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PSC Opposes Weakening NYC Health Insurance Protections

Sep 09, 2022

September 9, 2022

Dear PSC members and retirees,

I am writing with an update and a request. The update concerns an impending change to the regulations governing health insurance for New York City employees, retirees, and their dependents – a change that the PSC opposes. The request is that you consider the information in this note, review the media reports that emerge in the next few days, and contact your City Council member to express your objection. The Council and the Mayor must approve this proposed change for it to take effect. We will follow up early next week with an Act Now letter to send to your Council member with one click.

Yesterday, the Municipal Labor Committee (MLC), which negotiates health insurance on behalf of the City’s public employee unions, including the PSC, agreed to propose a change to the Administrative Code of the City of New York. This agreement, sought by the City’s Office of Labor Relations, would alter an existing requirement about the City’s minimum obligation to cover the cost of health insurance premiums, as explained below. If approved by the Mayor and the City Council, the change to the Administrative Code will clear the path for implementation of a Medicare Advantage program for City retirees, a plan that the MLC and the City had agreed to last year but was successfully challenged in court. However, the implications of the proposed Administrative Code change are not confined to retiree health insurance and the current Medicare Advantage legal impasse. As PSC’s representatives, Barbara Bowen and I spoke strongly against the proposed change at the MLC Steering Committee meeting and MLC General Membership meeting, respectively, and cast a No vote in each forum, guided by consultation with the PSC Executive Council. Ten other union representatives joined the PSC in opposition, and a handful of others abstained, but the overwhelming majority voted Yes.

The proposed change eliminates the HIP-HMO rate as the single standard for determining the City’s obligation to pay for health insurance for City employees, retirees, and their dependents. Under current law, the City is required to “pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents, not to exceed one hundred percent of the full cost of HIP-HMO….” (NYC Administrative Code, Section 12-126). Currently, the HIP-HMO cost is over $700/month. In practice, when the cost of the GHI/Emblem plan exceeds the HIP-HMO cost in a given year, the NYC Health Insurance Stabilization Fund reimburses the City the difference. Less than 10 percent of municipal employees are enrolled in health insurance plans other than GHI/Emblem, which charge premiums in excess of the HIP-HMO cost, and they pay the difference themselves.

The amended provision will add an alternative method for determining the City’s financial obligation for health insurance. Under the modified language the City and the MLC could agree jointly on a different plan as the standard for either retirees and their dependents or active employees and their dependents, and provide only the cost of that plan. The modified language does not specify what if any elements of health insurance coverage a new “benchmark” plan must include.

A side letter signed by the Office of Labor Relations and the MLC chairman affirms the requirement that any new health insurance plan would have to be jointly approved as the “benchmark.” The letter also specifies that the City would not unilaterally impose a new benchmark plan on the unions as part of mandatory impasse resolution. However, negotiations between the City and the MLC are seldom conducted on an even playing field, and we are concerned that MLC unions will not only lose a critical “floor” currently regulating the minimum reimbursement rate but also lose bargaining leverage in future negotiations with the City over health insurance plans, whether for retirees and their dependents or in-service members and theirs.

Please stay tuned here for a follow-up message early next week that (a) includes an Act Now letter to send your City Council representative and (b) indicates the schedule of the two City Council public hearings that must be held prior to conducting a Council vote on the proposed change to the City’s Administrative Code.

In solidarity,

James Davis, President, PSC-CUNY

Published: September 9, 2022 | Last Modified: September 10, 2022

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