Authorizes all municipalities, with the consent of the county and the governing body of such municipality, to join a county self-funded or self-insured health plan.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A739
SPONSOR: Steck TITLE OF BILL: An act authorizing municipalities to join a county
self-funded or self-insured health plan
PURPOSE OR GENERAL IDEA OF BILL: Self-insurance or self-funding for
health insurance is significantly less expensive than contracting out to
private health insurers but requires a sufficient number of employees to
be economically possible. Accordingly, at least 19 Counties currently
self-insure. On the other hand, most municipalities, including school
districts, do not have enough employees to self-insure. This bill allows
them to do so by giving them the potential to join County self-insurance
plans.
SUMMARY OF PROVISIONS: The bill allows any municipality located in
whole or in part of a County to join a County self-insured health plan,
provided that the County and the municipality both agree to allow the
municipality do so.
JUSTIFICATION: Municipalities and the New York State Association of
Counties have requested and support the bill. In addition, certain
health insurers are preparing for the inevitability of self-insurance
plans, by establishing departments that serve such plans. The role of
the private insurer is reduced, since the private insurer no longer
handles plan funds, nor does it profit from plan funds, but is still
needed for claims processing and may charge fees for doing so.
LEGISLATIVE HISTORY: Articles 44 and 47 of the Insurance Law currently
allow municipalities to join together to share services, presumably
including self-insurance. However, the process is extremely cumbersome,
so in practice such cooperation is virtually non-existent, and is non-
existent in the area of self-insurance. Furthermore, Article 47
requires community rating, whereas self-insurance plans can be experi-
ence rated, so that they are less costly.
FISCAL IMPLICATIONS: Only positive. By bringing in more members to a
County self-insured plan, spreading of risk is enhanced, and costs to
the County and its employees are potentially reduced. In addition,
municipal costs are reduced by paying less for health insurance, which
is critical in a tax cap environment. Employee costs are likewise
reduced. For example, the Albany County self-insured health plan costs
employees approximately 50% less than NYSHIP.
EFFECTIVE DATE: This act shall take effect immediately
