New York Laws
Article 2 - General Municipal Finances
23 - Flexible Benefits Program.

§ 23. Flexible benefits program. 1. For purposes of this section, the
following terms shall have the following meanings:

a. "Code" shall mean the United States internal revenue code of
nineteen hundred eighty-six, as amended, and regulations promulgated
thereunder.

b. "Commissioner of labor relations" shall mean the officer of a city
having a population of one million or more responsible for the
administration of health benefits on behalf of such city and any of the
entities set forth in subparagraph two of paragraph c of this
subdivision.

c. "Employer" shall mean (1) a city having a population of one million
or more, or (2) any one of the following entities: (i) the city
university of New York, (ii) the New York city health and hospitals
corporation, (iii) the New York city transit authority, (iv) the New
York city housing authority, (v) the New York city off-track betting
corporation, (vi) the New York city rehabilitation mortgage insurance
corporation, (vii) the New York city board of education, or (viii) the
New York city school construction authority.

d. "Employee" shall mean any officer or employee of a city having a
population of one million or more, or any officer or employee of any of
the entities set forth in subparagraph two of paragraph c of this
subdivision who are eligible to receive benefits from the New York city
employee benefits program.

For purposes of this section, an independent contractor shall not be
considered an employee.

e. "Flexible benefits program" shall mean the program established
pursuant to this section, qualifying as a cafeteria plan as defined in
section one hundred twenty-five of the code or any successor section
thereto providing similar benefits, and provided as a part of the
employee benefits program administered by the commissioner of labor
relations.

f. "Program administrator" shall mean that agent, as determined by the
commissioner of labor relations, responsible for the maintenance and
management of the flexible benefits program as authorized in subdivision
two of this section.

2. Any city having a population of one million or more, acting by the
commissioner of labor relations, subject to the approval of the director
of the budget of such city, is authorized to establish and implement a
flexible benefits program for its employees and the employees of any
employer as defined in subparagraph two of paragraph c of subdivision
one of this section, consistent with applicable provisions of the code.
The commissioner of labor relations is authorized to enter into
agreements with persons or entities, on behalf of such city or employer,
to act as program administrators of the flexible benefits program. The
commissioner of labor relations shall promulgate rules for the
appropriate administration of such flexible benefits program.

3. At the request of an employee, the chief fiscal officer of the
employer, or the officer responsible for the administration of such
employer's payroll, shall, by payroll deduction, adjust the payment of
the compensation of such employee as provided in a written statement by
the employee in connection with the establishment and maintenance of the
flexible benefits program as authorized by subdivision two of this
section, and shall transfer the amount so adjusted to the authorized
program administrator.

4. Moneys held for employees in any accounts established pursuant to
the flexible benefits program, as authorized in subdivision two of this
section, shall be held by the program administrator as agent for the
participating employee, shall be accounted for separately and shall

remain the property of the employer to the extent required by the code.
Notwithstanding any law to the contrary, moneys may be paid out of such
accounts without any appropriation by law. Any unexpended balances in
such accounts at the end of a plan year as that term is defined by the
United States internal revenue service shall be returned to the control
of the employer to the extent required by the code.

5. To the extent permitted by the code, any salary deduction or
deferral to an employee under the flexible benefits program established
pursuant to this section shall be considered part of such employee's
annual compensation for the purpose of computing pension contributions
and retirement benefits by any retirement system or plan to which the
employer contributes on behalf of said employee. However, this
subdivision shall in no way be construed to supersede the provisions of
sections four hundred thirty-one, five hundred twelve and six hundred
eight of the retirement and social security law or any other similar
provision of law which limits the salary base for computing retirement
benefits payable by a public retirement system.