Senate Bill 7 passes Legislature; on its way to Governor

SB 7 has passed both the House and the Senate today and is on its way to the Governor for his signature. Earlier, both chambers accepted the legislative conference committee report for SB 7.

The bill, requiring local governments and school districts to spend no more than a certain amount on their employees’ health insurance, is a combination of both a hard cap and an 80/20 plan.

Under a hard cap, SB 7 would require public employers to pay no more than $5,500 (single--NOT $5,000 as previously reported), $11,000 (individual and spouse) and $15,000 (family coverage).  A public employer could elect the 80/20 split with employees for health care costs. While local units of government could get out of either cost-sharing plan, school districts must choose either the hard cap or the 80-/20 plan.

Implementation is for health plan years beginning on or after Jan. 1, 2012. Current contracts are not affected. An unsettled contract must be settled, ratified and signed by Sept. 15 to be exempt from the new law. The conference committee’s SB 7 FAQs provides details of the new legislation. (PLEASE NOTE: In the second to last answer on the FAQ, it references Sept. 1 as the date by which contracts must be settled in order to not fall under the new provisions of the law.  However, that date is not referenced anywhere in the bill.  The date referenced in the bill is Sept. 15:  “A collective bargaining agreement or other contract that is executed on or after September 15, 2011 shall not include terms that are inconsistent with the requirements of sections 3 and 4.”)

SJR C, which would apply SB 7 restrictions to state and public university employees, came back for reconsideration in the House, but again fell short of the required two-thirds majority needed to pass it.

Throughout the debate on SB 7, Democrats charged Republicans with micromanaging local governments—what they criticize the federal government for doing—and destroying the freedom of local control.

Republicans, however, patted themselves on the back for having lowered the cost of health care to taxpayers and balancing the budget so more money can be sent to local communities.

Sen. Tom Casperson (R-Escanaba) was the only Republican to oppose the bill.

The real losers in the debate continue to be the employees who just got a greater burden of health care costs shifted onto their backs. Despite the rhetoric, this bill does nothing to contain health care costs or create jobs. This is just another attack on workers, collective bargaining rights, and the middle class.

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