Authorizes municipalities and districts to enter into cooperative agreements for the provision of centralized public employee administrative and personnel services

Summary of provisions

Section 1: Amends General Municipal Law section 92-a to add a new subdivision (8) so that the provisions of this section shall not apply if a municipal cooperative health plan is established pursuant to Insurance Law Article 47.

Section 2: Amends General Municipal Law section 119-n to expand the definition of "municipal corporation" for the purpose of expanding the scope of Article 5-G of the General Municipal Law which relates to municipal cooperative agreements or activities.

Section 3: Amends subdivision 2 of General Municipal Law section 119-o to add a new paragraph (b-1) to specifically authorize municipalities to cooperatively establish a centralized administrative office to share responsibilities and work for the administration of certain employee personnel services such as: employee payroll, time & attendance; participation in the NYS Health Insurance program (NYSHIP); the establishment of shared use and selection of various health care plans for its municipal employees; employee participation in tax deferred retirement plans, health care plans, and child care plans; municipal cooperative health plans established pursuant to Insurance Law article 47; and contracting with third party administrators to manage all shared employee health care benefits or tax deferred programs.

Section 4: A technical amendment to Insurance Law section 4326.

Section 5: Adds a new subparagraph (B-1) to Insurance Law section 4326 to permit a municipal employer to offer to its employees the Healthy NY insurance product as one of the plans that are offered to such employees.

Section 6: Adds an new Insurance Law section 4326-a to allow municipalities, either alone or in cooperation with other municipal employers, to offer the standardized health insurance product called Healthy NY. While employees may select the Health NY health insurance product, which is on average about 7% less expensive than most other cooperative health insurance products, the stop loss subsidy that is offered to qualifying small business employers or sole proprietors that may purchase Healthy NY may not be offered. The reason for this is because the stop loss subsidy is financed by HCRA funds and was designed to further reduce the cost of Healthy NY to encourage small employers and sole proprietors to purchase this product for their employees so that they had some type of medical coverage.

Section 7: Amends Insurance Law section 4702 which is the definition section of Insurance Law Article 47 which allows municipalities to establish self-insured municipal cooperative health benefit plans. This provision allows the premium rates for such health plans to allow for an actuarially appropriate reduction in premium rates for municipal employees that participate in wellness programs approved by the Insurance Department. Such Wellness programs can be either a risk management system that identifies at risk populations or any other systematic program or course of medical conduct which helps to promote good health or mitigates against acute or chronic sickness or disease. Also, for clarity, it adds the definition for "stop loss insurance" for the use in Article 47 of the Insurance Law.

Section 8: Amends Insurance Law section 4704 to reduce the number of municipalities that are needed to participate in a cooperative health benefit plan from 3 to 2. In addition, the number of covered employees needed to establish such plan is reduced from 2,000 to 500.

Section 9: Amends Insurance Law section 4704(b) to extend the time period from 30 days to 60 days after the Insurance Department's denial of an application to establish a municipal cooperative health benefit plan for the municipal applicants to appeal such a ruling.

Section 10: Amends Insurance Law section 4705 so that the municipal cooperative health benefit plan can offer one or more than one health benefit plans to its municipal employee members. Further, that a Wellness Program option, with a reduced premium rate, may also be offered.

Section 11: Amends Insurance Law section 4706 that relates to reserve and surplus requirements so that such reserves may be reduced to reflect a smaller number of municipal participants and number of covered employee.

Section 12: Effective date.

Justification

The cost of municipal government in New York continues to escalate, hence local real property taxes to support such governmental activities continues to increase. Further, due to New York's declining tax base in many sections of New York, this had lead to further increases in municipal tax rates to compensate for the reduced assess value of real property. The Purpose of this bill is to give

municipalities the tools that they need to cooperatively provide services and administer municipal employee benefits. Municipal employee benefits are a major part of the cost of running local municipal governments. This bill attempts to enhance the ability of municipalities to cooperatively provide municipal employee benefits such as health insurance, and tax deferred employee plans such as retirement, health flex, and child care plans. Further, it will allow municipalities to offer their employees the ability to participate in more health insurance plans that better reflect the needs of its employees. This increase in choice of plans can help to reduce the cost of providing benefits because employees will be able to better select the benefit plans that matches their family's needs (which can be at a reduced cost). Further, by increasing a municipality's ability to offer different health plans, this can increase employee satisfaction and hopefully productivity.

The bill also allows municipalities, either alone or in conjunction with others, to reduce premium rates if its employees to participate in Wellness programs. Not only will the participation in Wellness Programs help to reduce premium rates, it can increase the well being of its employees and hence, their work productivity via fewer sick days or injuries.

This bill also authorizes municipalities, either alone or jointly, to offer the Healthy NY insurance product which is, on average, cheaper than other health insurance products. Further, it can help reduce the overhead costs that municipalities experience to administer employee benefits by specifically allowing municipalities to join forces to share the cost of administering the servicers performed by a personnel office or by the town or village clerk.

Legislative history

2011-12- S.2843 - Passed the Senate in 2011.

Fiscal implications

To be determined.

Local fiscal implications

Anticipated savings to local governments.

Effective date

This act shall take effect on the first of January next succeeding the date on which it shall have become a law.