In the three years since Dansville Schools dropped Michigan Education Special Services Association insurance for a different high-deductible plan, it has saved $736,873.87 and its employees haven't had to pay for any health insurance premiums in that time, according to the superintendent.

MESSA is a third-party administrator affiliated with the Michigan Education Association that buys health insurance from Blue Cross Blue Shield of Michigan and resells it to school districts.

Dansville Superintendent Amy Hodgson said the $736,873 was how much more the district would have paid had it kept MESSA. She said the employees do have to make co-pays for things such as office visits. Dansville dropped MESSA in 2011-12.

Because of a 2011 law which has had big savings for taxpayers and districts, schools have the ability to choose an 80/20 option where employees pay 20 percent of the premium cost or the “hard cap,” which restricts the dollar amount a school district can spend on insurance premiums. The hard cap was set at $15,000 for the family plan in 2011 and increases every year at the rate of inflation.

Hodgson said Dansville has a hard cap plan, which allows them to cover the premium costs of their employees.

Since the 2011 bill that required employees to contribute to their own health care costs or put a cap on what schools could spend on it, MESSA has seen its program revenue decline, according to documents filed with the IRS.

MESSA’s program revenues have dropped from $1.25 billion in 2011 to $1.06 billion in 2013, a 15 percent drop.

“School districts are likely dropping MESSA because it's just not a good value,” said Audrey Spalding, education policy director at the Mackinac Center for Public Policy. “The 2011 law limiting health insurance costs has encouraged districts to shop around for better plans. As a result, districts throughout the state are saving money by leaving MESSA.”

Gary Fralick, spokesman for MESSA, did not return a request for comment.

Ann Arbor Public Schools three months ago negotiated a tentative agreement with its teachers union to provide “merit pay” of just $150 annually to educators who receive a “highly effective” rating. Under a law passed in 2011, however, merit pay is considered a “prohibited subject” for collective bargaining purposes.

Yet Liz Margolis, spokeswoman for Ann Arbor Public Schools, claims that the district didn’t violate the law because choosing whether to negotiate over the issue remained under the “sole authority” of the school board. Margolis said parties can discuss prohibited subjects, but the union can’t require bargaining on it.

But according to Public Act 103 of 2011, “Collective bargaining between a public school employer and a bargaining representative of its employees shall not include any of the following subjects: (Section 3) (o) decisions concerning the performance-based compensation of an individual employee …”

In effect, the Ann Arbor board of education voluntarily discussed with the union an item that the law prohibits bargaining over.

Ann Arbor is not the only school district that has agreed to provisions that mitigate the consequences of a recent law affecting public-sector unions. The right-to-work law enacted by the Legislature at the end of 2012 went into effect on March 28, 2013, and applied to all collective bargaining agreements signed after that date. A recent Mackinac Center study found that more than 70 school districts signed contracts between Dec. 11, 2012, and March 28, 2013 – the day right-to-work became effective. The effect of most new agreements was to force school employees to keep paying union dues as a condition of employment.

A 2010 Mackinac Center study found that nearly 80 percent of teachers union contracts were ignoring a law signed by then-Gov. Jennifer Granholm requiring merit pay to be a “significant factor” in determining teacher pay.

Jack McHugh, senior legislative analyst with the Mackinac Center for Public Policy, said these are examples of why the practice of collective bargaining is not appropriate for public employees.

“Given the political power of government employee unions, especially in low-turnout local elections like those for school boards, elected school boards have a strong incentive to keep the union placated," McHugh said.

Another example of closeness between elected officials and the union was highlighted in a Jan. 18, 2013, report by the Ann Arbor Chronicle. According to the Chronicle, at a Washtenaw County Board of Commissioners meeting prior to the right-to-work law going into effect, Commissioner Conan Smith said: "I hope we are comparatively aggressive in our stance of supporting our labor partners and finding innovative ways that we can test this new world.”

Todd DeMitchell, a professor of education at the University of New Hampshire who has also negotiated contracts for school districts, disagrees that school districts give away too much to the union. He said there appears to be a higher standard applied by critics to public sector unions involving the right-to-work negotiations.

“If the legislature passed a law on September 10, 2014 that the speed limit on its highways would be reduced to 55 mph on December 1, 2014 the police could not issue citations for driving 60 mph prior to December 1, 2014 asserting that the law had been passed and therefore they are violating the law,” DeMitchell said in an email. “… Why is it that there is a concern that the districts and unions acted legally prior to the deadline of a new law? Does this higher standard only apply to public sector unions?”

He added the following:

“It is asserted that school board members are essentially the tools of unions who have supported their election. This is an assertion with little to no facts to support it. If this were true, collective bargaining should take a bare minimum of time. There should be no controversy, there should be no impasse, there should be no strikes, there should be no work to rule. There would be a tacit understanding that the union tells and the school board serves…. The idea that all or even most school board members are governed by the union and do the bidding of the union is to denigrate school board members. Once again, what is the remedy?”

According to McHugh, the remedy is to no longer permit collective bargaining between government employees and public employers.

“Even President Franklin Delano Roosevelt recognized that what is considered a right in the private sector is not appropriate when the employer is a democratically elected government,” McHugh said, citing a 1937 letter from President Roosevelt to the Federation of Federal Employees that included the following:

“All Government employees should realize that the process of collective bargaining, as usually understood, cannot be transplanted into the public service. It has its distinct and insurmountable limitations when applied to public personnel management. The very nature and purposes of Government make it impossible for administrative officials to represent fully or to bind the employer in mutual discussions with Government employee organizations. The employer is the whole people, who speak by means of laws enacted by their representatives…”

Here is DeMitchell's full response to Capitol Confidential.