Judge Orders City to Delay Retiree Health Care Switch Until April 1

Retired city employees will be able to opt out of their newly-privatized health insurance until June 30, the judge ruled

Sam Mellins   ·   December 14, 2021
Mayor Bill de Blasio and DC37 Executive Director Henry Garrido in 2019 | Ed Reed/Mayoral Photography Office

A New York state judge Tuesday ordered that a proposed cost-cutting change in city government retirees’ health insurance be delayed until at least April 1, 2022. Retired city workers will have until June 30, 2022 to opt out of the plan. The ruling also listed several steps the city must take to provide more public information about the plan before the judge will allow it to move forward.

The ruling represents a setback for the de Blasio administration, which had originally sought to implement the change shifting retired city workers from Medicare plans to cheaper, privately-managed Medicare Advantage plans, on January 1, 2022. Retirees were to be automatically enrolled in the new plan unless they opted out by October 31, 2021.

Despite the delay, a spokesperson for the New York City Law Department, Nick Paolucci, said that the plan was a victory for the city. 

“We are one step closer to offering this enhanced health plan to our retirees in the near future. We are pleased the Court has ruled the City can move forward with the plan under certain conditions. We are carefully reviewing the order,” he said in a statement to New York Focus.

The plan has its roots in a 2014 agreement between de Blasio and the major municipal unions, which promised billions in health care savings in exchange for pay raises for current employees. Many retirees have voiced skepticism that the private plan, which will be run by insurance giants EmblemHealth and Empire Blue Cross Blue Shield, will provide health care as good what they currently receive through Medicare and supplemental coverage that the city provides free of charge.

In September, the NYC Organization of Public Service Retirees—a group formed in opposition to the shift in care—filed a lawsuit seeking to stop the plan’s implementation. On October 22, Judge Lyle Frank of the New York Supreme Court issued a temporary injunction against the plan, which prohibited the city from moving ahead with the switch.

In a three-page order issued at about 5 P.M. on Tuesday, Frank laid out a series of conditions that the city must comply with before implementing the new Medicare Advantage plan. He specified that retirees must be allowed to opt out of the plan until at least June 30, 2022—three months after the plan is scheduled to go into effect.

In addition to mandating that retirees be able to opt out until the end of June 2022, Frank also ordered the city to take steps to make sure that retirees are fully informed about what treatments and procedures are included in the new plan, and which doctors will and will not be participating. 

Confusion about what services will be included in the plan has been rampant among retirees, especially after the city mailed them a guide to the plan that contained numerous errors–and then refused to mail out a correction, citing a “global paper supply shortage.”

Frank ordered that the city send retirees a letter correcting the errors in its initial plan by January 7, 2022. The letter “must contain information on how a retiree can obtain a corrected Enrollment Guide free of charge, and the specific web addresses where the corrected Enrollment Plan may be seen,” Frank wrote.

Frank’s ruling also addressed another of the retirees’ main concerns: that many of their doctors have not heard of the plan, and thus don’t know whether or not they will accept it. Dozens of retirees have submitted affidavits or testified at public hearings that their doctors will not be participating in the plan, or have not heard of it at all.

Frank ruled that from January 7, 2022, until the plan becomes active, the city must submit biweekly reports detailing its efforts to contact providers and inform them about the plan, and a schedule for how and when it will contact additional providers.

Steve Cohen, the lawyer representing the retiree organization, said that the ruling was a win for retirees. 

"I think we got everything the retirees wanted,” Cohen said. "Retirees have to have accurate information about doctors, and accurate information about the plan. The judge is laying that out really clearly."

The order leaves the overall structure of the plan in place: in the October injunction, Frank wrote that he “does not intend to disturb” the city’s choice to move retirees to private insurance.

Nonetheless, Frank’s ruling said that the Organization of Public Service Retirees’ underlying case seeking to stop the move outright is still in play. That case “will be decided when the preliminary injunction has been lifted,” Frank wrote.

Marianne Pizzitola, the president of the Organization of Public Service Retirees, said that she was encouraged by the judge’s promise to hear arguments on the underlying suit. “He’s giving us an opportunity to fight the rest of our case,” Pizzitola said. “I’m taking this as a win.”

The office of Mayor-Elect Eric Adams, who will have assumed office by the time the plan is set to take effect, did not immediately respond to a request for comment on the ruling.

Sam Mellins is senior reporter at New York Focus, which he has been a part of since launch day. His reporting has also appeared in The San Francisco Chronicle, The Intercept, THE CITY, and The Nation. 
Also filed in Health

More counties are turning to private corporations to run medical care in jails. The companies have deadly track records.

Medicare Advantage plans are spreading across upstate New York, despite a reputation for denying care. In Cortland County, retirees kept it at bay.

In rural school districts where doctors are hard to find, in-school telehealth services seemed like a good solution. Then New York state stopped funding them.

Also filed in New York City

After the governor declined to answer questions, a New York Focus reporter was ejected from her event.

The constant gridlock is a major drag on Manhattan’s businesses, and source of frustration for commuters. And it’s never been so bad.

Lawsuits had threatened to kill congestion pricing. Now, it might take a lawsuit to save it.

Also filed in Labor

No state pursues workers for overpaid unemployment benefits as aggressively as New York. A proposed reform is colliding with New York’s own repayment problem.

New Yorkers for Local Businesses has spent half a million dollars trying to kill a bill to help workers recover stolen wages. Almost all its backers appear to own McDonald’s franchises.

In New York, unemployment recipients can be found guilty of fraud even if they thought their information was true. The state demands repayment at the highest rate in the country.