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.
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.
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.
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 experience rated, so that they are less costly.
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.
STATE OF NEW YORK ________________________________________________________________________ 6633 IN SENATE February 19, 2014 ___________Introduced by Sens. GRIFFO, VALESKY, FARLEY, LIBOUS, RITCHIE, ZELDIN -- read twice and ordered printed, and when printed to be committed to the Committee on Insurance AN ACT authorizing municipalities to join a county self-funded or self- insured health plan THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Notwithstanding articles 44 or 47 of the insurance law or any other provision of law to the contrary, a municipality is permitted, with the consent of the county and the governing body of such munici- pality, to join a county self-funded or self-insured health plan in any county in which such municipality is located in whole or in part. Muni- cipality is defined as any city, town, village or any other municipal corporation, a school district or any governmental entity operating a public school, college or university, a public improvement or special district, a public authority, commission, or public benefit corporation, or any other public corporation, agency or instrumentality or unit of government which exercises governmental powers under the laws of the state but is not a part of, nor a department of, nor an agency of the state. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13268-03-4