MI Court Rules against Public Worker Health Care Contribution

August 26, 2011 (PLANSPONSOR.com) - A Michigan appeals court has ruled that a requirement that state employees contribute 3% toward future health care benefits is unconstitutional.
The appellate panel noted that the Legislature enacted the 3% health care contribution to help fill the hole in the state that budget lawmakers had hoped to fill by denying a 3% raise (see MI Cost-Cutting Moves Include Public Worker Health Care Changes). However, the Detroit News reports the court found lawmakers did not have the authority to do so under the Michigan Constitution.

The state had appealed a Court of Claims decision holding that the statute requiring a 3% employee contribution is invalid. The Court of Appeals affirmed the lower court’s ruling that only the state Civil Service Commission can set rates of compensation for all classified public service employees, according to the Detroit News.