Small businesses in Michigan are increasingly using risk pools to manage rising health insurance costs, but experts say the benefits vary among companies. This trend and its implications were discussed by industry professionals and leaders on April 14.
The issue is important because small businesses often struggle to provide affordable and stable health insurance for their employees. The Small Business Association of Michigan has focused on advocacy efforts for these businesses, according to the official website.
Eric Hannah, a risk advisor at Brown and Brown Risk Strategies in East Lansing, said that 2026 has been “the toughest year in the medical insurance market in the past decade for employers ‘to deliver high-value benefits to their teams.'” He explained that traditional insurance markets have become unsustainable, leading more small businesses toward advanced or alternately financed medical plans. Hannah also noted that premiums for small businesses have increased by about 12% to 18% since 2022 depending on insurer and plan.
Brian Calley, president and CEO of the Small Business Association of Michigan, said: “The Small Business Association of Michigan wants to change the law to allow for risk pools to be built for combined industries.” Current laws restrict risk pools so only companies within the same industry can join together. Calley said this prevents retailers from joining with restaurants or other sectors. He added that if allowed, “small businesses would essentially be self-insured together,” pooling premiums into a common fund used to pay employee health care claims.
Hannah explained that each employee’s rate is determined by factors such as age, gender, zip code and plan choice. A pool sets rates based on overall costs across all participating businesses rather than individual company usage patterns. However, he cautioned about downsides: employers cannot customize plans as easily and companies whose employees use less healthcare may end up subsidizing those who use more.
The Small Business Association of Michigan operates as a nonprofit advocacy organization providing support including membership services, insurance options and resources statewide according to its official website. The association extends these services across Michigan with a focus on aiding small business interests.
Calley said small employers would benefit from plan design options similar to those available at larger firms: “Those are things that big employers can do.” As more employers seek greater control over costs through transparency and customization—sometimes forming smaller groups or partnering with similar companies—the discussion around changing current regulations continues.
