The New York State Department of Financial Services ("DFS") has published guidance providing technical assistance to local governments in the state intended to ease the process of creating health consortia called "Muni Coops."
Muni Coops are health risk-sharing agreements that permit municipal corporations to help share costs of health benefits for their collective employees. The guidance, specifically for smaller municipalities, is intended to help local governments improve their health insurance options while addressing rising health costs in New York State.
"While the federal government continues to make ill-conceived decisions that further increase health care costs and taxes for residents, New York is identifying and investing in ways to reduce the impact of these unreasonable actions," Governor Andrew M. Cuomo said. "We are working with our partners in local government to provide assistance and leverage the buying power of many municipalities to lower costs for all."
Many municipalities have considered forming a Muni Coop but have raised concerns that some of the statutory requirements act as a barrier to that objective. The guidance published by the DFS seeks to clarify some of the key statutory requirements governing Muni Coops to make Muni Coops more accessible for local governments.
Municipalities may consider using Muni Coops to:
- Help share the costs of employee health benefit plans;
- Provide an alternative approach to stabilize health claim costs;
- Lower per-unit administration costs; and
- Enhance negotiating power with health providers by spreading such costs among a larger pool of risks.
The DFS said that its guidance is intended to provide accurate information, counter misconceptions about requirements, and clarify what is needed to establish and maintain a Muni Coop under Article 47 of the New York State Insurance Law. The guidance addresses stop-loss flexibility, as well as geographic boundaries, size, and other issues.
Maria T. Vullo, the DFS superintendent, said, "DFS is proud to work with local governments in supporting Governor Cuomo's continuing and innovative efforts to lower health care costs for communities across the state. By clarifying the requirements for establishing Muni Coops and providing technical assistance, we are empowering local governments to better serve their employees and more efficiently provide vital health care insurance coverage."
Learn more: DFS Guidance.
Steven A. Meyerowitz
Steven A. Meyerowitz, a Harvard Law School graduate, is the founder and president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. He may be contacted at [email protected].