What it costs when your employees have no health plan.
About one in twenty Michiganders had no health insurance in 2024, and most people without coverage live in a family where someone works full time. Here is what going without costs them, what it costs the business that employs them, and what a group plan actually costs to offer in Michigan right now.
Most working Michiganders are covered at work. The ones who are not carry the risk alone.
5.1%
of Michiganders had no health insurance in 2024, down from 11.8% in 2008. Michigan ranks among the ten best-covered states, but that is still roughly half a million people. Most of them are working-age adults, and many are one diagnosis or one accident away from a bill they cannot pay. For an employer, that half million is not an abstraction: it is part of the local labor pool, and the part with the least cushion when something goes wrong. Sources: U.S. Census Bureau, American Community Survey 2024; University of Michigan CHRT.
About 5 million
Michiganders, 52% of the state, get their health coverage through an employer. That makes work the single largest source of coverage in Michigan, ahead of Medicare, Medicaid and the individual market. When a candidate compares two offers, most of them are comparing against a job that includes a health plan, and they know what it is worth to their household. Source: AHIP, Employer-Provided Coverage State-to-State, 2026.
73.8%
of uninsured Americans under 65 have at least one full-time worker in their family. Being employed is not the same as being covered. Some work where no plan is offered; others are not eligible because of hours or a waiting period; others are offered a plan and turn it down because their share of the premium is more than they can carry. Each of those is a design decision an employer can revisit. Source: KFF, Key Facts about the Uninsured, June 2026.
690,000
Michigan adults are living with medical debt, about 9% of the state’s adults. Medical debt does not stay at home. It shows up as distraction, overtime requests, second jobs and turnover, and it is the most direct way the cost of going without reaches a business that never paid a premium. Source: KFF estimate, reported by Bridge Michigan, 2026.
An ordinary year of care, at Michigan cash prices.
These are typical self-pay prices for common care in Michigan. An uninsured employee pays them in full, at the moment they are least able to. Sources: Priority Health, September 2026; MDsave.
Emergency Room Visit
$1,700 to $2,300, depending on age and diagnosis. If the visit ends in an admission, $10,000 to $30,000. Federal law requires a hospital emergency department to screen and stabilize anyone who arrives, whether or not they can pay, so an uninsured employee still gets treated. What changes is who receives the bill, and when it arrives, usually weeks later and in full.
Hospital Stay
About $3,025 a day, before procedures, medications or specialist fees. A three-day stay for something routine can pass $9,000 before anyone is billed for the surgeon, the anesthesiologist or the imaging. Even insured employees feel a stay through the deductible, which is why some employers pair a higher-deductible plan with hospital indemnity coverage.
Appendectomy
An average of $5,441 without insurance in Michigan, and that is the planned version. An appendix is rarely planned: it usually arrives through the emergency room, and an ER visit followed by surgery and an overnight stay can double the procedure price or more. It is the textbook example of a bill no one budgets for.
Screenings
About $255 for a mammogram and $1,444 for a colonoscopy, both of which are covered with no cost-sharing on most group plans. Under the ACA, recommended preventive care from an in-network provider carries no deductible or copay. Without coverage, these are exactly the appointments people skip, and skipping them is how a treatable finding becomes an expensive one.
Primary Care Visit
About $137 for an established-patient office visit at a posted cash price, before any lab work, imaging or prescription. It sounds manageable, and for one visit it is. The problem is that an uninsured employee weighs every visit against the grocery bill, so the sinus infection or the chest pain waits until it can no longer wait.
No Penalty, No Protection
There is no federal or Michigan penalty for going uninsured, which means nothing stops an employee from going without until the bill arrives. The federal individual penalty was reduced to zero in 2019 and Michigan never adopted its own. Going without is legal. It is also the most expensive way to buy health care, one full-price bill at a time.
People without coverage wait, and waiting is what makes care expensive.
Care Gets Put Off
38.6% of uninsured adults delayed, skipped or went without needed care or medication because of cost. The pattern is predictable: a symptom is watched instead of treated, a prescription is stretched or left unfilled, and a manageable condition turns into an urgent one. From the employer’s side it looks like an employee who is present but not well, until the day they are not present at all. Source: KFF, June 2026.
Bills Follow
62% of uninsured adults report health care debt, and 59% say someone in their household had trouble paying for care. Health care debt is often paid off in small amounts for years, and it competes with rent, car payments and child care. An employee carrying it is more likely to leave for a job that offers a plan, even at similar pay, because the plan is the thing they are missing. Source: KFF, June 2026.
Cost Is the Reason
61.7% of uninsured adults say they are uninsured because coverage is not affordable, which is why an employer contribution changes the decision. Most uninsured workers are not choosing to go without; they are priced out. An employer that pays a meaningful share of the premium, even for employee-only coverage, often turns a plan employees would decline into one they enroll in. Source: KFF, June 2026.
Insurance Alone Is Not the Whole Answer
Among Michigan survey respondents with medical debt, 73% had insurance when the debt was incurred. Plan design, not just having a plan, decides what employees owe. A plan with a deductible no one can meet protects against catastrophe but still leaves employees exposed to bills in the low thousands. The deductible, the out-of-pocket maximum and the network together decide whether coverage actually prevents the debt. Source: Healthcare Value Hub Michigan survey, 2025.
Not offering coverage has a price too. It just shows up somewhere else.
You Compete Against Employers Who Offer It
84% of Michigan workers are at companies that offer health insurance. A job without it is competing against most of the market for the same people. The gap shows up in who applies, how long offers take to accept, and who leaves after a year. Many owners find that the wage premium needed to hire without a plan costs more than the plan would have. Source: AHIP, 2026.
Coverage Is Tax-Efficient Pay
Employer contributions to a group health plan are deductible to the business and are not taxable income to the employee, so a dollar spent on coverage goes further than a dollar of wages. A $1,000 raise costs the business about $1,076.50 once its 7.65% share of Social Security and Medicare tax is added, and the employee keeps less than $1,000 after their own payroll and income taxes. $1,000 toward the premium costs the business $1,000 and reaches the employee in full. The employee’s own share can go pre-tax too, through a Section 125 plan.
At 50, It Becomes a Penalty
Employers with 50 or more full-time equivalents that do not offer coverage can owe $3,780 per full-time employee for 2027, after the first 30, once any employee receives a marketplace subsidy. Offering a plan is not the end of the test: coverage must reach at least 95% of full-time employees, meet minimum value, and be affordable, which for 2027 plan years means the lowest-cost employee-only option costs no more than 10.22% of pay under an IRS safe harbor. If coverage reaches enough employees but is unaffordable or falls short of minimum value, the charge is $5,670 for 2027 per full-time employee who actually receives a subsidy. Sources: IRS Rev. Proc. 2026-22; IRS Rev. Proc. 2026-26.
Put-Off Care Comes Back as Absence
Care that gets put off tends to come back as an emergency, and an emergency takes someone off the schedule for days rather than an hour. Coverage that gets people to a doctor early protects the schedule as well as the employee. In a small business the cost is not abstract: an absence means overtime for someone else, a missed delivery or a customer who waits. A plan that pays for the office visit is often cheaper than the week it prevents.
The real numbers for 2026 and 2027.
Group coverage is not cheap, and nobody should pretend it is. It is also more affordable than most owners expect once the tax treatment and the right design are counted.
National Averages
The average annual premium in 2025 was $9,325 for single coverage and $26,993 for family coverage. Workers paid 16% of the single premium and 26% of the family premium on average. In other words, employers typically fund most of both, but employees carry a noticeably larger share once they add a family. How much you put toward dependents is one of the largest levers on total spend, and it is entirely your decision. Source: KFF Employer Health Benefits Survey 2025.
Michigan Employers
Michigan employers contribute an average of $7,060 a year toward single coverage, about 79% of the premium. The employee pays the rest, usually pre-tax through payroll. You do not have to match that average to offer a competitive plan, but your employees’ friends and spouses work for employers who do, and that is the benchmark they carry into enrollment. Source: AHIP, 2026.
2027 Small-Group Rates
Michigan’s small-group carriers have proposed an average 9.6% increase for 2027, with filings from eight carriers ranging from 7.0% to 14.8%. The individual market averages 14.2%. These are proposed averages; final rates are approved later in the year, and each group’s renewal also moves with the ages on its census and the rating area. Two employers with the same carrier can see very different renewals in the same year. Source: Michigan DIFS, July 2026 proposed rates.
Design Moves the Number
Funding method, network choice, contribution strategy and plan design can move a small group’s cost further than the carrier’s rate change does. A healthy group may do better level-funded than fully insured. A narrower network or an HMO can cost meaningfully less than a broad PPO. Funding employee-only coverage generously and dependents less keeps the plan affordable where it matters most. An HSA-qualified plan with an employer deposit can lower premium without leaving employees exposed. We model these side by side on your own census before you choose.
There is more than one way to help employees pay for coverage.
Small employers that cannot fund a full group plan can reimburse individual coverage through a qualified small employer HRA or an individual coverage HRA, or look at a level-funded plan if the group is healthy. The right answer depends on who is on the census. For the basics of plan types, cost and eligibility, see group health insurance in Michigan.
Employee-Paid Group Plan
In Michigan’s small-group market, a group plan can start on the first of any month with as few as one W-2 employee, and the employer is not required to contribute. Employees get group rates and pay through payroll, pre-tax through a Section 125 plan. It is the lowest-cost way to put a real plan in front of your people, and you can add a contribution later.
QSEHRA
For employers under 50 full-time equivalents with no group plan. You set a monthly allowance and reimburse employees tax-free for individual coverage they buy themselves, up to $6,450 for employee-only and $13,100 for family coverage in 2026. The budget is fixed, and there is no group participation requirement. Source: IRS Rev. Proc. 2025-32.
ICHRA
An individual coverage HRA works for any size employer and has no federal dollar cap. Allowances can differ by class of employee, such as full-time and part-time or by location, which makes it useful for a workforce that is spread out or mixed. Employers at 50 or more still have to meet the affordability test through the allowance.
Level-Funded Plan
For a healthy group, a level-funded plan charges a fixed monthly amount that covers expected claims, stop-loss protection and administration. If claims run lower than expected, part of the surplus can come back to the business. It needs a careful look at the census first, because it works best where claims are predictable. How level funding works.
Where these numbers come from.
- U.S. Census Bureau, Health Insurance Coverage in the United States: 2025
- America’s Health Rankings, Uninsured in Michigan (ACS 2024)
- University of Michigan CHRT, Health Insurance in Michigan, 2008–2024
- KFF, Key Facts about the Uninsured Population
- KFF, 2025 Employer Health Benefits Survey
- AHIP, Employer-Provided Coverage: State-to-State 2026
- Michigan DIFS, 2027 Proposed Rate Changes
- IRS, Rev. Proc. 2026-22 (employer shared responsibility amounts for 2027)
- IRS, Rev. Proc. 2026-26 (2027 affordability percentage)
- Priority Health, The real cost of going uninsured in Michigan
- MDsave, Primary care office visit in Michigan
- Bridge Michigan, Michigan medical debts
- Healthcare Value Hub, Michigan medical debt survey
What employers ask about going without a group plan.
Is there a penalty for a small Michigan business that does not offer health insurance?
Not under 50 full-time equivalent employees. The federal employer mandate starts at 50, and Michigan has no state employer mandate. Below 50, the cost of not offering shows up in hiring, retention and absence rather than as a tax. At 50 or more, the penalty for not offering coverage is $3,780 per full-time employee for 2027, after the first 30, once any employee receives a marketplace subsidy.
Is there a penalty for individuals who go uninsured in Michigan?
No. The federal individual penalty was reduced to zero in 2019, and Michigan has not adopted its own. The cost of going without is the bill for care, not a tax, and it arrives at full self-pay prices. For an employer, that means no tax pushes employees toward coverage, so the contribution you set does much of the work in deciding whether they enroll.
How many Michiganders are uninsured?
About 5.1% of residents in 2024, according to the Census Bureau’s American Community Survey, which is roughly half a million people. That is down from 11.8% in 2008. Nationally, most uninsured people under 65 live in a family with at least one full-time worker.
How much does an emergency room visit cost without insurance in Michigan?
Typically $1,700 to $2,300, and $10,000 to $30,000 if the visit leads to an admission. Hospitals must screen and stabilize everyone who comes to the emergency department, so care is not refused, but the uninsured patient is billed for it afterward.
What does it cost an employer to offer a group plan?
Nationally, employers paid most of a $9,325 average single premium in 2025, and Michigan employers contribute about $7,060 a year per single enrollee. Your own cost depends on your census, your area, the plan design and how much you contribute toward dependents. Employer contributions are deductible and are not taxable to the employee, which narrows the real cost.
What if we cannot afford a full group plan?
An HRA that reimburses individual coverage, or a level-funded plan for a healthy group, can give employees real help at a cost the business controls. A small Michigan employer can also start an employee-paid group plan with no employer contribution and add one later.
Can a small business offer a group plan without contributing to it?
Yes. In Michigan’s small-group market a plan can start on the first of any month with as few as one W-2 employee and no employer contribution. Employees pay group rates through payroll, pre-tax through a Section 125 plan. It gives employees access to group coverage and pre-tax payment even when the business cannot fund a share. Carriers may still apply participation rules, so ask how many eligible employees must enroll before choosing this route.
What if we offer coverage but employees say it is too expensive?
For employers with 50 or more full-time equivalents, coverage has to be affordable under the ACA: for 2027 plan years, the lowest-cost employee-only option can cost no more than 10.22% of pay under an IRS safe harbor. If it costs more and an employee receives a marketplace subsidy, the charge is $5,670 for 2027 for each full-time employee who receives one.
Figures are the most recent published by each source as of September 2026. Cash prices vary by facility and change over time; rate changes shown are proposed, not final.
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The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
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