Court Stalls NYC Plan to Get Health Insurance Bids

NEW YORK (AP) -

A judge told the city Friday to hold off seeking bids for health insurance for its huge workforce, days after Mayor Michael Bloomberg spotlighted the plan in a speech about safeguarding the city’s fiscal health.

After unions sued Friday to halt a plan they say needs their consent, a judge ordered the city not to put out the request at least until a hearing Aug. 20.

Deputy Mayor Caswell Holloway said the city was confident it ultimately would be allowed to proceed. Still, the court action — for now — stalls a request Bloomberg said Tuesday he planned to issue within days.

“We support the city’s efforts to reduce healthcare costs, but there is a right and wrong way to go about it,” Municipal Labor Committee Chairman Harry Nespoli said in a statement. The group encompasses about 100 municipal-worker unions.

The developments come amid tension between the mayor and unions over contracts that have lapsed, leaving teachers and many other employees without cost-of-living raises, some for years.

City Hall has said it’s open to new contracts if workers don’t get retroactive raises and pay more for health insurance. Labor leaders want the city to use recent budget surpluses to give them raises.

Against that backdrop, the mayor made the bid announcement Tuesday during an address that invoked Detroit’s recent bankruptcy and Chicago’s layoffs of more than 2,000 school staffers as examples of the toll of rising government health care and pension costs.

New York’s health insurance bill has doubled since 2002, to $6.3 billion this year. The request for proposals will look to save up to $400 million a year, he said.

The Municipal Labor Committee’s suit argues the city can’t legally solicit bids without its consent. The group says it has raised concerns about how the plan would affect prescription drug coverage and the overall quality of workers’ care.

Holloway called the unions’ decision to sue counterproductive.

The proposal process “will not only improve the quality of health care and save money — it could generate the savings needed for new contracts that the municipal unions say they want,” he said in a statement.