Policy Bulletin No. 2000-02R - REISSUED
[Part 1 of 2, P-1 through P-10]

Section 21.3 - Sick Leave - March 20, 2001

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TO: Manual Holders
FROM: Robert W. DuBois, Director Employee Benefits Division
SUBJECT: Health Option Program (HOP) Revised Guidelines

This policy bulletin replaces Policy Bulletin 2000-02 entitled Health Option Program (HOP). It updates information on "Earning Sick Leave Under HOP," pages 8-9 and 18,
"Re-crediting of Sick Leave Balances for Employees in the IPP," pages 11-14, and Insurance Issues, pp. 18-19 of Policy Bulletin 2000-02. All other information remains unchanged.

Specifically, Policy Bulletin 2000-02, pages 8-9 and page 18, discussed earning of sick leave for non-IPP participants under HOP and stated that when a HOP participant changes status or loses eligibility during the calendar year there may be a delay between the time that their sick leave accrual rate changes and the time that their health insurance premium is adjusted. We have been able to eliminate that delay. The revised guidelines contain a detailed discussion of the impact of losing HOP eligibility and the impact of changes in employment percentage on the date of adjustment of the sick leave accrual rate (see pp. 10-12, 20).

The discussion on pages 11-14 of Policy Bulletin 2000-02 on re-crediting of sick leave balances for employees in the IPP has also been revised. Since we have been able to synchronize the adjustment in health insurance premiums and the change in accrual rate, the Health Insurance Contribution Credit (HICC) will not be reflected in any lag checks the employee receives. Consequently, lag checks should not be included in calculating the number of pay periods the employee received the HICC when re-crediting sick leave to IPP participants. The revised guidelines contain examples which exclude lag checks from the re-crediting calculation. (see pp. 13-17).

The discussion on pages 18 and 19 of Policy Bulletin 2000-02 has also been revised to clarify the point at which the HICC is adjusted or cancelled (see pp. 22-23).

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TABLE OF CONTENTS

For Part 1:

• PROGRAM OVERVIEW
• TERM OF PROGRAM
• ROLES AND RESPONSIBILITIES
• ENROLLMENT
• ELIGIBILITY
• EARNING SICK LEAVE UNDER HOP

For Part 2

• M/C AND RRSU EMPLOYEES IN THE IPP
• RE-CREDITING OF SICK LEAVE BALANCES FOR EMPLOYEES IN THE IPP
• LEAVES OF ABSENCE
• LOSS OF ELIGIBILITY
• INSURANCE ISSUES
• TAXABILITY

HOP ACCRUAL RATES ATTACHMENTS [Separate pages here.]

• I A- 40 Hour Workweek, Accrual Rate for Employees Earning 13 days per year-HOP Rate - 10 days per year.
• II A- 40 Hour Workweek, Accrual Rate for Employees Earning 10 days per year-HOP Rate - 7 days per year.
• III A- 40 Hour Workweek, Grant Rate for IPP Participants, Normal Rate - 8 Days per Year - HOP Rate - 5 day per year.
• I B- 37.5 Hour Workweek, Accrual Rate for Employees Earning 13 Days Per Year
  
• II B- 37.5 Hour Workweek, Accrual Rate for Employees Earning 10 Days Per Year
  HOP Rate - 7 Days Per Year
  
• III B - 37.5 Hour Workweek, Grant Rate for IPP Participants, Normal Rate - 8 Days Per Year, HOP Rate - 5 Days Per Year
• 
  

PROGRAM OVERVIEW

The Health Option Program (HOP) provides eligible classified service employees in the Executive branch of State service with the opportunity to reduce their yearly sick leave accrual rate by three (3) days in exchange for a credit of up to $300 that will be applied against the cost of the employee share of their New York State Health Insurance Program (NYSHIP) health insurance premiums paid during calendar year 2001.

During each calendar year that the program is available, participating employees (except those in the Income Protection Plan) will earn sick leave at a reduced biweekly rate in all biweekly pay periods that end on or after January l and on or before December 31. For example, in calendar year 2001, employees on the Administration payroll cycle will earn sick leave at a reduced rate beginning with the pay period ending January 3, 2001. The last pay period in which they will earn sick leave at a reduced rate ends on December 19, 2001. For employees on the Institution payroll cycle, the dates will be January 10 and...

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... December 26, respectively. IPP participants are credited with a reduced amount of sick leave on each IPP grant date.

In exchange, the employee share of participants' health insurance premiums paid between January 1 and December 31 of that calendar year will be reduced by up to $300. In each year they participate, employees will realize this credit via reduced NYSHIP health insurance premium withholdings from paychecks issued between January l and December 31. In calendar year 2001, for employees on the Administration payroll cycle, the first paycheck reflecting the reduced employee health insurance premium will be issued January 3, 2001. The last check reflecting the reduced premium will be issued on December 19, 2001. For employees on the Institution payroll cycle, the dates will be January 10, 2001 and December 26, 2001, respectively.

Election to participate in the program is prospective and applies only to sick leave credits that an employee would otherwise be eligible to earn in the calendar year following the election period.

Not all employees who enroll in HOP will actually forfeit three days of sick leave. By enrolling in HOP, an employee is electing a reduced sick leave accrual rate in exchange for a health insurance contribution credit. Employees may not be eligible to earn sick leave in every pay period during a period of HOP participation, for example, because of leave without pay or sick leave at half pay. However, employees continue to receive the health insurance contribution credit during such periods of leave.

For most employees, the biweekly accrual rate and the health insurance contribution credit assigned at the time of enrollment will remain unchanged for the calendar year. Employees, except those in the Income Protection Plan (IPP), whose payroll percentage changes during the calendar year of HOP participation will have their HOP sick leave accrual rate adjusted to reflect their new payroll percentage and their health insurance contribution credit will be adjusted to reflect a new prorated maximum based on their payroll percentage.

HOP participants in the IPP whose payroll percentage changes will have their HOP sick leave grant rate changed. However, their forfeiture of sick leave and the amount of their health insurance contribution credit will continue to be based on their status at time of...

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...enrollment.

Under certain circumstances, employees may lose eligibility to participate in HOP. In such cases, they will return to earning sick leave at their normal rate and to paying the employee share of NYSHIP premiums at the normal rate if they are still NYSHIP-eligible. Employees in the IPP may be re-credited with sick leave forfeited that exceeds the amount of health insurance contribution credit received.

HOP Accrual Charts are provided at the end of this bulletin.as hyperlinks to this bulletin. See the Table of Contents above.

TERM OF PROGRAM

The Health Option Program is effective for calendar year 2001. It may be extended for subsequent calendar years during the term of the 1999-2003 negotiated Agreements by mutual agreement between the State and employee unions.

ROLES AND RESPONSIBILITIES

b are responsible for:

• Providing interested employees with copies of the Program Description and enrollment form.
• Verifying eligibility of employees who elect to participate.
• Notifying agency timekeepers and health benefits administrators of (1) enrollment; (2) subsequent changes in status; and (3) separation from service.

Agency timekeepers are responsible for:

• Adjusting the sick leave accrual rates of participants in accordance with the attached accrual charts both at the beginning of HOP participation and as required subsequently by status changes during the period of participation.

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• For employees who are IPP participants enrolled in HOP, re-crediting sick leave balances of participants as necessary in accordance with the guidelines provided below.

Agency health benefits administrators are responsible for:

• Processing the health insurance contribution credit (HICC) for HOP enrollees.
• Processing adjustments to the health insurance contribution credit as a result of coverage changes (individual vs. family) and payroll percent for non-IPP HOP
  enrollees.
• Canceling the health insurance contribution credit when employees lose eligibility to continue in HOP.

The Governor's Office of Employee Relations will provide agencies with the HOP Program Description and HOP enrollment form.

The Attendance and Leave Unit of the Department of Civil Service will respond to agency inquiries concerning the leave component of HOP. Staff can be reached at 518-457-2295.

The Operations Unit of the Employee Benefits Division of the Department of Civil Service will issue guidelines for agency health benefits administrators. Questions should be directed to the Operations Unit staff member assigned to the agency.

ENROLLMENT

Eligible employees must file an election form during the month of November 2000 in order to participate during calendar year 2001.

Enrollment forms and a Program Description will be provided to agency personnel offices prior to the November enrollment period. These documents should be furnished to interested employees who must complete the form during the November 2000 enrollment period. Copies of this completed form must be routed to, and retained by,...

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... agency timekeepers and agency Health Benefits Administrators. Agency timekeepers will use the form to adjust participants' sick leave accrual rates and Health Benefits Administrators will use the form to process the health insurance contribution credit.

Employees who enroll in HOP must continue to participate for the calendar year so long as the employee continues to be eligible to do so (see Loss of Eligibility below). They cannot decide to withdraw from HOP during the calendar year. However, at the expiration of the calendar year, participation in HOP automatically ends unless the employee re-enrolls to participate in the following calendar year.

ELIGIBILITY

The program is available to employees in the Administrative Services Unit (ASU), the Operational Services Unit (OSU), the Institutional Services Unit (ISU), the Division of Military and Naval Affairs Unit (DMNA), the Professional, Scientific and Technical Services Unit (PS&T), the Rent Regulation Services Unit (RRSU) and to those designated Managerial/Confidential (M/C). Employees in RRSU and those designated M/C who participate in the IPP are eligible to participate in HOP under special provisions described in this bulletin.

Employees must meet the following criteria at the time they elect to enroll in HOP:

• be employed on an annual-salaried basis
• be employed in a bargaining unit that is eligible to participate (see above)
• be eligible to earn sick leave credits
• have a sick leave balance of 15 days or more at the time of election
• not have any outstanding un-repaid leave balances
• be a NYSHIP contract holder in either the Empire Plan or an HMO
• be on the payroll for some portion of the election period (including time on workers' compensation leave)

The requirement that employees be eligible to earn sick leave credits means that the employee must be employed to work a schedule that entitles the employee to earn leave credits. The employee need not actually accrue leave credits during the enrollment...

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... period. An employee at the sick leave maximum is eligible to enroll in HOP even though he/she is not currently being credited with sick leave earnings. If this employee subsequently uses sick leave and drops below the sick leave maximum, the employee will earn sick leave at the reduced HOP rate.

Income Protection Plan Participants
M/C and RRSU employees in the Income Protection Plan are eligible to participate in HOP, earning a reduced amount of sick leave on their IPP sick leave grant dates. There are special provisions in this bulletin which apply to employees in the IPP who enroll in HOP which take into account the unique way in which they earn sick leave.

Voluntary Reduction in Work Schedule (VRWS)
Employees on Voluntary Reduction in Work Schedule agreements (VRWS) who elect to participate in HOP do so as full-time employees. They must have a sick leave balance of 15 full-time (7.5 or 8 hour) days in order to be eligible to enroll in HOP. If eligible, they exchange three (3) full-time (7.5 or 8 hour) days of sick leave for a health insurance contribution credit of up to $300.

Part-Time Employees
Part-time annual salaried employees who meet the eligibility criteria described above are eligible to participate in HOP. They must have a sick leave balance of 15 prorated days based on their payroll percent in order to enroll in HOP.

Employees who are not in the IPP forfeit 3 prorated days of sick leave via a reduced sick leave accrual rate and receive a prorated health insurance premium credit based on their payroll percentage. Their participation in HOP is based solely on their payroll percentage. Additional hours worked beyond the employee's payroll percentage do not affect the employee's level of participation in HOP. Such employees who move from full-time to part-time, from part-time to full-time or who move between two different part-time payroll percentages during their participation in HOP will have their sick leave accrual rate and their health insurance contribution credit adjusted based on their new payroll percentage.

All eligible part-time employees in the IPP forfeit 1.5 full-time days of sick leave divided between their two grant dates in exchange for a health insurance contribution credit of up...

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... to $150, regardless of their actual payroll percentage. Their participation is fixed at this level for the calendar year.

Hourly and per diem employees are not eligible to enroll in HOP.

Re-employed Retirees
Retired New York State employees who have returned to work must meet all the eligibility criteria for participation in HOP and must have the employee share of their NYSHIP health insurance premium deducted from their biweekly paycheck. Re-employed retirees who retain retiree status for health insurance purposes are not eligible to participate.

EARNING SICK LEAVE UNDER HOP

The following applies to employees who are not in the Income Protection Plan:

During each calendar year of participation, employees earn three fewer days of sick leave than they would normally accrue. For example, a full-time employee who normally earns 13 days of sick leave per year would earn 10 days. For a full-time employee on a 37.5 hour workweek, the sick leave accrual rate would change to 2 3/4 hours for each qualifying biweekly pay period plus an annual adjustment of 3 ½ hours. A full-time employee in a 40 hour per week position would have a HOP accrual rate of 3 hours per biweekly pay period plus an annual adjustment of 2 hours.

Full-time employees working a 37.5 hour workweek will forfeit a total of 22.5 hours (three 7.5 hour days) of sick leave accruals over the course of the calendar year. Full-time employees working a 40 hour workweek will forfeit 24 hours (three 8 hour days) of sick leave accruals. This applies regardless of the actual length of the employee's workday.

Based on their payroll percentage, eligible part-time employees who elect to participate will have their sick leave accrual rate reduced by three prorated days per year of participation and receive a prorated credit to be applied against health insurance premiums. For example, a half-time employee who works 20 hours per week must have a sick leave balance of 15 prorated days (60 hours) in order to participate. If the...

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... employee normally earns 13 prorated days (52 hours) of sick leave per year, under HOP the employee would earn 10 prorated days (40 hours) of sick leave and receive a credit of up to $150 against the cost of the employee share of NYSHIP premiums.

Eligible employees participating in a VRWS program who elect to participate in HOP will have their annual sick leave accrual rate reduced by three full-time days (22.5 or 24 hours) and receive a credit of up to $300 to be applied against health insurance premiums. For example, an employee who would normally earn 13 days of sick leave (104 hours) working in a full-time 40 hour per week position (8 hours per day) enters into a VRWS arrangement by which she works 75 percent of a full-time schedule. Under the VRWS program, the employee earns 13 prorated days (6 hours per day multiplied by 13 equals 78 hours) of sick leave annually by virtue of participation in VRWS. If she chose to participate in HOP, she would then forfeit three full-time days (24 hours) of sick leave in exchange for a credit of up to $300 against the cost of the employee share of NYSHIP premiums, resulting in total sick leave earnings for the year of 54 hours (78 - 24 = 54). This forfeiture is accomplished via a reduced biweekly sick leave accrual rate (two hours per biweekly pay period and an annual adjustment of two hours).

An employee who moves from full-time to part-time, from part-time to full-time or whose part-time payroll percentage changes during a period of HOP participation will have his/her biweekly accrual rate and health insurance contribution credit adjusted to reflect the new payroll percentage. In no case, however, can the health insurance contribution credit exceed $300.

Employees who move between a 37 ½ and a 40 hour basic workweek continue to receive the health insurance contribution credit without adjustment provided their payroll percentage remains the same. However, their HOP sick leave accrual rate changes to reflect the new basic workweek just as it does now when the basic workweek changes for non-participants.

HOP accrual rate charts are provided as an attachment to this bulletin. HOP accrual rates apply to sick leave credits earned for biweekly pay periods ending January 3, 2001 through December 19, 2001 for employees on the Administration payroll cycle, and January 10, 2001 through December 26, 2001 for employees on the Institution payroll cycle.

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All other provisions concerning the crediting and use of sick leave remain unchanged.

Impact of Losing HOP Eligibility

As described under "Loss of Eligibility," there are several changes in employment status that will precipitate a loss of HOP eligibility if they take place during the calendar year of HOP participation:

• changing to a pay basis other than annual-salaried;
• moving to a position in a negotiating unit other than the one the employee was in at time of enrollment (except movement between CSEA units);
• separation from State service (except layoffs resulting in placement on a preferred list).

In such cases, as a result of losing HOP eligibility, employees who are otherwise eligible to earn sick leave will return to earning leave at the regular non-HOP rate beginning on the last day of the pay period in which the status change occurred. Similarly, the HICC is no longer applied to the employee share NYSHIP deduction beginning with the paycheck issued on the last day of the pay period in which the status change took place. In other words, the change in accrual rate and the change in employee share NYSHIP deduction occur at the same time. Therefore, the last date that the employee will earn sick leave at the HOP rate is the last day of the pay period preceding the pay period in which the status change took place. This is also the date that the employee will receive the last paycheck which will include an employee share deduction reflecting the HICC.

For example, a CSEA member enrolls in HOP during the November 2000 election period and pays his first reduced employee share deduction in the paycheck issued on January 3, 2001 (Administrative payroll cycle). Effective January 22, however, he moves to a position represented by Council 82 (also on the Administrative payroll cycle) and loses eligibility to participate in HOP. On January 17, the last day of the last full payroll period in...

[Continued in Part 2]

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