Does the PA 152 opt-out require a board resolution every year?

Yes — every single year, and by a two-thirds vote, before the coverage year starts. Under Section 8 of PA 152 (MCL 15.568), a local unit of government may exempt itself from the act only by a 2/3 vote of its governing body taken before the beginning of the medical benefit plan coverage year, and that exemption reaches exactly one coverage year forward. There is no permanent opt-out, no standing resolution, and no automatic rollover. There is also a second question hiding inside the first one, and it catches more Michigan employers than the timing does: most public employers are not eligible to opt out at all.

What the statute actually says

Section 8 of the act is short enough to read in full. Subsections (1) and (2) carry the annual-vote requirement:

Three constraints are doing the work there. Each year. Prior to the beginning of the coverage year. Local unit of government. Subsection (2) exists specifically to close the door on the reading that one good vote carries forward — an extension is not an extension in the ordinary sense, it is a fresh 2/3 vote taken again before the next coverage year begins. Treasury reads it the same way and has confirmed there is no cap on how many consecutive years a local unit may exempt itself, so long as the vote happens every time.

Who is actually eligible to opt out

This is the part that surprises people. PA 152 applies to public employers, a category defined broadly in MCL 15.562(h). But the opt-out in Section 8 is available only to a local unit of government, a much narrower term defined in MCL 15.562(d). The two lists are not the same, and the gap between them is where most of Michigan's public payroll sits.

Eligible entities are those inside the MCL 15.562(d) definition of "local unit of government." Everything below the line is a public employer under MCL 15.562(h) — fully subject to the act — but outside the Section 8 election. For a school district, an ISD, or a college, the only two lawful positions are the hard cap or the 80/20 alternative. County road commissions operating under their own statutory boards are autonomous public employers — subject to the act and, like the autonomous library and housing commission above, outside the Section 8 election. A road commission that has been dissolved into the county board of commissioners is a county department and follows the county's election. A commission uncertain of its status should confirm it with its own counsel; this page is educational information, not legal advice.

The "arm of the government" question

Treasury has been asked twice about entities that sit next to a local unit of government without quite being one — a housing commission and a public library with its own board. The answer both times followed the same logic, and it is worth understanding because it governs a lot of edge cases.

If the entity is genuinely an arm of the city, village, township, or county that created it, the parent's opt-out vote sweeps it in, whether or not the entity takes its own vote. If the entity is autonomous enough to sit outside that umbrella, it cannot opt out on its own — it does not meet the definition of a local unit of government — and it must comply through the hard cap or the 80/20 alternative. Autonomy cuts both ways: it buys independence and it forfeits the exemption.

The three paths, side by side

Every Michigan public employer is on exactly one of these three footings for each medical benefit plan coverage year. Two of them require a vote before the year starts; the third is what you get when nobody votes.

Note the asymmetry that trips up boards moving between options: the 80/20 election needs a simple majority, the opt-out needs a supermajority. A board that can comfortably pass one may not have the votes for the other. Full comparison of the first two: Hard cap vs. 80/20 — which should our municipality choose?

What "2/3 of the governing body" means in seats

The statute sets the threshold but does not spell out the arithmetic, and small boards are where fractions bite. On a five-member township board, two-thirds is 3.33 seats — which means four yes votes, not three. A 3–2 result is a majority and a failed opt-out at the same time.

The table computes two-thirds against the full membership of the body — the conservative reading where a statute says "vote of its governing body" without qualification, with fractions rounded up. MCL 15.568 does not itself define the base, and a charter or ordinance may speak to it for a particular entity, so a board should confirm the arithmetic with its own counsel before relying on a close vote. The vote itself must be taken at a meeting open to the public under the Open Meetings Act, which means it needs to appear on a properly noticed agenda — not be handled by consent or by poll.

The deadline is your coverage year, not the calendar

The statute ties the vote to the start of the medical benefit plan coverage year, which MCL 15.562(g) defines as the twelve-month period following the effective date of the plan the employer provides. That is not necessarily your fiscal year, and it is not necessarily January 1. Treasury has confirmed that a local unit may take the vote at any point prior to the start of the coverage year, and that the election has to be made separately for each new coverage year.

In practice this means the deadline moves with your renewal date. A township renewing January 1 has until December 31. A road-fund-conscious county renewing July 1 has until June 30 — and a December vote does it no good at all, because by then the coverage year is already six months old.

What the opt-out does not do

• It does not release you from your contracts. Section 8 lifts the statutory ceiling on employer contributions. It does not amend a collective bargaining agreement, and it does not relieve the employer of anything it has already promised at the table. The exemption changes what the state requires of you, not what you owe your unions.
• It is not a violation, and it does not endanger your funding. An exemption properly adopted under Section 8 is compliance with PA 152 — the act expressly authorizes it. The penalty machinery in MCL 15.569 is triggered by failing to comply, not by lawfully exempting. Boards sometimes hesitate here; they should not.
• It does not survive a strong mayor's or county executive's objection — and it is not available to Detroit at all. See the exceptions below.
• It does not last. Worth repeating because it is the single most common failure mode: the exemption expires with the coverage year it was adopted for, silently, with no notice from anyone.

The three exceptions: strong mayors, county executives — and Detroit

MCL 15.568 carries three subsections that rarely make it into summaries of the law. In a city whose mayor is both the chief executive and the chief administrator, an exemption is not effective unless the mayor also approves it (subsection (3)). The same rule applies in a county with a county executive who holds both roles (subsection (4)). A council or commission that clears two-thirds and stops there has not finished the job in those communities.

The third exception is absolute: under subsection (5), an exemption is not effective for a city with a population greater than 600,000. Only one Michigan city clears that threshold — Detroit — which means the state's largest public employer among cities has no opt-out at all, regardless of any vote its council takes. The subsection arrived by amendment (the section was amended by 2013 PA 273 and 2014 PA 184), and its existence is why the section's official catchline reads "Exemption from act; extension; exceptions" — plural.

How municipalities actually miss this

Almost never through disagreement. The exemption lapses because the vote is an annual chore attached to a date nobody owns — the renewal is handled by the clerk or the finance director, the resolution is a board item, and the two calendars are not the same calendar. Add turnover on the board or in the clerk's office and the institutional memory that the vote even exists goes with it. The state does not send a reminder; there is no filing, no certification, and no confirmation that the exemption was adopted. The first signal that anything is wrong is usually an auditor's question, months into a coverage year that cannot be redone.

That is a calendar problem wearing a compliance costume, and it is fixable in about ten minutes a year by the person who already tracks your renewal date.