BILL NUMBER:  S7120

 TITLE OF BILL :  An act to amend the civil service law, in relation
to health insurance buyout programs

 PURPOSE :

To facilitate the administration of collectively bargained health
insurance buyout programs sponsored by participating agencies or
participating employers in the New York State Health Insurance Plan.

 SUMMARY OF PROVISIONS :

Section 1 of this bill adds a new subdivision 4 to Civil Service Law
section 161 to provide that the Department of Civil Service shall not
deny any participating agency or participating employer the ability to
collectively bargain for an health insurance buyout program and that
the Department shall not limit the employees who participate in the
insurance buyout plan to those whose other health insurance coverage
is not coverage through the New York State Health Insurance Plan
("NYSHIP").

Section 2 of this bill provides that this act shall take effect
immediately.

 EXISTING LAW :
              

The Civil Service Law is silent regarding health insurance buyout
programs.

 JUSTIFICATION :

Many collectively bargained contracts include health insurance buyout
programs. These programs are beneficial for both the employee and his
or her employer because they reduce costs. Currently, the Department
of Civil Service, in accordance with Policy Memo 122r3 dated May 15,
2012, will only allow those employees whose other health insurance
coverage is not NYSHIP to participate in these programs.

The Policy Memo addresses the administrative issues that arise when
the employee who elected to participate in a buyout program retires or
is laid off during the buyout period and what rights, if any, the
employee has to NYSHIP enrollment as a retiree. The answer to this
question is the same regardless of whether the employee's other health
insurance NYSHIP or a private plan. Yet, the Department has chosen to
treat employees whose other insurance is NYSHIP differently than
employees whose other insurance is a private plan. This different
treatment does not favor these employees; rather it forces them to
expend more money for health insurance.

Based on the 2016 NYSHIP rates, the shared employer and employee cost
of the empire plan for participating agencies is $849.01 + $2.059
(administrative fee) for individual coverage and $1,926.21 + $2.059
(administrative fee) for family coverage. The monthly cost of the
empire plan for a family of 3 where both spouses work for a
participating employer is $2,797.87 because both spouses are required
to have health insurance even though one spouse has family coverage.
The annual additional shared cost for employees whose other insurance
is NYSHIP is $10,212.83.

In the Policy Memo, the Department states that it "is obligated to
protect the Plan." Unfortunately, it is difficult to see how this
policy protects NYSHIP without discriminating against the employees of
participating employers. An employee should not be penalized upon
retirement for participating in a buyout program that reduces the
employers and employees costs. This is a time when we need to exercise
sound fiscal judgment. Requiring an employee to remain in NYSHIP even
though a buyout program is available so that he or she can be eligible
for NYSHIP benefits upon retirement is simply a waste of precious
resources.

 LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

None to the State

 EFFECTIVE DATE :
This act shall take effect immediately.