senate Bill S2843

2011-2012 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 Committee


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 21, 2012 committed to rules
Feb 13, 2012 advanced to third reading
Feb 07, 2012 2nd report cal.
Feb 06, 2012 1st report cal.167
Jan 04, 2012 referred to local government
returned to senate
died in assembly
Jun 16, 2011 referred to local governments
delivered to assembly
passed senate
Mar 22, 2011 advanced to third reading
Mar 21, 2011 2nd report cal.
Mar 16, 2011 1st report cal.237
Feb 02, 2011 referred to local government

Votes

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Feb 6, 2012 - Local Government committee Vote

S2843
7
0
committee
7
Aye
0
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Local Government Committee Vote: Feb 6, 2012

aye wr (1)

Mar 16, 2011 - Local Government committee Vote

S2843
7
0
committee
7
Aye
0
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show Local Government committee vote details

Local Government Committee Vote: Mar 16, 2011

aye wr (1)

Co-Sponsors

S2843 - Bill Details

See Assembly Version of this Bill:
A6079
Current Committee:
Senate Rules
Law Section:
General Municipal Law
Laws Affected:
Amd §§92-a, 119-n & 119-o, Gen Muni L; amd §§4326, 4702, 4704, 4705 & 4706, add §4326-a, Ins L

S2843 - Bill Texts

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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.

view sponsor memo
BILL NUMBER:S2843

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 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

PURPOSE OR GENERAL IDEA OF BILL:
The purpose of this bill is to
enhance the ability of municipalities to join forces and
cooperatively provide and manage 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 SPECIFIC PROVISIONS:
Section 1: Amends General Municipal Law section 92-a to add a new
subdivision (8) so that the provisions of this section shall not
apply if a municipal cooperative health plan is established 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 General Municipal Law section 119-0 to add a new
paragraph (b-1)to specifically authorize municipalities to
cooperatively 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: A technical amendment to Insurance Law section 4326.

Section 5: Adds a new subparagraph to Insurance Law section 4326¸–1)to
permit a municipal employer to offer to its employees the Healthy NY


insurance product as one of the plans that are offered to such
employees.

Section 6: Adds an new Insurance Law section 4326-a to allow
municipalities, either alone or in cooperation with other municipal
employers, to offer the standardized health insurance product called
Healthy NY. While employees may select the Health NY health insurance
product, which is on average about 7 % less expensive than most other
cooperative health insurance products, the stop loss subsidy that is
offered to qualifying small business employers or sole proprietors
that may purchase Healthy NY may not be offered. The reason for this
is because the stop loss subsidy is financed by HeRA funds and was
designed to further reduce the cost of Healthy NY to encourage small
employers and sole proprietors to purchase this product for their
employees so that they had some type of medical coverage.

Section 7: 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 8: Amends Insurance Law section 4704 to municipalities that
are needed to participate in health benefit plan from 3 to 2
municipalities. covered employees need to establish such plan is
employees.

reduce the number of a municipal cooperative In addition, the number
of reduced from 2,000 to 500

Section 9: 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 can appeal such a ruling.

Section 10: Amends Insurance Law section 4705 so that the municipal
cooperative health benefit plan can offer one or more than one health
benefit plan to its municipal employee members. Further, that a
Wellness Program option, with a reduced premium rate may also be
offered.

Section 11: 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 lives.

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 7 %
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.

PRIOR LEGISLATIVE HISTORY:

New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
January 1, next succeeding the date it shall have become law.

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

                                  2843

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            February 2, 2011
                               ___________

Introduced  by  Sens. CARLUCCI, KLEIN, SAVINO, VALESKY -- 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  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

S. 2843                             2

  (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

S. 2843                             3

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

S. 2843                             4

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

S. 2843                             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.

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