Do employer HSA contributions count toward the PA 152 cap?

Yes. Employer payments into health savings accounts, flexible spending accounts, or similar accounts used for health care count toward total annual costs, alongside the plan's premium or illustrative rate and employer reimbursements of copays and deductibles. This is the most common trap: a single-coverage premium of $7,400 sits comfortably under the 2026 single cap of $7,942.09, but adding $750 of employer HSA funding brings total annual cost to $8,150 — $207.91 over the cap for that tier.

Does PA 152 count dental and vision coverage?

No. Dental and vision coverage are outside the total annual costs calculation entirely, as are retiree-only and separation-triggered benefits and cash payments in lieu of coverage. Amounts the employee pays — copays, coinsurance, deductibles, other out-of-pocket expenses, and the employee's own HSA or FSA contributions — also do not count. Employees who waive your plan are not counted at all when computing your cap.

What counts toward "total annual costs" under PA 152?

Q: What counts toward total annual costs under PA 152?

Under PA 152 (MCL 15.563 and 15.564), total annual costs include the medical plan's premium or illustrative rate, plus all employer payments for reimbursement of copays and deductibles, plus employer payments into health savings accounts, flexible spending accounts, or similar health care accounts. They exclude amounts the employee pays — copays, coinsurance, deductibles, other out-of-pocket expenses, and employee contributions to HSAs or FSAs. Dental and vision coverage, retiree-only benefits, and cash payments in lieu of coverage are outside the calculation, and employees who waive coverage are not counted when computing the employer's cap.

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Last verified: July 2026 Sources: MCL 15.563 · MCL 15.564(2) · 2013 PA 269 & 270 (curative amendments) · MCL 15.562(f)(i) with 2018 PA 173 (HICAA repeal) and 2018 PA 175 (Insurance Provider Assessment) · Reviewed by EBS against the statute text

Three things count: the plan's premium or illustrative rate, every employer dollar reimbursing copays and deductibles, and every employer dollar paid into HSAs, FSAs, or similar health care accounts. What the employee pays — their copays, coinsurance, deductibles, out-of-pocket expenses, and their own HSA or FSA contributions — does not count. Dental and vision are outside the calculation entirely, as are retiree-only benefits and cash paid in lieu of coverage, and employees who waive your plan aren't counted when computing your cap. The trap hiding in that definition: a premium that fits under the hard cap can still put you out of compliance once your HSA funding is added.

The total-annual-costs test
Counts toward the cap	Does not count
Premium or illustrative rate of the medical plan	Employee-paid copays, coinsurance, and deductibles
Employer reimbursements of copays and deductibles	Employee contributions to HSAs, FSAs, or similar accounts
Employer payments into HSAs, FSAs, or similar health care accounts	Dental and vision coverage
	Retiree-only / separation-triggered benefits (OPEB)
	Cash payments in lieu of coverage · employees who waive coverage aren't counted at all

The claims-assessment clause — repealed, but still in the statute

One line in the statute now points at a ghost. MCL 15.562(f)(i) counts, as a medical benefit plan cost, any payment the employer makes for the state health insurance claims assessment — the 1% tax on paid claims Michigan levied under the Health Insurance Claims Assessment Act. That assessment was repealed effective October 1, 2018 and replaced by the Insurance Provider Assessment (2018 PA 175), which is levied on insurance carriers, not employers, and does not touch self-funded plans at all. The practical result for today's cap math: there is no separate claims-assessment line to count. For a fully insured plan, any share of the carrier's assessment passed through arrives inside the premium — which the cap already counts. If a future legislature revives an employer-side assessment, this clause is where it re-enters the count — and this page will say so.

What the statute says

"…total annual costs includes the premium or illustrative rate of the medical benefit plan and all employer payments for reimbursement of co-pays, deductibles, and payments into health savings accounts, flexible spending accounts, or similar accounts used for health care but does not include beneficiary-paid copayments, coinsurance, deductibles, other out-of-pocket expenses, other service-related fees that are assessed to the coverage beneficiary, or beneficiary payments into health savings accounts, flexible spending accounts, or similar accounts used for health care." — MCL 15.564(2); the hard-cap section, MCL 15.563, uses the same components

The HSA trap — the compliant premium that isn't

Worked example — one employee, single coverage, 2026

Single-coverage hard cap: $7,942.09. Your HDHP premium for that employee: $7,400 — comfortably under the cap, and everyone relaxes. But the village also funds $750 into the employee's HSA to make the high deductible workable. Total annual cost: $8,150 — $207.91 over the cap for that employee's tier, before anyone noticed a problem. Multiply the same pattern across a group and a plan that looks compliant on the renewal spreadsheet quietly isn't. HDHP-plus-HSA designs — the exact designs that keep premiums low — are where this bites, because the premium line is the only line most people check.

Remember the aggregate flexibility, though: the hard cap is a group-level total, not a per-employee test, so headroom elsewhere in your census can absorb an overage like this — the caps are calculated per tier, but no individual employee is capped. The point isn't that HSA funding is a mistake. It's that the cap math is wrong unless HSA dollars are in it.

The waiver rule

An employee or elected official who waives your coverage is not counted when calculating your maximum — the Legislature said so explicitly in a 2013 curative amendment that applies retroactively. That cuts both ways: your aggregate cap is smaller than your headcount suggests if several employees waive, and a wave of new enrollments (a spouse loses a job, a waiver opts in at open enrollment) raises your costs and your cap at the same time. Run the math on enrolled lives, not employed lives.

What's excluded, and why it matters

Dental and vision. Not "medical benefits" for PA 152 purposes — the state's own certification guidance says so directly. Fund them as richly as your board likes; they never touch the cap.
Retiree-only benefits. Funding for health benefits available only upon retirement or separation is outside the definition of a medical benefit plan — another 2013 curative amendment. Your OPEB obligations live in a different (and larger) conversation, but not this one.
Cash-in-lieu. Opt-out payments to employees who waive coverage are excluded from medical benefit plan costs. A well-designed waiver stipend can lower your total costs without cap consequences — one of the levers we routinely check.

How to run the check at renewal

Build the number in three lines per coverage tier: premium × enrolled count, plus budgeted copay/deductible reimbursements, plus budgeted employer HSA/FSA funding. Compare the total against your aggregate cap for the year (current hard cap amounts). If you're over, you have options — and one of them is usually cheap: hard cap vs. 80/20. If you're near the line, check again at renewal, because a routine premium increase can break compliance on its own.

Want this handled for you — free, every year, automatically?

EBS runs the full total-annual-costs math — premium, reimbursements, and HSA funding — against your census at every renewal, and flags the trap before it becomes a finding. It's part of how we work as your agent — there's no fee for it.

Call EBS toll-free · (866) 793-2764 or send us a note