SAG-AFTRA leaders have been grappling for months with the outcry from members over big changes and cuts to the union’s health care plan starting next year.
But as 2020 draws to a close, Michael Estrada, CEO of the SAG-AFTRA Health Plan, has a simple message for the union’s 160,000-plus members: Those who are eligible should sign up online or by telephone for a plan by Dec. 31, or risk facing a lapse in coverage early next year. About 33,000 members at present are covered by the plan.
“There’s been some misinformation out there and that has led to confusion,” Estrada told Variety. “Especially among our retirees, this has created some panic.”
Estrada concedes that changes for 2021 that were unveiled in August were disturbing to members. With the health plan on pace to rack up a $141 million deficit this year, SAG-AFTRA Health Plan trustees had little choice but to significantly tighten up benefits eligibility and raise premiums. Another move that rattled many members was the shift in eligibility requirements for seniors and retired performers, who are forced to rely more on Medicare and supplemental policies offered through SAG-AFTRA’s Via Benefits exchange.
The changes spurred a class-action lawsuit spearheaded in part by actor Ed Asner, a former SAG president. The suit, filed Dec. 1 in Los Angeles federal court, asserts that the changes amount to age discrimination against older and retired actors.
Estrada emphasizes that even those who have concerns about the changes should sign up by the year-end deadline to avoid a lapse in coverage. The final deadline for obtaining coverage through the union for 2021 is Jan. 15 for active performers and Feb. 26 for retirees and senior performers. But Estrada notes that waiting until those later deadlines could mean that members face a period without any coverage.
“Nobody would be making these changes in a pandemic if we didn’t have to,” Estrada said. “We take our responsibility seriously and one thing we have to do right now when we know there’s confusion is to get the right information out there.”
Estrada said the union has hosted numerous webinars and health plan officials have had many one-on-one sessions with members to explain the changes. For retirees, he notes that most were already reliant on Medicare as their primary source of health care.
“Once we walked people through the financial challenges facing the plan and we walked them through the actual changes, most people understand,” he said. The lesson from the uproar in August was the importance of “over-communicating with members.”
Decisions to raise the earnings threshold and eligibility for some spouses of SAG-AFTRA members were not taken lightly by the 40 trustees that oversee the plan. The bulk of the plan’s funding comes from employer contributions. Producers of SAG-AFTRA-covered productions are required to pay into the plan based on a percentage of each performers’ earnings on a given project. That percentage is not deducted from the performers’ paycheck but paid out separately by the production entity. The percentage owed by the studio is also subject to an earnings cap per project (or episode) of $232,000 for feature films, $15,000 per half-hour episode of TV and $24,500 per hourlong episode. At present, the percentage that producers pay in to the fund stands at about 7.5% of performer earnings up to the cap.
The quality of the SAG-AFTRA Health Plan has long been a point of pride for union members as it was created out of sacrifice. In 1960, union members agreed to give up all TV residuals for movies produced before that year in order for the studios to fund a health plan that has now covered several generations of actors and performers.
The drop in TV production spurred by the COVID-19 pandemic had a ripple effect that hit the SAG-AFTRA health plan hard. It was already facing a deficit – at the end of 2019 the plan was $40 million in the red — but the outbreak and the slowdown in production was a cruel one-two punch, Estrada said. Moreover, there is an expectation that many members have delayed non-essential medical procedures that will likely be scheduled in 2021.
“The COVID shutdown had the most immediate and profound impact on the plan,” Estrada said. Health plan earnings from TV production are down about 35% over the past 12 months compared to the same period in 2019. Theatrical earnings are down about 25%, Estrada said.
The health plan is run by 40 trustees, half of which are appointed by the union and half by producers. If they had made no financial changes for 2021, the plan would have been out of its reserves by 2024.
“We did this out of necessity,” Estrada said.
SAG-AFTRA members can get more information about health plan options on the union’s website, SagAftraPlans.org/Health, or by calling (800) 777-4013 or by sending an email to firstname.lastname@example.org.