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Labor Committee Sues NYC Over Health Insurance Proposals

Aug. 10 (Bloomberg) -- New York City was sued by a group representing city workers in an effort to block it from pursuing a request for proposals to change their health benefits.

Deputy Mayor Caswell Holloway said in April that the city will seek a new provider for its $6 billion health-insurance plan that would require workers to pay premiums for the first time, while providing discounts for participating in wellness programs.

The Municipal Labor Committee, which negotiates health benefits with city officials on behalf of public employees, seeks a court order to stop the city from issuing a request for proposals, or RFP, on the plan without its consent, according to a complaint filed yesterday New York State Supreme Court in Manhattan.

“The city’s rush to release the RFP has been a deeply flawed process,” Municipal Labor Committee Chairman Harry Nespoli said in a statement. “First, the city’s unilateral action, without including the views of the city workers who receive those services in the decision-making process, goes directly against previous agreements. Second, making a $7 billion spending decision for services beginning six months after the mayor’s last day in office prevents any accountability for this important decision.”

$400 Million

The proposal, which requires approval by unions, would save about $400 million a year, Holloway said. Contracts have expired with all 300,000 city employees, and Mayor Michael Bloomberg has said any deal must require workers to start paying for health coverage, a cost Holloway said may rise 32 percent to $8.3 billion by 2018.

The “action by the Municipal Labor Committee suggests that it had no intention of participating in this process productively, despite transparency in the development of the RFP and a role in evaluating the results,” Holloway said yesterday in an e-mailed statement. “The losers here will be city workers and retirees, their families, and New York City taxpayers who foot the bill.”

The mayor is the founder and majority owner of Bloomberg LP, the parent of Bloomberg News. The mayor is in the final year of his last term, which ends Dec. 31.

The case is Municipal Labor Committee v. City of New York, 652814/2013, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court at 8969 or cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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