Pontiac council opts out of state hard cap to retain employee health plans for 2026

Pontiac City Council voted unanimously on Nov. 10 to opt out of the state hard cap on employer health-care cost sharing (Public Act 152, 2011) for 2026, a move city HR and administration said was necessary to preserve the city’s existing health plans without shifting large costs to employees.

Human Resources Director Melinda Durokovich and administration officials said benefit costs increased substantially for 2026 and that the city evaluated several alternatives — including switching carriers or moving to more restrictive plans — but concluded that opting out and covering the additional cost was the least harmful option for employees. Durokovich said the opt‑out would cost the city approximately $240,000 for the coming year.

“Employees would have effectively faced a pay cut if we made them absorb those changes,” Durokovich said, describing the retention and recruitment rationale. Council members on the finance and personnel subcommittee reviewed the options and supported the opt-out as a near-term approach while staff work on longer-term benefits strategy for future years.

The opt-out requires annual council approval; staff said the city will continue to analyze costs and consider alternatives during the 2026 benefits planning cycle. The resolution passed by roll call vote 6–0.