Carrying out a tough decision to protect the livelihoods of union members during the most severe fiscal crisis since the Great Depression, the Municipal Labor Committee (MLC) agreed to health-benefit changes to the health plan for city employees that would save the city $1 billion over six years. In exchange, the city agreed to defer 1,000 layoffs of permanent civil servants until at least October 1.

The 2009 Health Benefits Agreement was announced by Mayor Michael R. Bloomberg with MLC Chair Harry Nespoli at a June 2 press conference at District Council 37’s headquarters.

The agreement modifies the health benefits of more than 550,000 covered employees and retirees through co-pays, including $50 for an emergency room visit; $50 for an ambulatory surgery treatment; $100 for in-patient hospital admission under the HIP-HMO program; and better administration of the health program. The deal also eliminates coverage of preventive dental care but only at certain offices.

 “My responsibility to represent Local 237 members includes making tough choices in the face of challenges to our contracts and, above all, our job security,” said President Gregory Floyd, who serves as secretary of the MLC, which represents about 100 civil service unions in health care policy negotiations. “I am proud to represent the good faith of so many union members, who by sharing some small sacrifices will help other city employees keep their jobs and help our great city stay that way.”

MLC’s Nespoli, who is also president of the Uniformed Sanitationmen’s Association, said, “The unions of this city, when all is said and done, have been and always will be there when the city is in trouble.” He added, “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.”

Cost of Deferring Layoffs

The cost of deferring layoffs for a period of 90 days will be borne by the Union Stabilization Fund, funded by municipal unions out of their collective bargaining settlements in the mid-1980s. In addition, under the agreement, effective Oct. 1, there will be a one-time payment to the union-administered welfare funds of $200 per active employee and retiree to offset rising health-care costs. The funding will be provided through the Health Insurance Stabilization Fund, funded by the municipal unions out of their collective bargaining settlements in the mid- 1980s.

Calling for further sacrifices, Bloomberg said he hopes for action on a Tier 5 pension bill covering new employees that was proposed by Gov. David Paterson. The new pension tier would pay less and require more years of service. “We are not interested in sitting down to negotiate a Tier 5,” Nespoli was quoted as saying in the Chief.

The issue of pensions intensified when Gov. Paterson vetoed a bill to extend current pension benefits for new city police and firefighters. The bill has been extended since 1981.

Paterson later announced a deal with the Civil Service Employee Association (CSEA) and the Public Employees Federation (PEF), two large state unions that agreed to support the Tier 5 plan to avoid layoffs.

The MLC health plan agreement with the city still needs to be signed by city and labor officials before it can become effective for fiscal years 2010, which began July 1, and 2011. The deal protects basic health services and results in no premium payments. The changes essentially equalize the benefits co-payments of various health plans.

If the agreement is not signed, more than 900 city workers are scheduled to be laid off from the Administration for Children’s Services; 116 workers from the Department of Education; 55 from the Department of Health and Mental Hygiene, and about 100 from other agencies, labor officials told the New York Times.