§ 4705. Municipal cooperation agreements. (a) The municipal
cooperation agreement, under which the municipal cooperative health
benefit plan is established and maintained, and any amendment thereto,
shall be approved by each participating municipal corporation by
majority vote of each such corporation's governing body, and shall:

(1) specify all municipal corporations participating in the municipal
cooperative health benefit plan and describe the form or type of
municipal corporations eligible for participation;

(2) state that all participating municipal corporations agree to share
the costs of and assume the liabilities for medical, surgical and
hospital benefits provided under the municipal cooperative health
benefit plan to the covered employees (including retirees) and their
dependents of all participating municipal corporations;

(3) state that each participating municipal corporation agrees to pay
on demand such municipal corporation's share of any assessment ordered
by the governing board of the municipal cooperative health benefit plan
or by the superintendent under this article or article seventy-four of
this chapter;

(4) specify the eligibility requirements for membership in and
coverage by the municipal cooperative health benefit plan, including
reasonable geographic boundaries (if any) of such plan, provided that no
municipal cooperation agreement shall include any provision restricting
or otherwise limiting the right to participate in the plan of a
municipal corporation of the same type which provides satisfactory proof
of its financial responsibility and which is located within the
geographic region in which the municipal cooperative health benefit plan
operates;

(5) not include any provision restricting or otherwise limiting the
right of eligible employees (including retirees and dependents) of a
participating municipal corporation to enroll for coverage in the plan;

(6) designate the fiscal officer of a participating municipal
corporation to be the chief fiscal officer of the municipal cooperative
health benefit plan;

(7) designate the plan's attorney-in-fact to receive service of
summons or other legal process in any action, suit or proceeding arising
out of any contract, agreement or transaction involving such municipal
cooperative health benefit plan; and

(8) establish a governing board to be responsible for the management,
control and administration of the municipal cooperative health benefit
plan, provided any municipal cooperative agreement to establish such a
plan which is entered into after the effective date of this article
shall provide that unions which are the exclusive collective bargaining
representatives of employees who are covered by such health benefit plan
shall be entitled to representation on such governing board.

(b) The municipal cooperation agreement shall provide that the plan's
chief fiscal officer:

(1) shall have custody of all moneys received by the municipal
cooperative health benefit plan or made available for expenditure under
the plan;

(2) shall, notwithstanding any provision of the general municipal law,
make payment in accordance with procedures developed by the plan's
governing board and acceptable to the superintendent;

(3) may invest moneys not required for immediate expenditure in the
types of investment specified in the general municipal law or the
education law (as applicable) for temporary investments or as otherwise
expressly permitted by the superintendent; and

(4) shall receive no remuneration, except that the participating
municipal corporation employing the chief fiscal officer may be
reimbursed for reasonable expenses incurred in connection with the
duties of such fiscal officer in connection with the plan.

(c) A municipal cooperation agreement shall include a provision:

(1) describing the composition, number and procedures under which
governing board members are chosen, provided that, for those agreements
entered into after the effective date of this article, the governing
board shall include representation by unions which are the exclusive
collective bargaining representatives of employees covered by the plan,
and that such unions shall establish and agree to the procedures by
which the member or members of the governing board which represent
unions are selected;

(2) designating one governing board member to have custody of all
reports, statements and other documents of the plan; and

(3) that the governing board shall meet at least annually at a time
and place in this state designated in accordance with the agreement.

(d) The municipal cooperation agreement shall provide that the
governing board:

(1) shall design the plan of benefits provided by the municipal
cooperative health benefit plan and prepare the plan document and
summary plan description in accordance with section four thousand seven
hundred nine of this article;

(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, 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;

(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
subdivision six of section ninety-two-a of the general municipal law.

(3) shall be authorized to purchase stop-loss insurance, to the extent
required by section four thousand seven hundred seven of this article,
on behalf of the municipal cooperative health benefit plan;

(4) shall be authorized to establish a joint fund or funds to finance
all plan expenditures, including claims, reserves, surplus,
administration, stop-loss insurance and other expenses;

(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
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 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;

(6) shall be authorized to assess participating municipal corporations
for additional contributions, if actual losses due to benefits paid out,
administrative expenses and reserve and surplus requirements exceed
amounts held in the plan's joint funds; and

(7) shall be authorized to refund amounts in excess of reserves and
surplus required by section four thousand seven hundred six of this
article and anticipated expenses in the plan's joint funds to
participating municipal corporations, or to retain such excess amounts
or a portion thereof and apply such amounts in preparing the plan's
budget for the following year.

(e) The municipal cooperation agreement shall provide for the
following to be prepared and furnished to the governing board, to
participating municipal corporations, to unions which are the exclusive
bargaining representatives of employees covered by the plan and to the
superintendent:

(1) an annual audit, and opinions thereon, by an independent certified
public accountant, of the financial condition, accounting procedures and
internal control systems of the municipal cooperative health benefit
plan;

(2) an annual report and quarterly reports describing the plan's
current financial status; and

(3) an annual independent actuarial opinion on the financial soundness
of the plan, including the actuarial soundness of contribution or
premium equivalent rates and reserves, both as paid in the current year
and projected for the next fiscal year.

(f) The municipal cooperation agreement shall specify the rights and
obligations of a municipal corporation withdrawing from a municipal
cooperative health benefit plan to any contribution (or premium
equivalent) refund or reserve fund or for any contingent assessment
liability or other obligation.

(g) Every municipal cooperation agreement shall contain a provision
stating that nothing contained in such agreement shall be construed to
waive any right a covered person possesses with respect to the
confidentiality of medical records and that such right may only be
waived upon the written consent of such covered person.