The group of dissident actors behind the class action ageism lawsuit filed against the SAG-AFTRA Health Plan over its pending benefit cuts have answered the union’s five-point defense of the changes in coverage that will take effect January 1. Both sides are accusing the other of “misleading” the union’s members about the causes of the Plan’s troubles and the changes that they say are needed to rescue it.
Facing staggering deficits, the Plan, which is a separate entity from the union itself, has said that “without restructuring the Health Plans, we are projecting a deficit of $141 million this year and $83 million in 2021, and by 2024 the Health Plan is projected to run out of reserves.”
The Plan’s trustees have projected that some 3,500 performers and 2,800 of their dependents will lose benefits under the restructuring, although the vast majority of them are eligible for coverage under Medicare or Obamacare.
Upcoming changes to the Plan include increased eligibility thresholds for many and higher premiums for all participants in order to put it back in the black by 2022. The Plan’s actuaries estimate that under the changes, the Plan will run a surplus of $26 million in 2022 and a $53 million surplus in 2023. That money will be used to refill the Plans’ depleted reserves, which have plummeted 20% – or about $100 million – from a high of $500 million three years ago.
The lawsuit, filed Dec. 1 in U.S. District Court in Los Angeles, claims that the coming benefit changes “illegally discriminate based on age and violate the Age Discrimination and Employment Act of 1967,” and are a breach of fiduciary duty under the Employee Retirement Income Security Act. The 10 named plaintiffs in the suit include former SAG president Ed Asner and David Jolliffe, currently a vice president of the union’s Los Angeles Local – both of whom are leaders of the union’s Membership First dissident faction that spearheaded the lawsuit.
On Friday, the Plan’s board of trustees said that it will “vigorously contest” the lawsuit, calling it “entirely without merit,” with the union telling its members that “There’s no easy way to say this: You are being misled. 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. 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.”
In an email to its members on Friday, the union laid out “five facts you need to know about changes to the SAG-AFTRA Health Plan,” which the dissidents – who call themselves the SOS Health Plan Team – addressed today.
“You’ve recently received an email from the union’s official SAG-AFTRA communications’ account, deliberately misrepresenting the Health Plan Crisis,” the SOS Health Plan Team said in a statement posted on their website. “It began, ‘There’s no easy way to say this: You are being misled.’ They insist that the truth is paramount. We agree.”
See the dissidents’ website here:
The dissidents, who support the lawsuit, then answered each of the union’s “Five facts you need to know about changes to the SAG-AFTRA Health Plan.”
1. “The Union Says: ‘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?’
“We ask the same question. There were options:
• Direct more money into the Health Plan through recent Contract Negotiations. (2019 Commercials, 2019 Netflix and 2020 TV/Theatrical.)
• Change the premium structure.
• Add a new option with a higher earnings threshold.
• Use our reserves for their intended purpose: To mitigate the consequences of an emergency, in this case, the Pandemic.”
2. “The Union says: ‘Senior Performers are not losing their healthcare coverage; they will continue to have Medicare as their primary insurance, as they do today.’
“Seniors absolutely will be losing their SAG-AFTRA healthcare coverage,” the dissidents countered. “There was a decades-old legacy SAG benefit and SAG-AFTRA benefit upon which seniors based their retirement, which assured life-long secondary health coverage for participants and their spouses over 65 with 20 or more pension credits. That benefit has now been eliminated completely.
• “Despite being provided with a Health Reimbursement Account Stipend, members over 65 with Medicare as their primary insurance will be forced to choose a secondary plan from the marketplace that may not be comparable in coverage or price to the SAG-AFTRA coverage.
• “In addition: Senior performers over 65 taking their pension will now be in grave danger of losing their SAG-AFTRA primary Health coverage because their residuals will no longer count as credited earnings. Senior performers will now only be able to use their sessional earnings to qualify. That current qualifying threshold is $25,950.
3. “The Union says: ‘Spouses aren’t getting “kicked off” the plan.’” But the opposition says that “Spouses are getting ‘kicked off’ the plan.
• “If a spouse’s employer offers health insurance, that spouse must take that plan as primary, even if it’s more expensive and has inferior benefits.
• “Spouses of living participants over 65 with 20 or more pension credits will be losing their SAG-AFTRA secondary insurance, along with the actual participant.
• “Members with 20 or more pension credits were promised their widowed spouses would have lifetime SAG-AFTRA secondary health coverage at 65, until remarriage or demise. That promise has been broken.
• “Spouses over 65 also are losing their SAG-AFTRA primary coverage when their participant spouse loses coverage because residuals are no longer credited.”
4. “The Union says: ‘There’s a new reduced cost COBRA safety net available specifically designed to help ease the transition for many participants.’”
But the dissidents say that “The referenced reduced COBRA rates are still more expensive than the new ACTIVE or Plan 2 rates.
• “The reduced cost COVID Relief COBRA coverage costs between 54% (for an individual) and 213% (for a family with 2 or more dependents) more than the previous Plan II coverage.
• “The new Extended Benefits Cobra coverage for members with at least 12 extended career credits and $20,000 in covered earnings costs between 47% (for an individual) and 79% (for a family with 2 or more dependents) more than the new Active Plan (replacement for Plan I).”
5. “The Union says: ‘The idea that premium increases or higher employer contributions alone could have fixed the Health Plan is simply wrong.’
“Of course, premium increases and higher employer contributions alone wouldn’t have completely fixed the problem,” the dissidents say. “Adding premium increases and higher employer contributions would absolutely have bolstered the plan, and, along with proper use of the reserves, could have saved thousands of member participants’ coverage.”
The dissidents agree on several issues put forth by the union, but with several major caveats. “In their email, SAG-AFTRA conflates sound observations with utterly misleading assertions,” the dissidents said. “They say: ‘The root of the problem is the exorbitant cost of healthcare, a problem made worse by our industry’s shutdown due to the pandemic.’ We agree that healthcare costs and the industry shutdown are massive problems. But, the root of this plan’s problems is poor management.
“They say: ‘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.’ We agree.
“They say: ‘Structural changes were required to put the Plan on a secure footing now and into the future.’ “We certainly agree that structural changes are required.
“They say: ‘We understand that change, myths and rumors have led to anger and frustration.’ What has led to ‘anger and frustration’ are the draconian changes that harmed thousands of Participants. In 2017 SAG and AFTRA Health Plan Participants were assured the new SAG-AFTRA Health Plan would ‘be financially sustainable for all members for years to come’ and merging the Plans would ‘strengthen the overall financial health of the Plan while ensuring comprehensive benefits for ALL participants.’
“They say: ‘We understand that change is not easy, but it’s crucial that you have the facts. As we have learned in our country and on social media, not all claims are factual. Always check the credibility of your sources.’ We agree.”