WeVote
Log In

Bill

Bill

SB 1011

Insurance: pools; small business health pool; provide for. Amends 1956 PA 218 (MCL 500.100 - 500.8302) by adding ch. 71A.

2025-2026 Regular Session Introduced by Darrin Camilleri and 4 co-sponsors

Creates state-regulated MEWA-style small business health pools to expand coverage with solvency oversight, standardized disclosures, and a state reinsurance program.

referred to Committee on Insurance
#insurance:healthbenefits #insurance:pools
0
WeVote Research Nonpartisan
Bill Summary · SB 1011

Summary of SB 1011 (Session 2025-2026) – Michigan

Purpose and intent

  • Establishes a new chapter (Chapter 71A) within Michigan’s Insurance Code to create and regulate small business health pools through a state-regulated multiple employer welfare arrangement (MEWA).
  • Aims to provide health coverage to eligible small employers and self-employed individuals via bona fide sponsoring associations, with the goals of stabilizing premiums, expanding coverage, and increasing participation in Michigan-based pools.

Key provisions and changes

  • Definitions and framework (Sec. 7100):

    • Introduces terms specific to the chapter, including:
    • Bona fide sponsoring association: a Michigan-based nonprofit with a clear business purpose beyond health coverage, at least 1,000 dues-paying employer members or 10,000 workers represented in the prior five years, and compliant governance and finances.
    • Commonality of interest: geographic (within Michigan) or industry-based membership.
    • Eligible employer: small business under 500 employees, domiciled or primarily operating in Michigan, member in good standing of a sponsoring association, and meeting director-determined participation/contribution standards.
    • Eligible self-employed individual: Michigan-based, at least 2 years in business, positive net self-employment income, works ≥20 hours/week (or ≥80 hours/month), and not eligible for employer-based coverage.
    • Various pool/payment concepts (Fully insured pool, Level-funded pool, Self-funded pool, MEWA, etc.).

  • Enrollment and standards (Sec. 7101):

    • Pools must provide coverage of all essential health benefits per federal law.
    • Plans must comply with ACA-equivalent mental health parity, maternity, preventive services, and dependent coverage for small-group standards.
    • MEWA plan sponsors may offer pool arrangements as fully insured, level-funded, or self-funded, subject to solvency and reserve requirements set by the director.

  • Rates and rating (Sec. 7102):

    • Premiums must be actuarially justified and filed with the director; prior department approval of rates is not required.
    • Rating factors may include industry class, geography, age, and family composition, but not individual health status or claims history.
    • The director may review uniform industry-class rating methodologies for actuarial justification and nondiscrimination.
    • Employers must enroll at least 75% of eligible employees and contribute at least 50% of the employee-only premium.

  • Membership, disclosures, and solvency (Sec. 7103):

    • Sponsoring associations cannot condition membership on health status, claims experience, or genetic information.
    • Membership criteria may be neutral factors (e.g., Michigan location, dues payment, bylaws compliance).
    • Pools must provide enrollees with clear summaries of benefits, grievance procedures, and financial statements.
    • The department can place insolvent or noncompliant pools into receivership to protect enrollees.

  • Licensing, solvency, and reporting (Sec. 7104):

    • Pools must obtain a state license before enrolling members; the director’s oversight focuses on solvency, compliance, and consumer protection.
    • Fully insured pools must meet carrier solvency and rate filing requirements; level-funded pools must maintain stop-loss coverage and prescribed reserves.
    • Self-funded pools must maintain reserves sufficient to cover projected claims plus a surplus (minimum $500,000, adjustable by the director).
    • Pools must file audited annual financial statements and actuarial solvency certifications.

  • Small employer catastrophic reinsurance program (Sec. 7105):

    • Establishes a program to reimburse 60% of eligible claims between $75,000 and $250,000 per covered life per plan year.
    • Funded entirely by state appropriation (no insurer or employer assessments).
    • Requires annual actuarial and economic-impact reports on operations and premium effects.
    • Purpose: stabilize small-business premiums, expand coverage, and encourage participation in Michigan-based pools.

  • Regulatory oversight and reporting (Sec. 7106):

    • The department may examine, audit, and enforce compliance for all pools.
    • The director may adopt rules for licensing, reserves, and reporting to protect enrollees.
    • Annual department report to the legislature on enrollment, financial performance, and program outcomes.

  • Jurisdiction and federal alignment (Sec. 7107):

    • Pools are MEWAs under state jurisdiction.
    • The chapter’s design uses state-based commonality rules and does not rely on any new federal definitions.
    • This chapter does not diminish federal rights or requirements under the Public Health Service Act, ACA, or ERISA.

Who would be affected

  • Eligible employers and self-employed individuals in Michigan seeking small-group health coverage through MEWA-style pools.
  • Bona fide sponsoring associations that would administer or sponsor these pools (must meet the specified criteria).
  • Health plan enrollees in the pools, who would receive ACA-equivalent benefits, parity requirements, and standardized disclosures.
  • Insurance carriers and MEWA sponsors operating under the new licensing, solvency, and reporting requirements.
  • Michigan Department of Insurance and Financial Services (DIFS) tasked with licensing, solvency oversight, and annual reporting.

Procedural and timeline aspects

  • The bill establishes a regulatory framework and does not introduce immediate effective dates in the text provided; it outlines licensing, solvency requirements, and annual reporting obligations that would come into force upon enactment and subsequent rulemaking by the director.
  • It creates a state-funded reinsurance program with annual actuarial and economic-impact reporting to the legislature.
  • It requires insurers and pools to file actuarial certifications and meet solvency/reserve standards, with department oversight and potential receivership actions for noncompliant pools.

Notes

  • The bill emphasizes consumer protections (solvency oversight, clear disclosures, non-discriminatory membership) while enabling multiple funding structures (fully insured, level-funded, self-funded).
  • It explicitly asserts state control over MEWA-based pools and reserves the right to regulate without broad dependence on federal redefinitions, while preserving existing federal rights and requirements.

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

Sign in to ask a question.