NYSHIP Policy Regarding Health Insurance Buyout, Policy #’s 122r2 and 122r3
On June 9, 2016, the Appellate Division of the Third Department in New York State decided the case challenging NYSHIP’s authority to limit buyout provisions between school districts and employee unions. In essence, the court has now decided that NYSHIP may not interfere with any provision contractually negotiated between a district and employee regarding spousal insurance buyout provisions.
In 2012, NYSHIP had issued two policy memorandums, 122r2 and 122r3, indicating that if an individual and their spouse both had NYSHIP insurance then a buyout was not an option. This was the policy, regardless of any negotiated terms in the current collective bargaining agreement.
Previously, the policy was upheld by the Appellate Division on procedural grounds, despite a decision against the state in the Supreme Court. This recent decision of the Appellate Division has now upheld the earlier Supreme Court decision and invalidated these policies. Therefore, school districts are no longer bound by the NYSHIP policies prohibiting certain spousal health insurance buyout provisions.
The Appellate Division determined that, since this was not a policy, but actually a rule or regulation, it was null and void as it was not filed, as required, with the state. Therefore this policy is not enforceable and NYSHIP cannot limit a school district’s ability to negotiate buyouts with its employee unions.
The state does have thirty days to file a Notice of Appeal and/or Motion for Leave to Appeal and they may also request a stay of the decision pending the appeal. To date, SAANYS has no indication that this has been filed and we plan to monitor the situation for the next twenty six days.
For any questions on this new development, please feel free to contact the SAANYS Legal Department at (518) 782-0600.