Association Health Plan FAQs

It’s a bill in the Michigan Legislature referred to as the Small Business Health Coverage Act that would let small businesses and self-employed people band together through a trusted business association to buy health coverage as one larger group.

This bill would give small employers and sole proprietors access to the same pooling power that large companies already use to get better rates.

This bill is a proposal – not a program that’s already in place.

Small businesses and self-employed individuals usually pay more for health coverage and have fewer choices than large employers. A sole proprietor often has nowhere to turn but the individual market.

SB 1011 is meant to let these groups band together so they’re rated and served more like a big employer, spreading risk across a much larger number of people.

A qualified business association (an established, statewide group like SBAM) would sponsor a pool. Member businesses join, and their coverage is combined so risk and costs are spread across the whole group.

The pool is licensed by the state and meets Michigan’s existing rules for these arrangements, plus additional requirements that the bill adds on top.

No legislation can guarantee that every participating business will pay less. SB 1011 is designed to give small businesses and self-employed individuals additional purchasing options by allowing them to pool risk, operate at a larger scale, and receive protection against certain catastrophic claims. Actual premiums would depend on the pool, coverage selected, participant characteristics, and broader health care costs. 

Small employers (fewer than 500 employees) and self-employed individuals such as sole proprietors and independent contractors.

Each enrolled business must be Michigan-based and a member in good standing of the sponsoring association.

The bill would let a working sole proprietor or independent contractor join a pool instead of being stuck buying alone on the individual market. To qualify, you must:

Yes. Coverage runs through a “bona fide sponsoring association”, which is an established, genuine business organization that exists for reasons beyond selling insurance, and you must be a member in good standing. Associations must meet a high threshold to launch a pool to weed out bad actors.

Not everyone, but the bill sets participation and contribution floors similar to normal group coverage. Under the Senate-passed bill, a participating employer would be required to enroll at least 75% of employees and contribute at least 50% of the employee-only premium.

The bill would require participating plans to cover all essential health benefits specified under federal law and comply with mental-health parity, maternity, preventive-service, and dependent-coverage standards equivalent to ACA-compliant small-group coverage. The goal is to make coverage more affordable through pooling and scale, not by eliminating important benefits.

No. The bill prohibits conditioning membership or access based on health status, claims history, or genetic information, and it prohibits using individual health status or claims history to set rates. Rates could vary by objective factors like industry, geography, age, or family size, but not by how sick you are.

The Michigan Department of Insurance and Financial Services (DIFS) would regulate the program. All sponsoring associations would be required to obtain state authorization, hold cash reserves, file audited financial statements, and would be subject to DIFS examination and oversight. DIFS would retain the same oversight tools that they apply to other MEWAs, along with additional requirements established by the bill.  

SB 1011 would establish a state-funded reinsurance program to help participating pools manage unusually large claims. Under the Senate-passed bill, the program would reimburse 60% of eligible claims between $75,000 and $250,000 per covered person per plan year. By reducing the effect of catastrophic claims on the pool, reinsurance is intended to improve premium stability.

The program would be funded entirely through legislative appropriations. Payments could not exceed the amount appropriated by the Legislature.

In 2018, a temporary federal rule allowed SBAM to launch Transcend AHP, and participating employers saw significant premium savings. After that rule was later overturned, the expanded pathway was no longer available. SB 1011 is built under existing Michigan MEWA law with state regulation and reserves, rather than relying on a temporary federal rule, so it doesn’t depend on a federal pathway that can be withdrawn

No. SB 1011 is a bill working its way through the legislature. It hasn’t become law yet and no pools exist yet. 

When the bill does move, we’ll inform members through our social media channels, and through our weekly Watchdog newsletter. 

On June 25, 2026, SB 1011 passed the Michigan Senate unanimously by a 35 to 0 vote. The bill was then referred to the House Committee on Insurance, where it remains under consideration.

With the bill now before the House, lawmakers need to hear directly from small-business owners about rising health-coverage costs and how an additional purchasing option could affect their businesses and employees.

Contact your state legislator to tell them what affordable coverage would mean for your business and spread the word to other Michigan small business owners.