State RegulationsMI specificDifficulty 2/5
A Muskegon retailer employs 5 full-time-equivalent employees and applies for a small-employer health benefit plan. The carrier claims the business is too small to qualify. Under Michigan law, is the retailer a small employer?
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why C is correct
M.C.L. 500.3701(q) counts any employer with 1 to 50 full-time-equivalent employees as a small employer, and M.C.L. 500.3707 obligates carriers to make small-employer coverage available to the employer's eligible employees. A 5-employee retailer sits comfortably inside the range, so the carrier's too-small objection is inconsistent with the Michigan Insurance Code.
Why the other options are wrong
- A) No 10-employee minimum exists; the floor is 1 full-time-equivalent employee as of January 1, 2018.
- B) The definition is a range of 1 to 50, not a single headcount of exactly 50.
- D) Employee residency is not part of the small-employer definition in M.C.L. 500.3701(q).
Memory hook
5 FTEs is plenty — Michigan small group starts at 1.