News Story

Employees Pay for 21.5 Percent of Health Care at U of M

Michael Boulus, director of the President's Council of State Universities of Michigan, used the University of Michigan employees’ 30 percent contribution to health care costs as an example of why a bill requiring that public employees pay 20 percent of health care may not be such a good thing.

The average health insurance cost-sharing expected of private-sector employees in Michigan is 21 percent, according to the Kaiser Family Foundation. The national average is 27 percent. Michigan Capitol Confidential has provided extensive coverage of many school districts in Michigan that require substantially less than 10 percent.

According to a Michigan Information & Research Service (MIRS) article, Boulous “noted, for example, that the University of Michigan already requires a 30 percent contribution from employees to health care premiums. Once the U of M returns to the bargaining table with a 20 percent requirement put into state law it will be hard to retain the agreement the University already has in place.”

"In a way, we're sending the wrong message to many of our institutions," Boulous said.

According to MIRS, Boulous said state universities should be allowed to opt out of the bill.

However, the University of Michigan stated last week that the 30 percent figure used by Boulous includes the cost of co-payments and deductibles, something Senate Bill 7 specifically excludes. When just looking at health care premiums, U of M employees pay 21.5 percent of the premium costs, according to University of Michigan spokeswoman Kelly Cunningham. That’s more in line with what SB 7 is asking of all public employees.

Charles Owens, the state director of the National Federation of Independent Businesses, has followed the cost of benefits of public employees very closely. He was impressed when he heard U of M had such a high rate of contribution among its employees.

“What U of M has done (21.5 percent cost-sharing by employees) is pretty impressive given the wailing and moaning from public schools, many of whom are paying 100 percent of the cost of health insurance for teachers,” Owens stated in an email. “U of M deserves credit for being proactive.”


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Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.