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A Better Partnership
February 03, 2010

MSC grants leave to address employer-minimum contributions for health-insurance plans

On Friday, January 29, 2010, the Michigan Supreme Court granted leave to appeal in Priority Health v. Commissioner of the Office of Financial and Insurance Services. The case arose after the Office of Financial and Insurance Services (now the Office of Financial and Insurance Regulation ("OFIR")) barred health insurance carriers from conditioning the issuance of small employer health insurance plans on the employer making a minimum contribution toward the employees' premium costs. The circuit court and the Court of Appeals both affirmed OFIR's ruling. The Court of Appeals explained that because the Michigan Small Employer Group Health Coverage Act, MCL 500.3701 et seq., prevented a health insurance carrier from declining to renew a small employer health insurance plan for failing to make the requisite minimum employer contribution, health insurance carriers could not condition the issuance of a health insurance plan to a small employer on the employer's agreement to make minimum payments to defray each employee's expense. The Court of Appeals' decision is here.

The Michigan Supreme Court granted Priority Health's application for leave to appeal and ordered the parties to address "(1) whether, as part of a plan under the Small Employer Group Health Coverage Act, MCL 500.3701, et seq., an insurer or licensed [HMO] can require an employer to pay a specific percentage of the premium charged for each employee; and (2) whether MCL 500.3711(2) limits the provisions that can be included in such policies." The Court invited the Michigan Chamber of Commerce and the Small Business Association of Michigan to submit amicus curiae briefs. The Michigan Association of Health Plans submitted an amicus brief in support of the application for leave to appeal.

Disclaimer: WNJ represents the successful petitioner, Priority Health, in this matter.

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