A. Unfair Market Advantages for MESSA

Across the state of Michigan, public school districts are suffering at the hands of the Michigan Education Special Services Association. In the market for administration of insurance benefits to public school employees, MESSA has acquired numerous unfair advantages which have essentially restrained its competition and prevented school districts from locating an objective, cost-effective administrator of insurance. Ever since the Michigan Education Association established its lucrative insurance enterprise, most school districts no longer select their insurance administrator based on its quality and efficiency, but rather for its connection with the teachers' union. Consequently, MESSA now administers insurance to nearly 60 percent of all Michigan school districts, even though its benefit packages are designed with several apparent deficiencies (discussed in subsequent sections of this report).

In short, MESSA's unfair market advantage is that it has a privileged alliance with the MEA. No other insurance administrator in the state enjoys the benefit of having its programs sponsored by the bargaining representative of over 120,000 public school employees. The representation provided to MESSA by the MEA amounts to an unfair advantage for MESSA because the MEA can mobilize its interests in order to advance or protect the interests of MESSA. Hence, not only must school districts contend with the MEA during salary negotiations, they must also accommodate both the MEA and its insurance subsidiary on the issue of employee insurance benefits. The total effect of this biased treatment is that competition has been stifled in the market for administration of insurance benefits to public school employees, producing a hostile market environment for school districts to shop in.