Craig W. Lange (P27200) | Robert T. Carollo, Jr. (P76542) | Ryan J.L. Fantuzzi (P79616) | Kirk, Huth, Lange & Badalamenti, PLC | 19500 Hall Road Suite 100 | 586-412-4900 | [email protected] | [email protected] |
[email protected]

State Bar Public Corporation Law Section (PCLS)

The language of PA 152 that a “public employer may allocate its payments for medical benefit plan costs among its employees and elected officials as it sees fit” and that the “public employer may allocate the employees’ total share of annual costs of the medical benefit plans among the employees of the public employer as it sees fit” do not involve mandatory subjects of bargaining under PERA. Because the allocation of employee costs under PA 152 is not a mandatory subject of bargaining, MERC was without authority to interpret that statute so as to preclude a public employer’s use of “bundled insurance rates” in calculating those employee costs.

In this case, the Township imposed contribution limits for employer-provided health care as required by the Publicly Funded Health Insurance Contribution Act, 2011 PA 152 as amended, MCL 15.561 et seq. (“Act 152”) without bargaining with the Command Officers Association of Michigan (“Union”). The Union filed an unfair labor practice charge against the Township under the Public Employment Relations Act (“PERA”), MCL 423.201 et seq, arguing that employers have a duty to bargain in good faith over mandatory subjects of bargaining, including the cost allocation of health insurance under Act 152. Act 152 created two limiting options for public employer health care contributions. The Township implemented the percentage-limit option under MCL 15.564, which prohibits a public employer from paying more than 80% of the total annual costs of all of the medical benefit plans it offers.
On review, the Michigan Employment Relations Commission (“Commission”) decided that the Township’s choice between the two limiting options was not a mandatory subject of bargaining. Even though the Commission decided that PERA did not obligate the Township to bargain over which of the two limiting options to select under Act 152, it decided that PERA obligated the Township to bargain over the calculation and allocation of the employee premium share under Section 4 of Act 152 on the faulty premise that PERA, as dominant legislation, demanded this conclusion. The court of appeals affirmed this erroneous decision without consideration or interpretation of the pertinent text of Act 152