S T A T E   O F   N E W   Y O R K
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                                  6079

                       2011-2012 Regular Sessions

                          I N  A S S E M B L Y

                              March 4, 2011
                               ___________

Introduced  by  M.  of  A.  ZEBROWSKI  --  read once and referred to the
  Committee on Local Governments

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.
                                                           LBD08542-01-1

              

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  (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 AND

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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  chapter

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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  and

A. 6079                             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.