Offering health care coverage for workers will be easier for small businesses
thanks to a new law signed today by Governor Jennifer M. Granholm. The
new law will help make health insurance costs predictable and stable and allow
insurers to be more competitive in the small employer market.
“This is the first step in helping Michigan’s small businesses –
the economic muscle of our state – ensure that they will be able to continue
to offer health care to their employees,” Granholm said. “By
making health care coverage costs easier to predict and giving small businesses
more flexibility to shop around for the best coverage and premiums, we are helping
to ensure that small business will continue to flourish in Michigan. Stability
for employers means stable health care for employees.”
The new law will regulate rates and limit how much insurers can charge small
businesses for health care coverage. The new law also will limit the ability
to engage in the practices of “cherry picking” and “dumping”
in which insurers seek to cover younger, healthier employees by establishing
higher rates for the older and/or chronically ill workers.
Other provisions of the new law include:
allowing small employer insurance carriers to establish up to 10 geographic
areas in Michigan for use in adjusting insurance rates;
requiring Blue Cross Blue Shield of Michigan to continue to cover sole proprietors
and allowing other insurers to voluntarily cover sole proprietors, subject
to new rules;
requiring insurers to issue coverage to any willing purchaser and requiring
that coverage be renewable unless an insurer ceases to operate in a geographic
coverage;
requiring the Commissioner of the Office of Financial and Insurance Services
(OFIS) to determine each year whether a reasonable degree of competition exists
in the small group market.
The new law takes effect approximately January 23, 2004.
“Stabilizing health care costs will make it easier for small business owners to plan a budget and grow their business,” Granholm said. “This new law helps make Michigan an even stronger incubator for small business expansion and helps make sure that Blue Cross Blue Shield will continue to be a strong caregiver for Michigan’s people.”
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