NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A454
SPONSOR: Steck TITLE OF BILL:
An act to amend the general municipal law, in relation to permitting the
Niskayuna central school district to create an insurance reserve fund
PURPOSE OR GENERAL IDEA OF BILL:
To authorize the Niskayuna Central School District to establish an
insurance reserve fund in order to further mitigate the impact of high-
cost or high-volume claims in any fiscal year and modify the terms of
the stop-loss insurance in order to lower annual stop-loss premium
costs.
SUMMARY OF PROVISIONS:
Section one amends the general municipal law governing insurance reserve
funds to permit the Niskayuna Central School District to establish such
reserve funds.
Section 2 establishes the effective date.
JUSTIFICATION:
In an effort to contain costs associated with increasing health insur-
ance premiums, which create a significant strain on school budgets annu-
ally, many school districts have opted to move to a self-insurance model
for health benefit programs as opposed to traditional premium-based
programs.
The Niskayuna Central School District offers self-insured health,
dental, vision, and prescription drug insurance plans for its employees
and eligible retirees.
For the fiscal year ending 12/31/22, the district incurred a total of
$14.1 million in insurance claims.During that same period, the district
incurred stop-loss insurance premium expenses of over $850,000 to help
mitigate the district's financial liability for high-cost claims.
Historically, insurance claims have grown, on average, by over 8.6% per
year in each of the last six years. At the same time, stop-loss premiums
have increased exponentially. On average, these premiums have increased
by over 36% per year, and now represent more than $1.1 million in premi-
um expenses.
Under authority granted by § 6-N of our state's general municipal law
and article 74 of our state's education law, public school districts may
establish, fund, and make expenditures from an insurance reserve if so
authorized.
This request is to further mitigate the impact of high-cost or high-vo-
lume claims in any fiscal year and so that they may modify the terms of
the stop-loss insurance in order to lower annual stop-loss premium
costs.
PRIOR LEGISLATIVE HISTORY:
None.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
454
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. STECK -- read once and referred to the Committee
on Education
AN ACT to amend the general municipal law, in relation to permitting the
Niskayuna central school district to create an insurance reserve fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph (a) of subdivision 2 of section 6-n of the gener-
2 al municipal law, as separately amended by chapters 486, 515 and 525 of
3 the laws of 2024, is amended to read as follows:
4 (a) The governing board of any municipal corporation may establish a
5 reserve fund to be known as the insurance reserve fund. Upon the
6 creation of the fund, the municipality may make expenditures from the
7 fund for any loss, claim, action or judgment for which the municipal
8 corporation is authorized or required to purchase or maintain insurance,
9 except those kinds of risks for which insurance is authorized pursuant
10 to paragraph one, two, three, fifteen, sixteen, seventeen, eighteen,
11 twenty-two or twenty-three of subsection (a) of section one thousand one
12 hundred thirteen of the insurance law, or for payments in lieu of
13 contributions under article eighteen of the labor law; provided however,
14 that no municipality shall make an expenditure from such fund for any
15 loss, claim, action or judgment for which the municipal corporation has
16 established a reserve fund under any other provision of law; provided,
17 further that the Scarsdale union free school district, the Mamaroneck
18 union free school district, the Minisink Valley central school district,
19 the Vernon Verona Sherrill central school district, the Ithaca city
20 school district, the Kenmore-Town of Tonawanda union free school
21 district, the Bedford central school district, the Grand Island central
22 school district, the Tonawanda city school district, the enlarged city
23 school district of Middletown, the Frontier central school district, the
24 Owego Apalachin central school district, the Maine-Endwell central
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01128-01-5
A. 454 2
1 school district, the Binghamton city school district, the Candor central
2 school district, the Cleveland Hill union free school district, the
3 Depew union free school district, the Iroquois central school district,
4 the Liverpool central school district, the Auburn enlarged city school
5 district, the Carmel central school district, the Clarence central
6 school district, the Fulton city school district, [and] the Canastota
7 central school district, and the Niskayuna central school district may
8 establish insurance reserve funds in compliance with this section and
9 article seventy-four of the education law and such school districts may
10 make expenditures in compliance with this section and article seventy-
11 four of the education law from such reserve fund for any loss, claim,
12 action or judgment for which the school districts are authorized or
13 required to purchase or maintain insurance for the kinds of risks for
14 which insurance is authorized pursuant to paragraph three of subsection
15 (a) of section one thousand one hundred thirteen of the insurance law.
16 § 2. This act shall take effect immediately.
