State Activities​

State Of Michigan

State Capitol

Lansing, MI 48933

Dear Governor Whitmer,

As organizations that represent administrators, superintendents and elected school boards of Michigan’s public schools, we write today to express concerns with House Bill 6058, which has been ordered enrolled by the House. It makes changes to Public Act 152 of 2011 which governs how public employers and their employees split healthcare costs.

We acknowledge that school employees have struggled with rising healthcare costs and the ‘hard cap’ law in PA152 did not adequately keep the school districts’ amount paid toward their employees’ health coverage in line with actual cost increases. This has resulted in financial pressures for school employees that will need to be addressed. 

However, we have concerns about the increased costs this bill creates for school districts and the impact on our students and classrooms. We expressed these concerns regarding the cost with the Legislature and asked questions about the details of the policy and its short and long-term impacts. Our questions and concerns went unanswered as the bill was rushed through the process in December.

HB6058 is expected to cost more than $85 per pupil for districts who use the hard cap option, which the vast majority do. This unexpected expenditure will hit budgets as soon as the bill goes into effect, more than halfway through the budget year. This is not something that can easily be absorbed without having to pull money and resources from the classroom. Instead of creating new expenditures, we need to be finding sustainable and adequate funding for our schools.

We requested moving the effective date to July 1 for districts to be able to craft a budget incorporating the increases, or a supplemental budget appropriation to help districts absorb this mid-year hit to budgets. Neither request was acted on. Without supplemental funding, this cost will shift funds and resources away from our teachers, support staff and students in the classroom. 

There are also questions about changing the annual percentage increase for the hard cap from being tied to medical CPI to a medical care component percentage approved by the Department of Insurance and Financial Services, which was added late in the legislative process. It is our understanding that the medical care component of Michigan’s health insurance rates is not a specific number reported by DIFS. Therefore, districts would have a hard time budgeting with this new data that is not easily available.  

Please let us know if we can answer any other questions. A more thorough process with input from all stakeholders would yield a better result in making much-needed changes to this law. We appreciate your consideration of our concerns with this potential policy. 

Sincerely,