NEWS

Senate reintroduces bill on employee benefit costs

Several bills from the previous legislative session that became the center of a months-long constitutional dispute between the Michigan House of Representatives and Senate have been reintroduced in the Senate.

The measures were originally passed by the Legislature during the 2023-24 session but were never presented to the governor. The Michigan Supreme Court eventually ordered the bills to be sent to the governor, who then vetoed them.

As anticipated, lawmakers have now begun reintroducing those proposals.

One bill of particular interest to county governments is Senate 1136, by Sen. Kevin Hertel (D-Macomb). The legislation is a reintroduction of House Bill 6058 from the 2024 legislative session and would amend Public Act 152 of 2011, commonly known as the Publicly Funded Health Insurance Contribution Act.

Public Act 152 currently allows public employers to choose from three approaches for employer contributions toward employee health insurance:

• Comply with the statutory hard cap on employer contributions;
• Pay at least 80 percent of total health insurance costs (the 80/20 option); or
• Opt out of the statutory requirements through a governing body vote and negotiate health insurance contributions through collective bargaining.

For many counties, the hard cap and 80/20 options have provided a predictable framework that helps control costs while avoiding lengthy and often contentious negotiations over health insurance benefits.

However, MAC has long acknowledged that the inflationary adjustment built into the hard cap has failed to keep pace with the actual cost of health insurance. As health care premiums and prescription drug costs have increased, employees have been required to shoulder a growing share of premium costs simply because the statutory cap has not reflected real-world health care inflation.

While HB 6058 sought to address this issue, MAC opposed the bill in its previous form because it relied on a complicated bargaining process that could increase labor disputes and costs for counties rather than simply correcting the flaw in the law.

MAC has consistently supported a more straightforward solution that would:

• Reset the statutory hard cap to better reflect current healthcare costs;
• Replace the existing inflationary adjustment with one tied to Michigan’s actual health insurance market, such as the average rate increases approved annually by the Department of Insurance and Financial Services (DIFS);
• Preserve the existing options available under Public Act 152; and
• Allow counties to contribute more toward employee health insurance without forcing costly and contentious negotiations.

Counties value their employees and recognize the importance of offering competitive benefits to recruit and retain qualified workers. At the same time, county commissioners must balance those goals with the fiscal responsibility of funding constitutionally and statutorily required public services within increasingly constrained local government budgets.

MAC will continue working with Sen. Hertel and other stakeholders to amend the legislation to maintain the spirit of the law, while fixing the longstanding problem of inflationary pressures.  Should the legislation be amended to provide a simple, predictable fix that preserves the intent of Public Act 152, while modernizing the hard cap calculation, MAC would welcome the opportunity to support the proposal.

For more information on this issue, contact Deena Bosworth at bosworth@micounties.org.