MVP Health Care announced Friday that it will lay off 100 employees over the next few days, marking the fourth time in less than two years that layoffs have occurred at the Schenectady-based health insurer.
Since May 2012, MVP has laid off nearly 240 workers in an effort to reduce administrative costs and keep its health plans affordable. Dozens of positions have also been lost to attrition and unfilled vacancies. The workforce shedding actually began in January 2012 when the company offered early retirement packages to 156 of its 1,800 employees. Only 63 employees ended up taking the package.
This week’s layoffs will occur across MVP’s service area in New York, Vermont and New Hampshire. The bulk of MVP employees work out of Schenectady and Rochester. Company officials declined to say how many layoffs would occur in Schenectady, where MVP has headquarters at 625 State St.
“We’re in the middle of talking to our employees right now,” said MVP President and CEO Denise Gonick. “It’s not any one type of job or in any one department.”
A news release issued Friday morning originally said that 100 positions would be cut over the next few days through attrition, leaving vacancies unfilled and “some layoffs.” But in a phone interview Gonick said that the 100 positions will actually all be eliminated through layoffs, and that additional positions will be lost to attrition and unfilled vacancies.
“We focused on the attrition and vacancies before we got to the layoffs,” she said. “We’re always looking at that first before we impact people. It’s a decision we had to make to ultimately serve our members. But it’s very difficult. We’re trying to make it as smooth a transition as we can to our people.”
Affected employees will receive severance pay and benefits. In addition, employees will be encouraged to apply for other positions within the company. Lee Hecht Harrison, a global talent mobility firm, will provide outplacement assistance.
The changing health care landscape has put increased pressure on health insurers to make their plans affordable. With the launch of online state health exchanges last October, the consumer now has more transparency than ever when comparing the cost of health plans between insurers.
“We have to keep our health plans affordable in a very competitive marketplace,” said Gonick in Friday’s news release. “The health insurance industry is going through a time of unprecedented change, and we need a streamlined and nimble organization to stay ahead of the curve. Still, knowing the reality of the situation doesn’t make it any easier to say goodbye to the people who will be affected by this restructuring.”
Gonick stressed the job loss won’t affect MVP’s ability to do business on state health exchanges.
“We now have consumers with the ability to purchase their coverage on the exchange, but we also have private exchanges that are forming,” she said. “I think for us, the Internet and that shift to the consumer purchase is definitely a game changer. And it’s difficult to lay off coworkers, but we have to be focused on everything we can do to provide that affordable health coverage.”
Today, MVP employs about 1,500 people across New York and Vermont. As of last year, about 900 of those employees were based in Schenectady. The rest work out of offices in Rochester, Binghamton, Syracuse, Utica, Fishkill and Vermont.
Beginning in May 2012, MVP made the first in what would be a string of layoffs at the company. Forty-eight employees were let go in that first round. Eight months later, in January 2013, 68 employees were laid off and nearly 20 vacant positions were cut — again, the company stated, to keep its plans affordable to customers. Four months later, 22 more employees were laid off.
It’s unknown how many of these newest layoffs will occur in Schenectady. Previous rounds of job cuts layoffs affected 75 local employees.