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So Glad You Asked: Economic Vitality Incentive Program (EVIP)

Q: I heard there were more changes to EVIP. What happened?

A: April 26, 2012, the state Legislature made significant changes to the requirements placed upon local units to receive the third portion of EVIP. House Bill 5189, enrolled on May 1, 2012 as PA 107, is a supplemental appropriations bill, and it made two major changes:

1. The deadline for certification for the third portion of EVIP was changed to June 1, 2012 (from May 1, 2012.)

2. A second method for certification was added; compliance with PA 152 (the law that requires local units to provide health benefits in accordance with a hard cap/80-20/opt-out provisions.)

The direct language is as follows, available in its entirety at legislature.mi.gov:

(A) Any eligible city, village, or township that offers medical benefits to its employees or elected public officials shall certify to the department of treasury by June 1, 2012 that it is in compliance with the publicly funded health insurance contribution act, 2011 PA 152, MCL 15.561 to 15.569. Dental and vision coverages are not considered medical benefits. The department shall develop a certification process and method for cities, villages, and townships to follow.

(B) Any city, village, or township that does not offer medical benefits to its employees or elected public officials shall certify to the department of treasury by June 1, 2012 that it does not offer medical benefits to its employees or elected public officials. Dental and vision coverages are not considered medical benefits. The department shall develop a certification process and method for cities, villages, and townships to follow.

Q: Who is eligible for EVIP, anyway?

A: Each city, village, or township that received a FY 2010 statutory payment greater than $4,500 is eligible but must fulfill specific requirements to qualify for payments. Visit our EVIP resource page at mml.org or the department of treasury at michigan.gov (local government services/revenue sharing pages.)

Q: Originally the third part of EVIP about employee compensation required certification of intent to change retirement programs and health care premium sharing. Does the new option to comply with PA 152 in order to qualify for EVIP, only apply to the health care component of EVIP?

A: No! Under the new law, compliance with PA 152 (including opting out) satisfies Part 3 of EVIP. If you comply with PA 152—by adhering to the hard caps, or electing a 20 percent cost share through majority vote of council, or by opting-out altogether through 2/3 vote of council—you qualify for the 3rd leg of EVIP (assuming you are an eligible unit of government).

Q: EVIP requires that new hires pay 20 percent of health care premiums. How can you opt out of PA 152 and still comply with EVIP?

A: PA 152 provides the option for a local unit to exempt itself, or “opt-out” of requirements of the law by 2/3 vote of the council (where the mayor is both chief executive and chief administrator, his/her approval of the exemption is also required.) Opting out of PA 152 is complying with PA 152, therefore local units that opted out meet the requirements of the third part of EVIP. The new Treasury EVIP certification form includes an “opt-out” box. Visit michigan.gov to view the form.

Q: PA 152 states that the state will release figures annually related to the hard cap amounts to adjust for inflation. When will this happen?

A: PA 152 specifies, “By October 1 of each year after 2011 the state treasurer shall adjust the maximum payment permitted…based on the change in the medical care component of the United States consumer price index for the most recent 12-month period…” The League will aggressively communicate the state’s adjustments through our Inside 208 blog, the legislative Link e-newsletter, our website, and other means.

 

The League’s Information Service provides member officials with answers to questions on a vast array of municipal topics. Send your municipal inquiries to info@mml.org, or call 1-800-653-2483

 

 

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