Modeling police and fire health costs for bargaining
Good bargaining starts with a model both sides can read. Here is what to include and what the model should show before talks begin.
Six Parts of a Bargaining Model.
Public Act 152 Calculator
Test the cap methods against the unit’s costs.
Public Act 152 Explained
Constraints any projection must honor.
Retiree Health and Labor Contracts
Retiree terms the model should include.
Retiree Health Accounts for Public Employers
A funding option to include in the model.
A County Example
A large county’s planning example.
Open Enrollment Checklist
The bargaining and enrollment calendar the projection supports.
Making the model something both sides can read.
A bargaining model works when both sides accept the inputs. Agree on the census, the current and renewal rates and the contribution terms before anyone argues about conclusions. Then show results in the unit both sides care about: the employee share per pay period, and the employer cost per year.
Include what is easy to leave out. Retiree cost can outweigh the active changes on the table, and the cap method decides how much of a cost increase the employer can absorb. Showing the options side by side, with the assumptions listed on one page, turns a debate about numbers into a debate about choices.
Questions About Bargaining Cost Models.
Straight answers for HR, finance and bargaining teams.
What Goes Into a Bargaining Cost Model?
Headcount data, expiring and renewal premiums, contribution language, the method used to apply the statutory cap, and any retiree obligations attached to the bargaining unit.
Should the Model Include Retirees?
Yes when the contract covers them, because retiree cost can outweigh the active-employee changes being discussed.
How Do We Show Employee Impact?
Show what each option does to the employee share per pay period, so both sides see the same effect.
When Should the Model Be Ready?
Before the first session, so the proposals are built from numbers and not from estimates.
Does ERISA Apply to These Plans?
Usually no. A governmental plan falls outside ERISA Title I, though other federal and Michigan requirements can still apply, so involve your attorney.
Does the Affordable Care Act Apply?
Yes, if the public employer is big enough to count as a large employer under the ACA. Keep tabs on hours worked, offers of coverage and the required filings.
Do You Work With Public Safety Finance Teams?
We do. Michigan public employers rely on us for plan design, renewal strategy, contribution-cap compliance and retiree medical questions.
Can You Review Our Current Plan?
We can. Share the plan documents and the renewal, and we will explain where the plan sits today and which alternatives are realistic.
What Should We Send You First?
The current plan summary, the renewal notice, plus any contract provisions or board resolutions that touch benefits.
How Do We Start?
Forward the renewal along with the date a decision is due. We will go through it and lay out the choices.
How far ahead of talks should the model be ready?
Early enough for both sides to review the inputs and ask questions, usually several weeks before the first session. Late models invite distrust.
Should the model show more than one year?
Yes. Showing the plan over two or three years helps both sides see trend effects and prevents a one-year fix from creating next year’s problem.
Next step? Send us your renewal or call to talk first. There is no fee and no commitment.
This page offers general background on modeling police and fire plan costs. It is neither legal nor tax advice; questions specific to your plan should go to your own counsel and tax advisor, and we can coordinate with them.
The Law Behind This Topic.
Every law and rule mentioned here links to its official text. The content is informational only and is not legal advice; requirements change, so read the current version and consult your attorney.
Publicly Funded Health Insurance Contribution Act (MCL 15.561)
Public Act 152 of 2011 is the Michigan statute that caps how much a public employer may contribute to medical plan costs.
Coverage of ERISA (29 U.S.C. 1003)
Clarifies that a plan meeting the definition of a governmental plan is not subject to ERISA Title I.
Police and Fire Compulsory Arbitration (MCL 423.231)
Section 1 of Act 312 of 1969, which sets Michigan’s policy of binding arbitration for police and fire labor disputes.
Related Public Safety Reading.
Police and Fire Benefits
The page this belongs to.
Employer Benefits Guides
The full section.
Public Administration Benefits
More on public administration benefits for public employers.
Want a Model Before Talks? Send the Data.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
An independent employee benefits consulting firm. We look at the entire benefits program — cost, plan performance, risk and administration.
Switch to CFH. Unhappy with your broker? Your employees won’t notice. You will. →