A compromise bill came out of committee that takes away public employees’ rights to bargain health care benefits and increases premium sharing costs to individuals by as much as $5,000 a year. Senate Bill 7 won final passage in Michigan’s State Senate on Wednesday, August 24, 2011.
SB7 passed this morning with little input from those whom it affects, thereby forcing all local governments, including schools, to be subjected to a maximum spending threshold for their employee’s health insurance. Essentially, this caps employer contributions to health insurance at $15,000 for family coverage, $11,000 for couples and $5,500 for individuals.
From Gongwer News: “Public employers could cover any combination of health insurance premium, health savings account contribution, or prescription reimbursement under the hard cap, and locals with voluntary employee benefit association (VEBAs) would calculate the maximum contribution under the hard cap formula.”
Local governments are given the opportunity to implement an 80/20 split of the cost of health insurance with their employees. This requires a majority vote of the local board and approval of the mayor or county executive. Municipalities could also opt out of either requirement with a 2/3 vote by its governing body each time a medical plan year expires.
There is a little bit of good news for some civil service employees who are exempt due to being constitutionally protected. However, that could change when it comes up for a House vote.
In the meantime, the bill takes effect on January 1st of 2012–but doesn’t affect any labor contracts currently in place unless they are modified or expire. Furthermore, any contracts negotiated between September 15th and January 1st cannot contain provisions that run contrary to the bill.
Penalties for not complying include a 10% withholding of revenue sharing and School Aid payments.
We are asking all POAM members to realize that we are under attack! Other important legislation is in the pipeline and you’d better become active and vocal on these issues or more benefits will be taken from you.