Trade group sues over state health claims tax

LANSING (AP) -- A new Michigan law that will place a 1 percent tax on health insurance claims faces a court challenge. The Self-Insurance Institute of America Inc. filed a suit challenging the law last Thursday in federal court. The suit says the Michigan assessment is pre-empted by federal law and should be blocked related to self-insured group health plans. The Michigan assessment begins Jan. 1 to help fund Medicaid programs. It would be paid to the state by insurers or HMOs It's expected to raise about $400 million a year and help the state draw more federal funds for Medicaid. The new law eliminates a 6 percent use tax on Medicaid managed care organizations. Gov. Rick Snyder's spokeswoman Sara Wurfel says the change was the "right thing to do" and is constitutional. Published: Tue, Dec 27, 2011