Facing Familiar Legal Challenges, NYC Must Put Aetna Retiree Plan on Hold

The City of New York and its retirees this month are experiencing déjà vu, and CVS Health Corp.’s Aetna is caught in the middle. The health insurer was slated to begin serving retired municipal workers and their eligible dependents on Sept. 1 via a Medicare Advantage PPO plan. But thanks to the latest court order in a years-long series of setbacks, the city’s plan to privatize retiree health coverage again is on hold.

Led by Mayor Eric Adams (D), the city was initially supposed to transition some 250,000 retirees and dependents to a private Medicare plan administered by Elevance Health, Inc., in January 2022. The move was delayed by a petition from retirees, and state Supreme Court Judge Lyle Frank ruled that the proposal violated city law by charging retirees $191 per month to maintain their fee-for-service Medicare coverage. Amid the legal challenges, NYC Comptroller Brad Lander declined to register the contract. After Elevance backed out of the deal, the city struck an agreement with Aetna to make its PPO plan the only premium-free coverage option.

© 2024 MMIT
Lauren Flynn Kelly

Lauren Flynn Kelly Managing Editor, Radar on Medicare Advantage

Lauren has been covering health business issues since the early 2000s and specializes in in-depth reporting on Medicare Advantage, managed Medicaid and Medicare Part D. She also possesses a deep understanding of the complex world of pharmacy benefit management, having written AIS Health’s Radar on Drug Benefits from 2004 to 2005 and again from 2011 to 2016. In addition to her role as managing editor of Radar on Medicare Advantage, she oversees AIS Health’s publications and manages the health editorial staff. She graduated from Vassar College with a B.A. in English.

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