The thorny issue of how New York City provides its nearly 250,000 retired civil servants with health care is shaping up to be a major impediment for contract negotiations getting underway with dozens of unions that represent the city’s roughly 300,000 employees.
“I think I was one of the first unions to reach out to City Hall to try and start negotiations for the next round of bargaining to get detectives their well-deserved increase in salary but the Medicare Advantage situation is holding everything up up because it could have a devastating effect on both our active and retired members,” Paul DiGiacomo, president of the Detectives’ Endowment Association, told City & State. “My strategic analysis is if I settle a contract now and get 3%, 4%, 5% over five years, whatever it may be, and then the health care costs come back and they say we have to contribute 3%, 4% or 5%, where’s the raise?”
The union’s contract expired in June, and the upcoming talks for city unions will play out under strained conditions. And with a booming private sector job market, New York City’s public agencies just don’t seem as attractive as they once did when jobs were harder to get. “On top of building and maintaining reserves, we have remained committed to reducing headcount and achieving savings,” Mayor Eric Adams said at the state Financial Control Board meeting this month. “Through our strict headcount and attrition management, we have reduced employee headcount to just under 304,000. This is 23,000 lower than the city’s peak in September 2019. As I have made clear, I will keep pushing city government to be more efficient and use taxpayers’ dollars wisely.” The mayor continued that in this budget cycle his administration “set aside additional resources to defray the cost of upcoming labor negotiations.”
“By adding nearly $4.7 billion to the labor reserve across the financial plan, we have now funded 1.25% annual wage increase for city employees,” he said. “Now, we are clear that this is the beginning, not an ending. However, while we are committed to paying fair wages, we will not make deals that the city cannot afford.”
DiGiacomo noted that the contract limbo was playing out at a time when more of his members were opting to retire, a trend that’s applicable across the NYPD. The pandemic and a perceived lack of support, DiGiacomo said, had affected morale. “There is no rank that stands out more than the rank of detective during the COVID virus when we lost eight NYPD detectives,” DiGiacomo said.
“Prior to the 2001 9/11 attack, we had 7,400 detectives. Right now, we are at 5,300, and we are doing a lot more investigations in addition to counterterrorism. The rank of detective is spread very thin with the number of violent crimes and shootings that need to be investigated,” he said. “There are some days when there are more defendants in the precinct cell than there are detectives working.”
UP IN THE AIR
Last year’s retiree revolt against then-New York City Mayor Bill de Blasio’s administration and the Municipal Labor Committee’s proposal to shift retirees to a privatized Medicare Advantage program resulted in an ongoing court case and a decision by the two health insurance companies to withdraw. One key issue was a requirement that city retirees who opted out of the new offering would have to pay a $191 monthly premium for their old plan.
While City Hall and the unions said the Retiree Health Alliance, which was going to be run by Anthem and Empire Blue Cross Blue Shield, would produce $600 million in savings with no degradation in coverage, the New York City Organization of Public Service Retirees said the change threatened retirees’ continuity of care, would cost more and would cover less.
Last month, when Anthem and Empire walked away, Adams spokesperson Jonah Allon said the city and the Municipal Labor Committee “continue to believe that a customized Medicare Advantage Plan (was the) best opportunity” for retirees and the city’s taxpayers, but there was been no resolution of the controversy that has pitted some retirees against union leadership.
Further clouding the city’s public sector labor contract picture was a request for information put out by the city and the Municipal Labor Committee in June looking for a new benefits administrator for its active duty workforce and dependents.
“Our joint goal of the redesign is to reduce the cost of delivering health care by at least 10% while continuing to provide efficient, high-quality health care to all city employees and pre-Medicare retirees without significant increases in member out-of-pocket cost,” according to the request. “This RFI requests information from interested, qualified entities to determine whether creative ideas and better delivery strategy can be achieved.”
Traditionally, New York City civil servants have successfully resisted having health care premiums imposed on them, even as other public employees, including state workers, have had to pony up. City union leaders insisted that they were not getting a free ride because they had made wage concessions for a generation to hold on to those benefits.
“We would probably be making 33% more in wages if we didn’t have to make the concessions to hold on to the health care for all these years,” said Joe Puleo, president of Local 983, which represents thousands of blue-collar workers. “A lot of our members don’t realize how it works, how these benefits are funded. They think the city just voluntarily picks up the tab.”
Citizens Budget Commission, a nonprofit fiscal watchdog, has advocated that city workers should pay some portion of their health insurance premium, a non-starter for city unions.
“This (is) always quite a challenge because the city has a long-term structural problem in its budget and any money that we spend in raises for workers that’s certainly deserved by many is not in the current budget that has out-year gaps,” said Andrew Rein, the group’s president. “We really need to change the nature of the labor-management compact because city employment has been structured to guarantee job security, not necessarily to be flexible, innovative and nimble.”
Dalvanie Powell, president of the United Probation Officers Association, told City & State that the inability to start contract talks due to the unresolved Medicare Advantage controversy was problematic.
“Our contract expired back in November of 2020, during the height of the pandemic,” Powell said. “I have been losing members since 2019 when we had 849, down to now just 671 in just the last three years. They are frustrated. The young people are leaving after just three, four and five years for other agencies because our salaries that start at just $45,934 are extremely low.”
Powell noted that her members are required to have a four-year college degree, are armed and receive firearms and self-defense training as peace officers, yet are considered civilians. The union, which is mostly comprised of women of color, has a pending Equal Employment Opportunity Commission case alleging that the existing pay disparity with the NYPD amounts to race- and gender-based discrimination. The city’s FDNY emergency medical services unions have a similar case pending.
In an interview with City & State, Harry Nespoli, chair of the Municipal Labor Committee, the umbrella coalition of all of the city’s public unions, said it was his understanding that the city Office of Labor Relations was holding off on contract negotiations pending a resolution of the Medicare Advantage controversy.
“This mayor did kind of inherit a broken city right now and he has been trying to put it back together, and all the unions are anxious to get back in there to negotiate,” Nespoli said. “These city workers have been through hell for these 2 1/2 years during COVID and there are still unions out there that did not get their contract settled in the last round yet because of the pandemic. I don’t see why (Adams) doesn’t move forward with those unions that didn’t settle in the last round.”
Nespoli, who is also president of the Uniformed Sanitationmen’s Association, believes that City Hall and the unions can work on a two-track strategy. “You know how long a contract takes? So, start talking to the unions now so that once this Medicare Advantage is resolved, one way or the other, we can get these workers their money,” he said. “I mean people like my members were all ordered in when the whole city was shut down. You have to compensate them. You see what inflation is doing now in the grocery store.”
Michael Mulgrew, president of the United Federation of Teachers, spoke in a wide-ranging interview about the UFT contract expiring in the middle of September and he expressed confidence that the health care coverage issue would be resolved because of the city’s strong financial situation.
“The workers of New York City are essential to it bouncing back from COVID,” he said. “They performed admirably throughout the pandemic and now the city does have record reserves. We are going to wait to see where things go. We see that tourism is back and is alive and well. But if New York City is going to bounce back big time and thrive, then we need to make sure we’re giving the workers the raises that they need to live here.”
The UFT, which is unusual in that it permits retirees to vote and participate in the union, has started its internal committee process that relies on hundreds of members to weigh in on future contract priorities.
“Universal child care is a big issue,” Mulgrew said. “My union is 80% female – and it shouldn’t be this way – but the women are always the ones taking care of the family.”
Organization of Staff Analysts Chair Bob Croghan, whose organization represents several thousand staff analysts in city agencies as well as in NYC Health + Hospitals, said wages were not the only thing on his members’ minds.
“It appears to be an odd period because people have been battered by the tremendous changes brought on by COVID and the pandemic that’s been going on forever, so that everything is really discombobulated, making it really hard to know what comes next, not just here in the city, but nationally,” Croghan said. “For that reason, I don’t think I am getting battered yet by my members about the high inflation and that there’s at least a possibility we don’t see such a high raise. I think I am waiting for the other shoe to drop.”
City Hall was asked about the concerns raised by several union leaders that contract negotiations were contingent on the resolution of the Medicare Advantage issue. “The city looks forward to bargaining with any unions who are willing to come to the bargaining table for contracts that are in the best interest of city workers and taxpayers,” Allon said.
Henry Garrido, the executive director of District Council 37, representing over 100,000 city workers, said in a statement, “City workers have sacrificed so much since the pandemic began, and they continue to put their lives on the line every day for New Yorkers while dealing with the pressure of economic uncertainty at home. As the cost of living continues to rise, our workers deserve a fair and reasonable wage. We look forward to negotiating with the Adams administration to achieve the best possible contract for our members.”
Bob Hennelly is a reporter with The Chief.