Friday, June 28, 2013

A Message Regarding Companion Life and the MI Medicaid Tax Assessment

To all Companion Life Agents and Brokers in Michigan:

As you are aware, effective January 1, 2012, the Legislature of the State of Michigan passed a 1% health claims tax imposed on all health insurance claims incurred by Michigan residents.  This includes all vision and dental insurance claims.  Insurance carriers were permitted to collect this tax directly from their insured employer groups.  Companion Life Insurance Company has been paying this tax each quarter since its inception while we retooled our billing system to reflect this tax separately.  

Effective July, 2013, Companion Life has added the tax surcharge to all employer group billing notices in Michigan.  The bill will include a tax surcharge of 0.72% of dental premium and 0.74% of vision premium to estimate the 1% tax due to Michigan on claims.  Companion will then remit the tax to the state as required by Michigan law.  There will be no retroactive charge to your clients for January 2012 through June 2013 taxes paid.

A letter of explanation has been included in each group bill.  In addition, future proposals will reflect a footnote that explains that the State of Michigan surcharge is not included in coverage rates within the proposal.

If you have any questions or comments, please contact your Companion Life representative.

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Trescott N. Hinton, Jr.
President, Companion Life Insurance Company

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