Relates to health insurance buyout programs

4 Co-sponsors

• Tony Avella
• David Carlucci
• Jesse Hamilton
• George Latimer

Title of bill

An act to amend the civil service law, in relation to health insurance buyout programs

Purpose

To facilitate the administration of collectively bargained health insurance buyout programs sponsored by participating agencies or participating employers in the New York State Health Insurance Plan.

Summary of provisions

Section 1 of this bill adds a new subdivision 4 to Civil Service Law section 161 to provide that the Department of Civil Service shall not deny any participating agency or participating employer the ability to collectively bargain for an health insurance buyout program and that the Department shall not limit the employees who participate in the insurance buyout plan to those whose other health insurance coverage is not coverage through the New York State Health Insurance Plan ("NYSHIP").

Section 2 of this bill provides that this act shall take effect immediately.

Existing law

The Civil Service Law is silent regarding health insurance buyout programs.

Justification

Many collectively bargained contracts include health insurance buyout programs. These programs are beneficial for both the employee and his or her employer because they reduce costs. Currently, the Department of Civil Service, in accordance with Policy Memo 122r3 dated May 15, 2012, will only allow those employees whose other health insurance coverage is not NYSHIP to participate in these programs.

The Policy Memo addresses the administrative issues that arise when the employee who elected to participate in a buyout program retires or is laid off during the buyout period and what rights, if any, the employee has to NYSHIP enrollment as a retiree. The answer to this question is the same regardless of whether the employee's other health insurance NYSHIP or a private plan. Yet, the Department has chosen to treat employees whose other insurance is NYSHIP differently than employees whose other insurance is a private plan. This different treatment does not favor these employees; rather it forces them to expend more money for health insurance.

Based on the 2016 NYSHIP rates, the shared employer and employee cost of the empire plan for participating agencies is $849.01 + $2.059 (administrative fee) for individual coverage and $1,926.21 + $2.059 (administrative fee) for family coverage. The monthly cost of the empire plan for a family of 3 where both spouses work for a participating employer is $2,797.87 because both spouses are required to have health insurance even though one spouse has family coverage. The annual additional shared cost for employees whose other insurance is NYSHIP is $10,212.83.

In the Policy Memo, the Department states that it "is obligated to protect the Plan." Unfortunately, it is difficult to see how this policy protects NYSHIP without discriminating against the employees of participating employers. An employee should not be penalized upon retirement for participating in a buyout program that reduces the employers and employees costs. This is a time when we need to exercise sound fiscal judgment. Requiring an employee to remain in NYSHIP even though a buyout program is available so that he or she can be eligible for NYSHIP benefits upon retirement is simply a waste of precious resources.

Legislative history

New bill.

Fiscal implications

None to the State

Effective date

This act shall take effect immediately.