A public employer does not buy benefits the way a private one does.
Michigan cities, townships, counties and school districts work inside Public Act 152, annual board action and bargaining calendars. Those three decide the budget, the timing and who has to approve a change. A comparison run without them is a comparison of numbers you cannot use.
Under Public Act 152, the contribution is decided before any quote is read.
Public Act 152 of 2011 limits what a Michigan public employer may pay toward medical coverage. The governing body elects how it will comply, and that election sets the number every carrier comparison has to fit inside.
The Hard Cap
The state sets a dollar limit for each coverage tier, and the Michigan Department of Treasury publishes the figures each year. Anything above the limit falls to employees. Whether it lets the employer contribute more than the 80% option depends on the mix of single, two-person and family enrollment, so it has to be calculated rather than assumed.
The 80% Option
The employer pays up to 80% of the total yearly plan cost and employees pay the rest. The 80% is a ceiling, not a requirement, and the calculation covers every medical plan the employer offers, so what counts as plan cost needs to be settled before the figure is used.
The Exemption
A governing body can exempt the employer by a vote, and the vote has to be renewed every year. It is not open to every kind of public employer, so counsel should confirm eligibility before anyone plans around it. Keep the vote record with the benefit files so the exemption can be shown if it is ever questioned.
We model all three options against your actual enrollment and plan costs, so the board votes on figures and not estimates. Try the PA 152 calculator or read the current caps and the election deadline.
Timing runs on board cycles and bargaining, not on a renewal date.
A private employer can change carriers when the renewal arrives. A public employer usually cannot, which is why the comparison has to start months before the decision it feeds.
Board Action
A change in carrier, plan design or contribution often needs a vote. That means quotes have to be in hand, and understood, before the meeting where they matter, not after it. Build the timeline backward from the meeting date so staff have time to review proposals and answer board questions.
Bargaining
Contribution levels and plan design are often set in collective bargaining agreements. The comparison has to show what the union side will see as well as what finance will see, or it will be argued over before it is useful.
Procurement
Public entities often buy through a formal process rather than a phone call. We write the comparison so it can be handed to whoever runs procurement, with the basis stated up front. Counsel should confirm which rules apply to your entity.
Retiree coverage is a liability on the financial statements, not a footnote.
Governmental employers recognize the net liability for postemployment benefits other than pensions on the face of the financial statements. How a retiree plan is built and funded changes what that number looks like.
Group Retiree Medical
Plan design, funding and the accounting meet here, and a decision made for budget reasons one year shows up in the liability the next. How group retiree medical works.
Retiree HRAs
A health reimbursement arrangement is one way public employers fund retiree coverage with a defined amount instead of an open-ended promise. Retiree HRAs for public employers.
Retirees 65 and Older
For retirees on Medicare we can place a group plan built for that population, and we price it alongside the alternatives in the same comparison. Medicare and retiree benefits.
Michigan public entities, handled as public entities.
Cities and Townships
Council or board action, several bargaining units and a plan that has to fit a published budget. We start from the election and work out from there. Give officials a clear side by side view of cost to the budget and cost to employees before they vote.
Counties
Larger and more varied workforces, often with several bargaining units and retiree populations to carry. The comparison has to price each group, not an average of them. Retiree and bargaining unit obligations should be reviewed alongside active employee coverage so a decision for one group does not create a surprise for another.
School Districts
MESSA, Public Act 152 and retiree coverage meet at the bargaining table. School district employee benefits has its own page.
For the compliance side of a governmental plan, including what ERISA does and does not require, see public administration employee benefits.
What public employers ask us.
Who has to follow PA 152?
Michigan public employers, including local governments and school districts, unless they are exempt. Your counsel can confirm whether the law covers you.
Can we send this out to bid?
Often, yes, subject to your procurement rules. The difference from a private bid is that the PA 152 election and the board calendar are settled first, so every response is priced against the same limit. Counsel should confirm the rules that apply to you.
What should we send first?
The renewal letter, the current plan summary, the contribution split by tier and the enrolled counts by tier. If bargaining agreements set the contribution, add the relevant sections.
Does the review cost anything?
No. We tell you whether the renewal looks competitive, where we see opportunity and the questions we would put to your carrier, with no obligation to move anything.
The rules in one place.
Michigan Employer Benefit Laws
Wages, sick time, civil rights and coverage mandates, in one place.
Send us your renewal.
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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