Act 152 of 2011 expressly limits public employer payments of annual healthcare premium costs for its employees. The Act strictly limits the amount townships may contribute to total annual health care premiums, based either on a “hard cap” or what’s known as the “80/20” plan. Townships, however, may choose to exempt themselves from the Act’s requirements on an annual basis with a 2/3 vote of the Board. The Act imposes a monetary penalty for local governments that fail to comply: a 10% reduction in state school aid or EVIP funds.
Practically speaking, this means that there is only a penalty if a township receives EVIP (formerly called statutory revenue sharing) funds. No other forms of state aid or funding are affected or reduced. If your township does not receive EVIP funds and either purposefully or inadvertently does not comply with the Act’s requirements, the only apparent sanction is the technical noncompliance being highlighted by a member of the public.
Stay tuned for next month when we tackle another township’s pressing question. If you have current issues or legal topics you need addressed, please fill out the form below with your question. We will select a question each month to answer.