Authorizes municipalities and districts to enter into 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.
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 administrative 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 benefit plans which offer employee wellness programs
PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to enhance the ability of municipalities to join forces and cooperatively provide and manage employee benefits in a manner that reduces the cost of providing such, benefits but which is also able to give municipal employees more choices in the benefits provided. Further, it clearly 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 SPECIFIC 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 General Municipal Law section 119-0 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 4328.
Section 5: Adds a new subparagraph 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 HeRA 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 municipalities that are needed to participate in health benefit plan from 3 to 2 municipalities. covered employees need to establish such plan is employees. reduce the number of a municipal cooperative In addition, the number of 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 can 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 plan 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 lives.
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 7 9(, 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.
PRIOR LEGISLATIVE HISTORY: 2011-12- S.2843 - Passed the Senate in 2011.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: January 1, next succeeding the date it shall have become law,
STATE OF NEW YORK ________________________________________________________________________ 1994 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government 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 administrative 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 benefit plans which offer employee wellness programs THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 92-a of the general municipal law, is amended by adding a new subdivision 8 to read as follows: 8. THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY PUBLIC CORPO- RATION WHICH PROVIDES HEALTH INSURANCE BENEFITS TO ITS OFFICERS AND EMPLOYEES PURSUANT TO ARTICLE FORTY-SEVEN OF THE INSURANCE LAW. S 2. Subdivision a of section 119-n of the general municipal law, as amended by chapter 413 of the laws of 1991, is amended to read as follows: a. The term "municipal corporation" means a county outside the city of New York, a city, a town, a village, a board of cooperative educational services, A PUBLIC LIBRARY AS DEFINED IN SECTION TWO HUNDRED FIFTY-THREE OF THE EDUCATION LAW, A fire district or a school district. S 3. Subdivision 2 of section 119-o of the general municipal law is amended by adding a new paragraph b-1 to read as follows: B-1. THE ESTABLISHMENT OF A CENTRALIZED OFFICE TO COLLECTIVELY PROVIDE:EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD00407-01-3 S. 1994 2
(I) EMPLOYEE PAYROLL, TIME, ATTENDANCE AND PERSONNEL ADMINISTRATION SERVICES; (II) PARTICIPATION IN THE NEW YORK STATE HEALTH INSURANCE PROGRAM; (III) A PERSONNEL OFFICE TO PROVIDE INFORMATION ON EMPLOYEE HEALTH INSURANCE AND OTHER EMPLOYEE BENEFITS; (IV) EMPLOYEE HEALTH INSURANCE BENEFITS FROM MORE THAN ONE HEALTH INSURANCE CARRIER OR ORGANIZATION, WHICH GRANTS EACH EMPLOYEE THE CHOICE OF WHICH HEALTH INSURANCE PLAN WHICH WILL PROVIDE COVERAGE; (V) EMPLOYEE PARTICIPATION IN TAX DEFERRED RETIREMENT PLANS, HEALTH CARE PLANS AND CHILD CARE PLANS; (VI) MUNICIPAL COOPERATIVE HEALTH BENEFIT PLANS PURSUANT TO ARTICLE FORTY-SEVEN OF THE INSURANCE LAW; (VII) ADEQUATE AND ONGOING FINANCIAL CONTROLS AND SECURITY ARRANGE- MENTS TO ENSURE THAT THE PARTICIPATING MUNICIPAL CORPORATIONS AND DISTRICTS REMAIN SOLVENT; (VIII) THE PREPARATION AND DISSEMINATION OF INFORMATIONAL AND SOLIC- ITATION MATERIALS TO FACILITATE COMPARISON OF THE VARIOUS EMPLOYEE HEALTH INSURANCE PLANS OFFERED BY THE PARTICIPATING MUNICIPAL CORPO- RATIONS AND DISTRICTS; (IX) FOR THE ENROLLMENT, BILLING, PREMIUM COLLECTION, PREMIUM DISBURSEMENT AND RECONCILIATION, COMMISSION DISBURSEMENT, AND OTHER PROCESSING SERVICES FOR HEALTH INSURANCE BENEFITS PROVIDED TO MUNICIPAL EMPLOYEES; (X) CONTRACTING WITH QUALIFIED THIRD PARTIES FOR THE PROVISION OF ANY SERVICE NECESSARY TO CARRY OUT SUCH OFFICE'S POWERS AND DUTIES; AND (XI) NEGOTIATION WITH PARTICIPATING HEALTH INSURERS AND HEALTH MAINTE- NANCE ORGANIZATIONS WITH REGARD TO THE ADMINISTRATIVE EXPENSES PORTION OF PREMIUM RATES CHARGED FOR HEALTH CARE COVERAGE OFFERED TO MUNICIPAL EMPLOYEES BY SUCH OFFICE. S 4. Clause (iii) of subparagraph (B) of paragraph 1 of subsection (c) of section 4326 of the insurance law, as added by chapter 1 of the laws of 1999, is amended to read as follows: (iii) at least thirty percent of its eligible employees receiving annual wages from the employer at a level equal to or less than thirty thousand dollars. The thirty thousand dollar figure shall be adjusted periodically pursuant to subparagraph (F) of this paragraph
[.]; OR S 5. Paragraph 1 of subsection (c) of section 4326 of the insurance law is amended by adding a new subparagraph (B-1) to read as follows: (B-1) A MUNICIPAL EMPLOYER AS DEFINED IN AND IN ACCORDANCE WITH SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX-A OF THIS ARTICLE. S 6. The insurance law is amended by adding a new section 4326-a to read as follows: S 4326-A. STANDARDIZED HEALTH INSURANCE CONTRACTS FOR MUNICIPAL EMPLOYERS. (A) FOR THE PURPOSES OF THIS SECTION, "MUNICIPAL EMPLOYER" SHALL MEAN A MUNICIPAL CORPORATION OR A DISTRICT, AS DEFINED IN SECTION ONE HUNDRED NINETEEN-N OF THE GENERAL MUNICIPAL LAW, OR ANY COMBINATION THEREOF. (B) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ANY MUNICIPAL EMPLOYER MAY OFFER ITS EMPLOYEES, THAT ARE NOT OTHERWISE QUALIFIED TO PURCHASE A STANDARDIZED HEALTH INSURANCE CONTRACT SPECIFIED IN SECTION FOUR THOU- SAND THREE HUNDRED TWENTY-SIX OF THIS ARTICLE SHALL BE ELIGIBLE TO PURCHASE SUCH STANDARDIZED HEALTH INSURANCE CONTRACTS; PROVIDED, HOWEV- ER, THAT SUCH MUNICIPAL EMPLOYERS AND EMPLOYEES THAT PURCHASE SUCH CONTRACTS SHALL NOT DIRECTLY OR INDIRECTLY RECEIVE ANY PREMIUM REDUCTIONS DUE TO STOP LOSS FUND SUBSIDIES RECEIVED BY INSURERS ANDS. 1994 3
HEALTH MAINTENANCE ORGANIZATIONS PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SEVEN OF THIS ARTICLE. (C) ALL HEALTH MAINTENANCE ORGANIZATIONS THAT ARE REQUIRED TO OFFER CONTRACTS PURSUANT TO SECTION FOUR THOUSAND THREE HUNDRED TWENTY-SIX OF THIS ARTICLE AND ALL COMPANIES SUBJECT TO ARTICLE FORTY-TWO OF THIS CHAPTER AND CORPORATIONS SUBJECT TO THIS ARTICLE THAT VOLUNTARILY OFFER CONTRACTS PURSUANT TO SUCH SECTION SHALL NOT RECEIVE STOP LOSS FUNDS OR REIMBURSEMENTS FOR CLAIMS LOSSES SUSTAINED BY STANDARDIZED HEALTH INSUR- ANCE CONTRACTS ISSUED TO MUNICIPAL EMPLOYERS AND EMPLOYEES PURSUANT TO THIS SECTION. (D) PREMIUM RATE CALCULATIONS FOR CONTRACTS ISSUED TO MUNICIPAL EMPLOYERS AND EMPLOYEES PURSUANT TO THIS SECTION SHALL BE SUBJECT TO THE FOLLOWING: (1) COVERAGE MAY BE COMMUNITY RATED OR EXPERIENCE RATED, AND INCLUDE RATE TIERS FOR INDIVIDUALS, TWO ADULT FAMILIES AND AT LEAST ONE OTHER FAMILY TIER. THE RATE DIFFERENCES MUST BE BASED UPON THE COST DIFFER- ENCES FOR THE DIFFERENT FAMILY UNITS AND THE RATE TIERS MUST BE UNIFORM- LY APPLIED; (2) IF GEOGRAPHIC RATING AREAS ARE UTILIZED, SUCH GEOGRAPHIC AREAS MUST BE REASONABLE AND IN A GIVEN CASE MAY INCLUDE A SINGLE COUNTY; AND (3) CLAIMS EXPERIENCE UNDER CONTRACTS ISSUED TO MUNICIPAL EMPLOYERS AND EMPLOYEES MAY BE POOLED SEPARATELY FOR RATE SETTING PURPOSES. S 7. Subsections (a) and (f) of section 4702 of the insurance law, as added by chapter 689 of the laws of 1994, are amended and a new subsection (i-1) is added to read as follows: (a) "Community rating" means a rating methodology in which the premium equivalent rate for all persons covered under a municipal cooperative health benefit plan is the same, based upon the experience of the entire pool of risks covered under the plan, without regard to age, sex, health status or occupation and such that refunds, rebates, credits or divi- dends based upon age, sex, health status or occupation are not permitted; PROVIDED, HOWEVER, THAT, SUBJECT TO THE APPROVAL OF THE SUPERINTENDENT, SUCH PLAN MAY PROVIDE AN ACTUARIALLY APPROPRIATE REDUCTION IN PREMIUM RATES IN RETURN FOR AN ENROLLEE'S OR INSURED'S ADHERENCE TO A BONA FIDE WELLNESS PROGRAM. A BONA FIDE WELLNESS PROGRAM IS 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, HELPS TO PREVENT OR MITIGATE ACUTE OR CHRONIC SICKNESS OR DISEASE, OR WHICH MINIMIZES ADVERSE HEALTH CONSEQUENCES DUE TO LIFESTYLE. SUCH WELLNESS PROGRAM SHALL DEMONSTRATE ACTUARIALLY THAT IT ENCOURAGES THE GENERAL GOOD HEALTH AND WELL-BEING OF THE COVERED POPULATION. SUCH PLAN SHALL NOT REQUIRE SPECIFIC OUTCOMES AS A RESULT OF AN ENROLLEE'S OR INSURED'S ADHERENCE TO THE APPROVED WELLNESS PROGRAM. (f) "Municipal corporation" means within the state of New York, a city
[with a population of less than one million or], a county outside the city of New York, town, village, board of cooperative educational services, school district, A FIRE DISTRICT, a public library, as defined in section two hundred fifty-three of the education law, or district, as defined in section one hundred nineteen-n of the general municipal law. (I-1) "STOP-LOSS INSURANCE" MEANS AN INSURANCE POLICY WHEREBY THE INSURER AGREES TO PAY CLAIMS OR INDEMNIFY A MUNICIPAL CORPORATION FOR LOSSES INCURRED UNDER A MUNICIPAL COOPERATIVE HEALTH BENEFIT PLAN IN EXCESS OF SPECIFIED LOSS LIMITS FOR INDIVIDUAL CLAIMS AND/OR FOR ALL CLAIMS COMBINED, OR ANY SIMILAR ARRANGEMENT. S 8. Paragraphs 2 and 3 of subsection (a) of section 4704 of the insurance law, paragraph 2 as amended by section 3 of part A of chapterS. 1994 4
494 of the laws of 2009 and paragraph 3 as added by chapter 689 of the laws of 1994, are amended to read as follows: (2) except for any plan that provided medical, surgical and hospital services on or before January first, nineteen hundred ninety-three pursuant to a municipal cooperation agreement, the number of municipal corporations participating in the municipal cooperative health benefit plan shall be at least
[three]TWO; (3) except for any plan that provided medical, surgical and hospital services to at least three hundred fifty covered employees (including retirees and not including dependents) on or before January first, nine- teen hundred ninety-three pursuant to a municipal cooperation agreement, the number of covered employees (including retirees and not including dependents) of municipal corporations participating in the municipal cooperative health benefit plan shall be at least [two thousand]FIVE HUNDRED; S 9. Subsection (b) of section 4704 of the insurance law, as added by chapter 689 of the laws of 1994, is amended to read as follows: (b) The superintendent shall refuse to grant a certificate of authori- ty to an applicant that fails to meet the requirements of this section. Notice of refusal shall be in writing and shall set forth the basis for the refusal. If the applicant submits a written request within [thirty]SIXTY days after receipt of the notice of refusal, the superintendent shall promptly conduct a hearing to give the applicant the opportunity to show cause why the refusal should not be made final. S 10. Paragraphs 1, 2 and 5 of subsection (d) of section 4705 of the insurance law, paragraphs 1 and 5 as added by chapter 689 of the laws of 1994 and paragraph 2 as amended by chapter 681 of the laws of 2002, are amended to read as follows: (1) shall design the plan OR PLANS of benefits provided OR OFFERED by the municipal cooperative health benefit plan and prepare the plan docu- ment and summary plan description in accordance with section four thou- sand seven hundred nine of this article, AND SHALL INCLUDE A WELLNESS PROGRAM OPTION; (2) may enter into an agreement with a contract administrator or other service provider, determined by the governing board to be qualified, to receive, investigate, recommend, audit, approve or make payment of claims under the municipal cooperative health benefit plan OR PLANS, provided that: (A) the charges, fees and other compensation for any contracted services shall be clearly stated in written administrative services contracts as required in subdivision six of section ninety-two-a of the general municipal law; (B) payment for contracted services shall be made only after such services are rendered; AND (C) no member of the plan's governing board or any member of such member's immediate family shall be an owner, officer, director, partner, or employee of any contract administrator retained by the plan [; and (D) all such agreements shall comply with the requirements of subdivi- sion six of section ninety-two-a of the general municipal law]. (5) shall prepare an annual budget for the municipal cooperative health benefit plan to determine the premium equivalent rates for participating municipal corporations to be deposited in the plan's joint fund or funds during the fiscal year, provided that: (A) the governing board shall designate the bank or trust company in which joint funds, including reserve funds, are to be deposited andS. 1994 5
which shall be located in this state, duly chartered under federal law or the laws of this state; and (B) the governing board shall establish premium equivalent rates for participating municipal corporations on the
[bases]BASIS of a community rating methodology filed with and approved by the superintendent and, in determining the annual premium equivalent rates, the governing board: (i) may contract for necessary actuarial services to estimate expected plan expenditures during the fiscal year; (ii) shall maintain reserves in amounts equal to or exceeding the minimum amounts required by section four thousand seven hundred six of this article; and (iii) shall maintain a stop-loss policy or policies, to the extent required by section four thousand seven hundred seven of this article; S 11. Subparagraphs (A) and (B) of paragraph 5 of subsection (a) of section 4706 of the insurance law, as added by chapter 689 of the laws of 1994, are amended to read as follows: (A) five percent of the annualized earned premium equivalents during the current fiscal year of a municipal cooperative health benefit plan which consists of [five]TWO or more participating municipal corpo- rations and covers [two thousand]FIVE HUNDRED or more employees and retirees; or (B) seven percent of the annualized earned premium equivalents during the current fiscal year of the municipal cooperative health benefit plan which consists of [four]TWO or fewer participating municipal corpo- rations or covers fewer than [two thousand]FIVE HUNDRED employees and retirees. S 12. This act shall take effect on the first of January next succeed- ing the date on which it shall have become a law.