Boston City Hall unions fire back at Michelle Wu after ‘ultimatum’ on dropping GLP-1 coverage amid budget crunch

The Public Employee Committee, which bargains health insurance benefits on behalf of City of Boston unions, is firing back at the Wu administration after its “ultimatum” over dropping GLP-1 weight loss coverage to cut costs.

Elissa Cadillic, PEC co-chair, said a “majority” of city unions considered the city’s offer to implement a utilization management system for fiscal year 2027 that would require prior authorization for employees seeking to be prescribed GLP-1 drugs like Ozempic and Wegovy, and opted to go in a different direction.

The Wu administration, citing the need to cut down on “skyrocketing” health insurance budgetary costs driven by the popular weight loss drugs, was looking to implement utilization management on July 1. The city’s chief financial officer said Monday that the system would save the city between $8-9 million per year.

The PEC, after drawing the city’s ire by voting down the offer on March 9, said it’s willing to agree to the system, but on its own terms, which are that implementation be delayed by six months — halfway through the fiscal year — to Jan. 1. The committee is also looking for a year-long contract extension for union health benefits.

“The unions have gotten together and have made what we view is a good-faith response to what they’ve put out there,” Cadillic told the Herald Tuesday, after sending a letter with the PEC’s counter-offer to the Wu administration.

“It’s not a rejection of an offer, because they haven’t made an offer,” Cadillic said. “They’ve put an ultimatum out, but they haven’t made an offer. We are putting an offer out to extend, to say, ‘Look, this is what we’re willing to reconsider.’ ”

Cadillic’s letter states that the PEC was taken aback in recent weeks by the city’s threat to eliminate GLP-1 coverage for weight loss by switching to the Commonwealth’s Group Insurance Commission, which voted to eliminate coverage for state employees last month— should UM not be adopted.

“The PEC had been asking for these discussions to take place for over a year, and the administration has failed to engage,” Cadillic wrote. “At no point during discussions with the unions was the threat of moving to the GIC stated. And it is a threat … since the financial hardship and significant disruption the GIC would have on city employees and retirees is immense, with minimal savings to the city.”

Boston Chief Financial Officer Ashley Groffenberger sent a letter to the City Council Monday, stating that the city had requested that the PEC take another vote on its offer to implement utilization management for FY27 by Friday.

The letter described the March 9 vote as hasty, given that the vote to reject the city’s offer was driven by three unions representing a majority of those present at the meeting. Three unions voted to adopt utilization management and “several” others were unable to attend “due to short notice,” Groffenberger wrote.

A source familiar with the matter told the Herald the push to reject the city’s proposal was driven by the Boston Teachers Union and the Boston firefighters union, Local 718, which comprised the majority of a vote held “with little notice.”

The source said it “was just hostility immediately out of the gate, and an effort just to kill this, and never really entertain it.”

“The consequences of this inaction, if allowed to stand, are massive and immediate,” Groffenberger wrote. “Health insurance rates for non-Medicare plans will increase by 22.6% over FY26 — the highest year-over-year premium increase in recent history. These rate increases will be deeply felt by the city and across our workforce.”

Groffenberger claims GLP-1 usage is accounting for 14.7% of the projected cost hike, from FY26 to FY27, despite only 7.7% of employees with non-Medicare plans using the drugs for weight loss.

The CFO estimated GLP-1 for weight loss costs at $31.6 million for FY26, with projections to rise to approximately $47.4 million in FY27. The concern comes amid a budget crunch for the city, with further cost-cutting expected amid “constrained revenue growth,” Groffenberger said.

Cadillic, who heads AFSCME Local 1526, the Boston Public Library Employees Union, has disputed the city’s numbers. She said there is no “definitive evidence” that switching to a utilization management system would “actually have any cost savings to the city.”

She added that the unions are being asked to re-negotiate health costs in the middle of an agreement, set to expire on June 30, 2027. Cadillic further expressed uneasiness with the city’s move to request prior authorization through UM extending to other non-specialty medications beyond GLP-1 drugs.

The mayor’s office did not respond to a request for comment on PEC’s counter-offer, but the committee’s “hard line” with the Wu administration on this matter is bothering other unions that didn’t constitute the majority PEC vote.

The Herald has learned the city’s largest police union, Boston Police Patrolmen’s Association and SEIU Local 888 were two of the three unions to vote in favor of the city’s cost-cutting offer for GLP-1 drugs.

Thomas McKeever, SEIU president, said bluntly that the PEC does not speak for all unions in taking a “hard line” against the mayor on this matter, despite having the votes.

“If we don’t have those discussions, then the majority of citywide unions will be facing layoffs, and sincerely that would really impact my members, as they are some of the lowest wage workers in the city,” McKeever told the Herald.

Speaking specifically to the PEC’s March 9 vote before the counter-offer was made, McKeever said, “We’re not in favor of the decision a small group of leaders across the city had made, as it relates to the PEC.”

“They’re taking a hard line against the mayor and refusing to open the contract,” McKeever said. “I’m saying that we need to open the contract and resume negotiations that will preserve our members to be gainfully employed.”

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