Public Act 106 Compliance

The state of Michigan’s Public Act 106, otherwise known as the Public Employers Health Benefit Act, was enacted in 2007 to require public employers that provide health coverage or benefits for their employees to solicit at least four bids when the benefit plan is established. At least one of those bids must be from a Voluntary Employees’ Beneficiary Association (VEBA).

Additionally, the Act requires that public employers engage in a similar bidding process every three years when renewing or continuing a benefit plan.

Requirements are also laid out for creating and maintaining pooled plan, with parameters dictating a minimum of 250 public employees and that the pooled plan must accept any public employer that applies, agrees to make the required payments and to remain in the pool for at least three years, and adheres to the other provisions of the plan.

Ensuring Compliance with Public Act 106

Burnham & Flower can help public employers solicit four or more bids every three years when renewing or continuing a medical benefits plan, including at least one bid from a VEBA as described in section 501(c)(9) of the internal revenue code, 26 USC 501(c)(9). In fact, we utilize our own VEBA to ensure compliance with Public Act 106.

With more than 50 years of experience in the Michigan public entity sector, Burnham & Flower understands the challenges the Act can present for public employers and can help ensure your agency complies with the Act’s requirements, avoiding severe penalties.

For more information, contact Amber Howes at ahowes@bfgroup.com or 800.748.0554.