§ 161. Health insurance. 1. The president is hereby authorized and
directed to establish a health benefit plan for state officers and
employees and their dependents and officers and employees of the state
colleges of agriculture, home economics, industrial labor relations and
veterinary medicine, the state agricultural experiment station at
Geneva, and any other institution or agency under the management and
control of Cornell university as the representative of the board of
trustees of the state university of New York, and the state college of
ceramics under the management and control of Alfred university as the
representative of the board of trustees of the state university of New
York and their dependents which, subject to the conditions and
limitations contained in this article, and in the regulations of the
president, will provide for group hospitalization, surgical and medical
insurance against the financial costs of hospitalization, surgery,
medical treatment and care, and may include, among other things
prescribed drugs, medicines, prosthetic appliances, hospital in-patient
and out-patient service benefits and medical expense indemnity benefits.

2. Such health insurance shall not include expenses incurred by or on
account of an individual prior to the effective date of the plan as to
him or her; cosmetic surgery or treatment except to the extent necessary
for correction of damage caused by accidental injury while covered by
the plan or as direct result of diseases covered by the plan; services
received because of illness or injury arising out of or in the course of
employment and entitling the individual to benefits under a workers'
compensation or occupational disease law; services received in a
hospital owned or operated by the United States government for which no
charge is made; services received for injury or sickness due to war or
any act of war, whether declared or undeclared, which war or act of war
shall have occurred after the effective date of this plan; expenses for
which the individual is not required to make payment; expenses to the
extent of benefits provided under any employer group plan other than
this plan, and such other expenses as may be excluded by regulations of
the president.

3. The health benefit plan shall be designed by the president (1) to
provide a reasonable relationship between the hospital, surgical and
medical benefits to be included, and the expected distribution of
expenses of each such type to be incurred by the covered employees and
dependents, and (2) to include reasonable controls, which may include
deductible and coinsurance provisions applicable to some or all of the
benefits, to reduce unnecessary utilization of the various hospital,
surgical and medical services to be provided and to provide reasonable
assurance of stability in future years of the plan, and (3) to provide
benefits on a non-discriminatory basis to the extent possible, to active
members throughout the state, wherever located.