SBAM Wins With Multi-Industry Small Business Health Care Pool Passing Senate

Article courtesy of MIRS for SBAM’s Lansing Watchdog newsletter

Without opposition, the Senate passed legislation allowing small employers, regardless of industry, to band together to purchase insurance plans for their workers.

The goal of the bill is that by allowing small businesses to come together, premiums will be cheaper because there will be more parties coming together to contribute to the risk pool for high insurance claims.

The unanimous passage of SB 1011 represents a win for the Small Business Association of Michigan (SBAM).

In a May membership survey, nearly eight of 10 of SBAM’s participating members saw double-digit jumps in their employee healthcare premiums. More than 75% expressed that healthcare costs limited their ability to hire new employees.

SBAM heard back from 269 respondents, with 80% reporting 50 or fewer workers. Forty-two percent said in one to three years, they might consider dropping employer-sponsored coverage entirely, which would result in their workers having to purchase plans on their own.

“We can take action to reduce premiums for small business owners all across our state as they provide insurance to their employees. What this does is allows them to pool their employees together across multiple different industries, creating larger pools with more individuals to ensure to then spread that risk and drive down the premiums,” said Senate Health Policy Chair Kevin Hertel (D-St. Clair Shores) on his SB 1011.

He said the proposal is a proven way to reduce costs, as well as something simple that legislators can take action on today.

With reports showing that inflation is rising at its fastest pace in more than three years, higher costs are crushing families and small businesses that employ people all across Michigan, Hertel said.

“We hear from small businesses across Michigan that rising health care costs are putting pressure on every part of their business, from hiring and wages to whether they can even continue offering coverage,” said SBAM President Brian Calley. “Association Health Plans give them a practical way to come together, increase their buying power and expand more affordable options for their teams so they can keep offering benefits and stay competitive.”

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