State Senate passes fixes to law that caps districts’ contributions toward employees’ health care premiums

The state Senate unanimously passed a package of bills Tuesday that would fix a number of problems with a state law that limits the amount that school districts can pay toward their employees’ health care premiums.

Public Act 152 of 2011 limited the total amount a school district can pay for health insurance premiums to $5,500 multiplied by the number of employees receiving individual coverage, $11,000 times the number of employees with coverage for themselves and their spouses, and $15,000 multiplied by the number of employees with coverage for themselves and their families.

Alternatively, school districts can choose  to pay no more than 80 percent of employees’ total health care premiums, provided their school boards choose to do so by a two-thirds’ annual vote.

The law has been fraught with issues, due in large part to ambiguous wording and subsequent misinterpretation by the state Department of Treasury. MEA members and staff, school management groups, and municipal leaders have worked closely with state senators to fix the law and eliminate any ambiguity. Senate Bills 541-545, which are supported by MEA, would do just that:

  • Senate Bill 541, introduced by Sen. David Robertson, R-Grand Blanc Township, would disallow a schools district’s contributions toward retiree health care from being counted toward the cap on total health care premiums. The state Department of Treasury currently interprets the law as requiring retiree health care costs to be counted toward districts’ limits.
  • Senate Bill 542, introduced by Sen. Bruce Caswell, R-Hillsdale, clarifies that employees with a single dependent constitute a family, not a couple, thus raising the amount districts are allowed to pay toward their health care. The bill also raises the member-spouse cap to $13,455, and allows that amount to be adjusted each year. Finally, Senate Bill 542 mandates that cash-in-lieu payments to employees who decline coverage not be counted toward a district’s cap.
  • Senate Bill 543, introduced by Sen. Mike Nofs, R-Battle Creek, would require school boards to hold their votes on whether to go with a hard cap or 80/20 split before the start of their district’s health plan year. As is stands, many school boards hold these votes in the summer, prior to the start of the new fiscal year — when few are paying attention. Holding the vote before the beginning of a medical plan year could help ensure more school employees are tuned in to the process and have the opportunity to provide their input.
  • Senate Bill 544, introduced by Sen. Tom Casperson, R-Escanaba, and Senate Bill 545, introduced by Sen. Mark Jansen, R-Gaines Township, would make small technical changes to the law to ensure it would be consistent with Senate Bills 541-543.

The bills now go to the House Committee on Financial Liability Reform.