AATA Opts for 80/20 Health Care

At its June 21, 2012 meeting, the Ann Arbor Transportation Authority board passed a resolution in order to comply with the Michigan legislature’s Act 152 for non-union employees, which was signed into law on Sept. 27, 2011. The AATA will now limit its contribution to medical benefits for non-union employees to 80% of the premium for the Blue Care Network Core Plan, starting Aug. 1, 2012.

The law limits the amount that a public employer like the AATA can make to its employee’s medical benefits plans – $5,500 for single-person coverage, $11,000 for two-person coverage, and $15,000 for family coverage. However, the act provides another option – under which a public employer can choose through a vote of its governing body (in this case, the AATA board) – to not apply the hard dollar cap. Instead, the employer can limit its contribution to 80% of the medical benefit, leaving the employee to cover the remaining 20%. It’s this 80/20 option that the AATA board exercised in its June 21 vote.

The AATA put together health plan options for non-union employees that would essentially make their health care costs roughly the same as current costs – if they choose to opt for higher co-pays.

Deliberations by the board included animated discussion among the board members as they weighed the possibility that they could delay the implementation of the 80/20 plan for non-union employees until it’s implemented for union employees, which is not required until their union contract is renewed at the end of the year. Board members Charles Griffith and Roger Kerson voted against the resolution – because they did not want to impose the reduced health care benefit on AATA employees until it was absolutely necessary. They felt that it was possible to delay based on the way that some other transit agencies in Michigan had proceeded; however, that  ran counter to the opinion of the AATA’s legal counsel.

Kerson appeared to speak for the majority of the board, however, when he suggested that just because the state had given public entities “a hammer,” it did not mean that they had to use that hammer against their employees. So there seemed to be a majority sentiment that the “windfall” that the AATA would realize from its reduced health care costs should be put back into compensation for employees, to “make them whole.”

This brief was filed from the downtown location of the Ann Arbor District Library at 343 S. Fifth Ave., where the AATA board holds its meetings. A more detailed report will follow: [link]