One of the largest union-administered health-insurance funds in New York is dropping coverage for the children of more than 30,000 low-wage home attendants, union officials said. The union blamed financial problems it said were caused by the state’s health department and new national health-insurance requirements.
The fund is administered by 1199 SEIU United Healthcare Workers East, an affiliate of the Service Employees International Union. Union officials said the state compelled the fund to start buying coverage from a third party, which increased premiums by 60%. State health officials denied forcing the union fund to make the switch, saying the fund had been struggling financially even before the switch to third-party coverage.
The fund informed its members late last month that their dependents will no longer be covered as of Jan. 1, 2011. Currently about 6,000 children are covered by the benefit fund, some until age 23.
The union fund faced a “dramatic shortfall” between what employers contributed to the fund and the premiums charged by its insurance provider, Fidelis Care, according to Mitra Behroozi, executive director of benefit and pension funds for 1199SEIU. The union fund pools contributions from several home-care agencies and then buys insurance from Fidelis.
“In addition, new federal health-care reform legislation requires plans with dependent coverage to expand that coverage up to age 26,” Behroozi wrote in a letter to members Oct. 22. “Our limited resources are already stretched as far as possible, and meeting this new requirement would be financially impossible.”
Behroozi estimated that the fund faced a $15 million shortfall in 2011 and more in the following years for the coverage of workers’ children.