BILL NUMBER:S4466

TITLE OF BILL:

An act authorizing municipalities to join a county self-funded or
self-insured health plan

PURPOSE:

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.

JUSTIFICATION:

              

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.

LEGISLATIVE HISTORY:

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.

FISCAL IMPLICATIONS:

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.

EFFECTIVE DATE:

Immediate.