New York City and Municipal Unions Agree to Health-Benefit Changes

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Municipal unions and the city agreed to major benefit changes in February under a $3.4 billion plan to hold down health-care costs.

The Municipal Labor Committee (MLC), which is comprised of public sector unions in the city and negotiates on health-care matters on their behalf, approved the benefit modification package on Feb. 22. The changes will go into effect July 1.

DC 37 Executive Director Henry Garrido discussed the modifications – a series of co-pay changes – at the Delegates meeting on Feb. 23.

Garrido noted that the agreement maintains the quality of the city’s health-care plans and avoids premium contributions.

“We remain the only major municipality in the country with free coverage,” Garrido said.

In addition to maintaining coverage and avoiding a premium contribution by the members, the agreement calls for the city to make a one-time $100 welfare fund payment for each employee. This will help the trustees of the DC 37 Health & Security Plan as they continue to study how to address a growing budget deficit driven in large part by out-of-control prescription drug prices.

Municipal unions and the city agreed to the $3.4 billion savings plan in 2015. The agreement opened the door for contract negotiations, which were stalled during the Bloomberg administration.

The benefit changes will save an estimated $1.3 billion in the current fiscal year and help meet the $3.4 billion savings target of the 2015 agreement.

The city and the unions are holding on-going discussions to look for ways to hold down health-care costs by identifying waste and more efficient and creative ways to provide coverage.

For instance, the city is encouraging municipal employees to enroll in the Advantage Care Physician (ACP) network, which provides services more efficiently by offering comprehensive care under one roof.

The 2015 agreement with the MLC calls for $400 million in savings in fiscal year 2015, $700 million in fiscal year 2016, $1 billion in fiscal year 2017 and $1.3 billion in fiscal year 2018. The agreement aims to guarantee $1.3 billion in health care savings annually after 2018.

In their discussions, the city and the unions fell short of the $700 million target for fiscal year 2016. Since the city refused to use monies from the health-care Stabilization Fund for the savings, both parties entered talks about the benefit modification package. The city later threatened to take the unions to arbitration over its proposals. Fearing an arbitrator might impose a premum contribution, the unions decided it was better to seek a compromise.

“The city’s original proposal was much more onerous but we did our best to prevent the benefit changes from imposing a huge financial burden on members,” said Willie Chang, administrator of the DC 37 Health & Security Plan. Chang chairs the MLC’s health subcommittee, which conducts the complicated and technical talks on health benefits.

The most recent benefit changes affect retirees who aren’t yet eligible for Medicare in addition to DC 37 members.

Significantly, under the plan, the co-pay for visits to primary care physicians will remain the same ($15 for GHI-CBP and $0 for HIP/HMO).

To encourage workers to enroll in the Advantage Care Physicians network, the agreement eliminates the $15 co-pay for primary care physicians and the $20 co-pay for specialists in the plans.

To discourage members and retirees from going to the emergency room when their medical condition can be treated for less at a doctor’s office, the agreement raises the co-pay for hospital emergency visits from $50 to $150.

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