Public Employee Press

Union uncovers $100 million health-care rip-off by Bloomberg administration

By GREGORY N. HEIRES

Based on financial analysis by a DC 37 benefits expert, an arbitration panel ruled Sept. 29 that the Bloomberg administration had shortchanged the health benefits of employees and retirees by about $100 million over the last three years. The city must now pay up.

"One of the important roles of the union is to make sure our benefits are properly funded," DC 37 Executive Director Lillian Roberts said. "So, we are obviously very pleased with this ruling."

The case decided by the arbitration panel was filed by the Municipal Labor Committee, which represents unions of 350,000 municipal employees and retirees on health-care issues. The umbrella group took the action after Willie Chang, senior director of health planning for the DC 37 Health & Security Plan, discovered the funding shortfall as he reviewed the city's annual payments to the labor-management health insurance Stabilization Fund. As the chair of the MLC Technical Subcommittee on health issues, Chang is responsible for verifying the city's calculations.

"When we looked closely at the numbers, it was obvious that the city was short-changing the fund. In the long run, the city aimed to escape its obligation to the fund under a formula that has been used for decades," Chang said. "Bilking the fund was part of the Bloomberg administration's attempt to squeeze major health-care concessions out of city workers."

The Stabilization Fund was established to equalize the funding of GHI and the city's other major plan, HIP. The city is obligated to pay into the fund when the HIP rate exceeds GHI's.

The Bloomberg administration's failure to make the estimated $30 million to $35 million annual payments undermined the funding practice and ultimately could have forced unions to agree to co-pays for HIP, higher co-pays for GHI and/or health insurance premium contributions, said Chang.

Last year, faced with a similar threat to the benefits, the MLC successfully fought off the former mayor's unilateral attempt to put the health-care program out to bid, a move that could have led to a radical restructuring of the entire program. The MLC blocked the action in court, and Mayor Bill de Blasio decided not to pursue Bloomberg's appeal.

"The arbitration ruling is a relief," said DC 37 General Counsel Robin Roach, who with Associate General Counsel Steven Sykes assisted the MLC's law firm, Greenberg Burzichelli Greenberg P.C., the lead counsel on the case.

"We are lucky to have Willie Chang as our health-care watchdog," Roach said, noting that his technical analysis was critical to the MLC's legal argument. "We will always be vigilant about making sure our health-care benefits are properly funded and stopping the city from escaping its obligations."