Confronting the dire financial condition of its health insurance fund, Actors Equity Assn. has quietly approved sweeping changes in its eligibility guidelines that will ultimately leave as many as 4,500 unemployed and underemployed actors without Equity health insurance.
The new restrictions, which take effect March 1, are part of a plan by Equity to reverse the rapid depletion of its health fund reserves. Sources say the fund is down to $ 5 million and is losing $ 1 million a month; at its current rate, the fund would be bankrupt by June.
Skyrocketing healthinsurance costs, exacerbated by the devasting impact of AIDS in the acting community and, according to Equity officials, “overutilization” of the insurance program, have left the fund in critical condition.
“The fund has taken a big beating,” said Alan Eisenberg, Equity’s exec secretary, adding that the union “has not been able to get sufficient money in its collective bargaining” to cover rising costs.
Eisenberg stressed that Equity “is trying to cover the working actor.”
In addition to the eligibility restrictions, Equity will divert, from February 1993 to July 1994, as much as $ 14 million earmarked for the union’s pension fund to the health fund, pending expected approval from producers unions.
The $ 380 million pension fund is considered “extremely healthy” by the union and can spare the money, said Robert Bruyr, Equity’s exec assistant for communication and education.
While the pension fund diversion will have little direct impact on the union’s 35,000 members — more than $ 14.5 million has been similarly diverted since 1985 — the slashing of eligibility could leave thousands of actors without health insurance.
Current eligibility guidelines provide free post-employment health coverage for actors who have worked 12 weeks or earned $ 5,000 during the previous year. The new guidelines are 20 weeks or $ 14,000.
The more restrictive rules will reduce the number of eligible participants from the current 10,500 to 6,000-6,500, according to Eisenberg.
Those no longer eligible for free coverage may elect to continue coverage by paying their own premiums, but the cost will undoubtedly be prohibitive for many , if not most, unemployed actors. Eisenberg estimates the out-of-pocket cost would be between $ 600 and $ 700 a quarter.
New participants in the modified plan will begin receiving benefits June 1. Participants receiving benefits under the old guidelines will continue to do so until their coverage lapses, after which they must meet the new criteria. Bruyr estimates the reduction of plan participants will span the course of a year.
According to Bruyr, the fund’s monthly income from both producer and self-paid contributions is $ 1.6 million. The fund pays out $ 2.5 million each month to Blue Cross (which provides Equity’s hospitalization plan) and Union Labor Life (which provides the medical coverage). With an additional $ 100,000 in monthly operating costs, the deficit adds up to an even $ 1 million.
Bruyr says the monthly costs average about 25% higher than last year.
But at least as damaging is a miscalculation Equity said it made two years ago in revising the health plan’s eligibility guidelines. Officials estimated the 12-week/$ 5,000 rule would cover approximately 8,500 Equity members. Instead , the union found itself with 10,500 eligible members.
“For the plan to be stable,” Bruyr said, “it should be covering 6,000 to 6, 500 members.”
“The last time we made changes (in eligibility), we were hopeful that the plan participants would be at a number we could afford,” said Harriet Slaughter, director of labor relations for the League of American Theaters & Producers, who represents the producers on the health fund’s board of trustees. “But too many people qualified.”