator an assessment of 0.75% on that carrier's or third

House Bill No. 5105 as amended February 24, 2016

party administrator's paid claims. For dates of service beginning

on or after July 1, 2014 and ending on ~~December 31, 2017,~~ <<July

1, 2020>> subject to this subsection and subsections (2), (3), and

(4), the assessment levied under this subsection will increase to

1.0% if the federal government informs this state that the use tax

revenues assessed on entities under section 3f of the use tax act,

1937 PA 94, MCL 205.93f, will not be federally reimbursed. If the

assessment is increased as provided in this subsection, the

increased assessment levied is effective on the date that the

federal government informs this state that the revenue collected

from the use tax assessed on ~~medicaid~~ Medicaid managed care

organizations under section 3f of the use tax act, 1937 PA 94, MCL

205.93f, will not be federally reimbursed. For the purposes of this

subsection, a fiscal quarter begins on the first day of January,

April, July, or October.

(2) A carrier with a suspension or exemption under section

3717 of the insurance code of 1956, 1956 PA 218, MCL 500.3717, on

September 20, 2011 is subject to an assessment of 0.1%.

(3) All of the following apply to a group health plan that

uses the services of a third party administrator or excess loss or

stop loss insurer:

(a) A group health plan sponsor is not responsible for an

assessment under this section for a paid claim if the assessment on

that claim has been paid by a third party administrator or excess

loss or stop loss insurer, except as otherwise provided in section

3a(2).

(b) Except as otherwise provided in subdivision (d), the third

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party administrator is responsible for all assessments on paid

claims paid by the third party administrator.

excess loss or stop loss insurer is responsible for all assessments

on paid claims paid by the excess loss or stop loss insurer.

(d) If there is both a third party administrator and an excess

loss or stop loss insurer servicing the group health plan, the

third party administrator is responsible for all assessments for

paid claims that are not reimbursed by the excess loss or stop loss

insurer and the excess loss or stop loss insurer is responsible for

all assessments for paid claims that are reimbursable to the excess

loss or stop loss insurer.

(4) The assessment under this section shall not exceed

$10,000.00 per insured individual or covered life annually.

(5) To the extent an assessment paid under this section for

paid claims for a group health plan or individual subscriber is

inaccurate due to subsequent claim adjustments or recoveries,

subsequent filings shall be adjusted to accurately reflect the

correct assessment based on actual claims paid.

[(6) Through June 30, 2014, if the assessment under this

section collects revenue in an amount greater than $400,000,000.00,

adjusted annually by the medical inflation rate since 2011, each

carrier and third party administrator that paid the assessment

shall receive a proportional credit against the carrier's or third

party administrator's assessment in the immediately succeeding

year. Beginning July 1, 2014, if the sum of the assessment under

this section and the portion of the use tax assessed on entities

House Bill no. 5105 as amended December 8, 2015

under section 3f of the use tax act, 1937 PA 94, MCL 205.93f, that

is dedicated to the general fund, less the general fund amount

necessary to reimburse those entities for the cost of the use tax,

is greater than $400,000,000.00, as adjusted annually by the

medical inflation rate since 2011 but not to exceed an amount

greater than $450,000,000.00, each carrier and third party

administrator that paid the assessment shall receive a proportional

credit against the carrier's or third party administrator's

assessment in the immediately succeeding year. The department shall

send a notice of credit to each carrier or third party

administrator entitled to a credit under this subsection not later

than July 1. A carrier or third party administrator entitled to a

credit under this subsection shall apply that credit to the July 30

payment. Any unused credit shall be carried forward and applied to

subsequent payments. If a carrier or third party administrator

entitled to a credit under this subsection has no liability under

this act in the immediately succeeding year or if this act is no

longer in effect, the department shall issue that carrier or third

party administrator a refund in the amount of any unused credit. If

a third party administrator receives a credit or refund under this

subsection, the third party administrator shall apply that credit

or refund to the benefit of the entity for which it processed the

claims under a service contract.]

Sec. 7. (1) All money received and collected under this act

shall be deposited by the department in the health insurance claims

assessment fund established in this section.

(2) The health insurance claims assessment fund is created

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within the department.

(3) The state treasurer may receive money or other assets from

any of the following sources for deposit into the fund:

(a) Money received by the department under this act.

(b) Interest and earnings from fund investments. The state

treasurer shall direct the investment of the fund. The state

treasurer shall credit to the fund interest and earnings from fund

investments.

(4) Money in the fund at the close of the fiscal year shall

remain in the fund and shall not lapse to the general fund. ~~and~~

~~shall remain available after this act is repealed January 1, 2014~~

~~to pay any remaining credits or refunds due under section 3(6)~~

~~until all pending appeals and claims are resolved.~~

(5) Except as otherwise provided in this act, the department

shall transfer money from the fund, upon appropriation in the

respective departments, only [for the following:

(a) To ] finance the expenditures of ~~medicaid~~ Medicaid

managed care organizations that include ~~medicaid~~ Medicaid

contracted health plans and specialty prepaid health plans.

[(b) To pay any credits or refunds due under section 3(6).]

Enacting section 1. Enacting section 2 of 2011 PA 142, as

amended by 2013 PA 58, is repealed.

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