MEA VOICE At Issue
Just the FAQ - Answers to frequently asked questions about PA 106 (the MESSA bill)
Question: How does Public Act 106 (PA 106) affect MEA members?
Answer
Under PA 106, health coverage for public employees remains subject to collective bargaining. MEA members who have MESSA should be reassured that MESSA will continue its strong traditional commitment to providing outstanding member service and quality coverage at affordable rates. MESSA members also know that MESSA has always placed a premium on protecting the privacy of their medical claims information. PA 106 requires health plans to release employees’ medical claims experience (not tied to individual names) to employers. MESSA is committed to protecting members’ medical information to the maximum extent allowed by PA 106. Other health plans and commercial insurance companies may very well release additional medical information to employers beyond the data required by PA 106. The information may also be subject to release to any person under the state Freedom of Information Act (FOIA), increasing MEA members’ fears about violations of their privacy.
Question: How does PA 106 affect school districts?
Answer
PA 106 requires school districts to solicit four bids for employee health insurance coverage, subject to collective bargaining. It requires medical plans serving public employers in Michigan to release medical claims experience for groups of 100 or more employees to their employer. Public employers with fewer than 100 employees can join together with other employers to also request the data. PA 106 allows public employers, including school districts, cities and counties, to choose to join together in insurance pools for the purpose of providing health insurance coverage for some or all of their employees.
Question: Will school employees still be able to collectively bargain the health benefits of their choice?
Answer
Yes. PA 106 did not amend or change PERA (Public Employment Relations Act), which governs collective bargaining by public employees in the state of Michigan. School employees represented by unions will still be able to bargain their choice of health care plan and coverage, even when that choice of coverage is not one of the four bids solicited by the employer.
Question: What is the essential issue surrounding PA 106 for educational employees?
Answer
The essential issue is who will control employee benefits. Issues raised in the Legislature by supporters of PA 106 such as bidding, public employer pooling or release of claims experience were a smokescreen. School districts pushed for PA 106 to make it easier for them to move employees away from MESSA so they could take control of benefit levels, review and analyze employees’ medical claims data, reduce benefits, and increase co-payments, deductibles and out-of-pocket costs. MESSA is the only health plan affiliated with your union. It is a not-for-profit membership organization whose mission is to reduce hassles and provide quality coverage, outstanding service, peace of mind and financial security for families. MESSA puts its members, not profits, first.
Question: PA 106 requires school boards to solicit four bids for health insurance. How will the bidding impact collective bargaining over health benefits?
Answer
School districts are required to ask for four bids, but the actual selection of the health insurance plan remains fully subject to collective bargaining. Many school districts have brought competing bids and quotes to the bargaining table in recent years. The actual choice of coverage and carrier must still be bargained and need not be from one of the four employer-solicited bids.
Question: Does PA 106 require school districts and employee bargaining groups to accept the lowest bid?
Answer
No. In fact, the act does not require that the district even bring the bids to the bargaining table, nor does it require that the eventual plan settled on in bargaining be a plan included in the four bids.
Question: Does the act require the four bids to all represent the same specifications?
Answer
No. The act is silent on specifications. In reality, each bid could reflect different levels of coverage, co-payments, out-of-pocket costs and service. It will be very difficult if not impossible for competing health plans to match MESSA’s not-for-profit focus, unique benefits, rich tradition of personalized service, and mission of acting in its members’ best interests.
Question: Will MESSA be able to bid on coverage for employee groups that currently are not covered by MESSA?
Answer
Yes. Subject to MESSA’s bylaws and mission, MESSA may choose to compete for business it currently does not have. MESSA’s not-for-profit charter currently limits us to serving “educational employees.” Our bylaws require that members be MEA members or non-MEA members employed by a district where at least one employee group is an MEA group with MESSA coverage. As more is known about PA 106, MESSA’s Board of Trustees and leaders will likely examine a number of strategic options designed to maintain MESSA’s leadership in the market.
Question: Are local governments and school districts required to form insurance pools together?
Answer
No. The decision to join together in a pool is entirely voluntary. Only nonrepresented and administrative groups can automatically be placed in a pool by the employer. Coverage for represented groups, including a decision to put represented employees into a pool, is still subject to collective bargaining.
Question: Given the experience of the West Michigan Health Insurance Pool, how viable are these new public employer pools?
Answer
The experience of the West Michigan Health Insurance Pool suggests school districts and local governments should approach pooling with much caution. The West Michigan Pool, which has been in existence for three years, is in serious financial trouble. It recently reassessed its 29 member school districts $1.85 million to make up for a shortfall in last year’s expenses. And it raised rates 21.6 percent July 1, 2007.
Question: How does MESSA plan to comply with the release of members’ medical claims experience data as detailed in PA 106?
Answer
MESSA intends to comply with the law. We are seeking expert legal counsel on the specific requirements and will report more to you once we receive our attorneys’ recommendations.
Question: Will the requirement to release claims experience harm MESSA’s current strategy of community pooling small employee groups into larger groups to spread risk and provide stable rates?
Answer
Yes. PA 106 requires all public employer pools and health plans serving public employers to release claims experience data to the employer. The act further specifies that employers release the data to the bargaining representatives of the employees as well as to any competing health plans that express an interest in bidding on the benefits. The mandatory release of claims experience will lead to cherrypicking of MESSA pools. MESSA is reviewing its community pool rating methodology in light of this concern. MESSA expects to fully compete for business in the new market environment created by the act, but it is not likely we will be able to continue to pursue a pure pooled strategy for all groups.
Question: Will MESSA need to develop new plans and new options?
Answer
There is no question that the number of products will increase in the market. Some of the largest commercial insurers in the country lobbied heavily for PA 106. In addition, despite the Legislature’s approval of a tax increase, the revenue problems that have beset education funding in Michigan are not going away anytime soon. No recommendations on plans or options have been made by MESSA’s senior leadership to the board of trustees as of this date. Given the increased competition from private insurers, MESSA may need to develop more options and expand its product line in order to serve the needs of our members and to successfully compete with the new carriers and multitude of new plans brought the market.