§40.1 The State and UUP agree that they shall hereinafter enter into a contract to provide for the continuation of the UUP Benefit Trust Fund, in accordance with such terms as shall be jointly agreed upon by the parties and subject to the approval of the Comptroller, to be administered by UUP to provide certain health and welfare benefits for "employees" to be defined hereinafter.

Effective May 9, 1996, quarterly payments to the UUP Benefit Trust Fund shall not include payments for prescription drug coverage for eligible UUP represented employees. Prescription drug coverage for eligible UUP represented employees will be provided through either the Empire Plan Prescription Drug Program or a Health Maintenance Organization in accordance with Article 39.11.

§40.2 The State shall contribute an amount to the UUP Benefit Trust Fund which shall equal the maximum payment per eligible employee as described below. For the period July 1, 1995, to May 8, 1996, the State shall deposit in the UUP Benefit Trust Fund a payment equal to the difference between any amounts the State has already paid to the Benefit Trust Fund and $207.65 per employee per quarter. For the period beginning May 9, 1996 and ending June 30, 1996, the State shall deposit in the UUP Benefit Trust Fund a payment equal to $100 per employee per quarter. Such payments shall be based on an employee count of 19,200 per quarter but will not exceed $6,384,192.

The State shall deposit in the UUP Benefit Trust Fund a payment equal to $100 per employee per quarter for the period July 1, 1996, to June 30, 1997. Such payment will be based on an employee count of 19,200 per quarter, but will not exceed $7,680,000.

The State shall deposit in the UUP Benefit Trust Fund $117.15 per employee for each quarter of the year beginning July 1, 1997, and ending June 30, 1998.

Effective July 1, 1998, the State shall deposit in the UUP Benefit Trust Fund a payment equal to $130.50 per employee per quarter.

§40.3 To the extent such information is available, the UUP Benefit Trust Fund shall notify the State of any employee who was participating in the prescription drug plan provided by the UUP Benefit Trust Fund through May 8, 1996, and who was not enrolled in any State health insurance plan although eligible to do so.

§40.4 For the purpose of determining the amount to be deposited in accordance with Section 40.2 above, the number of employees shall be determined to be the number of employees on the payroll on the payroll date closest to 21 days before the first day of the quarter for which the deposit is to be made, except that with respect to the payments outlined in Section 40.2 for the period beginning July 1, 1995, and ending June 30, 1997, the number of employees shall be 19,200 per quarter, notwithstanding the provisions of Section 40.5. In the case of persons in positions which are on an appointment cycle which does not place them on the payroll at such times, the parties shall agree upon a representative payroll period during the quarter to determine the number of such additional employees.

§40.5 For purposes of this Article, the term "employee" shall mean any person holding a position in this negotiating unit who is eligible for enrollment in the State Health Insurance Program in accordance with the provisions contained in Part 73 of the Rules and Regulations of the Department of Civil Service (4 NYCRR Part 73). Notwithstanding the above, the portion of the contribution for dental coverage shall not be required for those employees who would otherwise have been ineligible for dental coverage under the dental insurance plan administered by the Department of Civil Service (employees holding appointments expected to last less than six months).

§40.6 The UUP Benefit Trust Fund shall implement a system of internal controls consistent with the guidelines contained in the Framework for Employee Benefit Fund Administration (Attachment B of the Memorandum of Understanding dated June 17, 1992) to safeguard assets, check accuracy and reliability of data, promote operational efficiency and encourage adherence to established management policies of the Fund.

§40.7 Within 15 days from the end of each quarter, the Fund will provide the Governor's Office of Employee Relations with written reports showing the Fund's expenditure activity for the previous quarter. These reports shall include expenditures for benefit administration and claims in a format agreed to by the parties. These reports are in addition to the annual Financial Statement and any other annual reports which are necessary to evaluate the financial status of the Fund.