Galef/Harckham Bill to Establish Carmel Central School District Insurance Reserve Fund Now Law

New York State Assemblywoman Sandy Galef and Senator Pete Harckham announced that their bills, A.04494/S.04481, were signed into law by Governor Cuomo on July 16 and are now Chapter 290 of New York State’s 2021 laws. The new legislation goes into effect immediately.


The bill amends the state’s General Municipal Law to add Carmel to the list of districts that may establish insurance reserve funds and make expenditures from such reserve fund for any loss, claim, action, or judgement directly related to the district’s self-insured plan. This will enable Carmel to make more cost-effective use of savings.


For example, the Carmel school district has self-insured their employees’ health benefit plans for over a decade and has been able to save several millions of dollars by identifying the most cost-effective healthcare plans and pharmaceutical contracts. These savings go directly back into the district, helping to maintain the its workforce and supporting programs and services for students.


Other districts included on the list of those permitted to establish insurance reserve funds are the Scarsdale Union Free School District, the Mamaroneck Union Free School District, and the Minisink Valley Central School District. Insurance reserve funds such as those now permitted in Carmel and these districts aids administrators and school boards in planning their districts’ annual budgets and weather increases or decreases in health insurance expenditures.

“I was happy to partner with Senator Harckham to sponsor this legislation,” said Assemblywoman Galef. “This bill will help the Carmel School District avoid financial burden that could lead to large year-to-year variations in claims.”


“This legislation will give the Carmel district flexibility in funding basic services and responding to unforeseen expenditures,” said Senator Harckham. “I applaud efforts like this that help local taxpayers, and am pleased to have been able to partner with the district in this regard.”

In a memorandum of support, the New York State School Boards Association said, “Over the course of ten years, the district’s annual health insurance expenditures have varied greatly. The 2009-10 school year resulted in an expenditure increase of more than $3.3 million, whole 2021-13 experienced a decrease in expenditures by more than $1.6 million. Even with this relative volatility, the district has found that self-insuring continues to be the most cost effective approach. A health insurance reserve would improve the district’s ability to plan their annual budget despite dramatic year to year increases or decreases in health insurance expenditures.”