NY State Senate Bill 2017-S1718

Senate Bill S1718

2017-2018 Legislative Session

Authorizes municipalities and districts to enter into cooperative agreements for the provision of centralized public employee administrative and personnel services

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Archive: Last Bill Status - In Senate Committee Local Government Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to local government
Jan 10, 2017	referred to local government

co-Sponsors

2017-S1718 (ACTIVE) - Details

See Assembly Version of this Bill:: A10133
Current Committee:: Senate Local Government
Law Section:: General Municipal Law
Laws Affected:: Amd §§92-a, 119-n & 119-o, Gen Muni L; amd §§4702, 4704, 4705 & 4706, Ins L
Versions Introduced in Other Legislative Sessions:: 2011-2012: S2843, A6079
2013-2014: S1994, A1448
2015-2016: S3224, A5130
2019-2020: A3545
2021-2022: A1908
2023-2024: A2828

2017-S1718 (ACTIVE) - Summary

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.

2017-S1718 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S1718

 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 reduction of premiums for
municipal cooperative health benefit plans which offer employee
wellness programs

 PURPOSE :

To enhance the ability of municipalities to join forces and
cooperatively provide and mange 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 PROVISIONS :

Section 1 amends section 92-a of the general municipal law by adding a
new subdivision 8 so that the provisions of this section shall not

apply if a municipal cooperative health plan is establishes 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 subdivision 2 of section 199-o of the general
municipal law to add a new paragraph (b-1) to specifically authorize
municipalities to cooperative 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 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 5 amends Insurance Law section 4704 to reduce the number of
municipalities that are needed to participate in a cooperative health
benefit plan from 3 to 2. In addition, the number of covered employees
needed to establish such plan is reduced from 2,000 to 500.

Section 6 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 to appeal such a ruling.

Section 7 amends Insurance Law section 4705 so that the municipal
cooperative health benefit plan can offer one or more than one health
benefit plans to its municipal employee members. Further, that a
Wellness Program option, with a reduced premium rate, may also be
offered.

Section 8 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.

Section 9 is the effective date.

 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, 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.

 LEGISLATIVE HISTORY :

2011-12 - S.2843 - Passed the Senate;
2013-14 - S.1994 - Referred to Local Government
2015-16: S3224/A5130 - local government/local government

 FISCAL IMPLICATIONS :

Anticipated savings for to local governments.
 EFFECTIVE DATE :
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law.

2017-S1718 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1718
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                             January 10, 2017
                                ___________
 
 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 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.
   § 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.
   §  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:
   (I)  EMPLOYEE  PAYROLL,  TIME, ATTENDANCE AND PERSONNEL ADMINISTRATION
 SERVICES;
   (II) PARTICIPATION IN THE NEW YORK STATE HEALTH INSURANCE PROGRAM;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD01961-01-7

 S. 1718                             2
 
   (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.
   §  4. 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

 S. 1718                             3
 
 EXCESS OF SPECIFIED LOSS LIMITS FOR INDIVIDUAL  CLAIMS  AND/OR  FOR  ALL
 CLAIMS COMBINED, OR ANY SIMILAR ARRANGEMENT.
   §  5.  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
 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;
   §  6. 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.
   §  7.  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

 S. 1718                             4
 
 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
 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;
   § 8. 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.
   §  9. This act shall take effect on the first of January next succeed-
 ing the date on which it shall have become a law.

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Senate Bill S1718

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Sponsored By

David Carlucci