An Easy Breakdown of the Comptroller’s Audit of the Health Stabilization Fund

The piggy bank is broken.

During our winter break, the NYC Comptroller released a 48-page audit about the Health Stabilization Fund. Most working people do not have the time or energy to read something that long, so A Better Contract (ABC-UFT) created a breakdown of what the audit found in plain language.

For about 40 years, city workers and retirees were told there was a big piggy bank just for healthcare. When insurance costs went up, this piggy bank was supposed to help, so that workers and retirees would not have to pay healthcare premiums.

The NYC Comptroller’s audit shows that the piggy bank is now empty and more than $3 billion in debt.

Oversight of this fund was handled by the City and union leadership, with the largest role played by the biggest unions– especially the UFT and DC 37, which had the most influence over decisions about how the money was used.

Here are the four main things the audit says went wrong:

1. The money was used for things it was never meant for. The piggy bank was supposed to be only for healthcare costs. Instead, money was used for other expenses. Once you use a piggy bank for other things, it stops being protected.

2. More money was taken out of the piggy bank than put in. Year after year, the fund paid out more than it received. You can do that for a short time, but eventually the piggy bank runs out.

3. Real money was replaced with empty promises. Instead of putting actual cash back into the fund, the City was allowed to promise to pay later. A promise is not the same as money you can actually use.

4. Union members were not clearly told what was happening. The people who rely on this piggy bank were never given a simple, honest explanation that the piggy bank was being drained. When people are not told the truth, they cannot ask questions or stop bad decisions.

That is how a fund that held billions ended up broken. The audit makes clear this was not caused by everyday union members or every union. It was the result of decisions made by a small group of leaders who oversaw the fund and failed to protect it.

The only way to prevent another collapse is for UFT members to organize, stay informed, insist on accountability and spread the word to all UFT members. The piggy bank is now broken beyond repair, but our UFT doesn’t have to be.

For more detailed information on the destruction of the NYC Health Stabilization Fund:

The Wire: The Audit the MLC Doesn’t Want You to See

The Wire: The Healthcare Fund They Quietly Decided to Kill

Work Bites: Whoever’s Responsible for Those MLC Leaks Deserves a Medal

NYC Comptroller: Audit of the Financial and Operating Practices of the Joint Health Insurance Stabilization Fund

The City: Explosive Audit Urges Dissolving Insolvent City Employee Health Fund