As the announcement was made, cheers rang though the hall, as many of union members have in recent weeks expressed concern that the administration was shopping around for different coverage.
However, the administration said they needed to look at other providers so they could have competing bids with Blue Cross/Blue Shield, which wanted a 33 percent increase.
Both the administration and the unions said that the announcement is good news for workers and the city. While the contract has not yet been signed or approved by the City Council, all nine council members said Wednesday that they will approve the one-year deal when the final contract is before them at the next City Council meeting.
The administration's position
The issue came to the forefront recently when the Roberts administration learned that Horizon Blue Cross/ Blue Shield were pushing massive cost increases onto the city.
"Horizon Blue Cross/ Blue Shield came to us asking for a 33 percent increase," said Roberts Wednesday. "We told them this was completely unacceptable."
Roberts added that over the past several years, just as in the private sector, healthcare costs have spiraled upwards. According to the city budgets, in Hoboken, health care has risen from $5.5 million in 2001 to around $11 million, which is anticipated in the 2005 budget.
But while premiums rise, municipal employees have one of the best health care coverage deals going. Currently, they don't have to make monthly contributions to health insurance. Also, the current plan has a low deducible and low prescription co-pay, compared to most privately owned companies.
And while Roberts said that he wants the best coverage for the city's workers, he said that he can't be blind to the cost of this coverage.
"I have an obligation to our taxpayers to press the issue and do everything that I can to control costs," said Roberts. "Next to salaries, health care is the city's biggest expense, and as everyone knows, the premiums have been mushrooming for some time now."
So when the first Blue Cross' Blue Shield offer was not acceptable, the administration shopped around to see if the city might find a better deal. They called Oxford Insurance, the same firm the Board of Education recently switched to and is now using.
But the membership of all six unions, which are made up of the city cops, fire, and municipal workers, strongly and immediately denounced the fact that Oxford was even mentioned. Despite Roberts' claims that no firm would be used without union approval and that whichever plan would be selected would have equal or better coverage, the unions said that Horizon Blue Cross/Blue Shield provides better coverage than Oxford. The unions mobilized and wrote strongly-worded letters to the editors of this and other papers, and began planning a large protest rally in front of City Hall.
Needed leverage
Meanwhile, Roberts said that without shopping around and getting other offers, the city would never have any leverage to negotiate with Horizon Blue Cross/Blue Shield.
"It's all part of negotiating," said Roberts, "and in this case it worked out to everyone's benefit."
According to Roberts, the city was able to play Blue Cross and Oxford against one another, and a bidding war ensued.
The quotes began to drop. What started as a 33 percent increase dropped to 18 percent, and then after a second round of talks, Blue Cross/Blue Shield again lowered its asking price to a 12 percent increase.
"Talking to the other company got Blue Cross to the table, which, in the end, is going to save the city hundreds of thousands of dollars," said Roberts. He estimated that savings could be as much as $1 million this year.
Unions claim victory
While Roberts said that Oxford was being used as negotiation leverage, the leaders of the six unions said Wednesday that the pressure they put on the administration was successful in persuading them to stay with Blue Cross/Blue Shield.
Vincent Lombardi, the president of the Hoboken Policemen's Benevolent Association Local No. 2, said that health care insurance is one area where his union will not stand for change.
"We will not stand for anyone tampering with our health coverage," said Lombardi to his members Wednesday. "When it comes to this, we have to stay together."
Kenneth Ferrante, president of the Hoboken Police Superior Officers Association, said that this is an important happening, because all six of the city's unions came together for a singe cause.
"I can't remember another time when all six city unions have been this unified on a single issue," added Ferrante. "We want the word Oxford out of the city vocabulary," he said.
He added that they have stopped preparing for a protest, but if the administration amends the plan or cancels the Blue Cross deal, "We will organize a new rally in less than 72 hours."
Joseph Grossi, the president of the Hoboken Municipal Employees Union, said he's glad that a deal is almost in place.
"It sent a chill down my spine when I first heard they might make a change," said Grossi. He added that municipal workers are often "the caboose" of negotiations, because they are the lowest paid union employees, with an average salary of only around $25,000. Because of this, he said, the superior municipal health care plan is a major benefit of the job, and any change would be unduly burdensome to his members.
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