Los Angeles Workers to Pay Health Insurance Cost for First Time

August 24, 2010, 7:22 PM EDT

By Christopher Palmeri

Aug. 24 (Bloomberg) -- Los Angeles, the second-largest U.S. city by population, will get some help from a civilian union in paying health-insurance costs for the first time, Mayor Antonio Villaraigosa said.

The Los Angeles-based Engineers & Architects Association, which represents one-seventh of the municipal workforce, agreed to terms that call for members to pay 5 percent of their monthly health insurance premiums and $20 co-payments for doctor’s visits, according to Michael Davies, the union’s interim executive director. Workers cover $10 co-pays currently.

“It was clear the city could no longer subsidize us at 100 percent,” Davies said today in a telephone interview.

The second largest U.S. city after New York had its credit rating cut in April as it confronted years of projected budget deficits. In May, the mayor and City Council bridged a $492 million fiscal 2011 gap by closing libraries, raising fees and making workers to take unpaid time off.

In exchange for the concession on health insurance, the city reduced the number of unpaid furlough days that members of the Engineers union must take to 10 from 26 this fiscal year, according to a press release. The agreement will save the city more than $20 million in one-time and annual costs.

“In this economy, shared sacrifice is the name of the game,” Villaraigosa said in the release.

--Editors: Ted Bunker, Mark Tannenbaum.

To contact the reporter on this story: Christopher Palmeri in Los Angeles at cpalmeri1@bloomberg.net.

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net