By GREGORY N. HEIRES

Members overwhelmingly approved a contract extension that will allow millions of dollars to be poured into the union welfare plan’s financially-troubled prescription drug plan.

An independent monitor, the American Arbitration Association, announced the results of the mail-ballot vote on March 10. Members approved the extension by a vote of 94 percent, with 22,526 in favor and 1,196 opposed.

“The passage of the contract extension is a very significant step toward protecting the plan from being devastated by the relentless pressure of rising drug prices,” said DC 37 Executive Director Henry Garrido.

This extension will earmark $24 million to the DC 37 Health & Security Plan, which provides the popular drug benefit.

Under an agreement between the city and the union, the city will permanently raises its annual contribution to the DC 37 Health & Security Plan. The city will soon provide an additional $200 every year for each full-time member and retiree, increasing its annual fixed rate from $1,575 to $1,775. This rate contribution is pro-rated for part-time workers.

“The permanent rate increase is a big help,” plan Administrator Willie Chang said. “For about 20 years, the city has only been providing us with one-time cash increases. This additional $200 in annual payments for each member and retiree will give the plan greater financial stability in the next few years.”

The contract extension, which the union and city negotiated in January, will enable the DC 37 Health & Security Plan to maintain the benefits package for members and retirees.

During the past eight years, the pharmaceutical industry has raised prescription drug prices by 105 percent. During this period, the city’s contribution increased 1.05 percent. Today, prescription drugs consume 76 percent of the costs of the welfare fund, which also covers the dental benefit and other benefits managed by the plan.

The union’s current 2010-17 agreement will be extended from July 2 to Sept. 25. All other terms of the contract will remain the same.

During each round of bargaining on the economic agreement, the union and the city also negotiate over the benefit contributions.

 

The economic agreement covers DC 37 members working in mayoral agencies, NYC Health+Hospitals, the Dept. of Education and the New York City Housing Authority.

Members at the School Construction Authority and members in prevailing rate locals will be asked to vote on a similar contract extension.

City University of New York employees and Local 924 members have already approved contracts that include the extra $200 payment. Some DC 37 members are covered by contracts with different expiration dates. Those contracts will similarly be extended to two months and 23 days.