Michigan Court of Appeals Approves Health Benefits for Unrelated Co-Residents of State Employees

by Miller Canfield
Contact

On January 8, 2013, the Michigan Court of Appeals, in a two-to-one decision, held that the Michigan Civil Service Commission could extend eligibility in the State Health Plan to “other eligible adult individuals” (OEAI) who are co-residents, but not relatives, of state classified civil servants without running afoul of either the “Marriage Amendment” to the Michigan Constitution or its Equal Protection Clause.

At issue was a decision by the Civil Service Commission to establish an OEAI health plan policy, which permits state classified civil servants who do “not have a spouse eligible for enrollment in the State Health Plan” to “enroll one [OEAI]” so long as the OEAI:

(1) is at least 18 years of age;

(2) is not a member of the employee’s immediate family (including spouse, children, parents, grandparents or foster parents, grandchildren, parents-in-law, brothers, sisters, aunts, uncles, or cousins); and

(3) has shared the “same regular and permanent residence for at least 12 continuous months” with the employee “other than as a tenant, boarder, renter or employee.”

Michigan’s Attorney General sued the Civil Service Commission, alleging that the OEAI benefits policy violates Michigan’s constitution under the theory that it discriminates against married civil servants based on their “marital status” by excluding married employees from sharing their benefits with persons other than their spouses, and against an employee’s other family members based on their “familial status” by excluding employees from sharing benefits with blood relatives. The Attorney General also suggested that the OEAI policy, which does not expressly apply to same-sex domestic partners, was nonetheless an attempt to circumvent the “Marriage Amendment.” The Court of Appeals disagreed with the Attorney General and affirmed the trial court’s dismissal of the case.

Noting that the OEAI benefits policy is “completely gender-neutral” and “does not allow married employees to share their benefits with anyone other than spouses” or “with close blood relations,” the Court of Appeals concluded that the policy does not violate Michigan’s Marriage Amendment, which prohibits the recognition of any “agreement” other than “the union of one man and one woman in marriage” as “a marriage or similar union for any purpose.” According to the Court, the Marriage Amendment “does not in any way prohibit incidentally benefiting such agreements, particularly where it is clear that an employee here could share benefits with a wide variety of other people.” It held that the OEAI policy “does not depend on the employee being in a close relationship of any particular kind with the OEAI beyond a common residence” and, thus, does not violate the Marriage Amendment.

Likewise rejecting the Attorney General’s Equal Protection claim, the Court explained that neither “marital status” nor “familial status” classifications, with which the Attorney General took issue, deserve heightened scrutiny under the Equal Protection Clause. Consequently, the policy withstands judicial scrutiny because it is rationally related to advance a legitimate state purpose. Specifically, the Court concluded that, under this “highly deferential standard of review,” the OEAI policy is lawful because “it is not the place of courts to second-guess the wisdom, need, or appropriateness of the state action,” particularly where the “[Civil Service Commission] had to ‘draw the line’ at some point.” Here, the Court explained, the Civil Service Commission crafted the eligibility criteria for OEAI benefits through negotiations with the unions, thereby “serv[ing] the negotiated, bargained-for needs of the individuals affected.”

Finally, the Court of Appeals re-affirmed that the Civil Service Commission, which is a constitutionally-created entity, retains “plenary and exclusive authority” to set compensation and conditions of employment for classified civil servants. This, according to the Court, includes the authority to determine eligibility rules for OEAI health benefits “because they are provided in exchange for services rendered by public employees.” As a result, the Court rejected the Attorney General’s assertion that the Michigan Civil Rights Act, which prohibits discrimination based on “marital status,” trumps the Civil Service Commission’s constitutional authority.

What this means for municipal employers

Under this decision municipalities may, without violating the Marriage Amendment or the Equal Protection Clause, have more latitude to offer health benefits to non-employees who are not the spouse or dependents of municipal employees. However, because municipalities do not possess constitutional authority like that of the Civil Service Commission, any “line drawing” performed by a municipality to determine who is eligible for extended health benefits must be done carefully and in consultation with experienced employment counsel to ensure compliance with applicable civil rights laws.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Miller Canfield | Attorney Advertising

Written by:

Miller Canfield
Contact
more
less

Miller Canfield on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):
hide

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.

Security

JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.
Feedback? Tell us what you think of the new jdsupra.com!