Does PA 152 apply to townships and villages?

Yes. A Michigan township or village is a public employer under MCL 15.562(h) and a local unit of government under MCL 15.562(d), which puts it squarely inside PA 152 — the Michigan hard cap law. But the question boards actually need answered is what triggers it, and the answer is not size, budget, or population. The trigger is one act: offering or contributing to a medical benefit plan for employees or elected public officials. Do that for even one person and the law applies in full. Offer no medical plan at all, and there is nothing for the law to limit.

The trigger is offering coverage — not headcount

The operative language opens Section 3 of the act:

Notice what is absent: any minimum number of employees. Federal benefits law trains small employers to look for thresholds — 50 full-time equivalents for the ACA employer mandate, 20 for COBRA. PA 152 has none. A general-law township with a two-person office and one enrolled employee is subject to the act on exactly the same terms as the City of Grand Rapids. What scales with size is only the aggregate cap itself, because the cap is the sum of per-person amounts by coverage tier.

Elected officials count — and that's usually where small townships feel it

The statute says "employees or elected public officials," and in a small township the officials often are most of the plan: a supervisor on family coverage, a clerk on two-person, a treasurer on single. Each one counts in the cap calculation at their tier, exactly like an employee. Two refinements matter:

• Waivers don't count. An official or employee who waives the coverage offered is excluded from the cap calculation entirely under MCL 15.563(3) — you don't get their cap amount as headroom.
• Cash in lieu is outside the law. A stipend paid to someone who waives coverage is expressly excluded from "medical benefit plan costs" under MCL 15.562(f). It doesn't count against the cap — and it doesn't drag a no-plan township into the act either.
• The 80/20 alternative has a personal bite for boards. If your board elects the 80/20 option instead of the hard cap, each participating elected official must personally pay at least 20% of the cost of their own coverage. There is no equivalent per-person rule under the hard cap. Boards weighing the two paths should know they are voting on their own paychecks: Hard cap vs. 80/20 — which should our municipality choose?

What counts against the cap — the short version

Both columns per the act's definition of medical benefit plan costs (MCL 15.562(f)) and Treasury's published FAQ. The full treatment, including the timing rules for reimbursements paid after year-end, lives here: What counts toward "total annual costs" under PA 152?

Your three options, once the law applies

Every township and village that offers a plan sits on one of three footings for each medical benefit plan coverage year. The hard cap is the default — it applies automatically when the board does nothing. The 80/20 alternative requires a majority vote of the board before the coverage year begins, taken fresh every year. And because a township or village is a local unit of government under MCL 15.562(d), it is among the entities eligible for the third path most public employers never get: opting out of the act entirely by a 2/3 vote of the board, renewed annually. On a five-member township board, two-thirds means four yes votes — the arithmetic, the deadline, and the traps are covered here: Does the PA 152 opt-out require a board resolution every year?

Departments, boards, and the edges of "the township"

The act follows the employer, not the org chart. Departments that are arms of the township or village — police, fire, the DPW — are inside the township's compliance position and ride on whatever election its board makes. Entities with genuine autonomy are different: a library with its own board that operates independently is its own public employer, must comply on its own, and — unlike its parent municipality — is not eligible to opt out. Where the line falls for a given entity is a question for that entity's own counsel; the analysis Treasury applies is laid out on the opt-out page.

What happens if a township ignores it?

The act's penalty machinery ties noncompliance to state payments — and for cities, villages, and townships the state's annual compliance reminder has quietly disappeared from the revenue-sharing paperwork, which is exactly how small municipalities drift out of compliance without anyone deciding to. The enforcement picture, and why silence from Lansing is not the same as safety: What are the penalties for violating PA 152?