Michigan Health Coverage Mandates and Protections
A policy’s benefits are not entirely the insurer’s choice. Chapter 34 of the Michigan Insurance Code requires certain coverage, requires insurers to offer other coverage, and forbids certain ways of treating people. A client will ask whether a policy covers autism therapy, whether a daughter can stay on a parent’s plan, or whether an emergency room visit will be paid if the problem turns out to be minor.
Which Policies These Rules Reach
Nearly every section here opens the same way: “An insurer that delivers, issues for delivery, or renews in this state a health insurance policy.” That term means an expense-incurred hospital, medical, or surgical policy, certificate, or contract, and it excludes a policy covering only excepted benefits such as disability income or accident-only coverage (MCL 500.608(b)). So a fixed indemnity plan sold on its own generally sits outside these mandates.
Several sections also exclude two other products. A short-term or 1-time limited duration policy of not more than 6 months is outside them, and so is grandfathered coverage, meaning coverage in which an individual was enrolled on March 23, 2010, and that has kept its grandfathered status (MCL 500.3406bb(8); 45 CFR 147.140(a)(1)(i)). Always read the section’s own exclusions.
Provide, Offer, and If Covered
The verb decides what the client actually gets.
- Provide or include. The coverage must be in the policy.
- Offer. The insurer must make the coverage available. The buyer may not end up with it.
- Offer or include. The insurer may do either one.
- If the policy covers it. The rule applies only if the policy provides that kind of benefit. Emergency rules, for example, apply to a policy “that provides coverage for emergency health services” (MCL 500.3406k(1)). In the individual and small group market, emergency services are required coverage (MCL 500.3406bb(1)(b)), so for emergency care this condition matters only outside that market or for a short-term or grandfathered policy (MCL 500.3406bb(8)).
Core Coverage in the Individual and Small Group Markets
An insurer selling a health insurance policy in the individual or small group market must cover ten categories: ambulatory patient services; emergency services; hospitalization; pregnancy, maternity, and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care (MCL 500.3406bb(1)). Preventive benefits in that list carry no cost sharing, subject to the federal exceptions the section names (MCL 500.3406bb(2)).
Four companion rules shape these policies:
- No dollar caps. An insurer may not set lifetime or annual limits on the dollar value of essential health benefits (MCL 500.3406z(1)). This one reaches any health insurance policy, apart from grandfathered and short-term coverage (MCL 500.3406z(3)).
- No preexisting condition exclusions. The ban covers a limit or denial because a condition existed before coverage began, whether or not it had been treated (MCL 500.3406ii(1), (3)). This one also reaches any health insurance policy. Exceptions include grandfathered coverage and hospital confinement indemnity, disability income, accident only, long-term care, Medicare supplemental, specified disease indemnity, retiree-only, and stand-alone dental and vision coverage (MCL 500.3406ii(2)).
- Coverage levels. An insurer must offer at least one level designed to provide benefits actuarially equivalent to 60%, 70%, 80%, or 90% of full actuarial value (MCL 500.3406ee(1)).
- Limited rating. Premiums may vary only by individual or family coverage, rating area, age (no more than 3 to 1 for adults), and tobacco use (no more than 1.5 to 1) (MCL 500.3474a).
During an open enrollment period, an insurer may not deny a policy or vary its price because of health status, claims experience, receipt of health care, or medical condition (MCL 500.3472(1)).
Mandated and Offered Benefits
| Benefit | Duty | Key terms | Citation |
|---|---|---|---|
| Prosthetic devices and reconstruction after mastectomy | Offer | Includes cost and fitting of the device | MCL 500.3406a |
| Hospice care | Offer | If the policy covers inpatient hospital care | MCL 500.3406c(1) |
| Breast cancer services and screening mammography | Offer or include | Terms no less favorable than for physical illness generally | MCL 500.3406d |
| Obstetrical and gynecological services by a nurse midwife | Include, or offer | If the policy covers these services | MCL 500.3406r(2) |
| Antineoplastic drugs | Provide | Includes off-label use for a neoplasm when conditions are met | MCL 500.3406e |
| Orally administered cancer drugs | Parity | If the policy covers both forms: cost no more restrictive than for intravenous or injected drugs, or a capped copay or coinsurance the department adjusts each year | MCL 500.3406ff(1) |
| Diabetes equipment, supplies, and training | Include | If medically necessary and prescribed | MCL 500.3406p(3) |
| Autism diagnosis and treatment | Provide | No limit on visits | MCL 500.3406s(1) |
| Mental health and substance use disorder services | Provide | Parity with medical and surgical benefits | MCL 500.3406hh(1) |
| Intermediate and outpatient substance use care | Provide | Not accident only, limited accident, travel accident, or specified disease policies | MCL 500.3425(1), (4)(b) |
| Blood pressure monitor, pregnancy or postpartum | Cover | Normal cost sharing applies | MCL 500.3406kk |
| Postpartum mental health screening | Provide | Screenings during the postpartum period | MCL 500.3406oo |
The mammography schedule is specific: 1 screening examination for a woman from age 35 to under 40 during that 5-year period, and 1 every calendar year from age 40 (MCL 500.3406d(2)).
Autism coverage has more moving parts. An insurer may not terminate or refuse coverage solely because of the diagnosis, limit visits, deny coverage because treatment is educational or habilitative, or apply dollar limits, copays, deductibles, or coinsurance that do not apply to physical illness generally (MCL 500.3406s(1)(a) to (d)). Section 3406s does let an insurer limit treatment coverage to insureds through age 18 and set annual maximums of $50,000 through age 6, $40,000 from 7 through 12, and $30,000 from 13 through 18 (MCL 500.3406s(1)(d)). That permission remains in the code, but it sits beside a later bar on annual dollar limits for essential health benefits. Those benefits include behavioral health treatment, which is part of autism treatment (MCL 500.3406z(1); MCL 500.3406bb(1)(e); MCL 500.3406s(7)(k)). Neither section mentions the other, so do not quote a cap as settled: read the policy and confirm with the insurer. A qualified health plan offered through an exchange need not provide autism coverage beyond its essential health benefits (MCL 500.3406s(4)), and short-term policies are excluded (MCL 500.3406s(5)).
Mental health parity means that financial requirements and quantitative treatment limits, such as visit limits, on these benefits can be no more restrictive than the predominant ones applied to substantially all medical and surgical benefits in the same classification (MCL 500.3406hh(1)(a), (5)(e)). Federal parity requirements apply as well (MCL 500.3406hh(2)).
Access to Care
Emergencies. Coverage turns on symptoms, not the final answer. If a policy covers emergency services, it must cover medically necessary services for a sudden condition severe enough that a prudent layperson with average knowledge of health and medicine could reasonably expect serious harm without immediate attention. The insurer may not deny payment up to the point of stabilization because of the final diagnosis or because prior authorization was not given (MCL 500.3406k(1)). So chest pain that proves to be indigestion can still be an emergency claim.
Direct access. Where a policy requires a primary care provider, a female insured may reach a participating obstetrician-gynecologist for annual well-woman examinations and routine care without prior authorization or referral (MCL 500.3406m). A dependent minor may likewise select and access a participating pediatrician (MCL 500.3406n).
Networks. An insurer may require insureds to use only providers under prudent purchaser agreements, or may give a financial advantage for using them without requiring it (MCL 500.3405(2), (3)). The insurer must keep a provider network that satisfies any adequacy requirements imposed by the Director under federal law (MCL 500.3428).
Telemedicine. An insurer may not require face-to-face contact for services appropriately provided through telemedicine, as it determines, and must provide at least the same coverage as for an in-person service, subject to the policy’s normal cost sharing (MCL 500.3476(1)).
Prescription Drugs
A formulary is not a final answer. An insurer must allow exceptions when a nonformulary alternative is medically necessary and appropriate (MCL 500.3406o(1)(c)). In exigent circumstances, it must decide within 24 hours after it has the necessary information. Otherwise it must decide within 72 hours (MCL 500.3406o(2), (3)).
A policy with pharmaceutical coverage must also cover an off-label use of an FDA-approved drug for a life-threatening, or chronic and seriously debilitating, condition if a physician prescribes it, it is medically necessary and available through the formulary, and the use is recognized in listed sources (MCL 500.3406q(1), (2)). And a policy covering prescription drugs must cover an emergency supply of insulin that a pharmacist dispenses under the public health code, if the insulin is covered under the policy (MCL 500.3406v).
Children and Dependents
A policy that makes dependent coverage available must make it available, at the policyholder’s option, until the dependent turns 26, with the same benefits and premium as any other covered dependent (MCL 500.3403(1)(a) to (c)). Children’s benefits apply to a newborn from the moment of birth and include care for medically diagnosed congenital defects and birth abnormalities (MCL 500.3403(1)(d)).
The insurer may not deny enrollment because a child was born out of wedlock, is not claimed on the insured’s tax return, or does not live with the insured or in the service area (MCL 500.3403(2)). It need not cover a dependent’s own child (MCL 500.3403(3)).
When a court or administrative order requires a parent to provide coverage and the insurer has been notified, the child is enrolled without regard to enrollment season, and the insurer may not drop the child except in limited cases (MCL 500.3406h(1), (3)). If coverage runs through the noncustodial parent, the custodial parent may file claims without that parent’s approval (MCL 500.3406h(2)(b)).
Protections Against Unfair Treatment
An insurer may not:
- Rate, cancel, refuse, or refuse to renew solely because an insured or applicant is or has been a victim of domestic violence (MCL 500.3406j(1)).
- Require genetic testing, or disclosure of test results or genetic information, from an insured or an asymptomatic applicant (MCL 500.3407b(1)).
- Consider whether a person is eligible for Medicaid when deciding eligibility or paying claims (MCL 500.3406i(1)).
- Deny, cancel, price, or vary a disability insurance policy based solely on status as a living donor, unless there is additional actuarial risk (MCL 500.3406z1).
A disability insurer also may not prohibit or discourage a provider from advocating for an insured or discussing treatment options (MCL 500.3407a), and no insurer may pay a health professional an inducement to deny or delay specific medically necessary care (MCL 500.3477(1)).
Lesson summary
- These rules generally reach a “health insurance policy,” not policies covering only excepted benefits, and several exclude short-term and grandfathered coverage.
- Check the verb: provide, offer, or offer or include. Only a provide or include duty guarantees the benefit is in the policy.
- Individual and small group policies must cover ten categories of essential benefits and may rate only on coverage tier, area, age, and tobacco (MCL 500.3406bb(1); MCL 500.3474a).
- Insurers may not impose dollar limits on essential health benefits or preexisting condition exclusions, subject to the listed exceptions (MCL 500.3406z; MCL 500.3406ii).
- Emergency claims turn on the prudent layperson standard, not the final diagnosis (MCL 500.3406k(1)).
- Formulary exception decisions are due in 24 hours in exigent cases and 72 hours otherwise (MCL 500.3406o).
- A policy that offers dependent coverage must make it available to age 26, and children’s benefits apply to a newborn from the moment of birth (MCL 500.3403).
- Domestic violence, genetic information, Medicaid eligibility, and living donor status may not be used against an applicant or insured as the statutes describe.