80/20 Health Insurance Cost Reform Headed To Governor

After being approved by conference committee on Tuesday, Senate Bill 7 secured quick House and Senate approval Wednesday and is on its way to the desk of Governor Snyder for approval. The Senate approved the measure on a 25-13 vote with Senator Tom Casperson (R-Escanaba) joining all 12 Democrats in opposing the measure. The vote in the House of Representatives was 59-48 with 5 Republicans voting “no” and one Democratic, Representative Tim Melton (D-Auburn Hills), voting “yes.”

The legislation places limits on the amount a local unit of government, including school districts, can contribute for employee health insurance plans. Local units’ contributions are capped at $5,500 for an individual, $11,000 for a couple and $15,000 for a family.

Alternatively, if approved by a simple-majority vote of the local board (e.g. school board, county board of commissioners, city council, etc.) and agreed to by the mayor, county executive, superintendent or other empowered executive where appropriate, the local unit can opt to split the health insurance costs with employees at 80% - 20%. There is also a total opt-out provision for local units, allowing for neither alternative to be followed; however, the total opt-out requires a two-thirds majority vote of the local board every year.

The measure, once signed, will take effect on January 1^st of 2012; however, it will not affect labor contracts already in place until they expire or are otherwise modified. Senate Joint Resolution C, the measure necessary to extend the same reform to state and public university employees, again failed to obtain the 74 votes necessary in the House of Representatives.

posted by PAA Online , Friday, August 26, 2011 10:37 AM
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