City Council:
AN ORDINANCE AUTHORIZING THE
ESTABLISHMENT OF A POLICY FOR
WAIVER OF HEALTH INSURANCE
(COMP2026-2)
Whereas, in correspondence dated April 16, 2026, the Comptroller formally requested authorization to establish a formal policy allowing eligible City employees to voluntarily waive participation in the City’s employer-sponsored health insurance program in exchange for a financial incentive, thereby reducing duplicative coverage and controlling healthcare costs; and
Whereas, pursuant to Section 91 of the Mount Vernon City Charter, the Comptroller is charged with the supervision of the City’s financial affairs and the establishment of policies and practices to promote fiscal responsibility; and
Whereas, the City of Mount Vernon continues to experience rising health insurance expenditures, necessitating the implementation of cost-containment strategies that maintain employee benefits while reducing unnecessary financial burdens; and
Whereas, the Comptroller has identified that the City currently lacks a formal policy permitting eligible employees to waive employer-sponsored health insurance coverage in favor of alternative group coverage, except as otherwise provided through certain collective bargaining agreements; and
Whereas, the absence of such a policy has resulted in instances of duplicative or dual health insurance coverage, thereby increasing costs to the City without a corresponding benefit; and
Whereas, municipalities throughout New York State commonly implement health insurance “opt-out” or “buyout” programs to reduce redundant coverage and achieve net savings; and
Whereas, New York State Civil Service Law § 167(8) authorizes participating employers in the New York State Health Insurance Program (NYSHIP) to establish health insurance buyout programs, subject to local approval and compliance with applicable guidelines; and
Whereas, NYSHIP guidelines permit opt-out arrangements provided that employees demonstrate enrollment in other employer-sponsored group coverage and that incentive payments do not exceed allowable limits established by the State; and
Whereas, the establishment of such a policy must be implemented in accordance with the Taylor Law (New York Civil Service Law Article 14) and any applicable collective bargaining agreements, recognizing that health insurance benefits are a mandatory subject of negotiation; and
Whereas, compliance with applicable federal laws, including Internal Revenue Code Section 125 (Cafeteria Plans) and the Affordable Care Act (ACA), is required to ensure proper tax treatment and regulatory adherence; and
Whereas, the Comptroller has recommended the adoption of a formal Health Insurance Waiver Policy, which includes an annual opt-out incentive of Three Thousand Dollars ($3,000), structured to ensure that the City realizes net savings when compared to the cost of providing full coverage; and
Whereas, the proposed policy will be administered in coordination with the Department of Human Resources, Labor Relations, and Corporation Counsel to ensure legal compliance and proper implementation.
NOW, THEREFORE, BE IT ORDAINED by the City Council of the City of Mount Vernon as follows:
Section 1. Title. This Ordinance shall be known as the “Health Insurance Waiver (Opt-Out) Policy Ordinance of 2026.”
Section 2. Purpose. The purpose of this Ordinance is to establish a formal policy allowing eligible City employees to voluntarily waive participation in the City’s employer-sponsored health insurance program in exchange for a financial incentive, thereby reducing duplicative coverage and controlling healthcare costs.
Section 3. Establishment of Policy. There is hereby established a Health Insurance Waiver (Opt-Out) Policy for the City of Mount Vernon, subject to the terms and conditions set forth herein and, in any implementing regulations promulgated by the Comptroller and the Department of Human Resources.
Section 4. Eligibility.
A. Employees eligible for City-sponsored health insurance coverage may elect to waive such coverage, provided they:
1. Demonstrate enrollment in alternative employer-sponsored group health insurance coverage (e.g., through a spouse or family member); and
2. Provide proof of such coverage in a form acceptable to the City.
B. This policy shall not apply where prohibited by law or where inconsistent with the terms of an applicable collective bargaining agreement, unless and until such agreement is amended accordingly.
Section 5. Opt-Out Incentive
A. Eligible employees who elect to waive City-sponsored health insurance coverage shall receive an annual opt-out incentive in the amount of Three Thousand Dollars ($3,000).
B. The incentive shall be paid in accordance with procedures established by the Comptroller and may be prorated based on the effective date of the waiver.
C. Payment of the incentive shall be conditioned upon continued proof of alternative qualifying coverage.
Section 6. Compliance with Law. This policy shall be implemented and administered in compliance with:
1. New York State Civil Service Law § 167(8) and all applicable NYSHIP rules and guidelines;
2. The Taylor Law (New York Civil Service Law Article 14) and all applicable collective bargaining obligations;
3. Federal requirements, including Internal Revenue Code Section 125 and the Affordable Care Act (ACA); and
4. Any other applicable federal, state, or local laws and regulations.
Section 7. Administration
A. The Comptroller, in coordination with the Department of Human Resources, Labor Relations, and Corporation Counsel, is hereby authorized to:
1. Develop and implement administrative procedures necessary to carry out this policy;
2. Establish enrollment periods, documentation requirements, and verification processes; and
3. Ensure ongoing compliance with all applicable laws and regulations.
B. The City reserves the right to audit or require periodic recertification of alternative coverage.
Section 8. Collective Bargaining. Implementation of this policy for union-represented employees shall be subject to negotiation and agreement under applicable collective bargaining agreements and the Taylor Law.
Section 9. Severability. If any clause, sentence, paragraph, or section of this Ordinance shall be adjudged by a court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof.
Section 10. Effective Date. This Ordinance shall take effect immediately upon adoption, subject to implementation timelines established by the Comptroller and Department of Human Resources, and, where applicable, the completion of required collective bargaining.