To: Michigan Legislature
From: Kent Wood, Director of Government Relations, Northern Michigan Chamber Alliance
Date: December 14, 2015
RE: Opposition to HICA Tax Increase – HB 5105
The Northern Michigan Chamber Alliance, representing eight chambers of commerce and economic development organizations in northern Michigan, and over 6,500 hundred members, is opposed to House Bill 5105 (Rep. Pscholka), which would extend and expand the Health Insurance Claims Assessment (HICA), a tax on individuals and businesses purchasing health insurance in the state.
We can understand the pressure the legislature feels in light of the federal government’s preliminary notification that the Managed Care Organization (MCO) use tax must be repealed, and the nearly $1.3 billion in traditional Medicaid funding that would be in jeopardy. As supporters of the Healthy Michigan Plan which expanded Medicaid coverage in Michigan, we want to see the program succeed.
However, with the current HICA sunset date of December 31, 2017, we see no compelling reason to act now to expand this business tax before all avenues of appeal to the federal government have been tried.
We urge the state to work with its partners on continuing to challenge the federal notice and appeal if necessary, and withstand expanding the HICA tax until these measures have been exhausted.
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