Opinion ID: 223505
Heading Depth: 2
Heading Rank: 1

Heading: New York City's Health Benefits Program and the Proposed Merger

Text: The City and several related entities obtain health insurance for their employees and their employees' dependents through the City's Health Benefits Program. Approximately 1.2 million individuals are insured through the Program. The City's Office of Labor Relations administers the Program jointly with the Municipal Labor Committee, an association of about 50 unions that represent the employees. As a result of collective bargaining agreements and municipal law requirements, the City offers its employees several types of health insurance plans. Employees can select coverage through a Health Maintenance Organization (HMO) plan, a Participating Provider Organization (PPO) plan, or a Point of Service (POS) plan. The City periodically issues Requests for Proposals (RFPs) inviting insurers to propose plan designs and associated premiums. Insurance providers compete to be selected during each procurement round. Employees choose among the plans that the City selects. Those who do not receive Medicare benefits can choose among thirteen plans, and Medicare participants can choose among fifteen. GHI and HIP offer the two least expensive and most popular plans. GHI offers a PPO plan and HIP offers an HMO plan. The majority of City employees and non-Medicare retirees select coverage from GHI's or HIP's plan, with only a small minority choosing the plan with the third largest share of enrollment. Under municipal law and by agreement between the City and the Municipal Labor Committee, the City pays the entire premium for employees who enroll in either the HIP plan or the GHI plan. Employees who select more expensive coverage from another carrier must pay any excess in the cost of that coverage over the cost of the HIP plan. In September 2005, GHI and HIP announced their intent to merge and to convert from non-profit to for-profit status. The United States Department of Justice and the New York State Attorney General investigated the antitrust implications of the proposed merger and decided not to challenge it. The New York State Departments of Health and Insurance granted approval for GHI and HIP to combine their operations as an interim step pending approval of an acceptable plan of conversion to a publicly owned company and, thereafter, a formal merger.