Amd SS92-a, 119-n & 119-o, Gen Muni L; amd SS4326, 4702, 4704, 4705 & 4706, add S4326-a, Ins L
Authorizes municipalities and districts to enter in cooperative agreements for the provision of centralized public employee administrative and personnel services; provides for health insurance coverage of municipal employees pursuant to standardized health insurance contracts; and authorizes the provision of reduced premiums for municipal health insurance plans which offer wellness programs.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1448A
SPONSOR: Zebrowski (MS) TITLE OF BILL: An act to amend the general municipal law, in relation
to authorizing cities, towns, villages, school districts, boards of
cooperative educational services, library districts, fire districts,
improvement districts and special districts to enter into cooperative
agreements for the provision of centralized public employee administra-
tive and personnel services; and to amend the insurance law, in relation
to authorizing the provision of health insurance coverage to municipal
employees pursuant to standardized health insurance contracts and
authorizing reduction of premiums for municipal cooperative health bene-
fit plans which offer employee wellness programs
PURPOSE:
To enhance the ability of municipalities to join forces and cooperative-
ly provide and manage employee benefits in a manner that reduces the
cost of providing such, benefits but which is also able to give munici-
pal employees more choices in the benefits provided. Further, it clear-
ly enables municipalities to, cooperatively administer such employee
benefits and other administrative personnel overhead costs to help lower
the overall cost of municipal government.
SUMMARY OF PROVISIONS:
Section 1: Amends General Municipal Law section 92-a to add a new subdi-
vision (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; partic-
ipation in the NYS Health Insurance program (NYSHIP); the establishment
of shared use and selection of various health care plans for its munici-
pal 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 employ-
ees.
Section 6: Adds an new Insurance Law section 4326-a to allow munici-
palities, 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 employ-
ees 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 peri-
od 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 Well-
ness 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 employ-
ee.
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, clue to New York's declining tax base in
many sections of New York, this had lead to further increases in munici-
pal tax rates to compensate for the reduced assess value of real proper-
ty. 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 Well-
ness 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.
