Latest News - May 2011

May 13, 2011
Health care union to hike health plan costs
Source: Crain’s New York business.com
By: Barbara Benson

At a time when New York state is trying to expand health care coverage for low-income workers, an initiative that made insurance affordable for unionized home care attendants is struggling to achieve that goal.

Escalating health care expenses have forced the union to ask its 35,000 home care attendants enrolled in the plan to start paying for health coverage. The new fees could force many of the low-income workers into the ranks of the uninsured.

Three years ago, the state created a vehicle that let home care attendants in 1199 SEIU United Healthcare Workers East enroll in Family Health Plus, a public insurance program. The initiative, the FHP Employer Buy-in program, launched in April 2008 to cover home health attendants who cared for New York's elderly and disabled but often had no insurance themselves.

But over its three-year history, escalating health care expenses have forced the union benefit fund covering the home care attendants to make a series of changes to the plan design, including dropping both spousal and dependent coverage.

The ongoing financial pressure has forced the benefit fund to now require a weekly $30 payroll deduction starting in June for those hired on or before March 1, 2004.

A $1,560 increase in health care costs is a sizable burden for the 35,000 workers left in the health plan. But the union has seen health care costs, and therefore premiums, rise 60% over the past three years, with no additional funding to offset them. Medicaid cuts to the home health agencies that employ the attendants mean that those agencies have less money to pass on to the benefit fund.

The 1199 SEIU workers are enrolled in Fidelis Care New York. The health plan and the benefit fund have grappled with the problem of balancing affordability with the high cost of providing health coverage to the home care workers.

In 2008, the union increased the hours required to work for spousal eligibility. In November 2009, the plan dropped spousal coverage altogether, forcing 6,043 spouses, among 40,000 enrollees, off the plan. And last fall, the fund dropped coverage for dependents.

Health costs have escalated in part because so many of the workers are in poorer health themselves. The Fidelis Employer Buy-in premium is significantly higher than that for a typical FHP member because the state Department of Health sets a risk-adjusted premium rate. The union members' greater level of medical service utilization results in higher premiums.

The union declined to comment, so it isn't clear how many workers filled out payroll-deduction authorizations last week for the $30 payment—and how many will drop coverage because they won't pay the $30.

The state Department of Health is “always concerned where there is a possibility that individuals will no longer be able to afford coverage and we will continue to work with 1199 to explore options,” said a DOH spokesman.

The FHP Employer Buy-in program was launched in 2008 under New York’s Partnership for Coverage initiative, the state’s road map for providing health coverage to 2.6 million uninsured residents. It debuted with the enrollment of 60,000 low-wage workers as the result of a partnership of the state and city, the 1199 SEIU benefits fund and Fidelis Care.

At the time, it was considered a model for other unions or employers. The state Department of Health opened the FHP Employer Buy-in program to all employers and unions in late 2009.