SENATE BILL No. 1359

 

 

November 8, 2012, Introduced by Senator KAHN and referred to the Committee on Appropriations.

 

 

 

     A bill to amend 2011 PA 142, entitled

 

"Health insurance claims assessment act,"

 

by amending section 3 (MCL 550.1733).

 

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

 

     Sec. 3. (1) For dates of service beginning on or after January

 

1, 2012, subject to subsections (2), (3), and (4), there is levied

 

upon and there shall be collected from every carrier and third

 

party administrator an assessment of 1% on that carrier's or third

 

party administrator's paid claims at the following rate:

 

     (a) In 2012, 1%.

 

     (b) In 2013 through 2014 except as otherwise provided in this

 

subdivision, the rate levied in the immediately preceding year.

 

However, if the department of treasury determines that the rate

 

levied in the immediately preceding year collected revenue in an

 


amount less than or greater than the base need, the department of

 

treasury shall increase or reduce the rate, as appropriate, to a

 

rate that would have generated for the immediately preceding year

 

revenue equal to the base need. As used in this subdivision:

 

     (i) "Base need" means the following:

 

     (A) For 2012, $400,000,000.00.

 

     (B) For 2013 and each year after 2013, the base need in the

 

immediately preceding year adjusted by the medical inflation rate.  

 

     (ii) "Medical inflation rate" means that rate determined by the

 

annual national health expenditures accounts report issued by the

 

federal centers for medicare and medicaid services, office of the

 

actuary.

 

     (2) A carrier with a suspension or exemption under section

 

3717 of the insurance code of 1956, 1956 PA 218, MCL 500.3717, on

 

the effective date of this act is subject to an assessment of 0.1%.

 

     (3) All of the following apply to a group health plan that

 

uses the services of a third party administrator or excess loss or

 

stop loss insurer:

 

     (a) A group health plan sponsor shall not be responsible for

 

an assessment under this subsection for a paid claim where the

 

assessment on that claim has been paid by a third party

 

administrator or excess loss or stop loss insurer, except as

 

otherwise provided in section 3a(2).

 

     (b) Except as otherwise provided in subdivision (d), the third

 

party administrator shall be responsible for all assessments on

 

paid claims paid by the third party administrator.

 

     (c) Except as otherwise provided in subdivision (d), the

 


excess loss or stop loss insurer shall be responsible for all

 

assessments on paid claims paid by the excess loss or stop loss

 

insurer.

 

     (d) If there is both a third party administrator and an excess

 

loss or stop loss insurer servicing the group health plan, the

 

third party administrator shall be responsible for all assessments

 

for paid claims that are not reimbursed by the excess loss or stop

 

loss insurer and the excess loss or stop loss insurer shall be

 

responsible for all assessments for paid claims that are

 

reimbursable to the excess loss or stop loss insurer.

 

     (4) The assessment under this section shall not exceed

 

$10,000.00 per insured individual or covered life annually.

 

     (5) To the extent an assessment paid under this section for

 

paid claims for a group plan or individual subscriber is inaccurate

 

due to subsequent claim adjustments or recoveries, subsequent

 

filings shall be adjusted to accurately reflect the correct

 

assessment based on actual claims paid.

 

     (6) If the assessment under this section collects revenue in

 

an amount greater than $400,000,000.00, adjusted annually by the

 

medical inflation rate, each carrier and third party administrator

 

that paid the assessment shall receive a proportional credit

 

against the carrier's or third party administrator's assessment in

 

the immediately succeeding year. The department shall send a notice

 

of credit to each carrier or third party administrator entitled to

 

a credit under this subsection not later than July 1. A carrier or

 

third party administrator entitled to a credit under this

 

subsection shall apply that credit to the July 30 payment. Any

 


unused credit shall be carried forward and applied to subsequent

 

payments. If a carrier or third party administrator entitled to a

 

credit under this subsection has no liability under this act in the

 

immediately succeeding year or if this act is no longer in effect,

 

the department shall issue that carrier or third party

 

administrator a refund in the amount of any unused credit. If a

 

third party administrator receives a credit or refund under this

 

subsection, the third party administrator shall apply that credit

 

or refund to the benefit of the entity for which it processed the

 

claims under a service contract.