For Immediate Release

Municipal workers and NYC reach health benefits deal

Jun 2, 2009 3:00 PM

The Municipal Labor Committee (MLC) and the City of New York have reached a tentative agreement on employee health plans that should result in $200 million in savings and forestall actions on most layoffs until at least September, MLC co-chair Randi Weingarten announced on June 2.

The deal maintains core health services and the existing premium-free plans for members, said Weingarten, president of the 200,000-member United Federation of Teachers (UFT) and its national parent, the American Federation of Teachers (AFT). 

The changes, which essentially equalize the benefits of various plans, are as follows:

1. There will now be a $50 emergency room co-pay for all members. Most UFT members already have one. Those being affected by the change include HIP members as well as GHI/ Blue Cross Senior Care Plan retirees covered by Medicare.  The fee will be waived if members are admitted to the hospital.
2. HIP members will now be subject to a $100 co-pay for in-hospital admission and $50 for ambulatory surgery, similar to members in GHI.
3. For members in GHI, free-standing surgical facilities and dialysis will now be on a participating/non-participating basis similar to providers in the rest of the program. If members use a non-participating facility, they will have to pay part of the cost.

There will be several administrative changes to the health plan that will save substantial sums of money but have minimal impact on services.(For example, municipal unions will stop paying premium taxes to New York State, utilizing a payment method that every other large employer already does.) The city health plan will also reduce its payments to non-participating hospitals, which are primarily out of state. In addition, the MLC is seeking a commitment from HIP to lower its rate.

The above health savings have recurring savings of about $155 million a year, Weingarten said. In addition, the city will receive lump sums of $45 million a year for two years from the health plan stabilization reserve. The savings amount to approximately $575 per city employee.

“I’m sure city workers are happy that we maintained core health services and held the line on premiums at this very crucial time in a tough economy by tapping reserves,” Weingarten said. “Given the current economic climate, it is a great victory for us to be able to continue providing the coverage that workers and their families need without burdening them with exorbitant additional costs.”

The union welfare funds will receive $200 per active and retired member from the stabilization funds. The stabilization fund will also pay the cost of delaying layoffs of permanent civil service employees until September, but provisional employees could still be cut sooner.

“This agreement provides $200 million in annual savings to the city, meeting the goals for health care cost containment in Mayor Bloomberg’s executive budget released in May, but at the same time maintains our pension and health benefits,” Weingarten said.