Bill Text: MI SB1011 | 2025-2026 | 103rd Legislature | Introduced
Bill Title: Insurance: pools; small business health pool; provide for. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding ch. 71A.
Sponsorship: Partisan Bill (Democrat 5)
Status: (Introduced) 2026-06-18 - Referred To Committee Of The Whole [SB1011 Detail]
Download: Michigan-2025-SB1011-Introduced.html
SENATE BILL NO. 1011
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
(MCL 500.100 to 500.8302) by adding chapter 71A.
the people of the state of michigan enact:
CHAPTER 71A
SMALL BUSINESS HEALTH COVERAGE
Sec. 7100. As used in this chapter:
(a) "Affordable care act" or "ACA" means the patient protection and affordable care act, Public Law 111-148, as amended by the health care and education reconciliation act of 2010, Public Law 111-152.
(b) "Bona fide sponsoring association" means a Michigan-domiciled nonprofit business association to which all of the following apply:
(i) Has operated continuously in this state for at least 5 years and maintains a principal office in this state.
(ii) Has at least 1 substantial business purpose other than providing health coverage, such as advocacy, education, or economic development.
(iii) Admits employer members based on geographic commonality within this state, by region, without regard to the NAIC, or admits members of a single trade or industry.
(iv) Is governed by a board of directors or trustees under bylaws meeting the department's fiduciary and conflict-of-interest standards.
(v) Has maintained at least 1,000 dues-paying employer members or represented 10,000 workers within this state over the previous 5 years, with audited financial statements showing positive net assets.
(c) "Commonality of interest" means either of the following:
(i) Geographic commonality, where members' principal place of business is located in this state, even if in different industries.
(ii) Industry commonality, where members share the same trade or profession.
(d) "Eligible employer" means a small business to which all of the following apply:
(i) Employs fewer than 500 employees in total across all operations and affiliated entities. A business health pool may include both small and mid-sized employers, including those subject to the affordable care act's applicable-large-employer provisions.
(ii) Maintains its principal place of business in this state or conducts a majority of its operations within this state.
(iii) Is a member in good standing of a bona fide sponsoring association.
(iv) Meets participation and contribution standards adopted by the director.
(e) "Eligible self-employed individual" means a Michigan-based sole proprietor or independent contractor to whom all of the following apply:
(i) Has operated the business for at least 2 consecutive years.
(ii) Demonstrates positive net self-employment income for the most recent tax year.
(iii) Works at least 20 hours per week or 80 hours per month in the business.
(iv) Is not eligible for coverage as an employee under another employer plan.
(f) "Fully insured pool" means covered lives under the insurance policy issued by an insurer, under which the insurer assumes the financial risk for the payment of claims.
(g) "Level-funded pool" means a health arrangement in which the sponsor entity pays a fixed monthly amount but retains claims risk up to a stop-loss threshold.
(h) "Multiple employer welfare arrangement" or "MEWA" means that term as defined in section 7001.
(i) "Plan" means an employee benefit plan of a multiple employer welfare arrangement authorized under chapter 70.
(j) "Pool", when used in reference to a multiple employer welfare arrangement, means the collective group of covered employees and dependents whose health care claims and associated financial risk are combined and administered under the MEWA's employee welfare benefit plan.
(k) "Program" means the small employer catastrophic reinsurance program established under section 7105.
(l) "Self-funded pool" means a group of covered individuals whose health care claims are paid directly from the assets of a health benefit plan or arrangement, and for which the plan sponsor or sponsoring entity retains primary financial responsibility for claims.
(m) "Small business health pool" means a state-regulated multiple employer welfare arrangement licensed under this chapter to provide health coverage to eligible employers and self-employed individuals through a bona fide sponsoring association.
Sec. 7101. (1) Each pool shall provide coverage that includes all essential health benefits required under federal law.
(2) A plan shall comply with mental-health parity, maternity, preventive-services, and dependent-coverage standards equivalent to ACA-compliant small-group coverage.
(3) A plan sponsor of a MEWA may offer a pool as fully insured, level-funded, or self-funded arrangements, subject to solvency and reserve requirements determined by the director.
Sec. 7102. (1) Premiums must be actuarially justified and filed with the director for review in accordance with existing law. Prior approval of rates by the department is not required. The director may require the filing of an actuarial memorandum or certification demonstrating that rating methodologies are consistent with sound actuarial principles and this chapter.
(2) Rating factors may include industry class, geography, age, and family composition, but must not include individual health status or claims history.
(3) The director may review rating methodologies that use industry class factors uniformly applied across all employers, even if employers are in different NAIC codes, to verify that the factors described under this subsection are actuarially justified and applied on a nondiscriminatory basis.
(4) Employers shall enroll at least 75% of eligible employees and contribute at least 50% of the employee-only premium.
Sec. 7103. (1) A sponsoring association shall not condition membership or access to the pool on health status, claims experience, or genetic information.
(2) Membership criteria may include only neutral factors such as Michigan location, payment of dues, or adherence to bylaws.
(3) Each pool shall furnish enrollees with clear summaries of benefits, grievance procedures, and financial statements as required by the director.
(4) The department may place any insolvent or noncompliant pool into receivership to protect enrollees.
Sec. 7104. (1) A pool must obtain a license from the department before enrolling members. The director's oversight under this chapter is limited to verifying solvency, compliance, and consumer-protection requirements. The director shall not approve or disapprove rates except as otherwise required by existing law for fully insured products.
(2) A fully insured pool shall meet carrier solvency and rate-filing requirements applicable to the insurer issuing coverage.
(3) A level-funded pool shall maintain stop-loss coverage and reserves as prescribed by the director to ensure payment of covered claims.
(4) Self-funded pools shall maintain reserves adequate to cover projected claims and a surplus of at least $500,000.00, subject to adjustment by the director based on enrollment and claims experience.
(5) A pool shall file audited annual financial statements and actuarial certifications of solvency with the department in the form and manner prescribed by rule.
Sec. 7105. (1) The small employer catastrophic reinsurance program is established in the department to reimburse 60% of eligible claims between $75,000.00 and $250,000.00 per covered life per plan year.
(2) The program is funded entirely by state appropriation. An insurer or employer assessment must not be imposed.
(3) The department shall issue an annual actuarial and economic-impact report on the program's operation, cost, and effect on small-business premiums.
(4) The program's purpose is to stabilize small-business premiums, expand coverage, and encourage participation in Michigan-based pools.
Sec. 7106. (1) The department may examine, audit, and enforce compliance for all pools.
(2) The director may adopt rules for licensing, reserves, and reporting to protect enrollees.
(3) The director shall report annually to the legislature on enrollment, financial performance, and program outcomes under this chapter.
Sec. 7107. (1) A pool authorized under this chapter is a MEWA and this state expressly exercises jurisdiction preserved under 29 USC 1114(b)(A)(ii).
(2) The geographic-based commonality and multi-industry eligibility under this chapter are state insurance standards and do not depend on any federal redefinition of employer.
(3) This chapter does not diminish any federal right or requirement applicable to health coverage under the public health service act, 42 USC 201 to 300, the affordable care act, or the employee retirement income security act of 1974, Public Law 93-406, 88 Stat 829.
