Last week the Senate and House leadership put the legislature on notice of their intention to address the Heath Care and Retirement crisis facing school districts across the State by introducing legislation to help school districts provide affordable benefits. The legislation will impact current employee health as well as future employee retirement benefits.
Currently the legislature is on Thanksgiving recess but there is a commitment from leadership to vote on this legislation when they return on the 29th. This legislation is on a fast track and therefore YOUR ACTION IS IMPERATIVE.
Legislation has been introduced in two parts (House and Senate). The Senate will be addressing the Health Care while the House will be focusing on Retirement reform. Here is what you should know:
The Senate has introduced Senate Bills 895-898, which would make it easier for school districts to enter into health insurance pools or to self-insure as an individual district. The legislation includes the following:
* Mandates the release of school district claims data to allow better informed decisions by the school employees and administration regarding the benefits that employees use.
* Creates a new state managed catastrophic claims insurance that will result in lower premium costs for districts because of the greater purchasing power in pooling.
* Allows competitive health care purchasing through coalitions or pools.
* Allows for the creation of proactive state of the art programs to improve member health
It appears now that the House will not introduce new legislation but rather substitute language into a vehicle bill (House Bill 4947). This proposed legislation will bring about much needed reform in our public school retirement system. This bill currently is sitting on the House floor and will include the following:
* A graded health insurance policy that would give retirees a health insurance subsidy based on the number of years worked. This will cut out a number of loop holes that are currently used.
* A change that would prevent retirees from receiving free health insurance for years purchased from the system until they hit their thirtieth year. This does not prevent early retirement, just the free health insurance for up to the five years of purchased time.
* Language that would prevent an individual from purchasing time until they have accumulated two full years of service credit. This would prevent the purchase of time at a rate that is not financially sound for the retirement system.
* Note: This bill may also include a defined contribution provision which does not have MASA support at this time. We will work through the legislative process to address this.
Our timeline for hearings, votes, and passage is the first two weeks of December. After the first of the year it will become increasingly difficult to get movement on this type of reform.
Both of these pieces of legislation include provisions that your Legislation Committee and Council support. Together, they represent two of our strongest Legislative priorities. Your Government Relations office and many MASA members have worked hard to get to this point, now we need an all-out effort from our membership to bring home results that will begin to provide the critical cost containment relief so badly needed while protecting access to quality health care benefits for the next generations of school employees and retirees.
Mike goes on to ask that supporters of Michigan's public schools contact their stste legislators in support of House Bill 4947 and Senate Bills 995, 896, 897 & 898.
He also added a page of FAQs:
Q: What is the proposal?
A: The proposal allows school districts to create regional pools to purchase health care for current employees. The proposal also requires the state to establish a statewide fund to cover catastrophic claims. Premiums would be lowered because better claims, cost and quality data availability, as well as enhanced collective bargaining power, allowing school districts to better negotiate and seek competitive prices.
Q: Will school employees be forced to accept inferior benefits?
A: No, school employees can keep their benefits and collectively bargain for health care benefits in the future.
Q: Are school employees losing their right to collectively bargain for health care?
A: No. School employees and administrators can still negotiate and will bargain with more collective strength through larger employee pools.
Q: If savings don’t come from cutting school employee’s benefits or raising co-pays, where do they come from?
A: Savings will come from:
• More efficient administration;
• Getting better deals by pooling employees in regional pools;
• Providing school districts and employees with information to negotiate fair premiums and identify high-quality providers;
• Competitive bidding for health care;
• Creating a statewide fund to pay for catastrophic care.
Q: Will schools be forced to pool together?
A: No, they can determine whether pooling would be beneficial. Most school districts would see cost savings from pooling.
Q: How much money can be saved and instead go towards student’s needs?
A: The American Federation of Teacher-Michigan estimates that it will save $573 million over the first three years.
Q: Through collective bargaining, Michigan teachers have at times traded salary increases for health care benefits. Why should they change?
A: Pooling creates cost savings that can increase benefits, allow the hiring of more teachers or the funding of programs that had been eliminated without cutting employee benefits or pay.
Q: Why is the Legislature attempting to change the school employee’s benefits?
A: This proposal was offered by the American Federation of Teachers – Michigan, and supported by school administrators and school boards. The Legislature is only trying to be responsive to the education community.
Q: How much does health care cost schools?
A: A district’s annual health care costs comprise 12-18 percent of costs, or approximately $1000 per pupil. The total cost is projected to be $2.3 billion this year. On average, school employees covered under individual school district plans will cost $12,149 in 2005, while state employees covered under the consolidated state employee plan will cost only $9,212.
Q: Will this be a statewide or regional pool?
A: Schools will be able to choose whether to join regional pools or have their own separate plan.
Q: Is this an attack on MESSA?
A: No. MESSA can continue to provide health insurance for school districts. This proposal merely gives schools districts more choices and generates cost savings so those dollars go towards educating children.
Q: When is the Legislature going to lower the cost of its own health care benefits?
A: The Senate has already done so and the House of Representatives is considering several options to lower health care costs.