PHOENIX — The Self-Insurance Institute of America will ask the U.S. Supreme Court to review a federal appeals court decision from earlier this year that found a 2011 Michigan law imposing a 1% tax on paid health care claims is not pre-empted by the federal Employee Retirement Income Security Act.

“Our board of directors met last week and made the decision we're going to continue this commitment, and we're going to appeal the litigation to the U.S. Supreme Court in December,” said Mike Ferguson, SIIA president and CEO, during a morning general session at the 34th annual National Educational Conference & Expo in Phoenix. “We still think we have a good, valid, solid leading argument.”

Under that law, revenue generated by the tax, which is used to help fund the state's Medicaid program, is paid by health insurers offering fully insured plans and by third-party claims administrators in the case of self-insured plans.

SIIA had challenged the 2011 law, arguing that it is barred by a provision in the federal Employee Retirement Income Security Act that pre-empts state and local laws and rules that relate to employee benefit plans. But both a U.S. District Court judge and the 6th U.S. Circuit Court of Appeals disagreed.

“For all of the pages that SIIA devotes to documenting ERISA's concern with uniformity, SIIA never actually explains how the (Michigan) act changes or interferes with plan administration. In reality, the act does not require a plan administrator to change how it administers the plan at all, and, thus, this argument fails,” the appellate court found. “SIIA fails to grasp that ERISA guarantees uniformity only with regard to the administration of employee benefit plans. Neither the (Michigan) act's definition of paid claims nor its reporting and record-keeping requirements conflict with” plan administrators' standard claims processing procedures and disbursement of benefits.”

“But it isn't so much the tax, in this case, it's the impact on the administration of benefit plans,” said John Eggertsen, an attorney at Eggertsen Consulting P.C. of Ann Arbor, Michigan, who is representing SIIA in the ERISA litigation, during Tuesday's morning general session.

In fact, administering the act is fairly onerous for third-party administrators and insurers paying claims on behalf of self-funded employers, according to Horace Garfield, chairman of SIIA's Government Relations Committee, who also spoke on Tuesday morning.

“The Michigan tax is only assessed on claims filed by Michigan residents who receive care in Michigan,” he said. “If a Michigan resident goes to the Cleveland Clinic, that claim isn't taxed.”