Toll-free
(866) 793-2764
Before your medical benefit plan coverage year begins — every year, with no late cure. Both of PA 152's elections run on the same clock: the 80/20 alternative takes a majority vote of your governing body each year, prior to the start of the coverage year, and the opt-out takes a 2/3 vote on identical timing. Only the hard cap needs no vote, because it is what applies when nobody votes. The two traps hiding in that rule: the deadline follows your plan renewal date, not the calendar or your fiscal year — and a vote taken even one day into the coverage year is void for that entire year.
The 80/20 election in Section 4:
The opt-out in Section 8 uses the same construction with a higher threshold — a 2/3 vote of the governing body, each year, prior to the beginning of the coverage year, with a fresh 2/3 vote required to extend it (MCL 15.568(1)–(2); the full anatomy of that vote, including who is eligible to take it at all, is here: Does the PA 152 opt-out require a board resolution every year?). Treasury reads "prior to the beginning" generously in one direction only: the vote may be taken at any time before the coverage year starts — early is always fine — but each election is made separately for each coverage year, and nothing reaches backward into a year already underway.
The coverage year that starts the clock is defined in MCL 15.562(g) as the 12-month period after the effective date of the medical coverage plan the employer provides. Treasury has been asked repeatedly whether that means the plan year, the contract year, the deductible year, or the fiscal year, and the answer each time is the same: it is its own defined term, and it may or may not match any of those. The one date that reliably anchors it is your renewal.
| Coverage year begins | Last safe day to vote | Typical board meetings available |
|---|---|---|
| January 1 | December 31 | November and December meetings |
| April 1 | March 31 | February and March meetings |
| July 1 | June 30 | May and June meetings |
| October 1 | September 30 | August and September meetings |
Practical guidance, not statutory dates: the statute sets only the outer deadline (the day before the coverage year begins). Boards that schedule the vote for the meeting where renewal numbers are presented never miss it — the renewal packet and the resolution belong on the same agenda. If your carrier changes the coverage year interval mid-stream, the caps pro-rate for the short transition year and the vote deadline moves with the new interval; Treasury's FAQ addresses the mechanics.
A missed vote is not a paperwork problem that can be fixed after the fact. The election exists only if it was made before the coverage year began; afterward, the hard cap governs the entire year by operation of law, and the earliest any new election can take effect is the next coverage year. Nothing softens this: the vote is not filed with the state, no agency confirms receipt, and no one in Lansing notices whether it happened. The resolution lives in your minutes and nowhere else — which also means your minutes are the only evidence that it happened, a point your auditor will eventually make for you. The same institutional silence is why the penalty regime catches municipalities that drifted rather than decided.
A township renews its medical plan every July 1. At its December meeting, the board discovers the opt-out resolution was never brought forward in the spring and votes 4–1 to exempt the township, minuting it as effective immediately.
For the coverage year that began July 1 and is six months old, the vote does nothing — that year was decided the moment July 1 arrived with no resolution in place, and the township has been under the hard cap all along. But the same four votes are perfectly good for the coverage year beginning next July 1, because "any time prior to the beginning" includes seven months early. The difference between a wasted vote and a valid one is a single line in the minutes: the resolution should name the coverage year it applies to. A resolution worded "for the medical benefit plan coverage year beginning July 1, 2027" is unambiguous; "effective immediately" invites exactly the confusion this board created.
| Election | Threshold | Deadline | Frequency |
|---|---|---|---|
| Hard cap — MCL 15.563 | No vote | — | Default, always |
| 80/20 alternative — MCL 15.564 | Majority | Before the coverage year begins | Every year |
| Opt-out — MCL 15.568 | 2/3 | Before the coverage year begins | Every year |
Identical deadlines, different arithmetic: a board that comfortably clears a majority may not have two-thirds — on a five-member board that's four yes votes, not three. Seat-by-seat numbers, the strong-mayor and county-executive approvals, and Detroit's exclusion are on the opt-out page. Whichever vote you take, it must occur at a meeting open to the public under the Open Meetings Act, on a properly noticed agenda.
Nothing about these votes is analytically hard. The 80/20-versus-hard-cap decision takes one comparison of your renewal numbers to your aggregate cap — covered here — and the opt-out is a policy call your board can make in one discussion. What sinks municipalities is purely the calendar: the renewal is handled by the clerk or finance director, the resolution is a board item, and the two dates live in different systems until the coverage year starts and the window closes silently. Put the vote on the same agenda as the renewal presentation, name the coverage year in the resolution, and the problem disappears.
EBS runs the cap math at every renewal, tells you whether the hard cap, the 80/20, or the opt-out actually favors your numbers, and delivers the deadline and draft resolution language — with the coverage year named — ahead of the board meeting where it belongs. It's part of how we work as your agent. There's no fee for it.