LANSING – A huge change to how most public employees’ contribute toward their health insurance is now law as Governor Rick Snyder has signed a bill setting caps on what school districts, local governments and other public entities pay for their workers health coverage.
Under SB 7 (PA 152), all public employers – except the state and public universities – can contribute a maximum of $15,000 for family health plans, $11,000 for couples and $5,500 for individuals. The Legislature was unable to approve a constitutional amendment (SJR C ) that would have had the bill apply to state and public university employees.
Alternatively, governments can also choose instead to split the cost of the health plan with their employees 80/20, with the employer covering no more than 80 percent of the cost. To go this route, the government’s board of control, along with concurrence by the mayor or county executive where appropriate, would be needed.
“These changes result in a fair and equitable approach that brings public employee benefits more in line with the private sector,” Snyder said in a statement. “Getting these currently unsustainable costs under control now helps ensure Michigan’s long-term future and allows us to all move forward together.”
The legislation takes effect January 1, but labor contracts already in place would not be affected until they are modified or expire. Local governments can opt out of either mandate entirely, but that takes a two-thirds vote of the governing board every year. Failure to comply with the law could mean the loss of state revenue sharing or school aid payments.
Snyder signed the bill Saturday, but it was not filed with the Department of State until Tuesday.
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