March 1, 2012, Introduced by Senator BRANDENBURG and referred to the Committee on Finance.
A bill to create a new financing mechanism for public employee
health benefits; to require the creation and operation of a public
employee health benefits financing trust; to provide the powers and
duties of certain state officers; to prescribe the powers and
duties of the trust administrator; to require participation in the
financing mechanism for state employee health benefits; and to
allow other public employers to participate in the financing
mechanism for public employee health benefits.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 1. This act shall be known and may be cited as the
"public employee health benefits financing act".
Sec. 2. As used in this act:
(a) "Health benefits" means health insurance provided as an
incident of public employment, including self-funded insurance and
worker's compensation insurance.
(b) "Public employer" means this state or a county, township,
village, city, authority, school district, intermediate school
district, or other political subdivision of this state and includes
any entity jointly created by 2 or more of those entities.
(c) "Trust" means the trust authorized in section 3 to finance
public employee health benefits.
(d) "Trust administrator" means the entity charged with
administering the trust as provided in section 4.
Sec. 3. (1) The attorney general shall oversee the
establishment and administration of an independent trust for use in
financing and disbursing payments for public employee health
benefits. The attorney general shall include terms in the trust
documents that protect public employer contract obligations to
provide health benefits. The powers and duties of the trust
administrator include all of the following:
(a) To accept funds for payment into the trust from any
source.
(b) To disburse funds from the trust to meet public employer
contract obligations for public employee health benefits.
(c) To invest trust funds that are not needed to fund current
trust obligations.
(d) To disburse funds from the trust to pay the expenses of
administering the trust.
(e) To seek methods to increase the value of the health
benefits received for the funds disbursed.
(f) To investigate and enter into financing methods secured by
trust assets.
(g) To administer the trust assets in accordance with the
obligations of an investment fiduciary under section 13(3) of the
public employee retirement system investment act, 1965 PA 314, MCL
38.1133.
(2) The trust administrator's powers do not include the power
to bind a public employer to any indebtedness or to decrease health
benefits provided to public employees under existing contract
obligations.
Sec. 4. The department of technology, management, and budget
shall contract with an entity to serve as trust administrator. The
trust administrator shall be required to post a bond in an amount
determined by the department of technology, management, and budget
to ensure faithful performance of the trust administrator's duties,
but not more than $2,000,000.00. The bond shall meet all of the
following requirements:
(a) Be issued by a bonding company licensed to do business in
this state.
(b) Name the trust administrator as the principal and the
state as the obligee.
(c) Be on a form prescribed by the department of technology,
management, and budget.
(d) Include the bond company's power of attorney as an
attachment.
Sec. 5. (1) After the trust is formed, this state shall
finance public employee health benefits under this act and shall
remit to the trust the premiums or contributions required of the
state and its current participating employees for self-insured
health benefits, contractual health insurance, or any other
arrangement this state has established for health care benefits.
This state shall also participate in financing health benefits for
public employee retirees under this act.
(2) After the trust has been in existence for 1 year, any
other public employer may participate in the financing of health
benefits for its public employees or public employee retirees under
this act.
Sec. 6. The department of technology, management, and budget
may promulgate rules to implement this act in accordance with the
administrative procedures act of 1969, 1969 PA 306, MCL 24.201 to
24.328.