Capitol News
April 11, 2021
During March, the Legislature took some important actions just before leaving for a two-week “district work” break from March 26 through April 12. State employees who are currently teleworking were ordered to stay home until July 12, a signal that State public health officials see danger in prolonged periods of time in enclosed spaces with unvaccinated people.
COVID-19
On April 7, Dr. Sarah Lyon-Callo, the State epidemiologist, announced that the State is first in the nation in number of cases, case rates, inpatient bed utilization, and adult ICU bed utilization. The highly contagious B117 variant from Great Britain is 75 percent of those testing positive in Michigan and especially prevalent in school-age and younger residents. The fact that COVID-19 can be spread by those without symptoms makes it difficult to contain.
However, rather than imposing more restrictions, Michigan Governor Gretchen Whitmer asked residents for two weeks of voluntary “individual responsibility” to suspend in-person high school classes, all youth sports, indoor restaurant dining, and gatherings with unvaccinated people indoors. By the time you read this, we will know if voluntary measures and minimal mandates can work.
Michigan has administered more than five million vaccines toward the goal of vaccinating at least 70 percent of the 10 million Michiganders ages 16 and older as soon as possible. With under a third of adult Michigan residents fully vaccinated amid this surge, the Governor asked President Biden for more vaccines. He nixed that and instead authorized more National Guard to help with vaccinations.
On April 5, vaccinations became available to all 16 and over; vaccination sites and appointment times are more plentiful now than ever for those who seek to protect themselves and the community. See how to get your vaccination at www.Michigan.gov/COVIDvaccine or call the COVID-19 Hotline at 888-535-6136 (press 1) Monday through Friday from 8 a.m. to 5 p.m., Saturday and Sunday 8 a.m. to 1 p.m.
PENSION CHANGE UPDATE
Seeing more action in March was House Bill (HB) 4264, the bill to amend the State Employees’ Retirement Act to change the way the State addresses the actuarially determined unfunded accrued liability in the State employee pension fund. Through its membership in the Coalition for a Secure Retirement (CSR), the State Employee Retirees Association Coordinating Council Chair Bob Kopasz and Legislative Representative Mary Pollock met with Appropriations Committee Chair State Rep. Tom Albert (R-Lowell) and school employee retiree representatives on March 4 to hear Albert’s description of the bills and ask him questions. At that time the Office of Retirement Services (ORS) had not yet taken a position on the bill. Subsequently, ORS met with Rep. Albert and asked for some changes in the bill.
On March 24, the House Appropriations Committee had another hearing on the bill and introduced a substitute bill. Anthony Estell, Director of ORS, testified in support of the substitute bill and the Committee reported it out of the Committee to the House floor.
Eliminating the Cap - Rep. Albert’s interest in improving the funding side of the State employee pension system is a positive step, but there is also a need to review and improve the benefit side of the State employee pension system.
The 3 percent or $300 cap on State employee retiree annual supplement was established in 1987. Subsequent inflation is such that only 15 percent of State retirees get a full 3 percent annual supplement and the other 85 percent are capped at $300 a year. That $300 in 1987 is worth about $129 in today’s dollars
The 3 percent annual supplement for State employee retirees is cumulative (but it is not compounded): that is, the 3 percent annual supplement is calculated on the base pension amount, including the 3 percent or maximum of $300 that has been added to the base amount in prior years. MCL 38.20g(7).
Example of a State Employee Retiree Postretirement Increase With $300 Cap |
John retired January 1, 2015, with a monthly pension payment of $1,200. Beginning October 2016 (the first October after he’s been retired a full year) he’ll begin receiving an additional $25 per month. (Though 3 percent of $1,200 is $36, the postretirement increase is capped by law at $300 a year/$25 per month.)
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Without the $300 cap, the State employee retiree annual supplement would be more responsive to long-term inflation. Simply removing the sentence in the State Employee Retirees’ Act establishing the $300 cap at MCL 38.20g(7) would give State employee retirees the same annual supplement formula as those who are covered by the Public School Employees Retirement Act, Member Investment Plan.
Example of a State Employee Post-Retirement Increase Without the $300 Cap |
Molly Smith retired on Dec. 1, 2017, with a monthly pension payment of $1,200. Beginning October 2019 (the first October after she’s been retired a full year) she’ll begin receiving an additional 3% of her initial pension, or $36 a month. No cap on maximum supplement.
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CSR and SERA representatives have expressed to Rep. Albert and others a need for the cap on our annual supplement of $300 to be eliminated. Potential House floor amendments to eliminate the cap or a stand-alone bill are being advocated.
HEALTH CARE PACKAGE
Before leaving for their spring district work, the Michigan House approved on a bi-partisan basis a number of bills designed to make health care and prescription drugs more affordable, a priority for Speaker of the House Jason Wentworth (R-Farwell). Business, health care plans, hospitals, insurance and pharmacist groups opposed some of the key pieces of the legislation, but consumer and patient advocates lauded the bills.
Insulin, Oral Chemo — HB 4346 and HB 4354, which passed 91-16 and 91-15, respectively, would cap the cost of insulin and put cost controls on oral chemotherapy treatments. HB 4346 would limit insulin costs to $50 for a 30-day prescription for a patient. Fifteen states have passed similar legislation. HB 4354 would prohibit a health insurance policy from applying financial requirements to orally administered anticancer medications that are more restrictive than the financial requirements it applies to intravenously administered or injected anticancer medications. However, this would not apply if the co-pay or coinsurance for orally administered anticancer medications under the policy were $150 or less per 30-day supply.
Telehealth — Most narrowly passing with the minimum number of 56 votes were two bills concerning telehealth. One would allow out-of-state providers to provide telehealth services (HB 4355, passed 56-51) and the other would allow consumers to renew their contact prescription (HB 4356, passed 56-51).
Pharmacy Benefit Managers (PBMs) — Third-party administrators of prescription drug programs like OptumRx would be licensed and regulated under HB 4351 and 4348 which passed 106-1 and 97-10, respectively. The bills would ban PBMs from spread pricing, which is when the PBMs keep a portion of the amount paid to them by the health plans for prescription drugs instead of passing the full payments on to pharmacies and potentially to patients.
Charge Master Posting — HB 4349 which passed 104-3 would require hospitals to post a digital copy of their charge master on their website. Hospitals would have to publish their standard charges both as a comprehensive data file and as a more selective searchable consumer-friendly list. Theoretically, this price transparency would permit consumers to compare hospital prices and might bring prices down. The bill incorporates into State law a recently adopted federal rule on the subject.
Other Bills — Other bills in the package would require drug manufacturers to submit a report to State regulators when they increase the cost of certain medications (HB 4347, which passed 100-7); ensure a health insurance policy provides coverage for prescription drugs and that the coverage must apply any amount paid by the insured when calculating a person’s overall contribution to any out-of-pocket maximum or any cost-sharing requirement (HB 4353, passed 98-9); place limits on drug manufacturers’ gifts to physicians (HB 4357, passed 102-5); stop insurance companies from removing a prescription drug from its list of offerings during a plan year (HB 4358, passed 99-8); expand the current exemptions to State law related to kickbacks or bribes to also exempt a rebate discount, product voucher, or items that would reduce a patient’s out of pocket expenses, either by way of copay or deductible (HB 4350, passed 101-6); and prohibit an insurer from requiring a patient to pay a higher copay than the cost of a dispensed medication while allowing pharmacists to disclose the current price of medications (passed 105-1).
The bills have been referred to the Senate Committee on Health Policy and Human Services chaired by State Sen. Curt VanderWall (R-Ludington).
ELDER ABUSE PACKAGE
Nine bills (HB 4472-4480) to protect super-seniors from abuse were reintroduced in the Michigan House on March 24. The bills made it through the Michigan House in 2020 but did not get taken up by the Michigan Senate last session.
The bills would make it a crime to assault or restrain an elder adult (defined as those 80 or older) or vulnerable adult (defined as those 18 or older who, because of age, developmental disability, mental illness, or physical disability, require supervision or personal care or lack the personal and social skills required to live independently). The bills would expand a prohibition against embezzlement from a vulnerable adult to include an elder adult, prescribe increased penalties, and amend the sentencing guidelines, among other things to account for these changes. The bills have been referred to the House Committee on Families, Children, and Seniors chaired by State Rep. Rodney Wakeman (R-Saginaw).
ELECTION LAW CHANGES PROPOSED
On March 24, Michigan Senate Republicans rolled out a 39-bill package (SB 273 through SB 311) to significantly change election laws in Michigan. Michigan Republican Party leaders vow to collect signatures for an initiated law that would not be subject to a gubernatorial veto if the Governor vetoes the voting reforms they want. Changes include:
- Requiring a copy of the voter’s driver’s license or State ID with the absentee ballot application;
- Requiring State and county election officials to approve location of city and township absentee ballot drop boxes;
- Requiring local clerks to prevent drop box use after 5 p.m. on the day before an election;
- Requiring local clerks to monitor every absentee ballot drop box with high-definition video cameras;
- Allowing political party poll challengers to film ballot tabulation inside polling places;
- Banning nonpartisan poll challengers like the League of Women Voters from monitoring the ballot counting process and allowing only political parties to designate challengers;
- Prohibiting the Secretary of State from providing a link on the website or mass mailing absentee ballot applications;
- Increasing training requirements for poll challengers;
- Requiring recording and public viewing of election audits;
- Prohibiting private donations for election activities;
- Eliminating in-person voting by affidavit of identity and requiring a provisional ballot be issued to the voter without a government-issued photo identification;
- Prohibiting prepaid postage on absent voter ballot return envelopes;
- Requiring signature verification training for clerks and election inspectors and requiring the Secretary of State to promulgate rules regarding an objective signature verification process.
The bills have been referred to the Senate Committee on Elections chaired by State Senator Ruth Johnson (R-Holly) who is a former Secretary of State.
Editor’s note: Mary Pollock is the Lansing SERA Chapter and SERA Council’s Legislative Representative. She may be contacted at 1200 Prescott Drive, East Lansing, MI 48823-2446; Phone 517-351-7292; E-mail michigansera@comcast.net.
Michigan SERA Recent News, a compilation of links to articles of interest to state employees, is no longer produced.
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