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HB-4207, As Passed Senate, July 3, 2026
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HOUSE BILL NO. 4207
A bill to amend 1956 PA 218, entitled
"The insurance code of 1956,"
by amending section 3701 (MCL 500.3701), as amended by 2016 PA 276.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 3701. As used in this chapter: 1
(a) "Actuarial certification" means a written statement by a 2
member of the American Academy of Actuaries or another individual 3
acceptable to the director that a small employer carrier is in 4
compliance with section 3705, based on the individual's 5
examination, including a review of the appropriate records and the 6
March 11, 2025, Introduced by Reps. Harris and B. Carter and referred to Committee on Insurance.
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actuarial assumptions and methods used by the carrier in 1
establishing premiums for applicable health benefit plans. 2
(b) "Affiliation period" means a period of time required by a 3
small employer carrier that must expire before health coverage 4
becomes effective. 5
(c) "Base premium" means the lowest premium charged for a 6
rating period under a rating system by a small employer carrier to 7
small employers for a health benefit plan in a geographic area. 8
(d) "Carrier" means a person that provides health benefits, 9
coverage, or insurance in this state. For the purposes of this 10
chapter, carrier Carrier includes a health insurance company 11
authorized to do business in this state, a health maintenance 12
organization, a multiple employer welfare arrangement, or any other 13
person providing a plan of health benefits, coverage, or insurance 14
subject to state insurance regulation. 15
(e) "COBRA" means the consolidated omnibus budget 16
reconciliation act of 1985, Public Law 99-272. 17
(f) "Commercial carrier" means a small employer carrier other 18
than a health maintenance organization. 19
(g) "Creditable coverage" means, with respect to an 20
individual, health benefits, coverage, or insurance provided under 21
any of the following: 22
(i) A group health plan. 23
(ii) A health benefit plan. 24
(iii) Part A or part B of subchapter XVIII of the social 25
security act, 42 USC 1395c to 1395w-6. 26
(iv) Subchapter XIX of the social security act, 42 USC 1396 to 27
1396w-5, 1396w-6, other than coverage consisting solely of benefits 28
under 42 USC 1396t. 29
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(v) Chapter 55 of title 10 of the United States Code, 10 USC 1
1071 to 1110b. For purposes of coverage under chapter 55 of title 2
10 of the United States Code, 10 USC 1071 to 1110b, "uniformed 3
services" means the armed forces and the commissioned corps of the 4
National Oceanic and Atmospheric Administration and of the Public 5
Health Service. 6
(vi) A medical care program of the Indian Health Service or of 7
a tribal organization. 8
(vii) A state health benefits risk pool. 9
(viii) A health plan offered under chapter 89 of title 5 of the 10
United States Code, 5 USC 8901 to 8914. 11
(ix) A public health plan. 12
(x) A health benefit plan under section 5(e) of title I of the 13
peace corps act, 22 USC 2504. 14
(h) "Eligible employee" means an employee who works on a full-15
time basis with a normal workweek of 30 or more hours. Eligible 16
employee includes an employee who works on a full-time basis with a 17
normal workweek of 17.5 to 30 hours, if an employer so chooses and 18
if this eligibility criterion is applied uniformly among all of the 19
employer's employees and without regard to health status-related 20
factors. 21
(i) "Full-time employees" means the term as calculated in 26 22
USC 4890h(c)(4), 4980H(c)(4), including application of the special 23
rules for determining group size as defined in 26 USC 4980h(c)(2) 24
4980H(c)(2) and the specification that full-time equivalents are 25
treated as full-time employees for purposes of determining group 26
size, as described in 26 USC 4980h(c)(2)(e).4980H(c)(2)(e). 27
(j) "Geographic area" means an area in this state that 28
includes not less than 1 entire county, is established by a carrier 29
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under section 3705, and is used for adjusting premiums for a health 1
benefit plan subject to this chapter. In addition, if the 2
geographic area includes 1 entire county and additional counties or 3
portions of counties, the counties or portions of counties must be 4
contiguous with at least 1 other county or portion of another 5
county in that geographic area. 6
(k) "Group health plan" means an employee welfare benefit plan 7
as defined in section 3(1) of subtitle A of title I of the employee 8
retirement income security act of 1974, Public Law 93-406, 29 USC 9
1002, to the extent that the plan provides medical care, including 10
items and services paid for as medical care to employees or their 11
dependents as defined under the terms of the plan directly or 12
through insurance, reimbursement, or otherwise. As used in this 13
chapter, all of the following apply to the term group health plan: 14
(i) Any plan, fund, or program that would not be, but for 42 15
USC 300gg-21(d), an employee welfare benefit plan and that is 16
established or maintained by a partnership, to the extent that the 17
plan, fund, or program provides medical care, including items and 18
services paid for as medical care, to present or former partners in 19
the partnership, or to their dependents, as defined under the terms 20
of the plan, fund, or program, directly or through insurance, 21
reimbursement or otherwise, is, subject to subparagraph (ii), an 22
employee welfare benefit plan that is a group health plan. 23
(ii) The term "employer" also includes the partnership in 24
relation to any partner. 25
(iii) The term "participant" also includes an individual who is, 26
or may become, eligible to receive a benefit under the plan, or the 27
individual's beneficiary who is, or may become, eligible to receive 28
a benefit under the plan. For a group health plan maintained by a 29
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partnership, the individual is a partner in relation to the 1
partnership and for a group health plan maintained by a self-2
employed individual, under which 1 or more employees are 3
participants, the individual is the self-employed individual. 4
(l) "Health benefit plan" or "plan" means an expense-incurred 5
hospital, medical, or surgical policy or certificate, or health 6
maintenance organization contract. Health benefit plan does not 7
include accident-only, credit, dental, or disability income 8
insurance; long-term care insurance; coverage issued as a 9
supplement to liability insurance; coverage only for a specified 10
disease or illness; worker's compensation or similar insurance; or 11
automobile medical-payment insurance.coverage only for excepted 12
benefits as described in 42 USC 300gg-91. 13
(m) "Index rate" means the arithmetic average during a rating 14
period of the base premium and the highest premium charged per 15
employee for each health benefit plan offered by each small 16
employer carrier to small employers and sole proprietors in a 17
geographic area. 18
(n) "Premium" means all money paid by a small employer, 19
eligible employees, or eligible persons as a condition of receiving 20
coverage from a small employer carrier, including any fees or other 21
contributions associated with the health benefit plan. 22
(o) "Public health plan" means a plan established or 23
maintained by a state, county, or other political subdivision of a 24
state that provides health insurance coverage to individuals 25
enrolled in the plan. 26
(p) "Rating period" means the calendar period for which 27
premiums established by a small employer carrier are assumed to be 28
in effect, as determined by the small employer carrier. 29
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(q) "Small employer" means any a person actively engaged in 1
business that, on at least 50% of its working days during the 2
preceding and current calendar years, employed not fewer than 2 and 3
not more than 50 eligible employees. Beginning January 1, 2018, 4
"small employer" means any a person engaged in business that, 5
during the preceding calendar year, employed an average of at least 6
1 but not more than 50 full-time employees and who that employs at 7
least 1 employee on the first day of the plan year. In determining 8
the number of full-time equivalent employees, persons that are 9
affiliated with each other or that are eligible to file a combined 10
tax return for state taxation purposes are considered 1 employer. 11
(r) "Small employer carrier" means a carrier that offers 12
health benefit plans covering the employees of a small employer. 13
(s) "Waiting period" means, with respect to a health benefit 14
plan and an individual who is a potential enrollee in the plan, the 15
period that must pass with respect to the individual before the 16
individual is eligible to be covered for benefits under the terms 17
of the plan. For purposes of calculating periods of creditable 18
coverage under this chapter, a waiting period is not considered as 19
a gap in coverage. 20
Enacting section 1. This amendatory act does not take effect 21
unless Senate Bill No. ____ (request no. S01771'25) or House Bill 22
No. 4208 (request no. H01771'25) of the 103rd Legislature is 23
enacted into law. 24