There are a number of associations that maintain health care benefit plans for unionized employees. These plans can be particularly beneficial in the smallest of districts, as claims data can fluctuate greatly, limiting the available options. Proponents of these plans also contend that as membership organizations, the associations can offer the best service. One such organization, the MEA-affiliated Michigan Education Special Services Association, puts it this way:
"MESSA’s advantage is the unique value it provides. As a not-for-profit membership organization, we are able to place the interests of our members and their families first. … The MESSA difference is also measured in more personal ways. The personalized service our staff provides is second to none. And we place a high value on protecting our members’ medical claims experience data."
While these plans are the dominant providers, many consider them to be overly expensive. By far the largest association plan in Michigan is operated by MESSA. MESSA manages health care benefits for more than 100,000 public school employees (55 percent of all Michigan school employees). Understanding MESSA helps one to understand some of the potential downside to association plans.
In 1960, the MEA established MESSA as a wholly owned subsidiary. MESSA is not an insurance company, but acts as a third party administrator (middleman) that collects premiums (estimated at $1.36 billion per year) and processes claims. The claims themselves are paid by Blue Cross/Blue Shield. MESSA in turn benefits the MEA by, in effect, paying fees to the MEA for representing MESSA in contract negotiations with school districts and for other services.
The Supreme Court of Michigan sorted out the relationship between MESSA and the MEA in 1998:
"The MEA is the exclusive agent for the MESSA and markets its products during the collective bargaining process. The MESSA pays the MEA for its services, which contractually its [sic] obligates school districts to provide MESSA products. … The MEA professional staff has a group of employees called Uniserv directors, business agents for the MEA who bargain for and administer contracts for MEA members. Uniserv directors are evaluated in part on the basis of how well they achieve negotiation of MESSA products into collective bargaining agreements. The MEA is required to use its ‘best efforts’ in obtaining employee participation in the MESSA, and the Uniserv staff is required to provide the MESSA with a list of presidents and negotiators, copies of fringe benefit contract language, and involve the MESSA in meetings where bargaining guidelines are established. All school employee members of the MESSA are either MEA members or employees of school districts represented by the MEA. Because the MESSA is solely dependent on the MEA to bargain for a role in insurance coverage, its agreement with the MEA requires the MEA to actively inform and consult the MESSA concerning collective bargaining activities for insurance benefits. Numerous other documents support the fact that the MESSA played a supporting role, directly, or indirectly, in the collective bargaining process. ..."
The relationship between the MEA and MESSA is important to both. According to Gary Fralick, MESSA’s director of communications and government affairs, "By harming MESSA, you’re harming the Michigan Education Association." Moreover, a 1993 Mackinac Center study showed that after MESSA paid for benefit costs, it paid out 35.4 percent of its remaining revenues to the MEA and its related Michigan Education Data Network Association. "The MEA/MESSA relationship, as frankly noted by a former director, was one where ‘We scratched each other’s backs. ...’" Indeed, the MEA has recommended to its bargaining team that it is the MEA’s objective to have "MESSA as the insurance carrier" in every contract. According to the MEA’s own annual report, required by the U.S. Department of Labor, the union received $4.7 million from MESSA between Sept. 1, 2004, and Aug. 31, 2005.
Frank Garcia, after negotiating with the Holland Education Association for a year and a half: "In a roundabout way, 99.9 percent of our bargaining session conversations have dealt with health care, more specifically MESSA."
Jeff Steinport: "[T]hey did have a bumper sticker made that said, ‘You’ll get my MESSA card from me when you pry it from my cold, dead hand.’ ... They are very militant about their MESSA, and they’ve threatened striking, even though they deny it because they can’t do it legally. My advice is to take it with a grain of salt. The law is on the board’s side, and the board needs to get some guts and stand up to the unions, because these costs are out of hand. Board members work for the public, not the union."
Sandra Feeley Myrand: "MESSA is considered the sacred cow by many MEA union activists."