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Phila. to switch health plans for managers

In a move clearly directed at Philadelphia's four major municipal unions, Managing Director Camille Barnett announced yesterday the adoption of a health-care plan covering 6,900 workers next year that she said would save the city more than $6 million with no increase in contributions or "significant" reductions in benefits.

Of those employees, 5,000 are department heads, their deputies, and other nonunionized employees from other departments such as row offices, City Council, and courts. The other 1,900 are union employees who have chosen the health care offered by the city.

Critics disagreed with Barnett's characterization by pointing out that the plan, which goes into effect Jan. 1, calls for an increase in co-pays.

The changes to coverage offered by Independence Blue Cross include hikes in out-of-pocket maximums; increases in hospitalization charges; and higher co-pays for specialists and outpatient surgeries.

Independence Blue Cross retained its contract with the city over a competing proposal from Aetna at a saving of $4.2 million for taxpayers, said the city's benefits manager, James R. Startare. Similar bids for prescription, dental, and vision resulted in an additional saving of $2.1 million, officials said.

About 70 percent of the savings involved moving to a self-insured plan. Under it, the city avoids paying a higher premium that insurance companies charge in case of a spike in claims. The city will assume the risk of increased claims and save money by taking out an insurance policy against cost overruns.

"The premium we have been paying in the past has been well in excess of the actual cost," Startare said.

In the past, the exempt and nonrepresented employee plans generally fell in line with what had been negotiated with the unions.

Bob Bedard, spokesman for both Local 22 of the International Association of Firefighters and District Council 47 of the American Federation of State, County and Municipal Employees, the city's white-collar union, said there was little about the changes that was unusual.

"Many of today's city proposals were adopted by the union health and welfare funds years ago," Bedard said. "The union funds routinely send out requests for better bids."

He added that the unions were "intent on maintaining benefits at the current level."

"If the city has a way to do that while guaranteeing their pledge of no additional cost to employees or lessening coverage to family members," Bedard said, "the unions would be happy to sit, meet and discuss."

In effect, the Nutter administration is laying out what it might hope to accomplish with the unions. If the administration were to achieve similar results with the police, fire, and two nonuniformed unions - which combined cover 23,000 employees - the city would save the $25 million annually that Mayor Nutter needs to make his five-year budget plan work.

"We're leading by example," Barnett said. "This is the kind of health-plan changes we think makes sense.

"I think it's going to be well received by both our employees and taxpayers."

One of those employees, Supervisor of Elections Bill Rubin, did not receive it well.

"At a time when [Nutter] should be negotiating contracts with unions, he's taking the path of least resistance," putting the burden on the nonunionized workforce, said Rubin, who was covered by AFSCME District Council 33's health plan before he became a supervisor on Sept. 1.

Rubin questioned whether the health-care changes would take away the incentive for employees to become leaders in their departments and lose their union coverage.

City Controller Alan Butkovitz, who has 32 employees in his office who would be covered under the new plan, criticized the administration for making the changes without consulting with employees, some of whom have told him they would accept increased contributions to maintain benefits at current levels.

Some of the most significant changes apply to those enrolled in Personal Choice PPO. That plan covers 100 percent of hospitalization for members. With the change, it will be 90 percent, and employees will be liable for up to $4,000 in out-of-pocket expenses. Under Keystone HMO plans, employees will have to spend $150 a day on hospitalization for up to five days. That is completely covered now.

Regular co-pays remain constant in all three Blue Cross plans, though specialist co-pays rise from $30 to $40 in the Keystone HMO and Keystone POS plan.

"One thing they've got to do is say what they mean," said Butkovitz, who is covered under a state plan awarded to legislators and former legislators. "You can't say you've achieved significant savings without acknowledging that there are significant sacrifices."

Butkovitz said that nonunionized employees had made the greatest sacrifices over the last year, taking furloughs and pay cuts and forfeiting bonuses, and that their sacrifices should be shared.

"Everybody knows there needs to be sacrifices," Butkovitz said. "They also need to know they are fairly and equally borne."

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