In 2011 the legislature passed PA 152 which mandated a local unit of government either be under hard cap amounts for health care, institute an 80/20 cost sharing arrangement or opt out with 2/3 vote of the governing body.  In recent months the Department of Treasury has issued a new frequently asked questions document that has raised concern amongst our membership about how the Department is interpreting several of the provisions.

Senate Bill 395 was introduced to respond to these concerns. The bill would amend the PA 152 to do the following:

• Exclude payments to an employee in lieu of medical coverage, and amounts paid for health insurance claims assessments, from the dollar and percentage limits on a public employer’s total contributions.
• Specify that “medical benefit plan” would not include a public employer’s contributions to a fund used solely for health  care benefits available to public employees or elected officials only upon retirement or separation.
• For purposes of the dollar amount limit based on the number of employees receiving coverage, include individual plus nonspouse dependent coverage in family coverage, and increase the multiplier for individual and spouse coverage from $11,000 to $13,455.
• Require an annual election before the start of a medical benefit plan coverage year, for a public employer to choose an 80% limit on its contributions, rather than the dollar amount limit
• Require a local unit’s vote on opting out of the Act to be held before the beginning of the medical benefit plan coverage year.

The League is supportive of this legislation. The committee is anticipated to vote on the legislation next week.

Samantha Harkins is the Director of State Affairs for the Michigan Municipal League.  She can be reached at 517-908-0306 or email at sharkins@mml.org