Article; Michigan Agenda: GOP vows to revamp educators' benefits

Instead of statewide plan, lawmakers want teachers to contribute locally and districts to pool coverage

Gary Heinlein/The Detroit News

December 18, 2005

LANSING-- Republican lawmakers, intent on slashing the cost of teachers' benefits, vow to continue pushing for an overhaul of pension and medical plans.

"We're not backing off. It's a top priority," House Education Committee Chairman Brian Palmer, R-Romeo, told reporters last week.

Republicans, who hold a legislative majority, want to replace a generous statewide teacher pension program with defined contributions plans. Employers save because they pay less while workers contribute designated amounts.

GOP lawmakers also want to make it easier for school districts to self-insure or pool their health coverage with that of neighboring school districts.

A self-insured employer pays workers' health care claims out-of-pocket, rather than contracting with an insurance company.

Lawmakers passed some of the school benefits bills before adjourning for the holidays. Palmer says negotiations with opponents will continue during the six-week break.

Steeply rising school benefit rates, which superintendents say will eat up the entire increase in state aid they'll receive next year, have prompted the push.

The proposals, however, add fuel to a long battle between the majority party and the state's biggest teacher union. Michigan Education Association leaders suspect the real agenda is to weaken the union -- which mostly supports Democratic candidates -- and its offshoot benefits organization, the Michigan Education Special Services Administration.

"By harming MESSA, you're harming the Michigan Education Association," Gary Fralick, MESSA's spokesman, said recently.

MESSA administers health benefits for 55 percent of all Michigan school employees, who won that coverage through collective bargaining. Other teachers are covered by various insurers.

Earlier this year, Republican lawmakers drew up a package of bills that would have put all teachers into a state insurance pool. In a $300,000 Senate-funded study, consultants concluded that such a setup could save millions. The bills are in limbo because backers can't muster enough votes to pass them.

Drafters of the latest teacher legislation argue that health plans are needlessly costly because boards of education lack the data necessary to insist on less-expensive alternatives. One measure would require providers such as MESSA to release details of benefit claims to school administrators.

Opponents say that would invade school employees' privacy, even if done anonymously