Printer Friendly Format Email a Friend

PR- 248-09
June 2, 2009


$200 Million for FY 2010 and $200 Million for FY 2011 Will Help Keep Budgets in Balance

$150 Million in Recurring Savings for Every Year Going Forward

Mayor Michael R. Bloomberg and Municipal Labor Committee (MLC) Chair Harry Nespoli today announced a tentative agreement modifying the New York City Health Benefits Program. The agreement, affecting over 550,000 covered employees and retirees, will save the City $200 million in FY 2010, $200 million in FY 2011, and $150 million in recurring savings every following year. Over the next six years, the agreement will save the city $1 billion. The savings will be generated through, for the first time in the history of the HIP-HMO program, co-payments for certain services; the implementation of hospital and ambulatory surgery networks; the realignment of the funding of hospital claims; and other administrative measures. The City has also agreed to defer the implementation of a number of scheduled layoffs affecting certain employees for a period of ninety days, the cost of which will be borne by the union’s Health Insurance Stabilization Fund. The Stabilization Fund was funded by the municipal unions out of their collective bargaining settlements in the mid-1980s. The Mayor and Mr. Nespoli announced the agreement at DC 37 Headquarters in Lower Manhattan.

“I’m proud to say that working together with the labor unions that represent our City’s workforce, we have reached a tentative agreement that will help stabilize the City’s finances,” said Mayor Bloomberg. “Working together, we’ve confronted the City’s budgetary challenge head on and come up with a plan that will continue to serve the long-term interests of our hard-working municipal employees while containing the cost of health care benefits.”

“The unions of this city, when all is said and done, have been and always will be there when the City is in trouble,” said MLC Chair Harry Nespoli. “This is not a problem we caused, but the 550,000 people that I and the other labor leaders represent always meet our responsibility to the citizens of New York City. This deal provides the city with the budgetary relief it needs with a minimum of disruption to our benefits. In addition, we achieved two important goals, which are additional money for our welfare funds and the suspension of layoffs of permanent workers for a period of time.”

The principal features of the 2009 Health Benefits Agreement include the following:

HIP/HMO program savings are:

  1. Establishing a $50 co-payment for a hospital emergency room visit, which will be waived if the patient is admitted;
  2. Establishing a $100 co-payment for an in-patient facility admission;
  3. Establishing a $50 co-payment for an ambulatory surgery facility treatment or service; and
  4. Eliminating the preventive dental rider from the base program.

GHI-CBP/Blue Cross and GHI/Blue Cross/Senior Care program savings are:

  1. Instituting the GHI-CBP/Blue Cross network for the entire hospital network;
  2. Implementing minimum premium program with the Blue Cross hospital program;
  3. GHI subcontracting of coordination of benefits;
  4. Establishing subrogation procedures for the Blue Cross programs;
  5. Use of participating-only freestanding ambulatory surgery facilities;
  6. Use of participating-only freestanding hemodialysis facilities; and
  7. Establishing a $50 emergency room co-pay for Senior Care Plan, which will be waived if the patient is admitted.

Welfare Fund – Under the agreement, effective October 1, 2009, there will be a one-time payment to the Union-administered welfare funds of $200 per active employee and retiree.  The funding will be provided through the Health Insurance Stabilization Fund at no cost to the City.  The Stabilization Fund was funded by the municipal Unions out of their collective bargaining settlements in the mid-1980s.

Labor-Management Committees - The parties will establish a Health Benefits Subcommittee to explore additional efficiencies and programs and to consider providing health benefits to certain groups of employees. This is subject to identification of a funding source mutually agreed upon by all parties.

A Labor Management Subcommittee will also meet and confer on issues such as: telecommuting; compressed work schedules; job sharing; unpaid furloughs and other unpaid leaves of absence; and potential employment opportunities for laid-off provisional employees.

The Mayor thanked Deputy Mayor Edward Skyler; MLC Chair Harry Nespoli and the MLC Steering Committee; Co-Chairperson of the MLC Randi Weingarten; and all of the constituent members of the MLC: District Council 37 Executive Director and MLC Executive Vice-Chair Lillian Roberts, MLC Secretary Gregory Floyd, and MLC Treasurer Steven Cassidy. The Mayor also thanked Labor Commissioner James F. Hanley, First Deputy Commissioner Margaret Connor and their team, and Mark Page, Director of the Office of Management and Budget, and his staff for all of their efforts in reaching this agreement.


Stu Loeser / Jason Post   (212) 788-2958

More Resources