Public Employee Press

Members' health and wellness news
Labor Commissioner Robert Linn
City on target for $3.4 billion health savings

"Our goal is to ensure that the savings are achieved while we are able to preserve our health-care benefits," said DC 37 Executive Director Henry Garrido.


The city is confident that it will meet the $3.4 billion target of health-care savings required under a four-year health-care agreement reached with municipal unions last year.

According to the de Blasio administration, the city is well on its way to achieving the $400 million savings required for fiscal year 2015.

The health-care agreement opened the way for DC 37 to negotiate a new wage contract with the city. The projected health savings will help fund wage increases. And under the health-care deal, the city agreed not to require members to make contributions toward their premiums.

Robert Linn, commissioner for the Office of Labor Relations, and Claire Levitt, the deputy commissioner responsible for the savings plan, described the $3.4 billion goal as "attainable" in a memo to Mayor Bill de Blasio and 1st Deputy Mayor Tony Shorris.

"We have preliminary savings from the Office of Labor Relations and are reviewing the 'fine-tuning' of them, but we certainly think we are headed in the right direction," said Willie Chang, administrator of the DC 37 Health & Security Plan, who is also the chair of the health benefits subcommittee of the Municipal Labor Committee, which represents city unions on health-care matters.

The city has not yet publicly identified specific savings, but it has indicated areas where it expects to find major savings in the current fiscal year. Savings will come from:

• a reduction of the premium of the GHI senior plan from 8 percent to 2 percent;
• terminating the coverage of individuals incorrectly classified as dependents of city employees;
• a new care management program that aims to cut hospital re-admissions by improving initial medical treatment, and
• renegotiating the Express Scripts contract for specialty drugs, specifically those under the city's PICA program, which covers injectable and chemotherapy drugs.
  

In addition to the $400 million in fiscal year 2015, the heath-care agreement calls for $700 million in savings for fiscal year 2016, $1.0 billion in fiscal year 2017 and $1.3 billion in fiscal year 2018. The $1.3 billion savings in fiscal year 2018 are supposed to be recurring in subsequent years.

Under the agreement, the city has the right to seek arbitration if unable to find the savings through negotiations with municipal unions.

Other savings initiatives under consideration include smoking cessation, a weight-loss program and nutrition counseling. In its first wellness program under the agreement, the city provided free flu shots for 10,000 municipal employees in November and December.