Library and Information Services Employee Benefits in Michigan
Most Michigan public libraries are run by a city, village, township or county, or by a separate library body. Either way, state law limits what a public employer may pay toward medical coverage.
This page covers the Publicly Funded Health Insurance Contribution Act as it applies to library employers: the dollar cap, the 80 percent alternative, and the question of whether a given library body is a covered public employer. Private information services such as archives and research firms follow the general rules instead.
The Dollar Cap on Employer Medical Payments
The default rule limits what the employer pays per covered employee.
The limits. Under MCL 15.563, a public employer that offers or contributes to a medical benefit plan may pay no more than $5,500 for a single-coverage employee, $11,000 for an employee with spouse or one nonspouse dependent, and $15,000 for family coverage.
Annual adjustment. The state treasurer adjusts these maximums each year by the change in the medical care component of the Consumer Price Index, so the current figures are higher than the statutory base amounts.
What counts. The cap includes annual plan costs and employer reimbursements for co-pays, deductibles and health savings or flexible spending accounts. The employer may allocate its payments among employees, and employees who decline coverage are not counted in the maximum.
The 80 Percent Alternative
A public employer other than the state may choose a percentage test instead of the dollar cap.
How it works. Under MCL 15.564, the employer pays not more than 80 percent of the total annual costs of the medical benefit plans it offers or contributes to. Total annual costs are the premium or illustrative rate plus employer payments toward co-pays, deductibles and health accounts, excluding amounts paid by the beneficiary.
How it is chosen. The employer elects this section by majority vote of its governing body each year, before the coverage year begins. A library board should calendar that vote ahead of its renewal.
Existing contracts. Under MCL 15.565, a collective bargaining agreement in effect on September 27, 2011 delays the cap for covered employees until it expires, and contracts signed after that date may not conflict with the cap.
Is the Library a Covered Public Employer?
The answer depends on how the library is organized.
The definition. MCL 15.562 defines a public employer to include this state and a local unit of government or other political subdivision, and a local unit of government to mean a city, village, township or county, along with certain listed authorities.
Library departments. A library operated as a department of a city, village, township or county is part of that unit. A standalone library body should have its legal form confirmed with counsel, because the statute’s text does not name libraries.
A Worked Scenario for a Library Board
Every figure in this example is made up for illustration; it simply walks through how the calculation runs.
The setup. A library has a single-coverage plan with total annual cost of $9,000 per employee.
Under the 80 percent option. The employer may pay 80 percent, which is 0.80 x $9,000 = $7,200, leaving an employee share of at least $1,800.
Under the dollar cap. Using the unadjusted statutory $5,500 only to show the mechanics, the employee share would be $9,000 – $5,500 = $3,500. The actual cap is the treasurer-adjusted figure, so the real share would be smaller.
Rules and Guides Behind This Page
For a closer look at the law behind a library board’s premium decisions, these guides go deeper.
Michigan Public Act 152
Overview of the public employer contribution law.
Public Act 152 for Authorities and Boards
How the law applies to boards and authorities.
PA 152 Calculator
Compare the dollar cap and the 80 percent option.
MCL 15.563, Dollar Cap on Public Employer Medical Payments · MCL 15.564, 80 Percent Option · MCL 15.562, Definitions
Talk Through Your Library Board Renewal
Bring your plan costs and board calendar. We will test the dollar cap and the 80 percent option side by side.
Related pages.
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Data Center and Hosting Benefits
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Studio and Digital Media Benefits
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Michigan Mini-COBRA
State continuation for smaller employers.
COBRA Continuation Coverage Law
Federal continuation coverage rules.
Questions that come up.
Library directors and board treasurers ask us these most often.
What is the dollar cap for a public library employer?
Public Act 152 of 2011 sets hard caps on what a public employer may pay toward medical coverage, and the amounts vary by single, two-person and family coverage tier and are adjusted each year. A library that falls under the act must stay beneath those limits unless its governing body opts out. CFH confirms the current figures with you each plan year.
How does a library board choose the 80 percent option?
A library board chooses the employer-share option by majority vote of its governing body, taken each year before the coverage year begins. The vote has to be documented in the board minutes, and the timing matters because open enrollment follows. Boards meet on fixed calendars, so planning early avoids missing the window. CFH tracks the deadline and prepares the figures for the board.
Is a library covered by Public Act 152?
If the library is part of a city, village, township or county, Public Act 152 of 2011 generally applies to it as part of that public employer. A standalone body, such as a district library or an authority created by agreement, needs its legal form confirmed before anyone assumes the rules apply. CFH helps you gather the facts and review the question with counsel.
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