AATA Accepts Empty Penalty on Health Care

For its unionized employees, the Ann Arbor Transportation Authority has decided not meet the conditions of Michigan’s Act 152 – which limits the amount that public employers can contribute to their employee health care. Instead, the AATA will accept the penalty specified in Section 9 of Act 152, which actually has no practical effect on the AATA. This will allow the AATA to comply with its obligations under federal law with respect to collective bargaining rights.

Act 152 limits the amount that a public employer like the AATA can make to its employees’ medical benefits plans – $5,500 for single-person coverage, $11,000 for two-person coverage, and $15,000 for family coverage. And the law provides another option, where the employer limits its contribution to 80% of the medical benefit.

However, in a vote taken by AATA board members at their Aug. 16 meeting, they decided not to pursue either compliance option, and instead to accept the penalty specified in Section 9 of the law, which involves funds to which the AATA is not entitled in any case: “If a public employer fails to comply with this act, the public employer shall permit the state treasurer to reduce by 10% each economic vitality incentive program payment received under 2011 PA 63 and the department of education shall assess the public employer a penalty equal to 10% of each payment of any funds for which the public employer qualifies under the state school aid act of 1979, 1979 PA 94, MCL 388.1601 to 388.1772, during the period that the public employer fails to comply with this act.” [.pdf of full text of Act 152]

The rationale for the vote was this: In order for the AATA to comply with Title 49 of United States Code 5333, as an agency that receives federal assistance, unionized health care benefits must be subject to collective bargaining – not the state’s mandated fixed-dollar or percentage caps. AATA bus drivers are members of the Transport Workers Union Local 171.

The AATA had already begun to grapple with this issue, when it voted at its June 21, 2012 meeting to comply with Michigan’s Act 152 for its non-union management staff. And that was followed with a discussion of possibly rescinding that vote at the board’s July 16, 2012 meeting. Although the possibility of scheduling a special meeting was discussed – to deal with non-union employee health care – no meeting was scheduled.

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