Michigan Health Insurance (MI)

Michigan (MI)
Individual Health Insurance Regulations

Learn more about Michigan Individual Health Insurance

Health insurance is invaluable when it comes to assuring your family’s physical well-being. In the event of unforeseen circumstances of sickness or injury, suitable health coverage can save you from unanticipated medical bills. Shopping for a health insurance policy is tedious and needs evaluation of family’s medical needs and finances. If you are a Michigan resident, you can choose from wide range of health insurance alternatives. The Michigan Office of Financial and Insurance Regulations regulates the laws under which the Michigan health insurers can sell private health insurance to individuals and families.

With the exception of policies written by Blue Cross Blue Shield of Michigan, all individual health insurance policies in Michigan may be underwritten by the health insurance carriers. Blue Cross Blue Shield of Michigan individual health insurance policies must be issued on a guarantee issue basis. HMO individual health insurance policies written during the annual open enrollment period must also be offered on a guarantee issue basis. Guarantee issue polices provide individual health insurance coverage, despite the applicants past or current health history. All medically underwritten polices are subject to carrier approval, with the insurance carrier being allowed to offer full coverage as provided under the health plan; offer coverage under the health plan with specific limitations and exclusions regarding pre-existing conditions; or denying coverage altogether based upon past and current health history. Under the medically underwritten policies, health insurance carriers are permitted to review your 6-month health history and add a 12 month exclusionary period limit on pre-existing health conditions, with credit for prior coverage not being required. Blue Cross Blue Shield of Michigan is required to community rate their line of individual health insurance products, with no rating restriction placed on any of the other individual health insurance carriers.

Michigan (MI)
Small Group Health Insurance Regulations

Small group health insurance is defined as a group of employees with numbers between 2 and 50 and is written on a guaranteed issue basis. Two employees must work for at least 6 months out of the year, and work 20 hours per week to eligible for the coverage. Guarantee issue health insurance policies demand that no group may be declined coverage due to past or current medical history of its employees. With the exclusion of Blue Cross Blue Shield of Michigan and HMO plans, health insurance carriers may impose an exclusionary period for pre-existing conditions on those applicants who do not have proof of prior creditable coverage. Once eligible to join the group health plan, an employer may impose a waiting period prior to allowing you to sign up for health care coverage under the group health plan. Michigan provides for group health insurance premium rates to be medically underwritten with a rate adjustment of 45%. This means that the insurance companies may charge a higher premium to small groups with a history or current status of medical conditions, but may not charge those higher risk groups more than 45% of the standard published rate. Blue Cross Blue Shield may not medically underwrite for rate adjustments, but may alter rates based on the geographical location of the business with a rate adjustment factor of 35%.

Michigan COBRA and Continuation Coverage

Groups of 20 or more employees must abide by federal COBRA regulations which state that a departing employee is entitled to remain on the group health plan for a period of 18 months, provided that group health plan remains in existence. An employee who has left work on his own or was terminated from the job is eligible to be covered by COBRA unless he was fired for gross misconduct. COBRA provides health coverage to individuals and their beneficiaries, spouses and dependents. The COBRA recipient will be responsible for the payment of the entire the insurance premium that the employer was paying for his coverage as well as 2% administrative costs.

Michigan does not have a state mini-COBRA law. HIPAA-eligible Individuals opting out of a group health insurance plan, who do not have COBRA benefits available to them may obtain guaranteed issue coverage through Blue Cross Blue Shield of Michigan. Because guaranteed issue coverage is available, Michigan does not have a high-risk health insurance pool.

Additional Michigan Resources

• MIChild
  Provides health insurance coverage to children of low-income families who are under the age of 19 and residents of the State of Michigan.
• Michigan Department of Community Health (MDCH)
  The Michigan Department of Community Health offers information and assistance about the health care programs available through Medicaid and how to qualify.

MI Medical Insurance Statistics

Total Population: 9,940,235
With Health Insurance: 8,843,414 / 89.0%
Without Health Insurance: 1,096,821 / 11.0%
*According to the Census Bureau’s March 2007 and 2008 Current Population Survey (CPS: Annual Social and Economic Supplements).

Note: The percentage of Michigan residents without health insurance has decreased by .2% since 2004.

Michigan Office of Financial and Insurance Services
Phone: 517-373-0220, 877-999-6442
The Office of Financial and Insurance Services (OFIS) provides information regarding financial institutions, insurance and securities.

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