Hospitals in New York City and the largest health care union have agreed on a new contract that bails out the union’s ailing health care benefits fund, officials said yesterday.þþThe current contract is not set to expire for 15 months, but the union, 1199 S.E.I.U. United Healthcare Workers East, and the hospitals agreed to open negotiations in part because the benefits fund faces a deficit of more than $700 million over the next five years, a result of rising medical costs.þþThe union and the League of Voluntary Hospitals, the labor relations group for most hospitals in the city, made a similar decision three years ago, when they reached a new pact with more than a year left on the previous one. In that case, 1199 agreed to a smaller pay increase to preserve health benefits.þþUnion members will vote on whether to ratify the proposed contract, which includes annual wage increases of 3 percent and runs through Sept. 30, 2011. The contract applies to 65,000 mostly low-wage workers at 61 hospitals and 20 nursing homes, said Bruce McIver, president of the hospital league.þþThe union agreed to postpone the 3 percent pay increase scheduled for July 1 until Dec. 1, with members getting the 3 percent increase each Dec. 1 through 2010.þþPostponement of the raises will save the hospitals enough money to enable them to increase their contributions to the benefit fund by $466 million over the life of the contract without raising their overall costs, Mr. McIver said. þþThe two sides also agreed to shift $300 million from the union’s pension fund, which has a surplus, to the benefits fund.þþWorkers and employers around the country have been squeezed by increased health care costs, but the outcome for 1199 is unusual — it will remain one of the few labor groups whose members pay no out-of-pocket medical costs.þþ“We’re very proud of a benefits plan where the members pay no co-payments, no deductibles and no premiums,” said Dennis Rivera, the union’s president.þþThe proposed contract also formalizes a commitment the hospitals have already made to the union, that it will find jobs for all 1199 members who are laid off as a result of an expected wave of hospital closings, mergers and downsizings ordered by the state. The layoffs are expected to be a few thousand.þþThe league includes all but a handful of private hospitals in the city and a few in Westchester County, but it does not include city and state hospitals. Its contracts often set the pattern for other hospitals in the region.þþThe 1199 benefits fund covers more than 100,000 current workers — including many whose employers are not part of the league — and more than 40,000 retired workers and their families.þþ
Source: NY Times
