Priority Health v. Commn’r of the Ofc. of Financial & Ins. Svcs.

This appeal challenged the small employer group health coverage act (Act), which establishes requirements for insurance carriers to offer health insurance benefit plans to small employers in Michigan. Priority Health sought a declaratory judgment from the Office of Financial and Insurance Services (OFIS) so that it could allocate a small portion of insurance premiumsâ costs to employers, lessening the financial burden on employees. Priority Health would not renew contracts with employers who did not agree to pay a portion of the premiums. Both the Court of Appeals and the Commissioner of the Office of Financial and Insurance Services (OFIS) concluded that âminimum employer contribution provisionsâ are inconsistent with the Act. They reasoned that an employerâs failure to pay a minimum percentage of its employeesâ premiums is not among the reasons in the Act that a carrier can use to refuse to renew an insurance plan. The Supreme Court disagreed with the appellate court and OFISâ interpretation of the Act. The Court found that just because the Michigan Legislature did not include an employerâs refusal to pay according to a minimum contribution provision as among the reasons for not renewing a contract for benefits, the [Priority Health] provision was unreasonable or inconsistent with the Act. In general, âunless a provision directly conflicts with the enumerated reasons [of the Act], it may be included in a plan so long as it is reasonable and not inconsistent.â The Court remanded the case to the OFIS for further proceedings.