MI IPAA Scope, Rates and Payment to the State
Enacted on June 11, 2018, the Michigan Insurance Provider Assessment Act (MI IPAA) is a new health care-related tax imposed on Fully Insured members residing in Michigan. By law, UnitedHealthcare is required to administer this assessment – $2.40 per member per month for members who are not supported by federal Medicaid funds. The MI IPAA replaces the Michigan Health Insurance Claims Assessment (MI HICA), which was repealed as of the effective date of the MI IPAA, October 1, 2018.
Under the MI IPAA, the assessment is calculated based on the number of member months shown on membership reports (FIS 322) filed by UnitedHealthcare. Payments will be made to the state of Michigan on a quarterly basis.
The MI IPAA assessment generally applies to major medical coverage in the group and individual markets. It does not apply to non-major medical coverage, such as short term medical, one time limited duration, non-comprehensive medical, specified disease, etc.
MI IPAA Billing Procedure
For 2-50 Fully Insured Customers, the MI IPAA will be included in the monthly premium, similar to the MI HICA.
For 51+ Fully Insured Customers, either a separate line item will be added to the customer’s monthly premium invoice or UnitedHealthcare will issue a separate invoice showing the amount due for MI IPAA.
MI HICA Discontinuance
Due to the October 1, 2018 repeal date of MI HICA, the Michigan Department of Treasury has announced that the MI HICA tax will not be assessed on claims paid after October 1, 2018. However, the MI HICA continues to apply to claims incurred and paid prior to October 1, 2018. It is also important to note that the new MI IPAA tax does not apply to self-funded customers.
For more information, please contact your broker.