Dive Brief:

• New York City Mayor Bill de Blasio struck a deal Thursday with the city's largest teacher's union, promising an 18% raise over nine years in return for the union reducing healthcare costs by $1.3 billion.  
• The $1.3-billion health care cut wasn't fully explained by officials, but raising premiums was promised to be out of the question.  
• Since this is first deal de Blasio has created with a union, some hope it will set a precedent for other contracts.  

Dive Insight:

Mayor de Blasio's union deal was monumental for two reasons. For one, it represents the beginning of a new era following former mayor Michael Bloomberg's tense relationship with the unions, which resulted in pay freezes and hostility. The promise of a pay increase has eased those strains and even resulted in the union agreeing to lossen up on some of its stances, like making it easier to fire a teacher for poor performance. The second reason the deal is important is it sets a precedent for deals with unions. De Blasio has deep ties to the labor movement, so many were curious to see how his conversations would unfold.

The health care cost cuts contingency is a bit ambiguous right now, leaving some gaps in the understanding of how this deal will unfold.  According to one official involved in the deal who spoke to the New York Times on the condition of anonymity, it would be prudent for those creating the deal to get specific saving measures in case the union can't achieve the $1.3-billion cuts.