Audit of the Financial and Operating Practices of the Joint Health Insurance Stabilization Fund

To the Residents of the City of New York,

My office has audited the Health Insurance Stabilization Fund (HISF) to determine the Fund’s financial condition, whether the Fund was used for its intended purpose(s), and whether expenditures were reasonable, appropriate, adequately supported, and properly authorized.

The audit found that HISF is insolvent, and the Office of Labor Relations (OLR) and the Municipal Labor Committee (MLC) did not take adequate steps to improve the Fund’s position. OLR and the MLC authorized significant transfers or payments from HISF that were not consistent with the Fund’s declared purpose(s). In addition, HISF has accrued significant liabilities totaling $3.1 billion through Fiscal Year 2023 for equalization payments owed to the City, and amounts owed to vendors as of April 2025, which it is unable to pay. As a result, HISF is unable to meet its obligations.

The audit also found that HISF lacks transparency and has inadequate governance and decision-making capacity. HISF does not have governing documents that set forth the Technical Committee’s purpose or authority, membership appointments, committee meeting frequency, attendees, or a process for disseminating information to OLR and the MLC for decision making.

Ordinarily, the audit would propose recommendations to management to address deficiencies. However, given that HISF is insolvent and cannot meet its intended purpose, the audit recommends that the City work with the MLC to dissolve the Fund. The City should also appropriately budget for healthcare costs and benefits.

The results of the audit have been discussed with OLR and the MLC, and their comments have been considered in preparing this report. OLR and the MLC’s complete written responses are attached to this report.

If you have any questions concerning this report, please email my Audit Bureau at audit@comptroller.nyc.gov.

Sincerely,

Brad Lander