LANSING (AP) – The Michigan Supreme Court is hearing arguments in a case that will determine whether more than $550 million will be returned to school employees who had money deducted for retiree health care.

Gov. Rick Snyder’s administration wants to keep the money but so far has lost in lower courts. His office says the money is necessary for the long-term stability of health insurance benefits.

School employees had 3 percent of their pay deducted for about two years under a law signed by Gov. Jennifer Granholm, but the law was declared unconstitutional. Snyder in 2012 signed a new law that has survived court challenges.

Lawyers for the administration say the money could keep the retiree health care program on firm footing. It’s now in escrow. The case is being argued Wednesday.

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