MEA Demands Immediate Health Insurance Payment From School District In Serious Debt
Judge ruled Pontiac School District has 10 years to pay off $7.8 million
The Michigan Education Association is demanding that the Pontiac School District pay in full $7.8 million it owes the Michigan Education Special Services Association by the end of July despite a judge ruling the district has 10 years to pay off the debt.
This comes as the state reviews the finances of the Pontiac School District to see if an emergency manager should be put in charge because the district has seen its deficit quadruple to $37.7 million since 2009.
According to a Michigan Department of Education memo dated May 20, Pontiac’s state aid was threatened to be withheld because the district has skipped its payment to the Michigan Public School Employees Retirement System and the district didn’t have enough money to pay its transportation, utilities, custodial, food service vendors or its substitute teachers.
Yet, the Pontiac Education Association, an affiliate of the MEA, is demanding full payment to MESSA. MESSA is a third-party administrator of insurance benefits that was created by the MEA and serves numerous school districts in the state.
MESSA has said it will end its health care and benefits coverage if it doesn’t receive payment from Pontiac by July 31, according to information on the MEA's website.
On June 25, the MEA posted an article on its website quoting Pontiac Education Association President Aimee McKeever saying it was “especially outrageous” that the school district hasn’t made its premium payment.
McKeever’s comments came five days after a judge ruled June 21 that the Pontiac School District could pay off its $7.8 million judgment over 10 years. The Oakland Press reported that the $7.8 million will be raised by a tax levy on residents from Auburn Hills, Pontiac, Sylvan Lake, Lake Angelus, Bloomfield Township, West Bloomfield Township, Waterford Township and Orion Township.
But continuing with MESSA, which is considered an expensive benefits program, may not be in the best interests of the Pontiac district, said Audrey Spalding, education policy director at the Mackinac Center for Public Policy.
"There are other insurance options available to the Pontiac School District," Spalding said. "This is a great opportunity for the district to find better, less expensive insurance."
For example, last year Dansville Public Schools Superintendent Amy Hodgson said that her district paid $250,000 less than they budgeted for health insurance in 2012 after switching from the top-tier MESSA plan to a high-deductible plan with co-pays. Dansville paid less and still was able to pay for all of its employees’ health insurance premiums and covered the deductibles by leaving MESSA.
All of MESSA’s trustees can be directly linked to the MEA either through past service as high-ranking MEA executives or as an MEA board member or committee member.
Nancy Knight, an MEA spokeswoman, didn't respond to a request for comment.
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.