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SIIA petitions Supreme Court to review Michigan health claims tax

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The Self-Insurance Institute of America Inc. has formally petitioned the U.S. Supreme Court to review and overturn an appeals court decision upholding a Michigan law that imposes a 1% tax on paid health care claims.

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.

Earlier, the Simpsonville, South Carolina-based SIIA 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 first a U.S. District Court judge and later the 6th U.S. Circuit Court of Appeals in Cincinnati 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,” according to the appeals court ruling, which was handed down in August.

In its petition to the Supreme Court, though, the SIIA noted that the Michigan law “grafts burdensome regulations onto the operation of ERISA health care plans without regard to existing plan requirements and procedures or the additional work and expense” that the statute creates.

In addition, the Michigan law opens “the door to a proliferation of similarly burdensome and potentially overlapping and conflicting state requirements,” according to the brief.

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