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Labor Lawyer Deborah Willig Weighs in on Philadelphia Employee Benefits

November 13, 2009

Those changes will affect 6,900 nonunionized workers and retirees. But Managing Director Camille Barnett also said that the city would like to see similar savings from the health benefits for the city's 22,000 unionized workers, whose contracts are still being negotiated.

"We are leading by example," Barnett said. "This is a good way to save money without decreasing benefits."

Although employee monthly contributions will not change, the new benefits set-up will increase out-of-pocket maximums and some co-pays for those on three different plans from Independence Blue Cross. Some unionized workers are also on the city-administered plan.

In addition, the city is shifting to what is known as a "self-insured" plan, meaning that instead of paying a per-member amount to Blue Cross each year, the city pays the claims directly, as well as administrative costs. This means that if city expenses come in lower than expected, the city keeps the difference. The city will also purchase "stop-loss insurance" that would help protect them against high claims.

Each of the city's four municipal unions has its own health and welfare trust, and the city negotiates a per-member amount to pay into those funds each year. Most members do not pay a monthly contribution for benefits.

Attorney Deborah Willig, who represents both the firefighters union and white-collar workers in District Council 47 of the American Federation of State, County and Municipal Employees, said that the unions might consider using self-insured plans.

"If we could be guaranteed a savings of money, we would consider it," Willig said. But she stressed that the unions would not consider giving billing authority to the city, which has also been proposed during contract talks.

Contracts for the four unions representing municipal workers expired June 30. So far, no new deals have been reached.

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