New York State to Fund Bonuses for Certain Healthcare Workers as Part of State Budget | JD Supra

As part of the Fiscal Year 2023 New York state Executive Budget
legislation, $1.2 billion in funding has been allocated for the
payment of bonuses for certain “frontline” healthcare

With the stated goals to “recruit, retain, and reward
health care and mental hygiene workers,” the provision –
located within Part D of the Health and Mental Hygiene Bill,
as amended – requires the state Commissioner
of Health, in consultation with the state Commissioner of Labor and
the Medicaid inspector general, to develop procedures to facilitate
payment of claims to covered employers for the purpose of funding
worker bonuses in accordance with the provision’s requirements.
Bonus amounts will be commensurate with the number of hours worked
by covered workers during designated vesting periods up to a total
of $3,000 per covered worker.

Covered Employers

Covered employers are defined as providers with at least one
employee and that bill for services under the state Medicaid plan
or a home or community based services (HCBS) waiver, or that have a
provider agreement to bill for services provided or arranged
through a managed care organization or a managed long term care
plan, as well as certain educational institutions and other funded
programs. These include certain providers, facilities, pharmacies
and school-based health centers licensed under the state Public
Health Law, Mental Hygiene Law, and Education Law, as well as
certain programs funded by the Office of Mental Health, Office for
the Aging, Office of Addiction Services and Supports, and the
Office for People with Developmental Disabilities.

Covered Workers

Covered workers are defined as “certain front line health
care and mental hygiene practitioners, technicians, assistants and
aides that provide hands on health or care services to
individuals” receiving an annualized base salary (excluding
any bonuses or overtime pay) of $125,000 or less, and include
full-time, part-time, and temporary employees as well as
independent contractors. Specific eligible job titles are as
determined by a list developed by the Commissioner of Health in
consultation with the commissioners of other related state

Determining Bonus Eligibility and Amounts

Bonuses will be required to be paid based on the number of hours
worked by a covered worker during defined vesting periods to be
determined by the state Commissioner of Health. The vesting periods
shall be up to two (per covered employer) six-month periods between
October 1, 2021 and March 31, 2024 for which workers that are
continuously employed by an employer during such six-month periods
may become eligible for a bonus. The use of any accruals or other
leave, including but not limited to sick, vacation, or time used
under the federal Family and Medical Leave Act (FMLA), shall be
credited towards and included in the calculation of the average
number of hours worked per week over the course of the vesting

Total bonus payments shall not exceed $3,000 per covered worker
(across all covered employers of the worker) and shall be
determined as follows:

  • workers averaging at least 20 but less than 30 hours per week
    over the course of a vesting period would receive a $500 bonus for
    the vesting period;
  • workers averaging at least 30 but less than 35 hours per week
    over the course of a vesting period would receive a $1,000 bonus
    for the vesting period;
  • workers averaging at least 35 hours per week over the course of
    a vesting period would receive a $1,500 bonus for the vesting
    period; and
  • full-time employees who are exempt from overtime compensation
    as established in the New York minimum wage orders or otherwise
    provided by New York state law over the course of a vesting period
    would receive a $1,500 bonus for such vesting period (it is noted
    that the statute does not specify a minimum number of hours
    required to be worked per week in order for exempt employees to

Covered employers are obligated to pay bonuses to eligible
employees in accordance with the vesting schedule to be established
by the Department of Health, although such payments need not be
paid until 30 days after the claimed amount is paid out to the
employer by the Department, “provided . . . that prior to such
date the employee does not terminate, through action or inaction,
the employment relationship with the employer.” Covered
employers shall be required to submit a claim for payment – using
forms and processes to be developed by the Commissioner of Health –
no later than 30 days after a worker’s eligibility for a bonus
vests. Bonus payments may not be used to reduce total compensation
otherwise due to covered workers.

No bonus amount may be paid to any worker who has been suspended
or excluded under the Medicaid program during the vesting period
and at the time an employer submits a claim.

Covered Employer Tracking and Recordkeeping

Covered employers will be tasked with determining eligibility
for the bonuses and will be required to track the number of hours
worked by covered workers during the vesting periods and, as
applicable, the number of patients served by the employer who are
eligible to receive services under Article 5, Title 11 of the New
York Social Services Law. As noted above, they will then need to
submit claims for payment of bonuses in accordance with the
schedule and processes to be established by the Department of
Health. Covered employers will be required to retain records of
claims and substantiating documentation for a period of no less
than six years.

The Medicaid inspector general, in coordination with the
Commissioner of Health, shall be authorized to conduct audits,
investigations, and reviews of employers required to submit claims
under the provision. Inappropriately paid claims shall constitute
overpayments as defined in the Medicaid regulations and may be
recovered accordingly from the employer without recoupment from, or
penalty to, any covered worker.

Sanctions up to and including exclusion from the Medicaid
program, as well as other penalties or actions authorized by law,
also may be imposed for improperly paid claims as well as: (i)
claims for bonuses not due or not actually paid out to covered
workers; (ii) claims in an amount in excess of correct bonus
amounts; or (iii) failure to claim a bonus due to a covered worker.
A covered employer who fails to identify, claim and pay any bonus
for more than 10% of workers eligible for the bonus shall also be
subject to additional penalties.

New York State To Fund Bonuses For Certain
Healthcare Workers As Part Of State Budget

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guide to the subject matter. Specialist advice should be sought
about your specific circumstances.

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