Update from the Office of the NYC Comptroller on New Municipal Employee Health Insurance

Update from the Office of the NYC Comptroller on New Municipal Employee Health Insurance

New York, NY - Pursuant to the New York City Charter, the Office of the New York City Comptroller is responsible for reviewing and registering contracts entered into by City agencies to ensure that they comply with procedural requisites established by the Charter and the Procurement Policy Board. The Comptroller's review does not address the substance of the contract, but instead whether the procurement process followed established procedures. In those cases (fewer than one percent) where established procedures have not been followed, the Comptroller returns the contract to the contracting agency, which can either withdraw the contract, correct and resubmit, or deem the contract registered over the Comptroller's Office's objection. This review must be performed, and the contract registered or returned within thirty days of contract submission to the Comptroller's Office. During Comptroller Lander's tenure, the Office reviewed and registered over 60,000 contracts and returned fewer than one percent.

After its review of the contract submitted by the NYC Office of Labor Relations (OLR) for the NYC Employees PPO plan (NYCE PPO), offered by EmblemHealth (Emblem) and United Healthcare (UHC), the Comptroller's Office concluded that all procedural requisites for the procurement process were met. As a result, the Comptroller's Office registered the contract, effective November 13, 2025. The NYCE PPO contract will replace the City's current healthcare plan for active employees, currently held by GHI CBP/Anthem BlueCross and BlueShield.

In June 2023, the Comptroller's Office declined to register the City's proposed contract with Aetna to shift City retirees to a Medicare Advantage health plan. In that case, pending litigation called into question the legality of this procurement and constrained the Comptroller's Office from confirming that procurement rules were followed, sufficient funds were available, and the City had the necessary authority to enter into the contract. In this case, the parties filed a lawsuit petitioning for a temporary restraining order to prevent the City from being able to replace the GHI plan with the self-insured NYCE PPO; the judge denied that request on Thursday, November 6 and allowed the City to proceed with the procurement.

During the contract review, the Comptroller's Office posed a number of questions to OLR as part of its due diligence. Summaries of the answers to those and other frequently asked questions regarding changes to the municipal health offerings are provided below.

Procurement Requisites
Q: How was this contract procured?
A: This was a complex procurement that required significant collaboration between the City and the Municipal Labor Committee. OLR complied with all applicable public notice requirements in soliciting expressions of interest from qualified vendors and received several that were determined to be qualified to advance to the negotiation stage. Ultimately, a handful of qualified vendors submitted responsive proposals and an evaluation committee reviewed and scored all proposals and requested best and final offers from finalists before making a vendor selection, with the goal of achieving the best possible combination of services and pricing for City employees, pre-Medicare retirees, and their dependents.

Q: This contract is a self-insured health plan, rather than a fully-insured plan or a minimum premium plan (like the current GHI-CBP plan). Was that OLR's intention from the start?
The initial procurement contemplated selection of a vendor to provide either a fully-insured health plan or a self-insured health plan. A fully insured health plan entails that the selected health carrier charge a monthly premium composed of both the healthcare claims cost (the actual medical/hospital healthcare costs) and the health carrier administrative services fee. In a self-insured health plan, the selected health carrier charges for administrative fees only, as the City is responsible for the payment of the healthcare claims. For this contract, the estimated administrative fee for the base term of the contract and the renewal is $950 million.

Q: Mid-registration review period, a lawsuit was filed. What makes this different than when the Comptroller previously denied a contract when litigation was pending, such as the Medicare Advantage contract?
A: When a contract comes to the Comptroller's Office for registration where pending litigation calls into question the legality of that procurement, it may constrain us from fulfilling our Charter mandated duties.

In this case, the parties filed a lawsuit petitioning for a temporary restraining order to prevent the City from being able to replace the GHI plan with the self-insured NYCE PPO; the judge denied that request on Thursday, November 6 and allowed the City to proceed with the procurement.

Changes to Municipal Health Offerings Q: Is my doctor covered by the switch in health insurance coverage? A: To see if your health provider is covered by the new NYCE PPO, visit https://www.emblemhealth.com/providers/resources/nyce-ppo/faqs

Q: What, if any, guarantees or measures exist to guard against future changes in provider network?
A: There is a network adequacy commitment that guarantees both a minimum number of providers and a minimum percentage of claims in-network. Both these commitments protect against significant adverse changes in the provider network.

Budgetary Analysis
Q: How much will this save the City in costs?
A: OLR estimates the cost reductions will be approximately $900 million starting from the first year of the contract. Cost reductions are attributed to 1) provider discounts; and 2) plan management.

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