Tuesday, February 9, 2016

UFT Elections, the 2014 Contract and The NYC Teacher Healthcare Crisis

One thing is for sure. Among the 99%, no one in this nation has health insurance as good as we have. Given that costs have been rising for three decades now and given the implications the Cadillac Tax brings, that party is about to come to an end.  And the next party will be BYO penicillin.... DOENUTS Blog
The DOENUTS blog has a 3 part series on healthcare that is worth taking a look at.
One of the things we pointed out in the 2014 contract was that a health care crunch was set to come after Mulgrew gets re-elected in May. So I looked through these posts for signs of what is to come.

In part I DOENUTS says:
...someone has to pay for all that health insurance. And that someone is our employer, the City of New York.
Since 2010, since the Patient Protection and Affordable Care Act became the law of the land, the city has been required to note the amount they spend each year on all of our healthcare costs. (This includes GHI, as well hospitalization and, I'm sure, other coverage). For the past six years, this amount has been counted as deferred wages on our W2 form. This allows us, and Obama, to see how much the city has paid for our benefits.

Now this amount has outraged some people and media outlets capitalize on that outrage (see here for example or here ($) for another) but it is a fact that, if you select the top rate GHI-CBP as your health insurance, the city pays the cost of the premium and we pay nothing.

Nothing, that is, unless the cost of your plan goes up over $10,200 for individual coverage and $27,500 for family coverage. If that happens, if the amount increases over those prices (and if city actuaries count our aggregate insurance as one), then we pay a tax of 40% of that amount (here). This is the famous Cadillac Tax and it goes into effect for those plans in two years -2018.
Nothing, that is, unless the mayor exclusively decides that we must now coin up and contribute from our paychecks. The unions quietly gave him this power almost three years ago.
In part 2 he talks about how Obamacare screws us and the Cadillac tax. Check it out - Part 2: Toward the Tipping Point

He addresses the contract in Part 3; The Road Ahead

On May 6, 2013, Michael Mulgrew announced to his UFT Executive Board that the union and city reached an agreement on a new contract.  Teachers would receive wages and back pay (albeit through a gradual arrangement where teachers didn't actually receive it for six more years) and the city would not be hit with over $3 billion in up-front costs. Both entities would now be 100% committed to keeping city spending under control. The city leaders, who wanted to show responsible fiscal policy and the union leaders, who wanted to ensure that there was money in the budget for the lump sum payments their member would receive for years to come were now all in it together.

Among the terms of the deal, the city would be able to withdraw $1 billion dollars from the Health Insurance Premium Stabilization Fund, an account funded by 81 unions and the city to help defer healthcare costs during times of need. This withdrawal would be what covered the initial costs of the contract(s). According to Mulgrew that evening, every single union leader in the city was on board with the withdrawal expect for one -the union that represents Sanitation workers- but that would soon change.
I smell trouble coming.
The ultimate agreement did indeed withdrawal $1 billion from the Health Insurance Stabilization Fund. That money was, in fact, used to cover our cash wage increases the following September (here or the IBO (p. 13)):
"...a one-time $1.0 billion transfer from the Health Insurance Stabilization fund, which was a product of the agreement between the city and the municipal labor committee on ways to help fund the current round of collective bargaining agreements..."
Since the mid-80s, the fund has covered Welfare Fund premiums (for the UFT and other unions) and city budgetary shortfalls as well. In order to help cover the cost of not laying off employees in 2011 (FDY and UFT employees were both on the chopping block), the unions and the city agreed to dip into the fund to cover the city budget prevent the layoffs (here).

And now they've dipped into the fund to pay employee salaries.

This is supposed to be the fund that relieves us from paying (or paying greater) health insurance premiums. Instead, it is being used to cover our paychecks.

And now, as part of a larger effort to reduce the city's health insurance costs, the city will be paying even less into the fund than it already does (here)

The largest projected savings [in healthcare] this fiscal year—$153 million—would result from an agreement labor relations commissioner Bob Linn and the municipal unions recently struck to allow the city to pay less into a fund jointly controlled by both parties and known as the "Health Insurance Premium Stabilization Fund."
You can only draw one conclusion from this: They are tapping the fund. It is no longer a fund to ensure our health insurance costs are not passed on to workers. It has become a source of income which supports city level governmental policy. And while those policies are admirable (over the past five years, they have included balancing the city budget during the Great Recession, enabling union contracts to be settled and reducing the long term costs of healthcare) they are still policies wrought by politicians who are leading a government. They no longer see the fund as a way to avoid having workers pay into their healthcare plans. That's an important distinction to make.
He closes with:
One thing is for sure. Among the 99%, no one in this nation has health insurance as good as we have. Given that costs have been rising for three decades now and given the implications the Cadillac Tax brings, that party is about to come to an end.  And the next party will be BYO penicillin

If doom does come and people are taking a big cut in salaray that wipes out the retro pay, doesn't Mulgrew have to run again in 2019?
Mulgrew will just channel good ole Scarlett Ohara: I'll think about it tomorrow.

Especially if he can escape to the AFT and leave someone else holding the bag.

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