County retiree health liability in Michigan: pricing the promise
Retiree coverage is a long-term promise that reaches future budgets. Pricing it and choosing how to fund it keeps it from surprising the next board.
Six Parts of the Retiree Question.
Retiree Health Accounts for Public Employers
A route for funding retiree coverage gradually over time.
Retiree Health and Labor Contracts
What contracts can promise retirees.
Public Act 152 Explained
The limit that governs plans it covers.
A County Example
A large county’s planning example.
Michigan Benefit Law at a Glance
Michigan rules that touch retiree coverage.
School District Benefits
A related public employer with similar retiree questions.
What a retiree liability review involves.
The review has four steps. First, collect every document that could contain a promise: contracts, policies, resolutions and past practice. Second, build the retiree census, including ages, coverage and what each person pays. Third, gather the current plan cost for retirees. Fourth, project the cost forward using assumptions on medical trend and retirement patterns.
The output is a number the board can plan with, and a view of how it compares with the annual budget. It also shows which assumptions matter most, so that the board can see how sensitive the result is. The conversation then turns to funding approach and to whether the language allows any change.
Questions About County Retiree Health.
Plain answers for HR, finance and deal teams.
What Is a Retiree Health Liability?
The cost of coverage a government has promised to retirees, which grows over time and has to be paid from future budgets.
How Do We Find Out What We Owe?
Collect the contract and policy language, the retiree census and the plan cost, then have the promise priced.
Can We Change Retiree Coverage?
That turns on the contract terms and governing law, so look at what has actually been promised before assuming any change is possible.
What Are the Ways to Fund It?
Options include paying claims as they come, setting money aside in advance, or using a retiree health account, and each shifts cost and risk in its own way.
Does ERISA Apply to These Plans?
Generally not, because governmental plans are exempt from ERISA Title I. Other federal and state rules still apply, so confirm with counsel.
Does the Affordable Care Act Apply?
It can reach governmental employers that meet the large-employer threshold, so track hours, offers and reporting.
Do You Work With County Retiree Coverage?
Yes. We work with Michigan public employers on plan design, renewals, contribution limits and retiree coverage.
Can You Review Our Current Plan?
Yes. Send the plan documents and renewal and we will show where the plan stands and what options exist.
What Should We Send You First?
Your current plan summary, the renewal, and any contract or board language that affects benefits.
How Do We Start?
Send your renewal and the timeline for the decision. We will review it and show your options.
How often should the liability be updated?
Typically each year or when the census, plan or contracts change significantly. A stale number is less useful than a rough current one.
Do small changes in assumptions matter much?
Medical trend and retirement timing can move the projected cost significantly over a long horizon, which is why the model should show a range.
Ready? Upload your renewal, or talk it through with someone first. No cost, no obligation.
This overview of county retiree liability is general information and not legal or tax advice. Your counsel and tax advisor handle plan-specific questions, and we will work with them.
The Law Behind This Topic.
The laws named on this page link to the statute or regulation they come from. This is general information, not legal advice, and rules change, so check the current text and ask your counsel.
Publicly Funded Health Insurance Contribution Act (MCL 15.561)
Public Act 152 of 2011, the Michigan law that caps what a public employer may pay toward medical plan costs.
Coverage of ERISA (29 U.S.C. 1003)
Explains that ERISA Title I does not reach a plan that qualifies as a governmental plan.
Related County Reading.
County Government Benefits
The page this belongs to.
Employer Benefits Guides
The full section.
Michigan Public Employer Benefits
More on michigan public employer benefits for public employers.
Want the Promise Priced? Send Us the Language.
We’ll tell you whether it looks competitive, where we see opportunity, and the five questions we’d put to your carrier. No cost, and no obligation to move anything.
The renewal letter
Your current plan summary
Contribution split by tier
Enrolled counts by tier
Four documents, two more if your group is 50 or more. Nothing else; every extra one is a reason to postpone.
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