A news service for the people of Michigan from the Mackinac Center for Public Policy

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Some Unions Still Battling Governor's Reforms; Taxpayers Left Holding the Bill

Cities, schools, government unions able delay health care savings

The unionized maintenance workers for the Brighton Area Schools pay between $400 to $600 a year for their top-shelf MESSA health insurance plan, far less than what most private sector workers pay.

Taxpayers by way of the school district pay $1,411 a month for the unionized maintenance workers' plan and absorb up to 12 percent of the yearly increases, according to the Brighton Educational Support Personnel Association’s contract, which expires in 2013.

Brighton privatized its unionized janitorial workers two years ago. The unionized maintenance workers include electricians and plumbers who receive MESSA, which is affiliated with the Michigan Education Assocation and considered the Cadillac of insurance programs.

Although those types of deals are less prevalent than they once were, taxpayers have yet to realize the full impact of Gov. Rick Snyder’s law that required public employers to pay no more than 80 percent of the annual cost of medical benefits.

While school districts have to implement the 80-percent mandate once union contracts expire, municipalities have the ability to opt-out.

For example, Salem Township employees do not contribute to health insurance premiums, says Robert Heyl, the Salem Township supervisor. The Salem Township board voted to exempt their employees from the state’s mandated cost-sharing program.

But there could be financial consequences if that continues into 2013.

Ken Silfven, deputy press secretary for Gov. Snyder, said in an email that what is being proposed is that municipalities that opt out could see a 10-percent cut in statutory revenue sharing fiscal year 2013.

But some unions aren't accepting the changes and Dearborn is facing legal action for trying to implement the 80 percent mandate.

Dearborn Mayor John B. O’Reilly said his city wanted to institute the state’s cost-sharing plan as soon as possible.

The city of Dearborn intended to begin collecting premiums from all full-time employees covered by city health insurance beginning January 1, said Mary Laundroche, the city’s spokeswoman. However, two city unions filed lawsuits saying the 80/20 plan shouldn’t begin until their contracts with the insurer expires July 1, 2012.

Currently, insurance benefits per public-sector employee are $7,149 more per year than in the private sector. According to the Kaiser Family Foundation, the average Michigan private-sector workers pays 22 percent of their health care, and the average for federal employees in Michigan is about 25 percent.

“The reason taxpayers won’t immediately benefit from this fiscally sound policy is that lawmakers decided to allow union contracts for government employees to trump state law for the time being,” said Michael Van Beek, education policy director at the Mackinac Center for Public Policy, in an email.

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See also:

Township Board Votes Unanimously to Exempt Employees From State Law, Continue Paying Nothing For Health Insurance

Township Board Creates New Tax Rather Than Trim 'Ridiculously Generous' Benefits

Headlines Screamed Mass School Layoffs, Reality Tells a Different Story

Beat the Clock: Government Union ‘Cadillac’ Health Plans Preserved Before Tighter Controls Take Effect

Adam Neuman was not afraid to put his life on the line; he's certainly not afraid of union bullying. He fought for freedom overseas, and he simply wants to exercise it back home. But the Brighton Education Association and his school district are violating his rights.


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