Extras on Excise: Self-Insurance Institute of America Continues its Challenge to Michigan’s Health Insurance Claims Assessment Act


The saga of Self-Insurance Institute of America’s (SIAA) challenge to Michigan’s Health Insurance Claims Assessment Act, enacted in 2011, continues. In July, the United States Court of Appeals for the Sixth Circuit ruled, in Self-Ins. Institute of America v. Snyder, 827 F.3d 549 (6th Cir. 2016), that ERISA does not preempt Michigan’s tax on all claims paid by plan administrators for medical services. SIAA has now filed a petition for a writ of certiorari with the United States Supreme Court (Self-Ins. Institute Of America v. Snyder, No. 16-593, 10/31/16), as reported by Matthew Loughran in the Weekly State Tax Report.

This is the second Supreme Court appeal sought by SIAA since initiating its challenge to Michigan’s assessment in 2012.

The trade association initially filed suit in the United States District Court for the Eastern District of Michigan (Self-Ins. Institute of America v. Snyder, D.E. Mich., No. 2:11-cv-15602, 8/31/12), seeking a declaratory judgment stating that ERISA preempted the Michigan Health Insurance Claims Assessment Act (HICAA), along with an injunction preventing enforcement of the law against ERISA entities. HICAA imposes an assessment on the Michigan paid claims of every carrier and third party administrator. When the law went into effect in 2012, the tax was 1 percent of paid claims. In 2014, the tax was reduced to 0.75 percent of paid claims.

The district court, however, granted the state’s motion to dismiss, and the Sixth Circuit affirmed that ruling.

In March 2016, the Supreme Court granted certiorari and vacated the judgment of the Sixth Circuit, remanding the case for further consideration based on the Court’s decision in Gobeille v. Liberty Mut. Ins. Co., 136 S. Ct. 936 (2016). In Gobeille, the Supreme Court affirmed the Second Circuit holding that ERISA preempted Vermont's efforts to force ERISA-governed health plans to submit claims data for a statewide database.

On remand in Self-Ins. v. Snyder, however, the Sixth Circuit again affirmed the district court’s dismissal of SIAA’s suit, finding that the Michigan law “escapes the preemptive reach of federal law.” Specifically, the court found that:

  • “The Act does not impose additional burdens” on ERISA entities nor does it “interfere with uniform plan administration.”
  • “The Act’s residency requirement does not intrude upon the relationships between ERISA-covered entities.”
  • Section 550.1733a does not intrude upon the relationships between ERISA-covered entities."

The Supreme Court distributed the case for conference on Jan. 6, 2017.

Continue the discussion on Bloomberg BNA’s State Tax Group on LinkedIn: Will the Supreme Court grant certiorari of the Sixth Circuit’s decision, on remand, to affirm the district court’s dismissal of SIAA’s suit?

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