Public Employer Contributions to Health Plans Limited in 2012

On September 24, Governor Snyder signed into law the Publicly Funded Health Insurance Contribution Act. This Act places certain limits on the amount public employers can pay toward employee medical benefit plans beginning January 1, 2012. Public employers who offer medical benefit plans to their employees or elected officials will be subject to maximum spending limits for their employee’s health insurance. Public employers will be limited to either paying a maximum hard cap on premium contributions or paying no more than 80% of the total annual costs of all the medical benefit plans they offer to employees and elected officials.

A local unit of government may exempt itself from the spending limitations of this new law by a 2/3 vote of its governing body each year. This exemption is not available for school districts, however.

Financial penalties in the Act include the loss of state aid for failure to comply.