Sturgis City Commission in September approved a resolution to control municipal health care expense.
Public Act 152, known as Publicly Funded Health Insurance Contribution Act, limits the amount public employers may pay for government employee medical benefits, according to city officials.
The legislation provides a maximum per-year amount (hard cap) that a public employer is allowed to pay for health insurance benefits, including premiums and contributions to flexible benefits or health savings accounts.
For 2024, maximum levels are $7,702.85 for single, $16,109.06 for two-person, or $21,007.83 for a family; the city’s current premiums for the PPO plan are above these levels.
Legislation also provides two alternatives for local municipalities. First, by a majority vote of commission, the city could “opt-in” to an 80-20% cost-sharing arrangement, in which the city would pay no more than 80 percent of annual cost for medical benefits.
A second alternative is that with two-thirds vote of the city commission, the city can “opt-out” and become exempt from requirements of the act for the next year.
The law requires action on either alternative be taken by Dec. 31, 2023, for 2024.
In 2022, the commission approved a resolution that included exercising the opt-out provision, setting employee contributions at 20% for 2023, and establishing modified contribution levels for a high deductible plan option.
City staff recommended that commissioners choose opt-out again this year, to continue the hybrid approach. With no action by commissioners, the hard caps would go into effect Jan. 1, 2024, for non-union employees.
Currently, the city offers a high-deductible plan with a health savings account to all eligible employees. Because of the savings associated with that plan, combined with significant increase in cost of deductibles, staff recommended that the employee contribution be set at $200 for a single contract or $300 for all others.
Under the recommendation, if an employee participates in the available health incentive, an employee’s contribution would be zero.
For employees opting out of coverage, the rebate they receive for opt-out of medical insurance was recommended to remain at $3,500 for 2024 with an additional $200 if an employee also declines dental coverage. Staff recommends the city contribute $1,200 to the health savings accounts in 2024, a continuation of the amount approved for 2023.
Sunday, November 24, 2024
