Spring 2010

IN THIS ISSUE . . .

Pharmacy Innovation AwardRecognizes National BenefitFund’s Creative Cost Containment Strategies . . . . . . . 2

New Prescription Initiatives Bring National Benefit FundCloser to Cost ContainmentTarget . . . . . . . . . . . . . . . . . . . . 2

Training And EmploymentFunds Train EnvironmentalWorkers for Tomorrow’sGreen Careers . . . . . . . . . . . . . . 3

Training Fund Conference Prepares Institutions to“Go Green” . . . . . . . . . . . . . . . . 3

Members Find it Easier to Apply for Child Care Benefits . . . . . . . . 4

FROM THE EXECUTIVE DIRECTORSAs contributing employers, you already know about the work our Funds are doingevery day to support your 1199SEIU employees with comprehensive benefits in themost cost-effective way. In this issue of 1199SEIU Employer News, you will read abouthow our programs are making a difference not only to our members, but through-out the healthcare industry.

After many years of successful cost containment initiatives, the National Benefit Fundhas been recognized with a national award for our innovative prescription programs– programs that are helping us reach our mandate to save an additional $150 millionover the next five years. The Training and Employment Funds are partnering in a newnational initiative supported by the U.S. Department of Labor to prepare healthcareworkers and our institutions for the green jobs of tomorrow. Meanwhile, our ChildCare Fund has been hard at work streamlining its registration process to enable arecord number of members to register for child care benefits in 2010.

Together, we are working to improve members’ lives and support the efforts of ourhealthcare industry, and we hope you enjoy this issue of your Employer News.

Sincerely,

Mitra BehrooziExecutive Director

Benefit and Pension Funds

Deborah KingExecutive Director

Training and Employment Funds

Vivian FoxExecutive DirectorChild Care Funds

Non-ProfitU.S. Postage

PAIDNew York, NYPermit No. 3700

1199SEIU Funds330 West 42nd StreetNew York, NY 10036-6977

Like every pension fund in the country, the 1199SEIU HealthCare Employees Pension Fund experienced enormous losseswhen the markets crashed in 2008.

Although the market gained ground in 2009, the improvementsare still incremental, and economists predict that a full recoverywill take years. But, as the economy slowly turns around,the asset returns in our pension funds have increased. Ourinvestment projections suggest that we may have achieved asmuch as a 17 percent return on our assets in 2009, climbingto an estimated $6.6 billion from $5.9 billion at the endof 2008.

While this is certainly an improvement over the dramatic32.4 percent loss the Fund suffered in 2008, the Pension Fund’sassets remain well below where they stood before theeconomic downturn. The Fund is still considered in “CriticalStatus" under the federal Pension Protection Act, but with therehabilitation plan adopted by the collective bargainers andtrustees in place, it is on the road to recovery.

As always, we continue to carefully monitor and safeguardthese assets to bring the Pension Fund back up to full fundingand ensure financial security for your 1199SEIU employees intheir retirement.

Healthcare Employees Pension Fund Recovers, Slowly But Surely

The Child Care Fund is committed to making sure everyeligible 1199SEIU member is able to register for the childcare benefits that your contributions support. Recognizingthat 1199SEIU parents are already juggling work, child careand other responsibilities, the Fund has turned its focus inthe past year to making the registration process as simpleand convenient as possible. As a result, more than 14,0001199SEIU members were able to apply for child carebenefits during the 2010 registration period this past fall.

As in past years, the Fund offered in-person registrationfor members at sites across New York City and in upstateNew York, with extended hours to accommodate workingparents’ schedules. Members visiting our Manhattan andHicksville, Long Island, offices had the option of seeing aregistration clerk, or registering online at computer terminalsunder the guidance of a staff person. While the majority ofmembers registering in person visited the Fund’s Manhattanoffice, more than 1,000 parents came in to register forbenefits at the Hicksville site. The Fund’s own staff wassupported by 34 1199SEIU parents who serve on theChild Care Fund’s Advisory Committee and were on hand tohelp their fellow members through the process.

Since we understand that it can be difficult for 1199SEIUmembers to get to a registration site in person, the Fund alsofocused on improving the online registration process. Fundstaff created an updated version of the online registrationtutorial, which guides members through the process stepby step, from start to finish, and created an extended andmore detailed instruction manual that members candownload and print for their convenience. Finally, the Fund

added a Google map feature to the child care providerlisting to help members select providers close to theirhome or worksite. With these improvements, 42 percent ofmembers were able to register online, an increase of sevenpercent over last year.

Over the next year, the Fund will continue to improve theregistration process, with the goal of ensuring that everyeligible member is able to apply for these benefits.

Members Find it Easier to Apply forChild Care Benefits

1199 SEIU Employer News Spring 2010_Layout 1 3/31/10 8:52 AM Page 1

Since implementing ourcost containment initia-tives five years ago, theNational Benefit Fundhas saved more than$200 million throughinnovative strategies thathave contained costs,while protecting your1199SEIU employees’access to quality care. In2008, these programskept our prescriptiontrend to a -1 percentwithout shifting costs tomembers, while aroundus the industry averagewas between eight and 10 percent.

This achievement was recently recognized by the PharmacyBenefit Management Institute (PBMI), which honored theNational Benefit Fund with a 2010 Rx Benefit InnovationAward in February. PBMI sponsors this prestigious industryaward as part of its educational mission to recognizeinnovative solutions to problems surrounding drug benefitprograms nationwide.

The Fund’s creative strategy for containing risingprescription costs has been to allow members access to themedications they need with no out-of-pocket costs as longas they comply with our prescription programs. When1199SEIU members use the Preferred Drug List, genericmedications, and The 90-Day Rx Solution mail order programfor long-term medications, they do not pay out of pocket.

Of the 2.3 million prescriptions dispensed last year, 66.4percent were generic. That’s 2.4 percent higher than ourPBM’s other labor clients. In fact, physician and membercompliance with generic substitution for brand-name drugs– where one existed – was 99.3 percent.

Last year, we also eliminated the cap on the differentialmembers paid when they filled a non-preferred prescription.Now, if members go outside these programs and use non-preferred medications or pick up monthly supplies oflong-term prescriptions at the pharmacy, they are responsiblefor paying the full difference.

This strategy works for everyone. Members continue tohave access to the most clinically effective medications on themarket, and the Fund is protected from significantly highercosts. When other health plans give plan participants theoption of accessing higher-cost medications through tieredplans, many still choose to pay for the more expensivemedication. For the participant, the difference mayrepresent a jump from a $10 co-pay to a $40 co-pay. Butfor the plan, that jump from a preferred to a non-preferred medication could translate to an additionalcost of hundreds of dollars. 1199SEIU members, onthe other hand, are responsible for the true cost difference,which encourages their compliance and preserves criticalbenefit dollars.

“In an era of aggressive cost shifting to participants,1199SEIU has proven it is possible to control costs byimplementing aggressive management strategies insteadof imposing an additional financial burden on members.Your successful engagement of members in the costcontainment program is commendable,” said DanaFelthouse, president of PBMI.

Spring 2010 EMPLOYER NEWS 3 2 EMPLOYER NEWS Spring 2010

Pharmacy Innovation Award Recognizes NationalBenefit Fund’s Creative Cost Containment Strategies

New Prescription Initiatives BringNational Benefit Fund Closer toCost Containment Target

The National Benefit Fund continues to build on ourprescription programs for increased savings. As ofFebruary 1, the Fund, like many other health plans, nolonger covers erectile dysfunction medications. Toreduce expenses for drugs that are also available over thecounter, the Fund will no longer cover prescriptioncough and cold medications after April 1. Finally, as wecontinue to work with our clinicians and Medco torefine our Preferred Drug List, we will add two newclasses for antivertigo/antiemetic agents, and steroids usedto treat ear infections, and remove some brand-name, oralhypoglycemic drugs used to treat diabetes, since there areequally effective generics and lower-cost brands available.

These changes are projected to save the National BenefitFund $2.3 million per year.

Healthcare workers in environmental services, such as house-keeping, are a critical link in keeping the workplace safe andhealthy for patients and their co-workers. With the new“green” focus on healthcare, these jobs will become evenmore critical in the coming years.

To prepare these workers and our institutions for the future,the Training and Employment Funds will be one of thepartners in a national project funded by the U.S. Departmentof Labor with a grant to the Healthcare Career AdvancementProgram (H-CAP), a national partnership between SEIU,employers and joint training funds. The $4.6 million grantwill provide training to workers at three League institutions,including St. Vincent's Hospital, Montefiore Medical Centerand NYU Langone Medical Center, as well as in California,Washington State and Maryland.

Through the training sessions, workers will learn principlesof green cleaning and its importance in health, safety andinfection control; methods of waste management that can

reduce costs to both employers and the environment; andways to monitor energy and water consumption to reduceour institutions’ carbon footprint. Workers will also beeducated on some of the new math and science skills thatthey will need to advance in their careers in the newlyemerging green jobs sector.

On top of the training, the employers and the Union willwork together to implement green changes in theirdepartments to support infection control, reduce energy,water use and waste, and recognize the value thatenvironmental services workers bring to their healthcareinstitutions. And since the new green focus will also create aneed for some new jobs in hospitals, the Funds will workclosely with the Union and employers to design thesenew jobs in ways that both meet employer needs andallow workers to move up the first steps of a new greencareer ladder.

"Environmental service workers are a critical part of thegreening of our institutions," said Christopher Berner,Assistant Vice President of Labor and Employee Relations atMontefiore Medical Center. "We're looking forward toworking with the Union, the Fund and our employees tomove forward together on this exciting new initiative."

Training and Employment Funds Train EnvironmentalWorkers for Tomorrow’s Green Careers

Training Fund ConferencePrepares Institutions to “Go Green”

As part of its work in preparing our workers andinstitutions for new green jobs, the Training andUpgrading Fund recently sponsored an accreditedsix-hour symposium for 750 participants on“The Greening of Healthcare.” The program – “TheClinician’s Role in ‘Going Green’ ” – was designedto raise awareness, foster discussion and inspire actionamong workers and management to achieve sustainablepractices that will improve worker safety and improvepatient outcomes. The symposium was co-sponsored byPractice Greenhealth and Health Care Without Harm,two companies in the forefront of the greening ofhealthcare both nationally and internationally.

For more information on upcoming workshops andsymposiums on issues affecting our industry, visitwww.1199SEIUFunds.org.

1199 SEIU Employer News Spring 2010_Layout 1 3/31/10 8:52 AM Page 2

Since implementing ourcost containment initia-tives five years ago, theNational Benefit Fundhas saved more than$200 million throughinnovative strategies thathave contained costs,while protecting your1199SEIU employees’access to quality care. In2008, these programskept our prescriptiontrend to a -1 percentwithout shifting costs tomembers, while aroundus the industry averagewas between eight and 10 percent.

This achievement was recently recognized by the PharmacyBenefit Management Institute (PBMI), which honored theNational Benefit Fund with a 2010 Rx Benefit InnovationAward in February. PBMI sponsors this prestigious industryaward as part of its educational mission to recognizeinnovative solutions to problems surrounding drug benefitprograms nationwide.

The Fund’s creative strategy for containing risingprescription costs has been to allow members access to themedications they need with no out-of-pocket costs as longas they comply with our prescription programs. When1199SEIU members use the Preferred Drug List, genericmedications, and The 90-Day Rx Solution mail order programfor long-term medications, they do not pay out of pocket.

Of the 2.3 million prescriptions dispensed last year, 66.4percent were generic. That’s 2.4 percent higher than ourPBM’s other labor clients. In fact, physician and membercompliance with generic substitution for brand-name drugs– where one existed – was 99.3 percent.

Last year, we also eliminated the cap on the differentialmembers paid when they filled a non-preferred prescription.Now, if members go outside these programs and use non-preferred medications or pick up monthly supplies oflong-term prescriptions at the pharmacy, they are responsiblefor paying the full difference.

This strategy works for everyone. Members continue tohave access to the most clinically effective medications on themarket, and the Fund is protected from significantly highercosts. When other health plans give plan participants theoption of accessing higher-cost medications through tieredplans, many still choose to pay for the more expensivemedication. For the participant, the difference mayrepresent a jump from a $10 co-pay to a $40 co-pay. Butfor the plan, that jump from a preferred to a non-preferred medication could translate to an additionalcost of hundreds of dollars. 1199SEIU members, onthe other hand, are responsible for the true cost difference,which encourages their compliance and preserves criticalbenefit dollars.

“In an era of aggressive cost shifting to participants,1199SEIU has proven it is possible to control costs byimplementing aggressive management strategies insteadof imposing an additional financial burden on members.Your successful engagement of members in the costcontainment program is commendable,” said DanaFelthouse, president of PBMI.

Spring 2010 EMPLOYER NEWS 3 2 EMPLOYER NEWS Spring 2010

Pharmacy Innovation Award Recognizes NationalBenefit Fund’s Creative Cost Containment Strategies

New Prescription Initiatives BringNational Benefit Fund Closer toCost Containment Target

The National Benefit Fund continues to build on ourprescription programs for increased savings. As ofFebruary 1, the Fund, like many other health plans, nolonger covers erectile dysfunction medications. Toreduce expenses for drugs that are also available over thecounter, the Fund will no longer cover prescriptioncough and cold medications after April 1. Finally, as wecontinue to work with our clinicians and Medco torefine our Preferred Drug List, we will add two newclasses for antivertigo/antiemetic agents, and steroids usedto treat ear infections, and remove some brand-name, oralhypoglycemic drugs used to treat diabetes, since there areequally effective generics and lower-cost brands available.

These changes are projected to save the National BenefitFund $2.3 million per year.

Healthcare workers in environmental services, such as house-keeping, are a critical link in keeping the workplace safe andhealthy for patients and their co-workers. With the new“green” focus on healthcare, these jobs will become evenmore critical in the coming years.

To prepare these workers and our institutions for the future,the Training and Employment Funds will be one of thepartners in a national project funded by the U.S. Departmentof Labor with a grant to the Healthcare Career AdvancementProgram (H-CAP), a national partnership between SEIU,employers and joint training funds. The $4.6 million grantwill provide training to workers at three League institutions,including St. Vincent's Hospital, Montefiore Medical Centerand NYU Langone Medical Center, as well as in California,Washington State and Maryland.

Through the training sessions, workers will learn principlesof green cleaning and its importance in health, safety andinfection control; methods of waste management that can

reduce costs to both employers and the environment; andways to monitor energy and water consumption to reduceour institutions’ carbon footprint. Workers will also beeducated on some of the new math and science skills thatthey will need to advance in their careers in the newlyemerging green jobs sector.

On top of the training, the employers and the Union willwork together to implement green changes in theirdepartments to support infection control, reduce energy,water use and waste, and recognize the value thatenvironmental services workers bring to their healthcareinstitutions. And since the new green focus will also create aneed for some new jobs in hospitals, the Funds will workclosely with the Union and employers to design thesenew jobs in ways that both meet employer needs andallow workers to move up the first steps of a new greencareer ladder.

"Environmental service workers are a critical part of thegreening of our institutions," said Christopher Berner,Assistant Vice President of Labor and Employee Relations atMontefiore Medical Center. "We're looking forward toworking with the Union, the Fund and our employees tomove forward together on this exciting new initiative."

Training and Employment Funds Train EnvironmentalWorkers for Tomorrow’s Green Careers

Training Fund ConferencePrepares Institutions to “Go Green”

As part of its work in preparing our workers andinstitutions for new green jobs, the Training andUpgrading Fund recently sponsored an accreditedsix-hour symposium for 750 participants on“The Greening of Healthcare.” The program – “TheClinician’s Role in ‘Going Green’ ” – was designedto raise awareness, foster discussion and inspire actionamong workers and management to achieve sustainablepractices that will improve worker safety and improvepatient outcomes. The symposium was co-sponsored byPractice Greenhealth and Health Care Without Harm,two companies in the forefront of the greening ofhealthcare both nationally and internationally.

For more information on upcoming workshops andsymposiums on issues affecting our industry, visitwww.1199SEIUFunds.org.

1199 SEIU Employer News Spring 2010_Layout 1 3/31/10 8:52 AM Page 2

Spring 2010

IN THIS ISSUE . . .

Pharmacy Innovation AwardRecognizes National BenefitFund’s Creative Cost Containment Strategies . . . . . . . 2

New Prescription Initiatives Bring National Benefit FundCloser to Cost ContainmentTarget . . . . . . . . . . . . . . . . . . . . 2

Training And EmploymentFunds Train EnvironmentalWorkers for Tomorrow’sGreen Careers . . . . . . . . . . . . . . 3

Training Fund Conference Prepares Institutions to“Go Green” . . . . . . . . . . . . . . . . 3

Members Find it Easier to Apply for Child Care Benefits . . . . . . . . 4

FROM THE EXECUTIVE DIRECTORSAs contributing employers, you already know about the work our Funds are doingevery day to support your 1199SEIU employees with comprehensive benefits in themost cost-effective way. In this issue of 1199SEIU Employer News, you will read abouthow our programs are making a difference not only to our members, but through-out the healthcare industry.

After many years of successful cost containment initiatives, the National Benefit Fundhas been recognized with a national award for our innovative prescription programs– programs that are helping us reach our mandate to save an additional $150 millionover the next five years. The Training and Employment Funds are partnering in a newnational initiative supported by the U.S. Department of Labor to prepare healthcareworkers and our institutions for the green jobs of tomorrow. Meanwhile, our ChildCare Fund has been hard at work streamlining its registration process to enable arecord number of members to register for child care benefits in 2010.

Together, we are working to improve members’ lives and support the efforts of ourhealthcare industry, and we hope you enjoy this issue of your Employer News.

Sincerely,

Mitra BehrooziExecutive Director

Benefit and Pension Funds

Deborah KingExecutive Director

Training and Employment Funds

Vivian FoxExecutive DirectorChild Care Funds

Non-ProfitU.S. Postage

PAIDNew York, NYPermit No. 3700

1199SEIU Funds330 West 42nd StreetNew York, NY 10036-6977

Like every pension fund in the country, the 1199SEIU HealthCare Employees Pension Fund experienced enormous losseswhen the markets crashed in 2008.

Although the market gained ground in 2009, the improvementsare still incremental, and economists predict that a full recoverywill take years. But, as the economy slowly turns around,the asset returns in our pension funds have increased. Ourinvestment projections suggest that we may have achieved asmuch as a 17 percent return on our assets in 2009, climbingto an estimated $6.6 billion from $5.9 billion at the endof 2008.

While this is certainly an improvement over the dramatic32.4 percent loss the Fund suffered in 2008, the Pension Fund’sassets remain well below where they stood before theeconomic downturn. The Fund is still considered in “CriticalStatus" under the federal Pension Protection Act, but with therehabilitation plan adopted by the collective bargainers andtrustees in place, it is on the road to recovery.

As always, we continue to carefully monitor and safeguardthese assets to bring the Pension Fund back up to full fundingand ensure financial security for your 1199SEIU employees intheir retirement.

Healthcare Employees Pension Fund Recovers, Slowly But Surely

The Child Care Fund is committed to making sure everyeligible 1199SEIU member is able to register for the childcare benefits that your contributions support. Recognizingthat 1199SEIU parents are already juggling work, child careand other responsibilities, the Fund has turned its focus inthe past year to making the registration process as simpleand convenient as possible. As a result, more than 14,0001199SEIU members were able to apply for child carebenefits during the 2010 registration period this past fall.

As in past years, the Fund offered in-person registrationfor members at sites across New York City and in upstateNew York, with extended hours to accommodate workingparents’ schedules. Members visiting our Manhattan andHicksville, Long Island, offices had the option of seeing aregistration clerk, or registering online at computer terminalsunder the guidance of a staff person. While the majority ofmembers registering in person visited the Fund’s Manhattanoffice, more than 1,000 parents came in to register forbenefits at the Hicksville site. The Fund’s own staff wassupported by 34 1199SEIU parents who serve on theChild Care Fund’s Advisory Committee and were on hand tohelp their fellow members through the process.

Since we understand that it can be difficult for 1199SEIUmembers to get to a registration site in person, the Fund alsofocused on improving the online registration process. Fundstaff created an updated version of the online registrationtutorial, which guides members through the process stepby step, from start to finish, and created an extended andmore detailed instruction manual that members candownload and print for their convenience. Finally, the Fund

added a Google map feature to the child care providerlisting to help members select providers close to theirhome or worksite. With these improvements, 42 percent ofmembers were able to register online, an increase of sevenpercent over last year.

Over the next year, the Fund will continue to improve theregistration process, with the goal of ensuring that everyeligible member is able to apply for these benefits.

Members Find it Easier to Apply forChild Care Benefits

1199 SEIU Employer News Spring 2010_Layout 1 3/31/10 8:52 AM Page 1