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No, no, no, and no. Separate dental and vision plans, benefits for retirees, cash-in-lieu stipends, and people who waive coverage are all outside PA 152's cap math — the first two by the act's definition of a medical benefit plan, the last two by amendments the legislature made in 2013 specifically to settle the question. But every one of these exclusions has an edge worth knowing, two of the answers used to be the opposite, and two costs employers routinely assume are excluded actually count. The details are where cap calculations go wrong.
| Item | Counts? | Basis | The edge to watch |
|---|---|---|---|
| Separate dental and vision plans | No | MCL 15.562(e), per Treasury | "Separate" is doing work — embedded coverage is different |
| Benefits for retirees | No | MCL 15.562(e) | Blended rates with retiree claims are still usable |
| Retiree health savings funds (RHS/HCSP) | No | MCL 15.562(e), 2013 amendment | Answer was yes before the 2013 amendments |
| Cash-in-lieu stipends | No | MCL 15.562(f) | Answer was yes before the 2013 amendments |
| Employees and officials who waive | No | MCL 15.563(3), curative & retroactive | No cap headroom — they exit the math entirely |
| Short- and long-term disability | No | MCL 15.562(e), per Treasury | — |
| Wellness programs; consulting fees | No | Treasury FAQ | — |
| Insurance agent and company commissions | Yes | MCL 15.562(f)(ii), from 2014 | Commonly assumed excluded — it isn't |
| ACA fees and taxes the employer must pay | Yes | MCL 15.562(f)(iii), from 2014 | Treasury's pre-2014 answer was no; the amendment flipped it |
The full counts-toward-the-cap treatment, including HSA and FSA contributions, reimbursement timing, and the claims-assessment line, is here: What counts toward "total annual costs" under PA 152?
Treasury's exclusion is precise: the act's definition of a medical benefit plan is interpreted to exclude separate plans for dental or vision insurance. A standalone dental policy and a standalone vision policy sit entirely outside the cap, no matter who pays for them. What Treasury has not said is that dental and vision benefits are excluded wherever they appear — and where those benefits are embedded inside a single medical plan with one premium, the conservative reading is that the whole premium counts, because the cap applies to the annual costs or illustrative rate of the medical benefit plan as a unit.
That makes plan structure a genuine compliance lever. An employer running tight against its aggregate cap with embedded dental and vision can unbundle them into separate policies, moving those dollars out of the countable premium without reducing anyone's benefits. Whether that's worth doing depends on pricing — unbundled coverage isn't always cheaper — but it's a question worth asking at any renewal that lands near the cap. Confirm your plan's structure with your carrier before assuming either treatment.
The act excludes retirees from two directions. Benefits provided to individuals already retired from a public employer are simply not part of a medical benefit plan under MCL 15.562(e) — retirees subscribing to your plan are not counted in the cap, and what you pay for their coverage is not capped. And since the 2013 amendments, the exclusion also reaches forward: employer contributions to a fund used for the sole purpose of providing health benefits that become available only upon retirement or separation — a retiree health savings program, for instance — are outside the cap as well. Treasury's original guidance had counted those contributions; the amendment reversed it, and Treasury rescinded the old answer.
One practical wrinkle Treasury has resolved in employers' favor: self-funded employers often receive a single set of illustrative rates blending the claims experience of active employees and pre-65 retirees. The employer may rely on that illustrative rate as delivered when calculating cap compliance for its actives — the act limits how much of the rate you may pay, and does not police how the carrier built it.
These two exclusions share a history worth knowing, because older guidance still circulates. As originally administered, a stipend paid to an employee who turned down coverage counted toward the employer's medical benefit plan costs — Treasury said so explicitly. The 2013 amendments (2013 PA 269–273) rewrote the definitions: payments in lieu of coverage are now expressly excluded from medical benefit plan costs under MCL 15.562(f), and Treasury rescinded its earlier answer. A township that offers no medical plan at all and simply pays stipends is not merely under the cap — it is outside the act entirely, as covered on the townships and villages page.
The waiver rule got the stronger treatment: MCL 15.563(3) excludes employees and elected officials who waive the offered coverage from the cap calculation, and the legislature declared the amendment curative and retroactive — a statement that this was the intent all along. The direction of the exclusion matters: a waiver doesn't hand you their cap amount as headroom for everyone else. They exit the math entirely, numerator and denominator both.
The same 2013 amendments that created the exclusions above also moved two items into the count for coverage years beginning on or after January 1, 2014, and both still surprise people. Insurance agent and company commissions are medical benefit plan costs under MCL 15.562(f)(ii) — before the amendment, Treasury could only suggest a conservative approach; now the statute answers it. And ACA fees and taxes the employer is required to pay count under MCL 15.562(f)(iii), reversing Treasury's pre-2014 position that they didn't. An employer whose cap math was last built before 2014 — or built from a checklist that predates the amendments — can be quietly miscounting in both directions at once.
A village plan covers seven people: four active employees, two retirees who stayed on the plan, and the village president. One additional employee waived coverage and receives a $2,400 annual stipend. The naive count is eight people and every dollar the village spends. The statutory count is five — the four actives and the president, at their coverage tiers. The two retirees are out (and the village's spending on them is uncapped). The waiver is out, and the $2,400 stipend never enters the math. But the countable side must include the commissions built into the premium and any ACA fees the village pays — the two lines most spreadsheets miss. Same village, same spending: two very different compliance answers depending on which rules the spreadsheet was built on.
Nobody fails a cap check because they thought dental counted. Employers fail because a stipend is sitting in the health-cost line of a spreadsheet built in 2012, or because commissions were never broken out of the premium, or because embedded vision was assumed excluded when the plan was never unbundled. The exclusions are simple; the bookkeeping that implements them is where the errors live — and the cap check is only as good as the cost lines feeding it.
EBS runs the cap math at every renewal with the statutory definitions applied line by line — stipends and waivers out, commissions and ACA fees in, plan structure checked for embedded coverage — so your compliance answer is built on the current law, not a 2012 checklist. It's part of how we work as your agent. There's no fee for it.