New York City Mayor Michael Bloomberg's plans to re-bid the city workers' health insurance contract has come to a halt for now, after a state court agreed with municipal union concerns and put the request for proposals on temporary hold.
Bloomberg announced his office was looking for a new health plan contract in August, with plans to seek RFPs for a new contract from the city's current insurer, EmblemHealth, and from potential competitors.
Days later the NYC Municipal Labor Committee, a coalition union representing public employees, sued in New York Supreme Court, arguing that the RFP was crafted without union input, in violation of their collective bargaining contract and a 1992 agreement with the city stipulating joint participation in benefit procurement.
Earlier this year, "the city and outside consultants secretly crafted an RFP without our knowledge," Municipal Labor Committee Chair Harry Nespoli said in a media release. "Then in June, with little warning, they dropped a 1,000-page highly-technical RFP on us and demanded we sign off without giving us sufficient time to review," said Nespoli, a former sanitation worker.
The Bloomberg Administration views rising public employee health costs as a threat to the city's otherwise sound finances, and eventually pushed back the release date of the RFP to August to give the union more time to weigh in.
But Nespoli and other labor committee leaders objected to several new benefits proposals in the draft RFP, including a requirement that the health plans be self-funded, the introduction of three tiers of premium and co-pays based on employee participation in wellness programs, and the removal of the Labor Committee from the proposal evaluation committee, according to the lawsuit.
New York Supreme Court Justice Melvin Schweitzer did not agree that union members would suffer "irreparable harm" from the current RFP going forward, but did agree with most of the committee's arguments and barred the RFP from being issued until the union and city can mediate the dispute. .
The city "has sought to be as bold and creative as possible in unilaterally crafting an RFP that seeks to push the envelope and obtain the broadest array of healthcare responses in a challenging time of change," wrote Schweitzer. "But the best of intentions and creative thinking when assembled in a vacuum without the fullest participation of its negotiating partner -- the MLC -- is not only ill-advised, but it is a breach of its contract with the MLC."
The Bloomberg Administration has said it will appeal the ruling. The RFP was initially set to be issued this past summer, and Bloomberg is leaving office after three terms in December, possibly leaving the issue to the next mayor.
It would be the first time in 15 years that New York City's public employee health plan was rebid, and the first time since current contractor EmblemHealth was formed in 2006 through the merger of Group Health Incorporated and HIP Health Plan of New York.
Emblem recently said that a number of accountable care and quality incentive programs are bringing some of the savings Bloomberg is seeking, citing those savings as one reason for withdrawing a proposed 10 percent premium hike for the roughly 1 million city employees and retirees.