Employee Healthcare Costs

Under the Township’s health care plan in 2020, a Township employee with a family of four pays $16.68/month in total for medical, prescription, dental, and vision coverage. Supervisor Savoie has argued that this isn’t too generous because they have a high deductible plan ($5,000/employee/year). What he doesn’t tell you is that we, the taxpayers, pay the first $3000 of the deductible for each employee into an HSA (Health Savings Account) that is tax-free to the employees. Employees pay only the last $2000 – should they need it. So, in total, Township taxpayers actually pay 99% of Township employees health care costs!

If that wasn’t generous enough, did you know residents pay 100% of Township retirees and their spouse’s healthcare costs for life. Yes, just put in 25 years working for the Township and you get health care for life at no cost other than Medicare. At age 65, the Township covers retiree’s and spouse’s supplemental Medicare plan.

In 2011, Michigan passed a state law, 2011 Public Act 152, that attempts to limit the amount that public employers (such as Bloomfield Township) pay toward employee medical benefit plans. In January 2019, the Township Board hired a health care consulting firm, Manquen Vance, to study the Township’s health care costs. Consultants from Manquen Vance presented findings at the November 25 Board of Trustees meeting.  

The law provides three options for public employers to choose annually. The cost estimates were provided by Manquen Vance and are for an employee with family coverage (medical, prescription, dental, and vision):

1. “80%/20%” Option – which limits a public employer’s share of total annual health care costs to not more than 80%. This means the Township taxpayers would pay 80% and the Township employees would pay 20% of their health insurance costs. This is pretty standard in the private sector. Under this option, a Township employee with a family would pay $441/month (20%) and taxpayers would pay the balance of $1,764/month/employee family (80%). Overall, employees would contribute $1.01M/year and taxpayers would contribute $4.39M/year.

2. “Hard Caps” Option – the State Treasury annually sets the cap amount based on a formula. If medical, prescription, or HRA rates exceed this cap, the employee pays the contribution. If the rates fall under the cap, there is no employee contribution (100% taxpayer funded). This would limit the taxpayer’s burden for total annual health care costs based on coverage levels. Under the “hard caps” option, a Township employee with a family would pay $658/month while taxpayers would pay the balance of $1,547/month/employee family. Overall, employees would contribute $1.62M/year and taxpayers would contribute $3.86M/year.

3. “Opt Out” Option – allows a local government to exempt itself from the requirements of the Act by an annual 2/3 vote of the governing body. This “opt out” option allows a local government to do what it wants in terms of paying for healthcare programs. Under this option, a Township employee with a family would pay $16.68/month while taxpayers pay the balance of $2,188/month/employee family. Overall, employees would contribute $0.04M/year ($42,764K/year to be more precise) and taxpayers would contribute $5.45M/year.

Since PA 152 was enacted, the Bloomfield Township Board has voted every year to simply “opt out”. At the November 25, 2019 Board meeting, Trustees once again voted 5-2 in favor of continuing the “Opt Out” for 2020. Only Trustees David Buckley and Dani Walsh voted against the “Opt Out”. Supervisor Savoie mocked and insulted taxpayers (click here for video, go to minute 29:00) who protested the vote with their presence, voices and signs.  

Why does the Board continually vote to opt out of PA 152 and offer over the top generous healthcare to its employees and retirees? Could it be that the Supervisor, Treasurer, and Clerk who all continue voting for this are also Township employees who directly benefit from this and will one day retire with free health care? Their legal position as an employee or an elected official appears unsettled so they choose who they are at their convenience. Simply stated they play both sides of the street. This is an obvious conflict of interest, but the Township’s attorney, Derk Beckerleg, stated his opinion that in the General Township Act, Township officials (the Supervisor, Treasurer, and Clerk) are “obligated by law” to vote on all matters of compensation even when it directly benefits them as employees – thus no conflict of interest per Mr Beckerleg!  I’m not making this stuff up. Check out the video here (start at 29:50) of the Nov 25 Board Meeting to see for yourself.

Supervisor Savoie has tried to pit the taxpayers against the Township employees on this matter of healthcare benefits. Don’t let him. This is not about the job our wonderful public servants do for our health and safety. They are indeed first class and they deserve to be paid a fair wage and receive fair benefits for the jobs they do. The problem is that we can no longer afford such generous health care benefits, without a greater contribution by the people who benefit. What do you pay for medical, prescription, dental, and vision? I bet it’s NOT $15/month for a family of four! On top of that, not only are you buying your own individual or family health care insurance, you’re paying for 99% of the Township health care costs via your taxes.  

To continue funding these outrageously generous health care benefits, the Township Board is sneaking in a renewal of the 2010 millage during the March Presidential Primary. Your NO vote is once again urged in the coming March election. We must demand that the Board seriously cuts costs before considering further taxing its residents. Absentee balloting begins in late January.