The International Union of Operating Engineers Local Union 94, 94A, 94B was established to represent employees covered by collective bargaining agreements between the Union and various employers, employer associations and the City of New York with office buildings and schools requiring maintenance of heating and air conditioning systems in the New York metropolitan area.
The work of the Union, as the representative of its members, is to provide for the continuous employment of labor, to bring about stable conditions in the industry, and to establish necessary procedures for the amicable resolution of disputes which may arise between employers and employees.
Business Manager’s Report
Spring Arrives with Union Elections and a Healthcare Reality Check
Brother and Sisters,
It seems like it was only yesterday, but in fact three years have passed and it’s time once again to conduct our Local 94 elections. Nominations for officers will be accepted during each of the General Membership Meetings (8:30 AM, 2 and 5 PM) Wednesday, May 8 at the Hotel Trades Council Auditorium, 305 W. 44th Street.
A copy of the Notice of Elections appears on pages 14 and 15 of this newsletter. I urge everyone to attend. This is YOUR union make your voice heard.
As Bill Caramico and others here at Local 94 continually remind us, “unions all across our country continue to face new and increasing difficult challenges. Whether it be the Supreme Court’s Janus decision on paying dues, to reducing or eliminating pension and healthcare.”
The greatest challenge and highest obligation of a union is to deliver a labor agreement which ensures good wages, provides job protections, and health and pension plans to ensure a secure future for our members and our families.
It requires looking beyond the next pay raise for all of our members and our families.
During our recently completed commercial negotiations with the Realty Advisory Board (RAB) we faced those challenges head-on. The result was an agreement which was overwhelmingly ratified.
We are gratified by your support and confidence.
However, in order to reach that agreement we had to make some difficult but necessary decisions concerning our healthcare program. Changes bring questions, and you deserve answers.
As in all contract negotiations, healthcare is a contentious subject, this year it was the most contentious in memory. In every contract, the Union’s job of securing increases in the employer contribution rate while maintaining the current level of benefits has become increasingly difficult.
Four years ago the Funds’ actuarial consultants projected the Commercial Health Fund to have approximately thirteen and a half months of reserves as of December 31, 2018. Through cost saving initiatives, the hard work of the Fund Office administration, and decisions made by the Trustees, the Fund was able to exceed those expectations. As of December 31, 2018 the Fund had approximately sixteen months of reserves.
However even with those reserves, the reality is, rising medical prices combined with governmental regulations have, and will continue to put a strain on the Local 94 Health Funds. Mental Health Parity, coverage for adult children, etc., although good for participants, have created additional expenses in the near and long term.
Due to increases in medical costs, the Trustees, Fund Office administration, and consultants have been evaluating the Commercial Fund’s current copay structures, retiree premium levels, and prescription formulary changes as well as other items. This evaluation includes how these changes would strengthen the long term sustainability of the Health Fund.
Increases to retiree premiums are being considered because they have not changed since 2005. As you are well aware, medical inflation itself warrants changes to these premiums. To be frank, the Commercial Health Fund cannot continue to collect retiree premiums at levels which were first established in 2005. Another consideration is increasing the eligibility requirements for retiree benefits. Currently, participants can be eligible for retiree health benefits as early as age 55. This means the participant and his/her family could potentially be covered for ten years until Medicare becomes the primary insurer.
A pre-Medicare participant such as this costs the Fund approximately $3,600 a month versus a Medicare retiree who costs. the Fund $854 a month!
We are also focusing on prescription cost saving strategies. As you are aware, the Fund recently switched its Pharmacy Benefit Manager to generate millions of dollars in savings. Additionally as we have done in the past, we will continue to implement strategies that will increase the utilization of generic prescription versus brand prescriptions. In many cases, the cheaper generic prescription is a clinically appropriate alternative to the more expensive, recognizable brand prescription.
The Fund is also looking to offer incentives to drive where care is received by participants. In the Health Fund Administrator’s report in this newsletter (see page 16), KathyFisler details the price differences between primary care, urgent care, and the emergency room. Typically, your primary care (doctor’s office) is your best and least expensive option. Obviously, it’s important to go to the emergency room and urgent care facilities when you have that emergency, but unnecessary emergency room visits costs the Fund a lot of money.
In conclusion, I want to emphasize the need to continue to be forward looking for the long term sustainability of the Local 94 Health Funds. By making certain modifications, we can position our Funds to continue to provide expansive benefits that most others do not have. I appreciate your consideration and patience on past strategies and future strategies moving forward.
Kuba J. Brown
Business Manager/Financial Secretary-IUOE Local 94, 94A, 94B
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