Michigan employers report sharply rising insurance premiums that threaten hiring, wages and expansion. Jocelyn Benson and John James offer different approaches to controlling costs.
LANSING — Michigan small-business owners are facing employee health insurance premium increases of up to $2,000 or more per worker, potentially adding tens of thousands of dollars to annual operating expenses and leaving less money available for hiring, wages and business expansion.
A September 30 survey released by the Small Business Association of Michigan (SBAM) found that 84% of participating employers reported health insurance premium increases of up to $2,000 per employee between 2025 and 2026. Another 16% reported increases of $2,000 or more.
Meanwhile, 69% said they increased wages or benefits to attract and retain workers.
For a company covering 25 employees, a $2,000 annual premium increase per worker would mean another $50,000 in insurance expenses — money that otherwise could support hiring, equipment purchases or expansion.
The findings put health care affordability at the center of Michigan’s economic debate ahead of the November 3 election, when voters will choose between Democratic gubernatorial candidate Jocelyn Benson and Republican John James.
Both have outlined different approaches to controlling health care expenses.
Michigan Employers Want Relief From Rising Premiums
Approximately two-thirds of SBAM survey respondents said controlling health care costs should be a top priority for Michigan’s next governor and Legislature.
For smaller companies, higher premiums can force difficult choices between absorbing additional expenses, passing more costs to employees or reducing spending elsewhere.
SBAM President and CEO Brian Calley said rising health care costs are placing significant financial pressure on Michigan employers.
“The small businesses of Michigan are varied in many ways, from geography to industry, but there is one major thing they’re united on: they are being absolutely crushed by the increasing costs of health care,” Calley said.
The survey also found that 29% of respondents reported declining business confidence during 2026, while 22% reported improving confidence and 49% said their outlook remained unchanged.
Eighty-one percent of participating businesses had 50 or fewer employees.
The findings are detailed in
.
Michigan Lawmakers Consider Insurance Reform
One possible solution is already before the Michigan Legislature.
Senate Bill 1011, known as the Small Business Health Coverage Act, would allow eligible small businesses and self-employed individuals to join together through association health plans.
The goal is to increase purchasing power and spread insurance risks across a larger group, potentially reducing premiums.
The legislation passed the Michigan Senate unanimously, 35-0, on June 25 and was referred to the House Insurance Committee.
SBAM supports the legislation, arguing that smaller employers need additional insurance purchasing options to compete with larger companies.
The association has estimated that the proposal could reduce premiums by 6% to 12%, although actual savings would depend on implementation, participation and insurance market conditions.
For a business spending $200,000 annually on employee health coverage, a 6% reduction would mean $12,000 in savings. A 12% reduction would equal $24,000.
Those figures are illustrative, not guaranteed savings.
The legislation would establish state oversight and coverage requirements intended to protect participating employees.
Benson And James Offer Different Health Care Approaches
Michigan’s next governor could determine whether the association health plan legislation becomes law and what additional insurance reforms the state pursues.
Benson and James addressed these issues in written responses to an
Jocelyn Benson: Balance Affordability With Coverage Protections
Benson, Michigan’s secretary of state, said she is open to exploring proposals allowing smaller businesses to pool their insurance risks.
However, she emphasized involving employers, workers, unions and health care advocates to ensure that lower premiums do not come at the expense of coverage or access to care.
Benson said she would evaluate additional insurance mandates individually, weighing their potential benefits against their effect on premiums.
Her broader proposals include establishing a Prescription Drug Affordability Board, expanding medical debt relief and improving access to health services in underserved communities.
John James: Expand Insurance Pooling And Reduce Mandates
James, a Republican congressman, explicitly supports allowing small businesses from different industries to combine their insurance purchasing power through association health plans.
He argues that pooling risks would give smaller employers more options and help them compete with larger businesses.
James opposes additional insurance mandates that increase premiums or restrict employer flexibility.
His broader proposals emphasize greater competition among health care providers, increased price transparency and changes to Michigan’s Certificate of Need regulations.
Where They Agree And Differ
Both candidates support greater transparency in medical pricing.
Their clearest differences concern insurance pooling and coverage mandates.
James explicitly supports cross-industry association health plans and opposes additional mandates that raise costs.
Benson is open to evaluating expanded insurance pooling but emphasizes affordability and coverage protections. She would assess proposed mandates individually.
Neither candidate has provided a verified estimate of how much a typical Michigan small business would save under their proposals.
What It Means For Michigan Jobs
Health insurance is increasingly both an employee benefit and an economic development issue.
For Michigan technology startups, manufacturers and professional-services companies, rising premiums can limit resources available for hiring, equipment and expansion.
Employers must also provide competitive benefits to retain experienced workers, particularly when competing against larger corporations.
The SBAM survey suggests that many employers are already spending more on compensation despite those pressures.
Michigan lawmakers have advanced one potential solution through association health plans. The next governor could influence whether that proposal becomes law and what additional reforms follow.
For small-business owners planning their 2027 budgets, the central question is whether Michigan can deliver measurable relief from rising insurance costs while preserving the coverage employees depend upon.
About The Survey
SBAM surveyed Michigan business owners during August and September 2026. Eighty-one percent of respondents operated businesses with 50 or fewer employees.
The survey findings and gubernatorial candidate responses are available through the
.
