Source: Sherman Publications

Village votes to opt-out of state health care law

by CJ Carnacchio

December 21, 2011

Oxford Village officials made it perfectly clear they have no interest in the state telling them how much either the municipality or its employees should pay for health insurance.

“I think it would be great if the state stays out of it and lets the local government negotiate with our unions and non-union employees – just like the rest of the world does,” said Councilwoman Maureen Helmuth. “We don’t need the state telling us how to negotiate.”

Last week, council voted 4-1 to opt-out of participating in the Publicly Funded Health Insurance Contribution Act, signed into law by Gov. Rick Snyder a few months ago.

Under the new law, local governments and school districts are offered three options for funding health care benefits for elected officials and public employees.

The first is a “hard cap” under which local governing units and school districts cannot pay more than $5,500 per year in health care costs for an individual, $11,000 annually for a couple and $15,000 per year for a family.

Option two allows public employers to pay no more than 80 percent of the total annual costs for all the medical benefit plans (which includes health, vision and dental benefits) it offers or contributes to for its employees and elected officials. The public employer may allocate the employees’ share of the total costs as it sees fit, however, elected officials must pay 20 percent or more.

The third option allows local governments and school districts to exempt themselves for one year from the new law’s requirements, which take effect Jan. 1, 2012., if approved by a two-thirds vote of its governing body. In order to extend the exemption each year after that, a two-thirds vote of the governing body would be required each time.

In the village council’s case, in order to continue opting out in the coming years, four out of the five officials must continue to vote in favor of it every time.

The village currently pays an annual cost of $220,668 to provide health insurance, plus vision and dental benefits, for 13 employees, both union and non-union.

Twelve employees each contribute $300 annually toward their health insurance, while the village manager contributes $1,500 per year. Combined they pay $5,100 each year.

Had the village council selected the “hard cap” option, the employees would have been contributing $2,731 per year for single-person coverage, $6,311 annually for couples, and $2,899 per year for families.

Had council selected the 80/20 option, the employees would have been paying $1,646 per year for single-person coverage, $3,462 annually for couples, and $3,580 for families.