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MARQUETTE -- During their Monday meeting, the Marquette City Commission voted on how much the city would contribute to the city employee's health care plans.
According to the motion background, read at the meeting by City Clerk Kyle Whitney, Public Act 152 in Michigan state government stipulates that government employers must choose each year between applying a hard cap on how much each government employer can pay towards an employee's health care costs, adopt an 80/20 cost sharing plan or opt out of the cost sharing model.
"While health care costs have seen a sharp rise in the past year, the hard cap amount has only increased by 3%, according to the state of Michigan Treasury," said Whitney. "The city medical plan costs have not been exempt from this rise in costs, with a 19% overall premium increase."
Even after the city health care committee met to review existing coverage and attempted to revise the plan, the employee share of city health care is still set to increase 300% from the current amounts.
"To mitigate the sharp rise in costs to city employees and to continue to attract and retain talent, it is recommended that the city commission exempt the city of Marquette from public act 152 for the 2027 year, and buy down a portion of the increase in the amount of $13.40 for a single person plan, $30.02 for a two person plan and $37.52 for a family plan per paycheck."
Under this plan, the city would pay 50% of the increase in health care costs, and take on a maximum of an additional $144,000 in health care costs. A budget amendment would be required.
Deputy City Manager Sean Hobbins later clarified that, for an employee who currently utilizes a family plan with core coverage whose payment per paycheck is $34.20, if the city did nothing the cost of health care would increase to $174.33 per paycheck. To get that cost down, the city's health care committee picked a different plan with less benefits, but even then costs for that same hypothetical employee would increase to $106.06 per paycheck. With the city covering 50% of the increase in costs, that person would be paying $71 per paycheck.
Commissioner Cody Mayer's motion amended the city's recommendation, stating that the city should pay $20.10 for single person plans per paycheck, $45.01 for two-person plans and $56.28 for family plans -- this plan would cover 75% of the employee's health care cost increase, and that hypothetical employee on a family plan would pay $49.78 per paycheck.
His motion was seconded by Commissioner Jessica Hanley. Deputy City Clerk Sean Hobbins reported that the total cost with Mayer's amendment would be conservatively estimated at a total cost of $210,000.
"I think this is one of these areas where I think it's not only a great point for us to lead by example a little bit," said Mayer. "But you know, no one goes into municipal government for the money. I know a lot of our employees could certainly probably make a lot more going and working in the private sector, but they choose to work in the public sector. And you know, when we're looking at these types of cost increases, we can talk about 3 or 4 or 5% raises on contracts, but this eats all of those raises away."
"…The amount I proposed, as far as the increase that we are anticipating this year on these premiums, is as the city telling our employees we are willing to cover 75% of the additional cost. I like the concept, and I really really appreciate Sean (Hobbins) and other staff members’ time that went into the numbers they presented to us here, which is more of a 50/50 ... but I think we can do better than that.
"We can show our employees that we want to take care of them and we prioritize their health and their families' health at the end of the day. They are still going to be paying more for their health care premiums, even with us covering something like 75% of this additional cost. I think it's a great way, though, for us to show our employees that, you know, maybe we can't give them the highest paying salary that they could be getting for their skills labor that they have, but we can at least make sure that their health care costs are not completely robbing their paychecks."
When asked by Hanley if the city could afford to pay 75% of the cost increase, rather than 50%, Hobbins replied that "I think we're budgeting fairly tight...this is an effort to really recognize the pain that employees are going to feel if we don't have some kind of mechanism in there to control the sharp rise of health care costs ... I looked at how much everything would cost and what a fair balance would be for both the taxpayers and city employees, so that's kind of where this number (the city's recommended 50% payment) came from."
Mayor Pro Tem Ottaway spoke next, saying that he agreed with Mayer's point that the city should be serving as an example, but that "the difference that we have compared to the private sector, though, is we're playing with public dollars. So I want to have a good understanding of where these finances are coming from."
"This is a little bit difficult, because as a role as a commissioner, we have to oversee the budget and represent the citizens," said Commissioner Sally Davis. "And so when we ask the citizens what they want to do with the $144,000, do they want to support the employees or do they want to take care of some of our infrastructure or some of the other needs that we have? So it's not as easy of a decision, at least for me, as it is for perhaps some of the other commissioners."
Mayer expressed concerns that employees could leave the city if health care costs were too high, and that the city would be unable to hire replacements.
"Any sort of noticeable drop in staff -- all our residents would feel it," said Mayer.
After more deliberation, the commissioners came to a roll call vote. Commissioner Davis and Larson, and Mayor Schloegel voted no, and Commissioner Hanely, Mayor and Mayor Pro-tem Ottaway voted yes. Commissioner Gottlieb was excused from the meeting. Because the motion required a ⅔ vote, it failed.
The commission then voted on the original agenda item, where the city would cover 50% of the health care increase. That motion passed 6-0.
Annie Lippert can be reached at 906-228-2500, ext. 550. Her email address is alippert@miningjournal.net.