January 10, 2011

Officials serving without compensation to pay full cost of health insurance coverage

Officials serving without compensation to pay full cost of health insurance coverage
Formal Opinions of the Attorney General, 2007 - F1

The Attorney General has issued an opinion indicating that public authorities, whose board members are State Officers and which members, pursuant to statute, serve without salary or other compensation, may not pay for health insurance coverage for current or retired board members.

With respect to political subdivisions of the State paying employer contributions for health insurance on behalf of unpaid officers and employees, the Regulations of the President of the Civil Service Commission [4 NYCRR 73.1(c)(1)(ii)] provide, in pertinent part that:

….any unpaid local elective official who occupies a position which by statute, local law, ordinance or resolution is expressly prohibited from receiving compensation or school board member electing to participate by reason of such membership shall be required to pay both the employer and the employee contribution for any coverage elected under the [New York State Health Insurance] plan …

The President’s Regulations apply only to State officers and employees and the officers and employees of those political subdivisions of the State that are “participating employers”* in the New York State Health Insurance Plan [NYSHIP].

In this regard, the Department of Civil Service has interpreted §167.2 of the Civil Service Law to permit uncompensated personnel of a public authority that is a participating employer to elect to participate in NYSHIP but bars the authority from making employer contributions for NYSHIP coverage on behalf of those serving without compensation.

Essentially, Opinion F-1 addresses the eligibility of “State Officers” serving without compensation to have employer contributions to NYSHIP made on their behalf.

It is unclear whether the Opinion is intended to apply to a political subdivision of the State that is not a “participating employer” in NYSHIP insofar as its officers and employees serving without compensation are concerned where such contributions are otherwise authorized by the jurisdiction involved.

* §163.4 of the Civil Service Law provides that: “Any public authority, public benefit corporation, school district, special district, district corporation, municipal corporation, or other agency, subdivision or quasi-public organization of the state, whose employees and retired employees are authorized to be included in the plan as provided by subdivision two, may elect to participate in such plan.” Such entities are referred to as “participating employers.”

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