Department of Civil Service

NY12-38r1

TO: New York State Agency Health Benefits Administrators
FROM: Employee Benefits Division (EBD)
SUBJECT: 2013 Health Insurance Opt-Out Program
DATE: November 15, 2012

Effective January 1, 2013, the New York State Health Insurance Program (NYSHIP) will again offer the Opt-out Program. This program allows eligible employees, who have other employer sponsored group health insurance, to opt-out of their NYSHIP coverage in exchange for an incentive payment.

As of the date of this memo, this program is available to employees represented by:

• Council 82
• CSEA
• PBANYS (APSU employees)
• PEF
• NYSCOPBA

This program is also available to the following groups:

• Management/Confidential employees
• Employees of the Legislature
• Employees of the Unified Courts System

Please note the NYS Health Insurance Opt-out Program may become available to other represented employee groups if union contracts are ratified or arbitrated settlements are reached. Information will be provided as soon as it becomes available.

For the purpose of the Opt-out Program, other employer sponsored group health insurance coverage means coverage through employment other than employment with the Executive, Legislative or Judicial branch of New York State government, including the State University of New York. Therefore, if the other coverage is through a NYS employee or retiree, the employee is not eligible for the Opt-out.

Eligibility
To be eligible for the Opt-out Program, an employee must meet the eligibility criteria below to receive the incentive payment:

1. The employee must currently participate in the Opt-out Program; or
2. The employee must have been enrolled in NYSHIP, continuously and in his own right, as a State employee, on April 1, 2012 or on the date first eligible for NYSHIP if that date is after April 1, 2012, through the end of the plan year; and
3. The employee must provide plan information and attest to having other employer sponsored group health insurance coverage in effect as of the Opt-out effective date.

Additional Eligibility Rules for New York State Employees Represented by CSEA
In addition to the eligibility requirements for the NYSHIP Opt-out Program described above, the following additional information applies to CSEA represented employees only. Both the CSEA represented employee and the spouse or domestic partner who is a State employee must be enrolled in a State plan in his or her own right in order to satisfy the first additional eligibility rule described below.

1. A CSEA represented employee who has a spouse or domestic partner who is a State employee, whether that spouse or domestic partner is a CSEA represented employee, represented by another state employee union, an M/C employee or an employee of the Legislature or the Unified Courts System, and both are covered by NYSHIP (dual enrollment), may elect to opt out and receive $1,000 for calendar year 2013 whether the CSEA represented employee is opting out of individual or family coverage; and
2. Both employees must have been enrolled in a State plan by April 1, 2012 to elect the Opt-out Program for calendar year 2013.

Opting-out for Employees Currently Enrolled in NYSHIP in a Health Insurance Option
Employees who are currently enrolled in NYSHIP and wish to participate in the Opt-out Program must elect to opt out during the Annual Option Transfer Period and must complete a PS-409 - Opt-out Attestation Form and a PS-404 - NYS Health Insurance Transaction Form. The actual effective date of the Opt-out (i.e., the date NYSHIP coverage will no longer be in effect) depends on the employee's payroll cycle; please refer to the annual option transfer memo for dates.

Opting-out for Newly Eligible Employees

1. An employee who is newly eligible to enroll in NYSHIP and wishes to participate in the Opt-out Program must make the election no later than the first date of his/her effective date for NYSHIP benefits (after 42 or 56 day waiting period has been satisfied). A newly eligible employee is one who was not previously eligible for NYSHIP benefits as an employee of New York State. An employee of New York State is an individual employed by the Executive, Legislative or Judicial branch of State government, including the State University of New York, or;
2. An employee who is newly eligible for the Opt-out Program as the result of a change in bargaining unit may elect to participate in the Program within 30 days of the effective date of the bargaining unit change.

An employee who is transferring from one State agency to another is not newly eligible unless the employee was previously working in a non-benefits eligible position or in a bargaining unit not eligible for the Opt-out Program.

A newly eligible employee must complete both a PS-409 - Opt-out Attestation Form and a PS-404 - NYS Health Insurance Transaction Form.

Employees Currently Participating in the Opt-out Program
NYS employees who currently participate in the Opt-out Program will receive the attached notice from the Employee Benefits Division. NYS employees who currently participate in the Opt-out Program also must submit to their HBA the PS-404 - Health Insurance Transaction Form electing the Opt-out Program and the PS-409 - the Opt-out Attestation Form. If they fail to submit the required documents during the Annual Option Transfer Period, their Opt-out payments will end with the last bi-weekly payroll check for plan year 2012.

Incentive Payments
The annual incentive amount for opting out of NYSHIP coverage is $1,000 for Individual coverage or $3,000 for Family coverage (unless otherwise explained in additional eligibility rules). The incentive payments will be prorated and reimbursed through the employee's biweekly paychecks throughout the year (payable only when an employee is on the payroll and meets the requirements to be eligible for the State to contribute to the cost of NYSHIP coverage).

The incentive amount will be credited to the employee's bi-weekly payroll check and will be treated as taxable income. The bi-weekly incentive amounts will be $38.47 for opting out of Individual coverage ($1,000/26 paychecks) or $115.39 for opting out of Family coverage ($3,000/26 paychecks).

Incentive payments to employees participating in the Opt-out Program for 2013 will begin coincident with the plan year's rate change, as described in the Annual Option Transfer Memo.

NYBEAS Processing
For employees who are currently enrolled in NYSHIP:
In order to process the employee's election (or re-election if they participated in the Opt-out Program in 2012) for the Opt-Out Program, HBAs must process a Benefit Plan Change transaction.

Changes Affecting Opt-out Program Eligibility

1. An employee loses eligibility for participation in the Opt-out Program during any period when:

• The employee is no longer employed in a benefits eligible position; or
• The employee no longer meets the requirements for the State to contribute to the cost of NYSHIP coverage; or
• The employee is no longer in a position assigned to a bargaining unit eligible for the Opt-out Program.

If an employee loses eligibility for the Opt-out Program temporarily because of being off the payroll, experiencing a reduction of hours or being on leave, the employee will automatically resume participation in the Opt-out Program for the remainder of that year upon regaining eligibility.

2. An employee receiving the incentive for opting out of Family coverage whose last dependent loses NYSHIP eligibility, will only be entitled to the Individual incentive payment, effective on the date the dependent loses eligibility.

Re-enrollment in NYSHIP
Employees who participate in the Opt-out Program may re-enroll in NYSHIP during the next Annual Option Transfer Period. To re-enroll in NYSHIP coverage at any other time, employees must experience a qualifying event, such as a change in family status (e.g.; marriage, birth, death or divorce) or loss of the other employer sponsored group health insurance. Employees must complete a PS-404 within 30 days of the date of the qualifying event and provide proof of the qualifying event or the re-enrollment will be subject to NYSHIP's late enrollment rules. See the NYSHIP General Information Book for details on late enrollment waiting periods.

Retirement while in the Opt-out Program
Participation in the Opt-out Program is considered participation in NYSHIP for purposes of establishing eligibility for NYSHIP coverage in retirement. Retirees are not eligible for the Opt-out Program, so participation terminates when the employee's eligibility for NYSHIP coverage as an active employee ends.

If you have any questions, please contact the HBA Help Line at 518-474-2780.

Enclosures
PS404
PS404I
PS-409
Sample Opt-out Participation Notice | PDF