Hard cap, 80/20 heads to Governor's desk

Legislation that requires public employers to either put a hard cap on health care costs or have an 80/20 cost sharing arrangement (with an opt out for locals) is headed to the Governor's desk.

SB 7 was approved by both the House and Senate yesterday after months of negotiations. The final version is similar to the hybrid idea that passed the House earlier this summer.

The bill has a preference for a hard cap, so all public employers are capped in what they can pay for an employee's health care costs. The cap is $5,500 for a single person, $11,000 for a couple and $15,000 for a family. A public employer may, with 2/3 vote of its governing body, instead opt into an 80/20 cost sharing arrangement.

If an employer opts into the 80/20, a public employer may not pay more than 80 percent of an employee's total costs (co-pays, deductibles, etc). This is different than previous versions that limited the 80 percent to premium share.

A local unit of government (city, village, township or county) may opt out of the entire plan by 2/3 vote of its governing body. The opt out was something very important for us, and we appreciate the legislators leaving that provision in this legislation.

Samantha Harkins works for the Michigan Municipal League handling municipal services issues.  She can be reached at 517-908-0306 or email at sharkins@mml.org.