The City, through the Office of Labor Relations (“OLR”), the Municipal Labor Committee (“MLC”), and Aetna have been in negotiations to finalize a Medicare Advantage (“MA”) plan that provides for sufficient and sustainable health insurance for all Medicare-eligible retirees and their respective dependents, while at the same time creating fiscal savings in order to revitalize the MLC Health Stabilization Fund.
Here’s the backstory: In February 2022, Justice Lyle Frank of the Supreme Court, New York County issued a decision nullifying a previously-negotiated arrangement between OLR, MLC, and Anthem Blue Cross Blue Shield (“The Alliance”) that would have generated $600 million in annual savings to be deposited into the depleted MLC Health Stabilization Fund through: i) the voluntary transferring of Medicare-eligible retirees into the MA plan, and ii) the assessment of recurring monthly fees of $191 for all Medicare-eligible retirees who decided to remain in the existing City-provided health insurance plan known as Senior Care. Justice Frank determined, amongst other things, that § 12-126 of the NYC Administrative Code proscribed the City, irrespective of negotiations with the MLC, from assessing any fees against Medicare-eligible retirees to cover health insurance costs under a certain dollar amount (HIP-HMO rate).
The City then appealed this decision by Justice Frank to the Appellate Division, First Department. However, in November 2022, this appeals court affirmed the decision by Justice Frank and unequivocally stated that §12-126 of the NYC Administrative Code expressly provides that the City shall bear the sole fiscal responsibility for health insurance up to the HIP-HMO rate for active and retired employees, as well as their respective dependents. As such, OLR requested the presiding arbitrator, who was empowered by the City and MLC to address disputes involving health insurance matters for public sector employees, to resolve the issue of the economic shortfall in the MLC Health Stabilization Fund. This arbitrator, in December 2022, determined that he was constrained by the aforementioned judicial rulings, that the City is under no obligation to continue Senior Care going forward, and that these parties should engage a different health care provider, given that Anthem Blue Cross Blue Shield was no longer bound by or interested in pursuing a MA plan with the City.
Since that time, the City and MLC have been in negotiations with Aetna to come up with a MA plan that satisfies the restrictions in the NYC Administrative Code, while also generating the savings necessary to revitalize the MLC Health Stabilization Fund. Furthermore, the MLC has been advocating for legislation currently pending before the City Council that would create the statutory authority for the City and MLC to assess certain fees against groups of individuals covered by §12-126 of the NYC Administrative Code. In fact, hearings were held before the City Council on this proposed legislation on January 9, 2023 and the status thereof is still up in the air.
