The National Federation of
Independent Business (NFIB) is urging lawmakers to support legislation
that would make much needed reforms to the state’s no-fault auto insurance
system.
Senate Bills 248 and 249 have
passed the Senate and were reported out of the House Insurance Committee on
Thursday, April 23rd and are now awaiting further action on the House Floor.
The House Committee version of the bills includes a requirement for auto
insurers to reduce rates by $100 per vehicle in the first two years after the
legislation becomes law. The legislation also sets reimbursement rates and fee
caps on hospitals and doctors as is done currently with most other health
insurance programs such as Medicare, Medicaid, Workers’ Compensation and most
private insurance plans.
NFIB testified in support of
similar legislation in 2013 after a survey showed that an overwhelming
percentage of small business owners supported similar reforms to the auto
insurance system. In that survey 76 percent of NFIB member small business
owners favor reforms to the current no fault system.
Michigan is the only state in the
country to have unlimited medical benefits for auto insurance and that has
resulted in some of the nation’s highest premiums. Price gouging by hospitals
and medical providers has resulted in no-fault auto insurance medical payments that
are out of line with similar payments made under other insurance plans such as
workers compensation and private health insurance.
While most work-related injuries
are covered under workers compensation, small business owners still pay a
per-vehicle premium that is inflated because of the no-limit provision on
medical expenses. The proposed reduction in premiums by as much as $100 per
vehicle is a significant savings for small businesses, especially those with
fleets of vehicles.
“The problem for small business
owners is that they are required to pay into the system but when they or their
employees are injured in an accident involving a company vehicle, they have to
file the medical claim under the workers comp system,” said NFIB State Director
Charlie Owens. “Essentially they’re forced to pay twice for the same
protection.”
Michigan’s system is out of step
with the market and small business would like the Governor and lawmakers to
implement the reforms included in these bills and reduce their costs. NFIB will
be pushing hard in the House to get the legislation to the Governor’s desk.
