Bill Text: MI SB0994 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Insurance; health insurers; insurance provider assessment act; create. Creates new act.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Passed) 2018-06-12 - Assigned Pa 0175'18 With Immediate Effect [SB0994 Detail]
Download: Michigan-2017-SB0994-Introduced.html
SENATE BILL No. 994
May 10, 2018, Introduced by Senators SHIRKEY, HORN, STAMAS, MACGREGOR, PROOS and SCHMIDT and referred to the Committee on Michigan Competitiveness.
A bill to impose an assessment on certain insurance providers;
to impose certain duties and obligations on certain insurance
providers, state departments, agencies, and officials; to create
certain funds; to authorize certain expenditures; and to impose
certain remedies and penalties.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"insurance provider assessment act".
Sec. 3. As used in this act:
(a) "Department" means the department of treasury.
(b) "Excess loss" or "stop loss" means coverage that provides
insurance protection against the accumulation of total claims
exceeding a stated level for a group as a whole or protection
against a high-dollar claim on any 1 individual.
(c) "Federal employee health benefit" means the program of
health benefits plans, as defined in 5 USC 8901, available to
federal employees under 5 USC 8901 to 8914.
(d) "Fund" means the insurance provider fund created in
section 13.
(e) "Health insurer" means an insurer authorized under the
insurance code of 1956, 1956 PA 218, MCL 500.100 to 500.8302, to
deliver, issue for delivery, or renew in this state a health
insurance policy. Health insurer includes a health maintenance
organization. Health insurer does not include a state department or
agency administering a plan of medical assistance under the social
welfare act, 1939 PA 280, MCL 400.1 to 400.119b, or a person
administering a self-funded plan.
(f) "Insurance provider" means a Medicaid managed care
organization or a health insurer.
(g) "Medicaid contracted health plan" means a contracted
health plan as that term is defined in section 106 of the social
welfare act, 1939 PA 280, MCL 400.106.
(h) "Medicaid managed care organization" means a Medicaid
contracted health plan or a specialty prepaid health plan.
(i) "Medicare" means the federal Medicare program established
under title XVIII of the social security act, 42 USC 1395 to
1395lll.
(j) "Member months" means the total number of individuals for
whom the insurance provider has recognized revenue for 1 month. If
revenue is recognized for only part of a month for an individual, a
prorated partial member month may be counted. Member months are
determined by the department of insurance and financial services
and do not include individuals enrolled in short-term medical, 1-
time limited duration, noncomprehensive medical, specified disease,
limited benefit, accident only, accidental death and dismemberment,
disability income, long-term care, Medicare supplement, stand-alone
dental, dental, Medicare, Medicare advantage, Medicare part D,
vision, prescription, other individual write-in coverage, federal
employee health benefit, Tricare, other group write-in coverage,
credit, stop loss, excess loss, administrative services only, or
administrative services contracts.
(k) "Specialty prepaid health plan" means an entity designated
by the department of health and human services as a regional entity
pursuant to section 204b of the mental health code, 1974 PA 258,
MCL 330.1204b, or a specialty prepaid health plan pursuant to
section 232b of the mental health code, 1974 PA 258, MCL 330.1232b,
to provide mental health services, services to individuals with
developmental disabilities, and substance use disorder services.
Sec. 5. (1) If the department of health and human services has
not already submitted an application to the federal Centers for
Medicare and Medicaid Services to request a waiver, for a period of
not less than 5 years, of the broad-based and uniformity provisions
of section 1903(w)(3)(B) and (C) of title XIX of the social
security act, 42 USC 1396b, relating to the assessment imposed
under this act, the department of health and human services shall
submit the request before October 1, 2018 and as necessary
thereafter to implement this act.
(2) Within 30 days after the effective date of this act, the
department of health and human services shall notify the department
of the number of member months and the rate to be imposed on these
member months under section 7(1)(a)(i) for the 2018-2019 state
fiscal year and identify the specialty prepaid health plans subject
to the assessment under this act.
(3) Within 30 days after the effective date of this act, the
department of insurance and financial services shall provide the
department with a list of insurance providers by tier that are
subject to the assessment under this act.
Sec. 7. (1) Beginning on the first day of the calendar quarter
in which the director of the department of health and human
services notifies the secretary of state and the department in
writing that the federal Centers for Medicare and Medicaid Services
has approved its request for a waiver of the broad-based and
uniformity provisions of section 1903(w)(3)(B) and (C) of title XIX
of the social security act, 42 USC 1396b, for implementation of
this act or October 1, 2018, whichever is later, there is levied
and imposed an annual assessment on the number of member months for
each insurance provider reported on its annual financial statement
filed with the department of insurance and financial services or
the department of health and human services, whichever is
applicable, for the previous calendar year at the following rates
in the following circumstances:
(a) For tier 1, a Medicaid contracted health plan's member
months supported with federal funds authorized under subchapter XIX
of the social security act, 42 USC 1396 to 1396w-5, as follows:
(i) For the number of member months and the dollar amount
necessary per member month, as determined each year by the
department of health and human services, to achieve a result of
between 1.00 and 1.02 on the statistical test imposed by the
federal Centers for Medicare and Medicaid Services according to 42
CFR 433.68(e).
(ii) For each remaining member month not assessed under
subparagraph (i), $1.20 per member month.
(b) For tier 2, a health insurer's member months not supported
with federal funds authorized under subchapter XIX of the social
security act, 42 USC 1396 to 1396w-5, $2.40 per member month.
(c) For tier 3, a specialty prepaid health plan's member
months supported with federal funds authorized under subchapter XIX
of the social security act, 42 USC 1396 to 1396w-5, $1.20 per
member month.
(2) Beginning May 15 and by each May 15 thereafter, the
department of insurance and financial services and the department
of health and human services shall make available to the department
the number of member months for each insurance provider and the
necessary assessment information for the department to calculate
the assessment due under this act, including the number of member
months and the rate to be imposed in accordance with subsection
(1)(a)(i) to satisfy the statistical test.
(3) For the initial year of implementation only, the
department shall notify each insurance provider after June 15, 2018
but before October 15, 2018, of the number of member months and the
rate imposed on these member months in accordance with subsection
(1)(a)(i) and of its assessment, prorated for 2 quarters, due based
on the insurance provider's member months for the previous calendar
year. The initial assessment is payable in 2 equal installments.
Each insurance provider shall submit the payments to the department
by January 30, 2019 and April 30, 2019.
(4) The department shall notify each insurance provider after
June 1, but before June 15 each year after implementation, of the
number of member months and the rate imposed on these member months
under subsection (1)(a)(i) and of its annual assessment due under
this act based on the insurance provider's member months for the
previous calendar year. The assessment is payable on a quarterly
basis and each insurance provider shall submit quarterly payments
on July 30, October 30, January 30, and April 30 to the department
for the amount of the assessment imposed under this act with
respect to the number of member months reported on its financial
statements for the previous calendar year.
(5) If a due date falls on a Saturday, Sunday, state holiday,
or legal banking holiday, the payments are due on the next
succeeding business day.
(6) The department may require that payment of the assessment
be made by an electronic funds transfer method approved by the
department.
Sec. 9. (1) An insurance provider liable for the assessment
under this act shall keep accurate and complete records and
pertinent documents as may be required by the department. Records
required by the department shall be retained for a period of 4
years after the assessment imposed under this act to which the
records apply is due or as otherwise provided by law.
(2) If the department considers it necessary, the department
may require a person, by notice served upon that person, to make a
return, render under oath certain statements, or keep certain
records the department considers sufficient to show whether that
person is liable for the assessment under this act.
(3) If an insurance provider fails to file a return or keep
proper records as may be required under this section, or if the
department has reason to believe that any records kept or returns
filed are inaccurate or incomplete and that additional assessments
are due, the department may compute the amount of the assessment
due from the insurance provider based on information that is
available or that may become available to the department. An
assessment under this subsection is considered prima facie correct
under this act, and an insurance provider has the burden of proof
for refuting the assessment.
Sec. 11. (1) The department shall administer the assessment
imposed under this act under 1941 PA 122, MCL 205.1 to 205.31, and
this act. If 1941 PA 122, MCL 205.1 to 205.31, and this act
conflict, the provisions of this act apply. The assessment imposed
under this act is a tax for the purpose of 1941 PA 122, MCL 205.1
to 205.31.
(2) The department is authorized to promulgate rules to
implement this act under the administrative procedures act of 1969,
1969 PA 306, MCL 24.201 to 24.328.
(3) The assessment imposed under this act shall not be
considered an assessment or burden for purposes of the tax, or as a
credit toward or payment in lieu of the tax under section 476a of
the insurance code of 1956, 1956 PA 218, MCL 500.476a.
(4) The department shall submit an annual report to the state
budget director, the senate and house of representatives standing
committees on appropriations, and the senate and house fiscal
agencies not later than 120 days after May 15 that states the
amount of revenue collected from insurance providers under this act
for the immediately preceding state fiscal year and the costs
incurred for administration and compliance requirements under this
act for the immediately preceding state fiscal year.
Sec. 13. (1) All money received and collected under this act
shall be deposited by the department in the insurance provider fund
established in this section.
(2) The insurance provider fund is created within the state
treasury and shall be administered by the department for auditing
purposes.
(3) The state treasurer may receive money or other assets from
any source for deposit into the fund. The state treasurer shall
direct the investment of the fund. The state treasurer shall credit
to the fund interest and earnings from fund investments.
(4) The department shall expend money from the fund, upon
appropriation, only for 1 or more of the following purposes:
(a) Beginning in the 2018-2019 state fiscal year, the first
$14,000,000.00 to be appropriated for the payment of actuarially
sound capitation rates to Medicaid managed care organizations, and
each state fiscal year thereafter, the amount necessary to continue
to support the payment of actuarially sound capitation rates to
Medicaid managed care organizations.
(b) For the 2018-2019 state fiscal year, to appropriate an
amount not to exceed $315,000,000.00 to offset the net revenue lost
under the health insurance claims assessment act, 2011 PA 142, MCL
550.1731 to 550.1741.
(c) For the 2019-2020 state fiscal year, to appropriate an
amount not to exceed $240,000,000.00 to offset the net revenue lost
under the health insurance claims assessment act, 2001 PA 142, MCL
550.1731 to 550.1741.
(d) To pay administrative and compliance costs in accordance
with section 15.
(e) The balance of the fund remaining after the appropriations
described in subdivisions (a), (b), (c), and (d) shall be
transferred to a separate restricted account within the insurance
provider fund and only used as appropriated by the legislature.
(5) Money in the fund at the close of the fiscal year shall
remain in the fund and shall not lapse to the general fund.
Sec. 15. For administration and compliance requirements
created by this act, in the 2018-2019 state fiscal year and each
fiscal year thereafter, the department shall receive from the
insurance provider fund created in section 13 an amount not to
exceed 1/2 of 1% of the annual remittances under this act in the
2018-2019 state fiscal year, subject to annual appropriation by the
legislature.
Sec. 17. The department shall provide the director of the
department of insurance and financial services with written notice
of any final determination that an insurance provider has failed to
pay an assessment, interest, or penalty when due. The director of
the department of insurance and financial services may suspend or
revoke, after notice and hearing, the certificate of authority to
transact insurance in this state, or the license to operate in this
state, of any insurance provider that fails to pay an assessment,
interest, or penalty due under this act. A suspension of a
certificate of authority to transact insurance in this state or a
license to operate in this state under this section shall not be
withdrawn unless any delinquent assessment, interest, or penalty
has been paid.
