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What is Commercial Health Insurance in MI?

Michigan is home to over 1 million businesses, which employ over 6 million residents. Each of these employees benefits from health insurance coverage because employees’ health is paramount to a business’s success. In Michigan, employers with 50 or more employees are mandated to provide health coverage to employees and their dependents. Failure to do this attracts a tax penalty, while the employees get a tax credit in the Michigan Health Insurance Marketplace. However, employers with less than 50 employees are not mandated to provide health coverage, but they may be entitled to a small business health care tax credit if they decide to offer health coverage. Small business employers are required to provide information about the Marketplace to the employees, whether they offer health coverage or not.

Commercial health insurance provided by employers generally has specific enrollment policies and deadlines that employees must be aware of. There is an annual open enrollment period within which employees can apply, change, or disenroll in coverage. Employees can make benefit changes or premium adjustments in the employer-sponsored group health insurance plan during this period. For new employees, Michigan employers may generally require up to a 90-day waiting period before they become eligible to enroll in the employer’s group health coverage. However, Special Enrollment Period (SEPs) are permitted when certain life events occur, such as marriage, divorce, birth, or adoption of a child. Employees can contact their employer's human resources department to enquire about SEPs.

In Michigan, employers may offer wellness plans to encourage employees to maintain a healthy lifestyle or participate in an improvement program. Health insurance providers that base their Michigan health insurance rates on tobacco use must offer a wellness program for any group policy. A health insurer may provide the employees with the following for participation in the wellness plan:

  • A rebate or reduction in premium
  • A reduction in deductible, co-payments, and co-insurance
  • A combination of these incentives

Employers can get commercial health insurance by consulting with knowledgeable health insurance agents in Michigan who have access to various insurers. An agent can help you compare plans based on the desired budget and coverages, and structure the best Michigan group health insurance policy that suits your business’s needs.

Michigan Group Employer-Sponsored Health

Most Michigan insurance companies offer group employer-sponsored health insurance to their employees. Although employer-sponsored health insurance is not mandated for every business in Michigan, businesses with more than 50 employers are required to provide health insurance for their employees. Michigan group health insurance is a health policy that an employer purchases for eligible employees and their dependents. Employers are the policyholders in group health policies, so they can modify the plan’s benefits, negotiate the terms of the group policy with the health insurer, switch health insurers, modify eligibility requirements, etc.

All Group health insurance in Michigan is compliant with the Affordable Care Act, so it covers pre-existing and chronic conditions, and the employee cannot be turned down from coverage. Typically, employer-group health plans offer:

  • Free preventive services
  • Dependent coverage to age 26
  • Specific minimum benefits required by Michigan law
  • Limits on out-of-pocket maximums
  • Zero annual or lifetime dollar limits on essential health benefits
  • Coverage for families of the primary insured

Employers can get employer-sponsored health insurance through health insurance brokers or agents, who specialize in employer-sponsored group healthcare plans.

Michigan small business health insurance can be obtained through an agent, directly from the insurer, or through SHOP, the Michigan health insurance marketplace for businesses with less than 50 employees. If using SHOP, the plans can cost from less than $160 per month to over $800, depending on the employee's health and the tier level selected (Bronze, Silver, Gold, or Platinum). If the business employs less than 25 employees and it pays a portion of the employee’s premiums, it may be eligible for tax credit for up to 50% of the contributions.

Michigan Disability Income Insurance

Michigan Disability income insurance provides benefits that are designed to supplement a primary (major) health insurance in Michigan by protecting the insured if they become injured or ill and unable to work during the recovery period. When the insured cannot work, their insurer will provide disability income benefits in the form of a monthly income, enabling the insured to cover expenses that may be incurred. The Center for Disease Control and Prevention (CDC) reports that over 2 million adults in Michigan have some type of disability. This makes up 26% or 1 in 4 Michiganders. Over 1 million of residents under the age of 65 have disabilities.

Michigan also runs a State Disability Assistance (SDA) program that provides cash assistance to eligible and disabled adults. The caretaker of a disabled person or a person aged 65 or older may qualify to get an SDA. The Michigan SDA program considers you eligible if you:

  • Reside in a special facility (like a licensed Adult Foster Care Home); or
  • Receive disability-related benefits (like Medicaid based on disability or blindness)
  • Obtain certification by MDHHS medical consultants certifying that you cannot work due to a physical or mental disability for no less than 90 days.

A beneficiary of the SDA must be a U.S. citizen (or acceptable alien status), reside in Michigan, and must not be receiving cash from any other state.

Michigan Workers Compensation Insurance

Workers compensation insurance in Michigan is required to be provided by all employers, as stipulated by the Workers' Disability Compensation Act, which was initially adopted in 1912. According to this Act, workers are to receive compensation when they suffer an injury on the job, and employers' liability is also protected. The Michigan Workers’ Disability Compensation Agency administers the Act. Employers required to get workers' compensation coverage in Michigan include:

  • All private employers who regularly employ one or more employees working 35 hours or more every week for 13 weeks or more during the preceding 52 weeks.
  • All private employers who regularly employ three or more employees per time, including part-time employees.
  • Agricultural employers who employ three or more persons working 35 hours or longer weekly for 13 or more consecutive weeks.
  • Households employing domestic servants who are required to work 35 hours or more weekly for 13 weeks or more during the preceding 52 weeks.
  • All public employers

Workers' Compensation Insurance in Michigan is available through the following options:

  • Private insurance companies. Most employers in the state purchase workers' compensation coverage through private Michigan insurance companies. The DIFS has a list of health insurance companies in Michigan that are approved for workers' compensation that employers can choose from.
  • Individual self-insurance. This option is for financially sound employers who are usually quite large. It is the self-insured option but the employer must get permission from the Michigan Workers’ Disability Compensation Agency. The Agency requires employers interested in being self-insured to demonstrate a reasonable position of solvency and ability to pay claims when due. The Agency has a list of self-insured employers.
  • Group self-insurance. It serves as an alternative to commercial insurance. Group self-insured programs are made up of groups of employers in the same industry that pool their workers' compensation premiums in order to meet their obligations under the Workers' Compensation Act. The Agency reviews and approves these programs annually.

Employers are advised to consult with health insurance agents in Michigan to help shop from multiple competing Michigan health insurance companies for the best prices on workers’ compensation insurance. Although price is an important consideration, you should also examine the quality of services each insurance company offers, such as service reviews, claims servicing, prevention and loss control.

Discuss Michigan health plans with state-licensed insurance professionals who have access to multiple insurers capable of covering large and small businesses. A knowledgeable agent can help by offering the right healthcare plan - that fits the needs of the company.