Judge Won’t Stop NYC Employees PPO Plan From Moving Ahead

Hands Off NY Care truck urges opposition to the NYC Employees PPO Plan.

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By Steve Wishnia

State Supreme Court Judge Lyle E. Frank has denied opponents of the city’s new self-funded health-care plan for employees a preliminary injunction that would stop it from going into effect on Jan. 1.

In a ruling issued Dec. 4, he wrote that Hands Off NY Care and several individual workers and retirees had not showed they would suffer irreparable harm if the plan went into effect, while stopping it would require people already enrolled in it to “be de-enrolled and the administrative efforts already expended to set up the new plan be reversed.”

The proposed NYC Employees PPO Plan will replace the current health-benefits plan for the next five years. It was approved by the Municipal Labor Committee, the group of more than 50 city workers’ unions that votes on citywide contracts, on Sept. 30.

The plan will cover about 750,000 people—active workers, retirees not yet eligible for Medicare, and their dependents. Unlike previous city employees’ health-care plans, it will be self-funded, paid for directly by the city government, instead of through an insurance company, although it will be administered by EmblemHealth and a UnitedHealthcare subsidiary. Supporters of the plan say it will save the city $1 billion a year.

Hands Off NY Care, a group headed by former District Council 37 political director Wanda Williams and two other DC 37 members, said the plan “threatens our access to the dependable health care we currently rely on.” “Attributing $300 million in savings to ‘utilization management’ is code for increased denials of care by a plan notorious for these practices,” it wrote in a letter to the MLC in September.

It also objected that neither the city government nor the MLC union leaders had given out adequate information about the plan. Migdalia Acevedo, a chapter president in DC 37’s Local 375, told Work-Bites before the Sept. 30 vote that union delegates had been allowed to look at only a “highly redacted” version of the 300-page plan.

Hands Off NY Care filed the lawsuit on Oct. 29, along with eight individual city workers and retirees. They argued that they would lose the regulatory protections for health-insurance consumers if the plan went into effect. They also contended that they might lose coverage for some medical procedures or providers, and that if the city became insolvent, it would be unable to pay out medical claims.

The city Office of Labor Relations (OLR) responded that the plan does “not diminish benefits or provider access presently provided.”

Judge Frank ruled that questions about whether coverage would be diminished or remain intact were “factual issues that would preclude granting a mandatory preliminary injunction.” He said concerns about future reductions to coverage or whether the city could afford to pay for it were “speculative” and thus also not enough to warrant an injunction.

The plaintiffs also argued that Section 12-126 of the city Administrative Code, the section Judge Frank cited in rulings that derailed the city’s plan to switch retirees to Medicare Advantage, required the city to contract with an actual insurance company to provide coverage. In this case, Frank wrote that the law, which states that the city must “pay the entire cost of health insurance coverage for city employees, city retirees, and their dependents,” was “ambiguous,” as “it neither explicitly bans nor permits self-funded options.”

Anthem Blue Cross and Blue Shield, the company that provides the city’s current employee health coverage, filed a second lawsuit against the new plan in mid-November. It too argued that the self-funded plan, which uses insurance companies for “administrative services only,” was illegal under Section 12-126. It also claimed that the selection process was unfair because Emblem had been allowed to give more recent pricing data than Anthem.

The judge also denied a motion by the city, the OLR, and OLR Commissioner Renee Campion to dismiss the Hands Off NY suit. He scheduled a conference to discuss further arguments in the case for Dec. 19.