SAG plan to cut benefits, up premiums

Facing financial pressure on several fronts, the Screen Actors Guild-industry health plan will be cutting benefits, hiking premiums and tightening eligibility next year.

Moves by the plan, which is notifying its 40,000 participants this week through its Take 2 newsletter, will undoubtedly color SAG’s upcoming negotiations with the congloms on primetime and features. SAG and the American Federation of Television & Radio Artists launch bargaining with the Alliance of Motion Picture & Television Producers on Sept. 27; the pact expires June 30.

The SAG plan — overseen jointly by reps of the guild and the industry congloms — is facing a $30 million deficit this year with projections of a $50 million deficit next year. Plan administrator Bruce Dow told Daily Variety that there were three major factors leading to the losses:

  • Increased costs of complying with the new health care reform bill and other governmental regulations

  • The need to divert contributions from the Health Plan to the Pension Plan to improve its funding after the financial market collapse of 2008

  • Reduced employer contributions from SAG’s TV work.

A year ago, Dow offered a similarly sobering view of the plan’s future at SAG’s annual membership meeting. He noted that employer contributions were down 10%-11% for the year and cited a variety of factors, including fewer movies, TV work shifting to AFTRA and a new provision in the ad contract that cuts so-called overscale contributions for top paid actors.

The upcoming changes in the SAG health plan include elimination of the mental health and substance abuse benefits in its Plan II tier.

Dow also noted that one provision in the new governmental regulations added 1,700 dependents to the SAG Health Plan.

“Unfortunately, the government’s ‘Mental Health Parity Act’ placed the Health Plan in a position that it could no longer offer these benefits under Plan II,” he added.

Currently, employers pay a contribution equal to 15% (9.25% for health, 5.75% for pension) of an actor’s salary into the SAG plans. For AFTRA, the contribution is also 15% (9.75% for health, 5.25% for pension).

The increase in premiums, which goes into effect in July, comes after the SAG plan already hiked premiums at the start of this year. For the first time, the plan’s also charging a separate — and higher — premium for participants with dependent coverage.

Plan I quarterly premiums, currently at $249, will rise to $273 for single coverage, $315 for two-party coverage and $342 for family coverage. Plan II premiums, currently at $294 per quarter, will be $324 for single coverage, $372 for two-party and $405 for family.

The guild disclosed last November that SAG actors saw a 2.5% decline in so-called covered earnings in 2008 to $2 billion, due largely to the impact of the writers strike. (The figure is derived from contributions that employers make to the pension and health plans and doesn’t include many of the paychecks for top stars).

The SAG plan’s previous round of hikes in premiums and cuts in benefits was announced last September and became an issue in the campaign for SAG’s national board. The self-styled progressives of Membership First blamed the self-styled moderates of Unite For Strength for not holding out for better terms in new-media earnings, while UFS blamed its rivals for creating a stalemate lasting over a year without any gains in minimums.

Membership First and Unite for Strength have both advocated merging the unions — although Membership First wants the combined union to be for actors only with the AFTRA broadcasters and recording artists excluded from the merged organization.

Follow @Variety on Twitter for breaking news, reviews and more