While one prominent Michigan employer has privately been a big financial supporter of this self-insurance legal defense initiative, the state’s largest employer organizations, as well as at least one major national association focused on ERISA preemption issues have been on the sidelines.
Now, it’s probably unrealistic to expect that the average self-insured employer will take the time to think about the longer term implications of ERISA preemption erosions. Significant as these implications are, those employers are more concerned about the immediate financial implications.
Fair enough. Let’s talk about this shorter term perspective.
We have just learned from a very reliable source that the revenue collected so far this from health claims tax is much lower than projected -- so much lower, in fact, that the state Legislature will likely consider a proposal to raise it early next year.
For employers who ran the numbers and determined that they could absorb a one percent tax, they should get ready to do a new set of calculations, perhaps on a yearly basis going forward, should a federal appeals court not strike down the law. At some point it would seem that this health care tax could become an important factor as employers consider whether self-insurance is as cost effective as it otherwise would be,
And in case you think this issue is contained to Michigan, think again. Other cash-strapped states are watching how things play out in Michigan and at least some are likely to follow-suit if they believe such action will go unchallenged.
When a camel gets its nose under the tent the occupants should not be surprised that the damage often cannot be contained. For self-insured employers with workers in Michigan, they may soon learn this important lesson.