LANSING — New changes to Michigan state employee benefits could be coming this year, after passing through the House and Senate last session.
Right now, public employers have two main options when deciding how to structure their benefit plans.
They could cover an employee’s benefit costs up to a statewide hard cap, after which an employee is responsible for the costs. That cap changes each year based on the consumer price index.
Or, they could agree to cover up to 80% of benefit costs, while the employee would be responsible for the remaining 20%.
“The state adjusts the hard caps annually, but these adjustments do not keep up with the inflation rates and of the insurance from year to year,” said James Humphreys, a member of the Wexford County Road Commission who spoke in support of the bill. “And it ends up costing the workers considerably.”
Between 2024 and 2025, employers' contribution requirement increased by just .2%, while teachers say their insurance premiums increased by about 15%.
“I don’t know how much longer I can continue this career path,” said Kim Sandefur, a Kalamazoo-area teacher. “It is not financially responsible to work long term, in a situation where I’m spending more than I earn.”
House Bill 6058, which was passed by both the House and Senate last year, would turn the 80% maximum into a minimum, allowing employers to cover a greater portions of their employee’s benefit costs.
It would also raise the hard caps by about 7% and set an increase schedule that would better reflect changing healthcare costs.
Supporters say the current limit on employer contributions dissuades people from taking public sector jobs.
“Staffing in our state’s public sector is currently at a crisis level, from the teacher shortage to understaffed municipal services,” said bill sponsor Rep. Mai Xiong, (D) 13th District. “It is clear that we must take action to ensure public employees and their families are better supported. ”
Jacob VanSickle, president of the Michigan State Employees Association, says public workers have seen most salary gains in recent years go to their benefit expenses.
“Every time we get something for them, then it just a couple months later gets dumped into health insurance and those increasing costs, because they’ve just continued to skyrocket,” he said. “Our cost on health insurance has definitely blown that cap way out of the water, and it just keeps coming out of our members’ pockets.”
Right now, the bills are caught in a legal battle because they were never presented to Gov. Gretchen Whitmer after being passed.