Q. I understand that the city unions agreed to some changes concerning our health benefits programs. What’s going on?
A. Three very important issues concerning members’ health benefits were resolved. Two involve preserving our core health benefits and maintaining the solvency of PICA, a special drug program fund. The third concerns the outrageous delay in getting health coverage for new and returning members.
Q. What was the resolution on our core health benefits and PICA?
A. On Dec. 18, the Municipal Labor Committee (MLC) and the city reached an agreement that maintains hospital and medical benefit programs and averts the threatened bankruptcy of PICA, despite the city’s earlier demands for wholesale changes in our core health benefits. On Tuesday, Dec. 23, the entire MLC (97 city unions) ratified the agreement. Only one DC 37 local dissented. All others approved, including the 56 other DC 37 locals, the UFT, the Professional Staff Congress (PSC) and the uniformed unions.
Q. What were the city’s demands?
A. In order to close a budget gap, the city had initially wanted $600 million in givebacks for budget savings (approximately $2,500 per person). The city also was trying to fundamentally shift health costs to active and retired members, generally having them assume a significantly larger share of medical costs by paying premiums now paid by the city and eliminating Medicare Part B reimbursements.
Q. What about PICA? What is that program and why was it in danger of bankruptcy?
A. PICA is an acronym for a drug benefit program that pays for certain specialized drugs -- psychotropic, injectible, cancer and asthma drugs - used in treating chronic conditions. PICA’s solvency was threatened because of increasing drug costs, despite city funding increases of 8 to 10 % a year.
Q. How did the agreement resolve these issues?
A. The unions succeeded in achieving our top priorities: to save our basic health coverage, including the city’s hospitalization and medical insurance program, prescription drug services and PICA, without annual premiums. The agreement maintains the comprehensive health plans we have, with small increases in existing co-payments that haven’t risen in many years and a small $35 annual health plan administration fee. The agreement also requires the city to contribute another $100 per member and retiree (a total of $70 million) to union welfare funds that provide supplemental health and other benefits. Finally, the city has agreed to expand its pre-tax programs such as Transit Check. Overall, the health care agreement is fair for both the city and its current and retired workers.
Q. Does that mean that our health benefits will stay the same as they were?
A. Yes. The unions saved our core health program without premiums but with small increases in existing co-payments. Any members who opt for the HIP/HMO will continue to have a no-employee cost health plan.
Q. What are the co-payment increases?
A. The agreement increases some existing co-payments that employees and retirees now pay for drug and physician/hospital visits:
Q. Will there be any other costs?
A. All members will contribute an annual health plan administration fee of $35, similar to other public sector plans in New York State.
Q. How will members who use the PICA program be affected?
A. Most important, they will continue to have access to the PICA program. But co-pays for these specialized drugs - many of them quite expensive - will rise from the current two-tiered $0 or $6 to three-tiered $5, $15 or $35, depending on whether the drugs are generic or on a preferred list known as a formulary. There will also be some administrative savings through such items as a mandatory mail program.
Q. When do these new co-pays and fees begin?
A. A definite timetable has not yet been decided, though the expectation is that they will begin around April 1, 2004. The UFT and your health plan will send you further information once the timetable is firmly determined.
Q. How will the city’s increased welfare fund contributions be used?
A. The city is funding the increases in welfare funds in a similar manner to the previous health care settlement in 2001. The union welfare funds that will receive the additional $100 per member cover, among other things, dental benefits, optical services and drugs not covered by other plans. The city’s increased contributions are used primarily to offset the rising costs in these benefits and services. The last time, the welfare fund was able to use some of the increased contributions to expand members’ dental benefits. This time, the welfare fund will look into the feasibility of using some of the increases to mitigate part of the higher co-pays and the administrative fee.
Q. How does this agreement affect the delays in getting health coverage for our new and returning members?
A. Though not part of the agreement, the UFT raised this issue forcefully during health care negotiations with the city, and threatened to file a lawsuit against the DOE, whose bureaucratic inefficiency left hundreds (and perhaps thousands) of members uncovered by health insurance.
Q. How was this problem resolved?
A. UFT pressure produced some positive results. The DOE said it processed 500 new members on Thursday, Dec. 18, the day of the agreement. Further, the DOE pledged to enroll all members who did not have health coverage in the system by the following Monday, Dec. 22, and to stay current as it receives new enrollment forms. Given the DOE’s action, the lawsuit does not need to be filed.
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