NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9715
SPONSOR: Abbate 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 insur-
ance buyout programs sponsored by participating agencies or participat-
ing 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 insur-
ance 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 imme-
diately.
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 122rd 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 (adminis-
trative fee) for individual coverage and $1,926.21 + $2.059 (administra-
tive 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 partic-
ipating 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 bene-
fits 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.
