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Patterson: Exempt Oakland County from health insurance limitation law for 2012

Public Date: 9/28/2011 12:00 AM
Contact: Bill Mullan, Media and Communications Officer
Phone Number: 248-858-1048

Pontiac, Michigan -- Oakland County Executive L. Brooks Patterson has asked the Board of Commissioners to adopt a resolution to exempt Oakland County from the provisions of Michigan’s public employee health insurance limitation law for calendar year 2012.

Patterson, noting that just last week Oakland County adopted a balanced three year budget, said immediate implementation of Public Act 152 of 2011 would be expensive and likely result in litigation from other entities, causing undue harm to county taxpayers and employees.

“Oakland County’s proven record of fiscal excellence is built on a deliberate, long-term outlook in our three-year budgeting process,” said Patterson. “Our adopted triennial budget for 2012 through 2014 is balanced, maintains fiscally responsible fund balances, continues employee salary reductions taken in previous years, and requires employee contributions to fund health care.”

Public Act 152 of 2011 became law September 27, 2011 – five days after Oakland County passed its triennial budget. The county has already incurred significant time and expense in executing its calendar year 2012 annual health care selection open enrollment process for employees. Those investments would be lost and Oakland County taxpayers would have to bear additional significant costs if Public Act 152 is required to be implemented by January 1, 2012.

“Insurance contracts, coverage options, co-pays and deductibles are complex items requiring thoughtful attention,” said Patterson. “The annual benefit selection process for medical care is a six month endeavor requiring substantial investments of time and money. We are already more than halfway through the process for the 2012 benefit year. Now, Act 152 would require that we stop and change everything.”

Oakland County employees have shared the burden of budget cuts as property tax revenues have declined. Their sacrifices include a 2.5% salary reduction for Fiscal Year 2010; a further reduction of 1.5% for Fiscal Year 2011; and salary freezes for Fiscal Year 2012, which begins October 1, 2011, and Fiscal Year 2013 for a combined savings of $31.9 million.

"I want to thank Oakland County employees for their hard work and sacrifice," said Patterson. "An overwhelming majority of them understand the financial challenges imposed by the economy, and they have accepted sharing the burden to reduce costs."

In addition, Oakland County’s employee benefits reforms have contributed to saving Oakland County taxpayers tens of millions of dollars. These include:

• Being the only county in Michigan to fully fund its accrued retiree health care obligation as of 2007 using Certificates of Participation, saving Oakland County taxpayers $150 million over the life of the program;
• Moving employees from retiree health care benefits to a Health Savings Account and from pensions to 401(k)-style retirement;
• And OakFit, the county’s employee wellness program, has helped Oakland County maintain health care costs $12 million below where they would be under private industry conditions.

There are three major health care plans available to Oakland County employees. For single person plans, employees already pay between 11.79% and 21.81% of the 2011 illustrative rate. Since 1997, Oakland County employees have contributed $26 million toward their health care costs.
For media inquiries only, please contact Bill Mullan, Media and Communications Officer,
at (248) 858-1048.