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Legislature may curtail municipal retiree health benefits

Posted at 3:38 PM, Dec 04, 2016

LANSING, Mich. (AP) — A push to curtail health care benefits for municipal retirees in Michigan is setting off a fight between those who say billions in debt can no longer be ignored and critics who contend it would cheat people out of coverage.

The new Republican-sponsored plan could be enacted yet this year. It aims to address $11 billion in unfunded liabilities.

Starting in May, newly hired municipal workers would no longer qualify for health insurance in retirement. Local governments could instead contribute to a tax-deferred account such as a health savings plan.

In many municipalities, retirees would have to pay at least 20 percent of the cost of coverage.

The debate comes as another retirement proposal — closing the pension system to newly hired teachers — is stalled in the Republican-controlled Senate.