The Municipal Labor Committee is a coalition of New York City public sector unions that negotiates with the City on health insurance benefits, welfare fund administration, and labor-management productivity initiatives. This page covers CBC’s work on health insurance premium-sharing, the consolidation of union welfare funds, retiree health benefit reforms, uniformed overtime spending, and the fiscal impact of labor-management savings agreements.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
The City should bring health and welfare benefit costs to sustainable levels, which requires negotiating changes with municipal labor unions.
City managers and labor should identify and work to change work rules that constrain operations to improve efficiency.
The City should consolidate the more than 100 separate welfare funds managed by various unions to provide comparable or better benefits at lower costs.
The City should structure gainsharing agreements to provide significant enough recurring fiscal benefits to the City, rather than just funding raises.
The City should ensure that savings from the agreement with the Municipal Labor Committee are used to reduce future budget gaps rather than being deposited into the Health Insurance Premium Stabilization Fund.
Key Data
In January 2023, the City and the Municipal Labor Committee (MLC) agreed to a plan to reduce annual costs by around $600 million by enrolling retirees in a new Medicare Advantage Plus plan, though these savings were directed to the Health Insurance Stabilization Fund rather than the City budget.
In September 2020, the CBC highlighted that while salaries and wages are negotiated by individual units, health insurance benefits—which cost the City $7.3 billion of the projected $50.2 billion in fiscal year 2021 personnel costs—are negotiated with the Municipal Labor Committee (MLC).
In November 2018, the City and the MLC committed to a health savings agreement spanning fiscal years 2019 to 2021 with a target of $1.1 billion in savings, including $200 million in fiscal year 2019, $300 million in fiscal year 2020, and $600 million in fiscal year 2021.
In April 2015, the City and the MLC had an agreement to save $3.4 billion between fiscal years 2015 and 2018, with annual targets of $400 million in fiscal year 2015, $700 million in fiscal year 2016, $1 billion in fiscal year 2017, and $1.3 billion in fiscal year 2018.
In June 2014, the City and the MLC agreed to offset municipal labor costs by drawing $1 billion from the off-budget Health Insurance Stabilization Fund.
An agreement between New York City and the Municipal Labor Committee to transition retirees to a federally funded Medicare Advantage plan is expected to reduce annual costs by approximately $600 million, though these savings will be directed to the Health Insurance Stabilization Fund rather than providing direct budget relief. To allow this agreement to proceed and help address health insurance costs projected to rise by 8.5% annually through fiscal year 2026, the City Council should pass Introduction 874 and eventually repeal the restrictive administrative code.
Recommendations related to Municipal Labor Committee (MLC)
The agreement between the City and the Municipal Labor Committee (MLC) is beneficial in restraining cost growth and reducing the City’s other postemployment benefit (OPEB) liability, therefore it should be implemented.
Introduction 874 is a workable solution that allows the City-MLC agreement to move forward.
The City and MLC also should undertake a comprehensive review of health and welfare benefits for employees and retirees and agree on a set of policy changes that preserves employee health and welfare while reducing the City’s costs to more manageable levels.
Key Data
$600 Million
— Estimated annual reduction in the City's costs from the Medicare Advantage plan, which would be directed to the Health Insurance Stabilization Fund under the City-MLC agreement.
$200
— Approximate monthly premium retirees would pay to remain in their current Medigap program under the City-MLC agreement.
8.5%
— Budgeted annual rate of increase for New York City's health insurance costs between fiscal years 2023 and 2026.
The City should negotiate with municipal labor unions to bring health and welfare benefit costs to sustainable levels, as current costs total nearly $7.2 billion annually. Additionally, the recent agreement with the Municipal Labor Committee to shift retirees to a Medicare Advantage Plus plan should be structured to ensure actual savings reduce future budget gaps rather than being deposited into a stabilization fund.
Recommendations related to Municipal Labor Committee (MLC)
The City should bring health and welfare benefit costs to sustainable levels, which requires negotiating changes with municipal labor unions.
City managers and labor should identify and work to change work rules that constrain operations to improve efficiency.
The City should consolidate the more than 100 separate welfare funds managed by various unions to provide comparable or better benefits at lower costs.
The City should structure gainsharing agreements to provide significant enough recurring fiscal benefits to the City, rather than just funding raises.
The City should ensure that savings from the agreement with the Municipal Labor Committee are used to reduce future budget gaps rather than being deposited into the Health Insurance Premium Stabilization Fund.
Key Data
$7.2 billion
— Annual cost of City health and welfare benefits.
4.2%
— Average annual growth rate of City health and welfare benefit costs since fiscal year 2014.
$122 billion
— City long-term fiscal liability for other postemployment benefits (OPEB).
$1.3 billion
— Amount of unspecified recurring labor and attrition savings included in the budget.
New York City faces a $1 billion labor savings target to avoid layoffs, which can be achieved by reforming health insurance benefits and work rules negotiated with the Municipal Labor Committee. By modernizing these benefits and improving productivity, the city can secure necessary savings while maintaining fair compensation for its workforce.
Recommendations related to Municipal Labor Committee (MLC)
The City should work with the MLC to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the VSFs and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could make four firefighters the standard staffing for engine companies.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
The City should reinvigorate the partnership with the MLC with the goal of implementing a new premium-sharing arrangement.
Key Data
$1.3 billion
— Projected City payments to welfare funds in fiscal year 2020.
$1.2 billion
— Estimated annual value of the taxpayer-provided guarantee for the tax-deferred annuity.
$4.9 billion
— Estimated assets of the Variable Supplement Fund for the police.
$164 million
— Estimated savings from consolidating welfare funds without a benefit cut.
$400 million
— Annual savings from eliminating Medicare Part B premium reimbursement and the income-related monthly adjustment amount.
$1.1 billion
— Uniformed overtime spending in fiscal year 2019.
New York City faces a $1 billion labor savings target to avoid layoffs, which can be achieved by reforming health insurance, consolidating welfare funds, and adjusting work rules. These measures, including premium-sharing and overtime caps, would align city benefits with other employers and improve fiscal stability.
Recommendations related to Municipal Labor Committee (MLC)
Health insurance should be a key focal point in negotiations between the Administration and the Municipal Labor Committee (MLC).
This partnership with the Municipal Labor Committee (MLC) should be reinvigorated with the goal of implementing a new premium-sharing arrangement.
The City should work with the Municipal Labor Committee (MLC) to consolidate welfare funds to leverage economies of scale for prescription drugs and other medical benefits.
The City should seek State legislation to eliminate the Variable Supplement Funds (VSFs) and have the assets transferred to the main pension funds.
The guaranteed return on the fixed return fund should be sharply reduced through State legislation.
The City could reduce overtime for skilled trades and uniformed employees through the implementation of overtime caps.
The City could make four firefighters the standard staffing for engine companies.
The City should be given the flexibility to shift at least half of the ALS ambulances to a one paramedic, one EMT staffing model.
Key Data
$1 billion
— The recurring savings target from negotiations with labor unions in the Adopted Budget for Fiscal Year 2021.
$50.2 billion
— The projected personnel costs for fiscal year 2021 out of the $93.5 billion budget.
7.0 percent
— The annual average growth rate of health insurance premium costs from fiscal year 2009 to fiscal year 2019.
$1.2 billion
— The estimated annual value of the taxpayer-provided guarantee for the Teachers Retirement System tax-deferred annuity.
$1.1 billion
— The amount spent on uniformed-agency overtime in fiscal year 2019.
$136 million
— The amount the City spent on the Absent Teacher Reserve in fiscal year 2018.
The agreement between New York City and the Municipal Labor Committee sets a $1.1 billion savings target for health insurance, but it lacks the ambition of previous deals by relying on conservative budget projections rather than structural reforms. Significant challenges remain, including the inefficient provision of prescription drug, vision, and dental care through welfare funds and the costly provision of health insurance to retirees.
Recommendations related to Municipal Labor Committee (MLC)
The City and the MLC should have maintained the 2018 savings targets to stimulate greater cooperation and movement on reforms.
Any recurrent savings from the prior agreement should have been returned to the general fund rather than attributed to new targets.
Savings against high budget projections should be used for general operating needs, rather than claimed as a savings against labor costs.
The City and the MLC must tackle the fragmented and inefficient provision of prescription drug, vision, and dental care via welfare funds.
The City and the MLC should address the costly provision of health insurance to retirees with no contribution to the cost of care.
Key Data
$1.1 billion
— Total savings target set by the new agreement spanning fiscal years 2019 to 2021.
$3.4 billion
— Health insurance savings target set by the previous agreement negotiated with the Municipal Labor Committee spanning fiscal years 2015 to 2018.
$211 million
— Estimated annual savings from the prior agreement that will be attributed to the new targets.
$658 million
— Projected savings from lower-than-anticipated premium increases secured from EmblemHealth.
80 percent
— Estimated portion of the target savings that the City and the Municipal Labor Committee have already achieved.
New York City's uniformed overtime spending has grown significantly, necessitating a new labor-management committee modeled after the Municipal Labor Committee to identify cost-saving reforms. This committee should focus on addressing systemic drivers of overtime, such as work rules and sick leave policies, to ensure fiscal responsibility across uniformed agencies.
Recommendations related to Municipal Labor Committee (MLC)
The City should establish a uniformed labor-management committee as part of the next round of collective bargaining in order to reduce uniformed overtime spending.
The City should consider adopting a system in which routine sick leave usage is accrued and capped (as for NYC civilian employees).
The City should consider changing certain work rules, such as eliminating overtime for travel to alternate work locations and guaranteed minimum overtime hours.
The City should consider instituting a per employee cap on overtime hours or overtime earnings, as exists for civilian employees.
The City should consider capping or eliminating overtime earnings in calculating final average salary for pensions.
Key Data
$1.2 billion
— Nearly $1.2 billion in overtime compensation was paid to roughly 63,000 uniformed employees in fiscal year 2016.
$19,400
— Uniformed overtime payments averaged $19,400 per employee in fiscal year 2016.
42 percent
— Overtime has exceeded the adopted budget in each of the past nine years by an average 42 percent.
62 percent
— From fiscal years 2009 to 2016, overtime spending grew 62 percent, from just over $1 billion to $1.7 billion.
8.0 percent
— From fiscal year 2009 to fiscal year 2016, uniformed overtime grew an average of 8.0 percent a year.
Key questions to monitor in the New York City Preliminary Budget for fiscal year 2018 include potential adjustments to economic assumptions, headcount growth, and the inclusion of health care savings bonuses for the Municipal Labor Committee. Critical fiscal areas to watch also include the homeless shelter census surpassing 60,000, overtime spending, and the $17 billion in unmet capital needs for the New York City Housing Authority.
Legacy costs, including debt service, pension contributions, and retiree health benefits, are projected to grow to over $20 billion by fiscal year 2020, consuming a significant portion of the city budget. To mitigate this growth, the city should negotiate with the Municipal Labor Committee to implement reforms such as requiring retiree premium contributions, consolidating union welfare funds, and eliminating Medicare Part B reimbursements.
Recommendations related to Municipal Labor Committee (MLC)
City-MLC negotiations should focus on reducing health care costs further and bringing retiree health costs in line with those of other state and local governments.
Retirees should share the cost of health premiums to align with practices in the private sector and other municipal governments.
The City should reform union welfare funds because they are inefficient, poorly managed, and unaccountable.
Medicare Part B premium reimbursements should be eliminated as this benefit is unheard of in the private sector.
Consolidating supplementary health care benefits under the city’s health plan would be more efficient.
Key Data
$20 billion
— Annual spending on legacy costs projected by fiscal year 2020.
$3.4 billion
— Expected savings from the City and Municipal Labor Committee partnership on health care costs.
$2.1 billion
— Announced savings to date from the City and Municipal Labor Committee partnership.
$1.6 billion
— Potential savings from three proposed changes to retiree health benefits by fiscal year 2020.
New York City's financial plan includes projections for tax revenues, expenses, headcount, and debt service. The plan also incorporates savings from the health savings agreement with the Municipal Labor Committee and the Citywide Savings Plan.
The City and the Municipal Labor Committee agreed to save $3.4 billion on health insurance costs between fiscal years 2015 and 2018, but current accounting methods credit savings to national health care trends rather than specific cost-saving initiatives. To achieve genuine fiscal relief, the city should prioritize structural changes like premium-sharing and improved chronic disease management rather than relying on projected growth rates.
Recommendations related to Municipal Labor Committee (MLC)
Initiatives should "bend the cost curve" and achieve recurring savings for City taxpayers.
The City should establish premium-sharing with employees and retirees to help bend the cost curve.
The City should focus on reducing per enrollee utilization of services to achieve recurring savings.
The City should prioritize better managing chronic conditions to improve health outcomes and save money.
The City should consider lowering provider payments through lower fees for service, higher deductibles, or higher copayments.
Savings should be counted clearly and honestly to ensure they reflect actual initiatives rather than market trends.
Lower national and regional health care inflation, temporary premium rate "freezes," and unusually low premium increases should not be credited as savings gained under the agreement.
Key Data
$3.4 billion
— The total savings target agreed upon by the City and the Municipal Labor Committee between fiscal year 2015 and 2018.
9 percent
— The annual rate at which the financial plan projected health insurance spending to increase.
2.89 percent
— The City's actual health insurance rate increase for fiscal year 2016.
$1.2 billion
— The amount of savings credited to the Municipal Labor Committee agreement in the November modification.
$1.0 billion
— The annual savings target for fiscal year 2017.
$1.3 billion
— The annual savings target for fiscal year 2018.
The agreement with the Municipal Labor Committee aims to achieve significant health insurance savings by establishing an objective system for measuring recurring, efficient cost reductions. To ensure these savings are genuine and sustainable, they must be based on specific changes in benefit structures rather than temporary freezes or unrelated national trends.
Recommendations related to Municipal Labor Committee (MLC)
An objective system for measuring qualifying savings should be established, with the basic principle that they are recurring and of a nature that truly 'bends the curve' in health care costs by making the system more efficient.
Savings should be based on an agreed upon baseline number of people covered, meaning increases or decreases in covered lives should not affect the calculation of savings.
Reductions in the number of people covered due to eligibility audits should be credited as savings, and an agreement should be reached that assures there will be regular audits in the future as a matter of managerial discretion.
A significant source of potential savings may be possible through changing the status or eligibility of retirees, for example, by moving some or all from City plans to those available on the New York State Health Exchange with federal subsidies.
Additional funding taken from the Health Insurance Stabilization Fund beyond the $1 billion already agreed upon should not count as savings, as it does nothing to make the delivery of health care more efficient.
Key Data
$1.3 Billion
— The total amount of health insurance savings targeted by the agreement with the Municipal Labor Committee.
$1 Billion
— The amount already agreed upon for the Health Insurance Stabilization Fund, beyond which additional funding should not count as savings.
1,000,000
— The baseline assumption of enrollees used in the hypothetical program to centralize radiation services.
$100
— The fiscal year 2014 average payment per service used in the hypothetical program to centralize radiation services.
New York City's fiscal year 2015 budget includes significant labor settlements that require the Municipal Labor Committee to achieve $3.4 billion in health care savings to remain affordable. Without these savings and additional efficiencies, the city faces rising personnel costs and projected budget gaps in the coming years.
Recommendations related to Municipal Labor Committee (MLC)
The Administration and the Municipal Labor Committee should agree to changes that provide recurring savings on rapidly-growing health care costs.
The Administration and the Municipal Labor Committee should adopt changes that make the health insurance system operate more efficiently, reduce utilization of services, or reduce the city’s costs through premium-sharing or lower payments to providers.
To the extent that necessary changes to city operations need to be collectively bargained, part of the ensuing savings could be used to fund larger wage increases or productivity bonuses.
Key Data
$13.6 billion
— Gross cost of negotiating labor agreements with the entire workforce between fiscal years 2014 and 2018.
$1 billion
— Amount drawn from the off-budget Health Insurance Stabilization Fund to offset labor agreement costs.
$3.4 billion
— Targeted health care cost savings agreed upon by the Administration and the Municipal Labor Committee.
$1.3 billion
— Recurring health care savings targeted after the initial period.
39 percent
— Projected growth in health care costs by the end of the financial plan in 2018 without the agreed-upon savings.
The health insurance agreement with the Municipal Labor Committee relies on one-time savings and artificial rate caps rather than structural reforms that would generate recurring, meaningful cost reductions. Savings calculations should be based on actual results of specific initiatives rather than projections that attribute national health care inflation trends to the agreement.
Recommendations related to Municipal Labor Committee (MLC)
The city should achieve substantial, recurring savings derived from initiatives that lower health care costs by making the system more efficient.
Savings should be calculated relative to actual results of specific initiatives rather than City Financial Plan projections.
The agreement should not attribute savings derived from shifts in national or regional trends in overall health care inflation to the agreement.
The agreement should avoid using artificial rate caps or adjustments to the City's contribution to the Health Insurance Stabilization Fund as a method for savings.
Establishing clear, objective guidelines for measuring health insurance savings is essential to ensure that only recurring, structural changes that reduce costs are credited under the agreement with the Municipal Labor Committee. These measures should exclude external factors like inflation or temporary rate freezes, focusing instead on verifiable improvements in efficiency and benefit structure.
Recommendations related to Municipal Labor Committee (MLC)
An objective system for measuring savings should be established, with the basic principle that qualifying savings must be recurring and of a nature that truly 'bends the curve' in health care costs.
Savings should be based on an agreed upon baseline number of people covered, meaning increases or decreases in covered lives should not affect the calculation.
Reductions in the number of people covered due to eligibility audits should be credited as a distinct type of savings.
National and regional trends in health care inflation unrelated to the initiatives launched as a part of this joint effort should not affect the calculation of savings.
Temporary 'freezes' or low premium rate increases not supported by specific benefit structure changes should not be credited as savings.
Key Data
1,000,000
— Baseline assumption of enrollees used in the hypothetical program to centralize radiation services.
$100
— Fiscal year 2014 average payment per service in the hypothetical radiation services program.
20
— Average utilization of service per 1,000 enrollees in the hypothetical radiation services program.
3.0%
— Historical annual increase in payment per service used for the hypothetical baseline.
5.0%
— Historical annual increase in utilization per 1,000 enrollees used for the hypothetical baseline.
New York City's health insurance policies for employees and retirees are significantly more generous than those of comparable public and private employers, with the city paying the full premium for most workers and reimbursing Medicare Part B costs. Implementing premium-sharing requirements for active employees and retirees, alongside eliminating Medicare Part B reimbursements, could generate between $1.8 billion and $2.2 billion in annual savings by fiscal year 2016.
Recommendations related to Municipal Labor Committee (MLC)
The City should implement premium-sharing by employees, as employee contributions toward the cost of health insurance are the norm in the private sector and in state and local governments.
The City should require premium-sharing by retirees, as few private sector employers offer retiree health insurance and public sector peers typically require retirees to contribute more toward the cost of health insurance premiums than they did as employees.
The City should eliminate Medicare Part B reimbursement, as this practice is rare even among state and local governments.
Key Data
$1.8 billion
— Total savings in fiscal year 2014 if recommended premium-sharing and Medicare Part B reimbursement changes are adopted.
$2.2 billion
— Total savings in fiscal year 2016 if recommended premium-sharing and Medicare Part B reimbursement changes are adopted.
$83 billion
— Estimated unfunded liability for retiree health insurance and other post-employment benefits (OPEB) as of fiscal year 2011.
90 percent
— Portion of the municipal workforce enrolled in health insurance plans that require no employee contribution toward the cost of the premium.
$6.6 billion
— Projected cost of health insurance in fiscal year 2016.
$280 million
— Cost to the City in fiscal year 2013 for reimbursing retirees and their spouses for the full out-of-pocket cost of Medicare Part B premiums.
No results for your current filters. Manually edit your filters, or
clear the filters.
Share Feedback
Give a star rating, write a comment of at least 10 words, or both.
