OGC Op. No. 04-03-28

The Office of General Counsel issued the following opinion on March 31, 2004, representing the position of the New York State Insurance Department.

Re: Municipal Cooperative Health Benefit Plans

Question Presented:

If employees of a Soil & Water Conservation District become covered under a self-funded benefit plan established by a County, would the self-funded plan be transformed into a Municipal Cooperative Health Benefit Plan (Muni-Coop) and become subject to regulation pursuant to New York Insurance Law Article 47 (McKinney 2000 and 2004 Supplement)?


Such districts are not presently encompassed within those that may, in accordance with New York Insurance Law Article 47, enter into a municipal cooperation agreement to provide health benefits.


A county’s plan does not presently cover any subordinate municipalities and the employees of the District were not employees of the county prior to formation of the District. The District was required to participate and does participate in the County Self-Insurance Plan pursuant to New York Workers’ Compensation Law Article 5 (McKinney 1994).


New York Insurance Law § 4702(e) (McKinney 2000) defines:

‘Municipal cooperative health benefit plan’ . . . means any plan established or maintained by two or more municipal corporations pursuant to a municipal cooperation agreement for the purpose of providing medical, surgical or hospital services to employees or retirees of such municipal corporations and to the dependents of such employees or retirees.

New York General Municipal Law § 119-n (McKinney 1999) defines:

(a) The term ‘municipal corporation’ means a county outside the city of New York, a city, a town, a village, a board of cooperative educational services, fire district or a school district.

b. The term ‘district’ means a county or town improvement district for which the county or town or towns in which such district is located is or are required to pledge its or their faith and credit for the payment of the principal of and interest on all indebtedness to be contracted for the purposes of such district.

New York Soil & Water Conservation Districts Law § 3(1) (McKinney 1997 and 2004 Supplement) defines:

‘District’ . . . means a county whose board of supervisors has by resolution declared said county to be a soil and water conservation district.

New York Soil & Water Conservation District § 5 (McKinney 1997) provides:

When the board of supervisors of any county determines that conservation of soil and water resources and control and prevention of soil erosion and prevention of floodwater and sediment damages are problems of public concern in the county . . . the said board of supervisors, by a resolution adopted at any regular or special meeting of the board, may declare the county to be a soil and water conservation district . . . These determinations may be made through hearings, petitions or referenda.

Since New York Soil & Water Conservation District Law § 9 (McKinney 1997 and 2004 Supplement), which sets forth the powers of such districts, does not empower them to pledge their credit, and since they are not included within those entities specified in New York General Municipal Law § 119-n(b), it is the position of the Department that such districts are not included within the definition of "municipal corporation" for the purposes of New York Insurance Law § 4702(e).

The extent to which such districts may enter into cooperative agreements is set forth in New York General Municipal Law § 119-o (McKinney 1999 and 2004 Supplement) and New York Soil and Water Conservation District Law § 10 (McKinney 1997 and 2004 Supplement). The absence of a provision in either statute, which would empower such districts to enter into agreements to cooperate with other entities for the provision of health services to employees, is a further indication that such a district may not participate in a Muni-Coop.

While there is an existing Muni-Coop that contains such a district as a member, that cooperative entity was formed prior to the enactment of New York Insurance Law Article 47. It is the understanding of the Department that the inclusion of the district in the Muni-Coop was in anticipation of a change in either New York General Municipal Law or New York Soil &Water Conservation District Law to specifically allow such cooperation. While the Department will not interfere with an entity that antedated New York Insurance Law Article 47, it will not allow such districts to join Muni-Coops until there is statutory authorization.

As to the District being part of the County’s Workers’ Compensation Self-Insurance Plan, New York Workers Compensation Law § 63(5) (McKinney 1994) provides that employees of a soil and water conservation district shall be deemed to be county employees for such a plan. The Department views the provisions of New York Workers’ Compensation Law § 63(5) as additional evidence that it requires specific statutory authorization for such a district to join with other governmental entities.

For further information you may contact Principal Attorney Alan Rachlin at the New York City office.