Sunday, September 18, 2011

Health Insurance for Live In Friends – HB 4770 and 4771

House Bill 4770 prohibits fringe benefits provided by public employers from being offered to unrelated persons living at the same residents of a public employee.  The bill defines public employees as any person who is employed by the state, a county, city, village, or township.  An unrelated person is any person who is not::

  • Married to an employee.
  • A dependent of an employee.
  • Not eligible to inherit from an employee under the laws of intestate succession in Michigan.  (Means a person not married to or related by blood)

House Bill 4771 prohibits circumventing the intent of 4770 through collective bargaining arrangements, by eliminating bargaining for benefits to be offered to non related persons at the same residence.

With the Michigan economy still in recovery, and taxpayers requiring accountability for the money that governments spend, health and fringe benefits provided to unrelated live-in roommates of employees is a luxury which Michigan can no longer afford.  Michigan's public employers have provided benefits that private sector employees would never have received.  Restricting live-in benefits is  a demonstration to taxpayers that the state will spend their money wisely and not continue to support such a disparate level of benefit between the beneficiaries and those who pay the for the benefits.

But these bills are about more than money. The Michigan Civil Service Commission (CSC) voted in January to re-define recipients of state employee health care benefits as "other eligible individuals," meaning any one roommate - in addition to spouses and dependents - could receive taxpayer-funded health care benefits. These benefits are estimated to cost Michigan at least $8 million annually The Civil Service Commission intentionally crafted the benefits such as to try to avoid the intent of the vote of the people of Michigan. The Commission has been irresponsible in awarding benefits without regard to the costs, and these bills are intended to send the message that the legislature which is responsible for balancing the budget must have a say in what the spending is.

Further, by the Civil Service Commission defining the benefits as it did, there need not be any of the usual trappings of a marriage, or civil union or any expression of commitment towards each other, but merely cohabitation, such as friends who simply room together for convenience and cost savings. This goes far beyond what even the most generous private company offers, and simply is not good public policy.

The CSC and other governmental entities' decisions to offer such benefits open up Michigan taxpayers to increased fraud, as roommates, friends and their children will be considered live-in partners to qualify for state employee benefits. We are doing the fiscally responsible thing by preventing this abuse.

These bills would not break any existing agreements because the changes would go into effect when the next contract is negotiated or the current agreement is amended or extended.

The bills include language that extends their effect to the greatest legal extent. In case the legislature has no authority over employees covered by the CSC (per Michigan Constitution, Article XI, Section 5), the Act will still be found constitutional. And should legislative authority extend to the CSC, at a later date, the Act will apply to them as well.

We have stressed accountability and efficiency in every state program, as we seek the highest return on the taxpayers' investment. These bills protect the taxpayers.


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