Three days after the SAG-AFTRA Health Plan and its Trustees were sued over upcoming cuts in benefits and eligibility for the plan, leaders of SAG-AFTRA have blasted backers of the suit and accused them of lying.
“There’s no easy way to say this: You are being misled,” the performers union said Friday night in a message to its 160,000 members. “Since the changes to the SAG-AFTRA Health Plan were announced in August, there has been a deliberate public and social media campaign spreading misinformation and fear.”
The message to members made no mention of the federal class-action suit, with 91-year-old Ed Asner as lead plaintiff. The action, filed Dec. 1, estimated that the health plan changes eliminated coverage for about 11,750 of 32,000 participants, including 8,200 senior performers. It alleges two counts of breach of fiduciary duty, one count of engaging in a prohibited transaction and one count of failing to disclose information material to plan participants.
In August, the health plan announced would raise the earnings floor for eligibility from $18,040 a year to $25,950, effective Jan. 1. Trustees said at that point that without restructuring, the plan was projecting a deficit of $141 million this year and $83 million in 2021. The suit asks that the court appoint any independent executive to operate the fund. The health plan announced Friday afternoon that the suit was without merit and would be “vigorously” opposed.
The suit also asserts that the SAG-AFTRA Health Plan Trustees knew soon after the SAG and AFTRA health plans merged in 2017 that the health benefit structure was not sustainable.
“However, the trustees did not disclose that information to members of the union’s bargaining committees on the most recent successor deals for the commercials contract, a new Netflix contract and the feature-primetime TV contract, approved in June with $54 million of the $318 million in gains going to the health plan,” the suit said. “Far less draconian and equitable adjustments were available for a one-time event like Covid-19, such as increased diversions.”
SAG-AFTRA’s message to members asserted that the plan and trustees are blameless for the cuts: “We understand that change, myths and rumors have led to anger and frustration. We also know that truth is the best balm in uncertain times. Here are five facts you need to know about changes to the SAG-AFTRA Health Plan: Without significant changes, the SAG-AFTRA Health Plan’s reserves would have vanished for ALL participants by 2024. Ask yourself this: Why would the Health Plan want to reduce coverage for members if there was any other option?”
The union insisted that the trustees had no other choice except to make the cuts: “The idea that premium increases or higher employer contributions alone could have fixed the Health Plan is simply wrong. The root of the problem is the exorbitant cost of healthcare — a problem made worse by our industry’s production shutdown due to the pandemic crisis. The cost of healthcare remains a top issue for Americans, and the SAG-AFTRA Health Plan is not immune from this and other economic forces. Structural changes were required to put the Plan on a secure footing now and into the future.”
The message also asserted that senior performers are not losing their healthcare coverage.
“They will continue to have Medicare as their primary insurance, as they do today,” it said. “Plus, they will receive a stipend under the new Health Reimbursement Account Plan to use for supplemental coverage of their choosing through Via Benefits. For many Senior Performers, this will mean comparable coverage at a comparable price.”
The message also asserted that spouses aren’t getting “kicked off” the plan and points to a COBRA plan that will enable those who qualify will be eligible to maintain their SAG-AFTRA Health Plan coverage with significantly reduced COBRA premiums — at only 20% of the regular COBRA premium — for 12-18 months after their current eligibility expires.
No leaders signed their names to the message. SAG-AFTRA National Executive Director David White is a Trustee and one of more than three dozen defendants.