All Eyes on Michigan: Will Assessments on All Health Plans Survive

On Monday, the United States Supreme Court sent back a Michigan case for a new finding that could forbid state assessments on self funded plans. The Supreme Court told the Sixth Circuit to reconsider its ruling that a Michigan health insurance tax was not preempted by the Employee Retirement Income Security Act (ERISA) in light of the Supreme Court’s decision last week in Gobeille v. Liberty Mutual. In Gobeille, the Court ruled that a requirement on Vermont’s self funded plans to submit claims data for a state All Payer Claims Database is not permissible under ERISA. The Court wrote in Gobeille that the new reporting requirements enacted by the state were cumbersome and that “preemption is necessary to prevent States from imposing novel, inconsistent and burdensome reporting requirements on plans.”

At issue in the Michigan case (Self-Insurance Institute of America Inc. v. Snyder et al.) is a one-percent tax on all paid claims by carriers or third party administrations to health care providers for health care services rendered in Michigan for Michigan residents. The revenue from the tax is used to help fund the state’s Medicaid obligations.  In ruling for Michigan, and in favor of the tax, the 6th Circuit had written that it did not believe Congress meant for ERISA to, “create a state-law free zone around everything that affects an ERISA plan.” NASHP will continue to follow this case.