https://www.iosconews.com/news/article_634db2d0-a0ae-4d73-bc78-5cb04542cacd.html
OSCODA – The Oscoda Township Board of Trustees (BOT) failed to pass an exemption from a Michigan health insurance act for 2026, during their special meeting on Dec. 29.
The Publicly Funded Health Insurance Contribution Act, known as Act 152, became effective in the state of Michigan on Sept. 11, 2011. The act has options that municipalities and townships can choose from for medical benefit plans offered by public employers, including the following:
- “Hard Cap” option – This option limits a public employer’s total annual health care costs for employees based on coverage levels, which means that the township would contribute no more than a fixed dollar amount per employee.
- “80%/20%” option – The act states that this option limits a public employer’s share of total annual health care costs to not more than 80%, and the employee pays at least 20%. This requires an annual majority vote of the governing body.
- “Exemption” option – Through this option, a local unit of government may exempt itself from the requirements of Act 152, which would last for one year. This requires an annual, two-thirds vote of the governing body.
In context to the hard cap option, according to the Michigan Department of Treasury, the limits for 2026 equal the 2025 limits increased by 2.9%. For medical benefit plan coverage beginning on or after Jan. 1 , the limit on the amount that a public employer may contribute to a medical benefit plan equals the sum of the following:
- $7,942.09 times the number of employees and elected public officials with single-person coverage.
- $16,609.38 times the number of employees and elected public officials with individual-and-spouse coverage or individual-plus-one-nonspouse-dependent coverage.
- $21,660.30 times the number of employees and elected public officials with family coverage.
In a memorandum prepared by Township Manager Adam Kline, he wrote that a resolution is required annually, to accomplish the following:
- Formally opt out of the Act’s cost-sharing restrictions for the upcoming plan year.
- Comply with statutory procedure, which mandates explicit annual action by the governing body.
- Retain benefit flexibility, allowing Oscoda Township to set health coverage terms, such as alternative cost arrangements, without defaulting to either the hard cap or 80%/20% model.
The memo also reads that it is common for municipalities to take the exemption option because it allows them to have more control over benefits, which is said to be useful when, “balancing competitiveness, stewardship and contractual obligations.”
It was recommended that the BOT opt out of the act’s 2026 cost-sharing restrictions, “to ensure that the township meets state requirements, avoids automatic costing formulas and maintains transparency and accountability through formal Board action.”
As stated in an associated resolution, by passing it and taking the exemption option, the trustees “believe that compensation determinations for township employees are most properly the responsibility of the township’s elected representatives, and not the State of Michigan or its officials.”
Treasurer Jaimie McGuire moved to adopt the resolution for the township to be exempt from Act 152, and Trustee Tim Cummings supported it.
Trustee Jeff Linderman started out discussions by pointing out that there were two other options the board could take, and he wanted to know why the exemption option was the only one being considered.
Kline responded that the even though he wrote the resolution, all three options are listed, so the board can still go through with any option they want.
“I do feel this is not any slight towards any employee of the township, but I think as we look at our revenue, income and expenses, I believe this area should be looked at with a fair share being across the board for everybody,” Linderman said.
Trustee Mark Wygant then provided his own thoughts, saying that he was not aware of any other reasonable option that they could take that day, to meet deadlines and to fix anything that may be perceived as a past mistake in the budget for the health care plan.
He also pointed out that the township attorney recommendation stated that many municipalities adhere to the exclusion for the reasons written earlier.
“So, it’s not like this is out of norm,” Wygant explained. “The state’s requirement is to simply do one of these three things. The state doesn’t require you to meet 80/20. The state requires you to do one of three, and that’s what we’re here today to do.
“We don’t have time to actually meet the state requirement of filing this on the timeline given, so our only option is to opt out of the cost-sharing restrictions for the upcoming year,” he proceeded.
Wygant continued to say that the board should be addressing this Act and discussing it immediately in 2026, so that they are ahead of it with their insurance providers.
He also remarked that they cannot open up one set of benefits for one class of employees, without looking at all classes as a whole.
“I don’t want to be hasty here in saying we’re going to obligate ourselves to cutting healthcare costs across the board for employees or any group of employees,” he said. “None of us have the facts to do that. We have no insurance quotes. We’ve had no discussions deeper than this top-level stuff that we’re talking about right now. To just go ahead and say, ‘well, I don’t have this, so they shouldn’t have it,’ is a very slippery slope, and not one we want to go down, in my opinion.”
Wygant further commented that it is unfortunate if this has been an ongoing concern, and people have either withheld information or chose not to act on it to proactively correct it.
As for the motion that was put forth, this resulted in a 3-2 vote, with Linderman and Supervisor Nicole Tregear casting the “no” votes.
Even though there were more board members in favor of the exemption, there was not a full board – with Clerk Heather Tait and Trustee Regina Fortner both absent from the meeting – and there was not the required, two-thirds majority vote in order for it to pass. Therefore, the motion failed.
“Are we willingly admitting we’re going to remain out of compliance?” Wygant asked, of those not in favor of adopting the resolution.
McGuire explained that because of not passing the exemption, the township could lose state revenue sharing of almost $1 million.
Kline added that if a resolution isn’t adopted, the township is supposed to default to the hard cap option.
Wygant went on to state that without a work session and discussion with insurance carriers to try and reach a solution, without the exemption, they would be defaulting to the hard cap with no warning to employees and no discussion on the downstream impact on contractual obligations.
“I still feel like we really should be looking at the exemption, because I feel like to make this decision now, and force this on people who didn’t have any warning, is not a good look,” Cummings weighed in. “We have a fiduciary responsibility to keep the people who are employed at the township happily employed and not in a financial situation that they didn’t realize they were going to be incurring in less than two weeks.
“We need to not only buy ourselves some time, we have to buy the time for the township employees who will become recipients of this decision,” he also noted.
Cummings later continued by saying that nothing stops them from making another motion, but he wasn’t doing it yet because he wanted to ask those who voted no about what they see as a solution going forward.
Linderman gave his reasoning, stating that they have always taken money from their reserve accounts to balance the budget. Because of this, they cannot afford things by their taxes, so they have to make up the difference.
He also did research and said he found that no previous boards in the past four years had taken any action regarding Act 152, nor was it ever brought up.
Wygant asked if anyone was aware of Act 152 before their budget meetings and, while Cummings responded that he wasn’t, Linderman said that he was aware of it back in January 2025, as it was discussed during training.
“You’re the only trustee that I’m aware of that is even aware of any of this up until a week ago,” Wygant said. “You disclosed that you missed the budget meeting that actually dealt with this specific area of the budget. You’re saying that you’ve had this information for a year, and we haven’t discussed it, haven’t had an honest conversation about it, where we’ve actually had the ability to do it.”
Wygant continued to say that from his perspective, it looks as if having no choice but to default to the hard cap was where Linderman wanted this issue to go, when it actually could have been addressed throughout the year.
“I don’t think it would have fell on deaf ears with me,” he said. “Unless our new supervisor is saying that she was aware and chose not to bring it to the budget, which I don’t think she is saying, where? Where do we lie this at? Where does this go?
“I think we owe it to our employees to revisit this,” Wygant went on. “If it’s a $60,000 expense to do the right thing by employees for 12 months while we address the issue, that’s an appropriate response. And that is a fiduciary response because you don’t know that downstream impact is, of cutting benefits 24 hours before their paycheck. You don’t know what the response is to attracting talent in the future.”
Wygant also stated that he received no such training related to Act 152.
He then made a motion to accept the resolution to have the township be exempt from the act, in addition to adding this topic to the BOT’s upcoming goals and objectives meeting. Cummings supported the motion.
As part of this discussion, Wygant said that the public deserves to hear every bit of what goes on in their heads when they are making these kinds of decisions, especially ones such as this, where it determines how much money is being taken directly out of their employee’s pockets.
“It’s about what we do to help try to make this right for the employees,” Cummings explained. “My opinion is that we’re trying to find the right thing to do, and I don’t think any one of us should be holding on to something to be right about. We just need to do the right things, and I think that’s where we need to make this vote.”
He said that if it doesn’t pass, “I just don’t think that the rightness that anyone thinks they might be trying to spearhead is going to come across to the people who work here, who are going to be directly and immediately impacted.”
McGuire agreed with the comments that Cummings made, pointing out that she doesn’t even know when the next opt-in or opt-out is, speaking to insurance open enrollment occurring once per year.
Wygant then noted that the 2026 fiscal year budget had just been passed at the BOT meeting, one week prior. While Tregear was absent from that meeting, Linderman voted in favor of approving the budget, but against being exempt from Act 152, which would directly involve some of the money in the budget.
“We’re talking about the right thing to do, and I think that would be to remain consistent, would be to remain transparent, open and honest, and would be to address this moving forward on a timeline that allows everybody to adapt and overcome,” he maintained.
Throughout all of this discussion period, Tregear did not give her reasoning as to why she did not vote in favor of the exemption.
As for the vote for the second motion, it once again came out to a 3-2 fail, with Tregear and Linderman sticking to their original opposing votes.
“I’m so sorry to the public, and I’m sorry to the township,” Cummings said, at the meeting’s conclusion.
