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SB 1111

Insurance: health insurers; compliance with affordable care act coverage; modify. Amends secs. 3403, 3406z, 3406bb & 3406ii of 1956 PA 218 (MCL 500.3403 et seq.).

2023-2024 Regular Session Introduced by Kevin Hertel

SB 1111 exempts retiree-only and certain non-grandfathered plans from ACA coverage mandates, allowing limits on essential health benefits and pre-existing condition exclusions.

placed on second reading
#insurance:healthbenefits #insurance:healthinsurers
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Bill Summary · SB 1111

SB 1111 — Summary (Insurance: ACA coverage; modify)

Sponsor: Senator Kevin Hertel
Chapters/Sections Amended: 1956 PA 218 — secs. 3403, 3406z, 3406bb, 3406ii (MCL 500.3403 et seq.)
Status: Placed on second reading (Substitute S‑1 passed the Senate 12/12/2024)
Introduced: Nov 14, 2024 (as introduced); substitute (S‑1) passed Senate 12/12/2024
Fiscal impact: No state or local fiscal impact reported

Purpose / Intent

The bill revises Michigan’s Insurance Code (Chapter 34, Disability Insurance Policies) to create additional statutory exemptions from certain coverage mandates that were codified from the Affordable Care Act (ACA) in 2023. It narrows which plans must provide dependent coverage, essential health benefits (EHBs), and protections against pre‑existing condition exclusions by identifying categories of plans that are exempt.

Key provisions

  • Retiree-only health insurance

    • Exempts retiree‑only plans from the dependent‑coverage requirements in MCL 500.3403. Those requirements include: offering dependent coverage to age 26, providing the same benefits and premiums to dependents, newborn coverage from birth, and prohibiting denials on grounds such as illegitimacy or tax filing status.
    • Allows retiree‑only plans to impose annual or lifetime dollar limits on the value of essential health benefit coverage (subject to other law).

  • Essential health benefits (EHBs) — Section 3406bb

    • Current required EHBs listed include ambulatory services, emergency services, hospitalization, pregnancy/maternity/newborn care, mental health and SUD services, prescription drugs, rehabilitative/habilitative services, laboratory services, many preventive/wellness services (per Director guidance), and pediatric oral/vision.
    • SB 1111 exempts both retiree‑only plans and “non‑grandfathered health plan coverage” (as defined in the bill — transitional individual and small‑group plans with delayed ACA compliance) from the EHB‑mandate, permitting those plans not to cover the full EHB list.

  • Limits on dollar value of EHBs — Section 3406z

    • Permits retiree‑only and non‑grandfathered plans to impose annual or lifetime dollar limits on EHBs (where current law generally prohibits such dollar limits).

  • Pre‑existing condition exclusions — Section 3406ii (and related)

    • Adds exemptions from the statutory prohibition on imposing pre‑existing condition exclusions for:
    • Fixed indemnity insurance,
    • Short‑term or one‑time limited‑duration policies/certificates of not more than six months,
    • Non‑grandfathered health plan coverage (the transitional plans described above).

  • Definitions/administration

    • “Non‑grandfathered health plan coverage” is defined to mean certain transitional individual and small‑group plans given additional time to comply with some ACA market reforms, and as further specified annually by the Director of the Department of Insurance and Financial Services until CMS requires full ACA compliance.

Who would be affected

  • Insurers offering retiree‑only plans, short‑term plans, fixed indemnity plans, and transitional/non‑grandfathered individual and small‑group plans — these carriers gain broader discretion to limit benefits or apply exclusions.
  • Consumers — retirees and their dependents, purchasers in the individual and small‑group markets, and enrollees in short‑term or fixed indemnity products may face narrower benefit coverage, annual/lifetime monetary caps on EHBs, and potential pre‑existing condition exclusions depending on plan type.

Procedural / timeline notes

  • Substitute S‑1 was reported favorably by the Senate Health Policy Committee and was passed by the Michigan Senate (12/12/2024).
  • As of the most recent status provided, the bill was placed on second reading; it has also been referred to Finance and other committees in subsequent steps. The bill’s companion is HB 1466.
  • Nonpartisan legislative analysis states no fiscal impact for state or local government.

Context / rationale

Legislative materials note that Michigan enacted several ACA provisions into the Insurance Code in 2023 (PA 156–163); testimony indicated some ACA provisions were not fully reflected. The bill is presented as a further adjustment to align state law with intended ACA-related provisions, while simultaneously carving statutory exemptions for specific product types.

Compiled from official sources — confirm details with the bill’s official record.

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