LOS ANGELES (January 28, 2002) - The Laborers Union Local 777 along with the Burbank City Employees Association (AFSCME) strongly opposed a recent decision by the California's Department of Managed Health Care (DMHC) to allow Universal Care (HMO) to change covered and increased premiums for 2002 after the close of open enrollment. The decision was released in an Opinion Letter on January 11th and will negatively impact employees of the Cities of Burbank, Los Angeles, and Newport Beach.

"If this were an auto dealer or a building contractor, the State would immediately step in and put a halt to a Bait and Switch. Burbank City employees would have never chosen Universal if they knew they would have to pay more for their premiums. This money has to come from somewhere, and for most, this not only hits the pocketbook, but their pension plans as well." - Robert Kaczmarek, President of the Burbank City Employees Association, Local 3143

The DMHC issued its opinion in response to a complaint filed against Universal Care by the Public Employees Health Plan.

"The DMHC Opinion will create significant instability in group health insurance plans. With this rate increase, a typical single family premium will go up to $42.00 a month. For a family of five or more, the rate will increase nearly $200. That's a lot of money for families who are on limited budgets." - Manual Sanchez, healthcare attorney

Prior to last summer's employee annual Open Enrollment Program, Universal's Underwriting Director confirmed in writing the coverage and "rates effective from January 1, 2002 through December 31, 2002". Relying on Universal's word, Public Employees Health Plan accepted the plan.

"I have never seen a decision quite so troubling. Health and Safety Code §2374.21 states that rates may be raised provided notice be given 'at least 30 days prior to the contract renewal effective date.' This decision goes against that code. - Fred Lowe, Business Manager of Laborers Union Local 777

The Burbank City Employees Association (AFSCME) and Laborers 777 have already contacted Governor Gray Davis' office for its help in asking the Department of Managed Health Care to reconsider its decision and require Universal Care to abide by its original promised 2002 renewal rates.

For more information or interviews, please contact Cheryl Bame at Tom Tomlin Associates at (310) 712-1155 or via e-mail at CdBame@aol.com