Public Employee Press

Welfare fund contributions increase

The city will soon boost its contribution to the union’s welfare fund benefits by about $9 million a year. The 2004 Health Benefit Agreement with the Municipal Labor Committee calls for the city to add $65 to its annual welfare fund contribution for each member and retiree. The $65 will raise the annual employer contribution to the fund as of July 1 from $1,475 per employee to $1,540.

As PEP went to press, the city planned to make a lump sum contribution to the DC 37 Health and Security Plan (retroactive to July 1) by the end of December. The union expects other employers, such as non-mayoral agencies, the Housing Authority, cultural institutions and libraries, to begin payments early this year.

City Labor Commissioner James F. Hanley notified DC 37 Executive Director Lillian Roberts about the payment schedule in a recent letter. Plan Administrator Rosaria R. Esperon said the new funding is equivalent to about a month’s annual cost of the prescription drug benefit.

The additional funds will reduce but not end the depletion of plan reserves, which now stand at $145 million.

As it grapples with huge increases in prescription drug prices, the plan has adopted a number of changes to cut costs: a new co-pay structure, which will save from $18 million to $23 million a year, and a new step therapy program, which will save about $3.5 million annually (see 'Q & A on Step Therapy'). The $65 payment to the DC 37 Health and Security Plan is part of a $100 increase in benefit contributions that the city and the Municipal Labor Committee negotiated in December 2003. The remaining $35 is an administrative fee.