MLC approves contentious healthcare agreement

Despite hesitancy among some labor leaders who said they had too little information to make an informed decision, unions representing municipal workers have signed off by a wide margin on a cost-saving health-benefit agreement city and union officials reached with two major insurance firms this summer. 

According to the weighted-vote formula used by the Municipal Labor Committee, by which each of the roughly 100 unions that make up the umbrella organization is allotted a vote for every 250 members, the five-year plan was approved by 88 percent of those voting, comfortably more than the required two-thirds majority needed for approval. 

“This morning’s overwhelming approval of the proposed NYCE PPO Plan is the outcome of years of research, deliberation and negotiations to develop a health plan that addresses what matters most to our members: comprehensive medical coverage, accessible care, and zero premiums,” the MLC said in a statement this afternoon.

Mayor Eric Adams, whose administration has been intent on lowering the city’s healthcare costs, also lauded the outcome.  “From day one, we have focused on making New York City safer and more affordable for working-class New Yorkers. Today, I applaud the Municipal Labor Committee for approving the proposed new health plan for city employees, pre-Medicare retirees, and their dependents, which will help deliver on this mission,” he said in a statement. 

A public comment period on the plan, during which rank-and-file union members can read the agreement, in redacted form, begins Wednesday. The agreement will then be sent to city Comptroller Brad Lander. He will have 30 days to review and register the agreement. An open enrollment period will then run all of November before the plan begins Jan. 1. 

Jointly administered by EmblemHealth and UnitedHealthcare, the plan provides premium-free coverage for 750,000 active and retired city employees but would cost the city about $1 billion less a year than the plan currently in place, city officials and union leaders have said. 

The proposal, while backed by union heavyweights District Council 37 and its executive director, Henry Garrido, and the United Federation of Teachers and its president, Michael Mulgrew, drew sharp criticism ahead of the vote from rank-and-file activists who argued that the the plan is risky and potentially irreversible. 

They also objected to the lack of transparency about the agreement, which was only available for inspection to union leaders in a redacted fashion and for just a brief period of time earlier in September at DC 37 headquarters

“City Hall is gambling with our health to balance their budget without giving us a seat at the table. The claim that this new plan will deliver $1 billion in savings has not been backed up with any proof, and the municipal employees and pre-65 retirees who will be directly affected were shut out of the negotiating process,” a joint statement from HandsOffNYCare and the NYC Organization of Public Service Retirees said. 

The two organizations held a rally outside of District Council 37’s downtown offices as the MLC vote took place. 

In a Sept. 24 note to union leaders, the MLC’s executive board, which includes Garrido and Mulgrew, said the redactions were routine and “limited to the propriety information, largely administrative fee pricing and network/clinical components” that could compromise EmblemHealth’s and UnitedHealthcare’s competitive advantages when it comes to securing other agreements. The board said the plan’s “scope of benefits,” such as network carriers and levels of copays, as well as a comparison with the current plan, were shared with union leaders. 

The self-funded insurance plan would trim the city’s healthcare costs by more than 10 percent, with savings expected at up to $1 billion annually, or just under 1 percent of the city’s budget, “while simultaneously expanding, instead of reducing, benefits and coverage,” city officials said in announcing the plan in late August. 

The agreement will for the first time offer a broad national network of providers for the more than 80,000 members currently covered by city health plans who live outside New York, according to officials. It would also bring an expected additional 200,000 members’ current out-of-network doctors into the system.

City officials have for years tried to trim runaway municipal healthcare costs. The tentative agreement’s announcement, while expected, came after years of sometimes acrimonious disputes, including in court, over proposed changes to healthcare plans for municipal workers and retirees, most notably the Adams administration’s efforts to move roughly 250,000 city retirees into a Medicare Advantage plan. 

“We understand employees and pre-Medicare retirees have questions regarding the new plan, but these details would not be available at this stage of the procurement process for any city contract. While some details have been shared with the MLC because health benefits are a mandatory subject of bargaining, they would not be shared outside the collective bargaining process until the appropriate stage in the city's procurement process,” William Fowler, a City Hall spokesperson, said in an email Friday.

A faction of educators represented by the United Federation of Teachers vehemently opposed the agreement on several grounds, including a lack of information. But it was also skeptical that city officials can effectively manage the self-funded system, saying it could expose members to significant risks. 

The plan “would throw us into uncharted waters, handing our health and futures to corporate insurers and a self-funded structure that has never been tested in this city,” a group of city public-school educators wrote in a Substack post recently. “Worse, this entire scheme is being rushed forward without transparency, without accountability, and without the trust of the rank and file.

The educators also noted what they said was the city’s recent poor handling of the joint labor-management Health Stabilization Fund, which has heightened distrust. The fund, originally established to buffer healthcare costs, has been repeatedly tapped for budget relief, leaving it depleted. The educators said that makes it hard to believe city officials would manage the new PPO plan responsibly.

richardk@thechiefleader.com