County exempts itself from 80-20 health care law

The Oakland County Board of Commissioners has again decided to exempt the county from complying with a state law requiring that public employees contribute at least 20 percent of their annual health care benefit costs.

The board’s decision, which came on June 7, marks the second time the county has opted to circumvent provisions of Public Act (PA) 152 of 2011, which requires that public employers can’t pay more than $5,500 a year in health care benefit costs for an individual, $11,000 for a couple, and $15,000 for a family. Instead of a hard and fast monetary figure, public employers can also opt to instead pay no more than 80 percent of the total annual cost for all of the medical benefit plans it offers or contributes to for employees.

A local unit of government can exempt itself from the requirements of the law for one year at a time via a two-thirds vote of its governing body, and another two-thirds vote would be required to extend the exemption. The chief executive of the unit of government also needs to sign off on the exemption.

Last year, the county exempted itself from the law “in order to avoid costs of litigation, avoid the expense of conducting delayed ‘open enrollment’ selection processes and to secure reasonable time to prudently employ the county’s recognized triennial budget process, and to allow the county to continue making changes over time that yield significant reductions in health care costs in a manner that is fair to both taxpayers and employees,” the exemption resolution reads.

The exemption extension unanimously cleared the Human Resources Committee before being approved by the full board earlier this month.

In addition to the previously cited reasons for exempting itself from the Publicly Funded Health Insurance Contribution Act, the resolution also states that the law “fails to provide a mechanism that would allow Oakland County officials to exercise their required due diligence by adopting a fiscal year 2013 budget only after knowing what the cap target allowed by law will be.”

In addition, PA 152 “makes knowledgeable acceptance of its cap formula before FY 2013 budget adoption effectively impossible” because the state treasurer is not required to adjust the maximum payment permitted under the law for each coverage category for medical benefit plan coverage years until Oct. 1 of each year, which is the beginning of the county’s fiscal year.

That date “is simply too late,” according to the county board’s resolution

“We already pay a portion (of health care costs), and we have deductibles and co-pays,” said Commissioner Shelley Taub (R-Orchard Lake), adding the county has pre-funded all retiree health care benefits costs. “We did all of the things that the governor is pushing people to do. We did it 15 or 16 years ago. We would prefer not to do it at 20 percent — 20 percent of your gross salary. That’s a huge bite.”