New York City, with its vast workforce of over 300,000 dedicated employees, relies on the commitment of these individuals to enhance the quality of life for all New Yorkers. Recognizing their invaluable contribution, the City has recently taken a significant step to ensure they receive top-notch health care benefits. Last month, a new health insurance contract was signed, introducing the NYC Employees Preferred Provider Organization (NYCE PPO) plan. This plan is set to cover 750,000 city employees, pre-Medicare retirees, and their dependents.
The introduction of the NYCE PPO plan promises to fortify existing coverage, broaden access to providers, and secure essential fiscal savings during these economically challenging times. Importantly, it maintains the premium-free coverage that city employees have come to rely on, continuing to deliver the high-quality care they deserve.
For the first time in over four decades, the City, in partnership with the Municipal Labor Committee, initiated a competitive bidding process for this plan. The outcome is a collaborative administration between EmblemHealth and UnitedHealthcare. This strategic partnership is expected to yield savings up to $1 billion without imposing additional costs on employees. Consequently, employees will continue to enjoy benefits such as no premiums, no in-network deductibles, and stable copays, with even lower costs available at NYC Health + Hospitals facilities.
These efficiencies and savings are realized not through benefit reductions but by harnessing the city’s substantial purchasing power to secure more favorable terms. Significant savings are anticipated from improved hospital rates under the new plan, coupled with operational efficiencies.
Unlike the previous GHI-CBP arrangement, which involved two separate plans with individual vendors, the new system consolidates services into a single plan with unified vendor cooperation. This integration minimizes redundant claims processing and enhances plan management, resulting in tangible savings. Additionally, the NYCE PPO will prioritize the management of fraud, waste, and abuse by upgrading systems to prevent unnecessary payments.
Moreover, the provider network is set for a substantial expansion. EmblemHealth will continue offering medical and hospital coverage within New York City, Long Island, and seven neighboring counties, increasing local providers from 64,000 to 78,000. UnitedHealthcare will extend its services beyond these regions, significantly expanding access from 79,000 to over 1.6 million providers nationwide, including a notable increase in mental health providers within New York State.
In short: more providers, more flexibility, and no new costs for members.
The economics of providing health care to employees have become increasingly challenging in recent years with skyrocketing costs. In the last 10 years inflation nationwide has been 32%, and the average employer cost of health plans has increased by 52%. The cost of the city’s largest plan, covering more than 750,000 total individuals, has increased by 109%, despite the city and our unions seeking to improve efficiencies in the plan.
Meanwhile, cost sharing for employees, such as copays, have largely not increased since 2016 and we continue to offer the plan at no premium to employees. Nationwide, only 1% of employers with more than 200 employees charge no employee premium for their health plans. State employees pay $7,000 to $8,500 for family coverage in the Empire Plan, the largest plan in the state health insurance program. Maintaining a no-premium plan without using the city’s buying power as leverage to lower costs would have been unsustainable.
Some claim a self-funded plan is risky, when virtually every large employer in the country (including New York State) has known for decades that self-funded plans provide greater savings without greater risk. Others express vague fears about what might happen in the future under this plan. But we know exactly what will happen if we do nothing: continued cost increases under an outdated plan, eventually forcing the city to impose employee premiums.
It’s especially disappointing to see groups claiming to represent retirees questioning this plan. The NYCE PPO does not affect Medicare-eligible retirees, but will finally provide meaningful provider access to pre-Medicare retirees living outside New York. The current GHI-CBP plan offers just 79,000 providers outside the New York City area — leaving many pre-Medicare retirees with limited options or higher-cost plans. This new plan addresses that gap, offering better care, more choice, and flexibility for those who have or are considering relocating.
Mayor Adams has always been committed to delivering for New Yorkers and our employees, working to ensure they are able to afford to live and raise a family here. Overhauling a decades-old health insurance plan with many stakeholders involved, wasn’t easy, but it was the right thing to do and will benefit those who have dedicated their lives to working for our great city.
Campion is the New York City labor commissioner.
