For opposing deficits, the SAG-AFTRA Health Plan increases premiums and earnings thresholds for coverage come on January 1st. “While this restructuring will maintain access to an excellent health plan for the majority of our participants, the changes will be disruptive for some,” the plan said in a letter to participants today, noting that those who lose coverage because they do not meet the new income requirements, may be eligible for coverage under Obama Care.
“Without restructuring the health plans, we are projecting a deficit of $ 141 million and $ 83 million in 2021 this year, and by 2024 the health plan is projected to run reserves. We must prevent this from happening, “the letter said. Last year, the Plan paid nearly half a billion dollars in coverage for 65,000 participants and their families.
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Under the restructuring, premiums will increase to $ 375 per quarter to cover one participant; up to $ 531 per quarter for a participant with one dependent, and up to $ 747 per quarter for a participant and two or more dependents. Under the new income thresholds, participants under the age of 65 will now have to earn at least $ 25,950 – including seasonal and residual earnings – over a 12-month basic income to qualify. Alternatively, they may qualify by working 100 days in a period of basic earnings under specified contracts.
See the newsletter here.
“It is no secret that we have lived through the past months due to extraordinary physical, emotional and financial pressures that have had a particularly severe impact on our sector,” the letter said. The SAG-AFTRA health plan has not been immune.
“Throughout our history, the plan has provided high health coverage to hundreds of thousands of participants and their families. However, the continuing high cost of healthcare, the global pandemic, and the closure of the sector have created an urgent need for the SAG-AFTRA Health Plan to restructure.
“We’ve all seen the headlines – the cost of healthcare is growing exponentially. This is not just an isolated area of the healthcare sector. Across the board, prices are going up. Unreliable inflation has nearly doubled the annual cost of U.S. health care in recent decades, and we have seen particularly sharp increases in health care benefit costs over the past two years, as illustrated below:
“We have been working to control the growing cost of healthcare by negotiating better contracts and reducing costs within our control. Examples include $ 30 million in negotiation of our pharmacy benefit manager contract in 2017, and an additional $ 29 million savings with a new contract for 2021. We have also worked continuously to reduce our operating costs, finding ways to more to do with less. Last year, just 8 cents of each revenue dollar was spent on the Plan’s operations, leaving more money to be paid for participants ’benefits.
“Despite our success in managing costs within our control, ever-increasing health care costs have resulted in persistent deficits, necessitating the use of our reserves to finance current expenditures. Last year, we paid nearly $ 468 million in expenses for our 65,000 participants and their dependencies. This marks an increase of $ 82 million in health care costs in health care in the last two years alone.
Rising health care costs have also increased the subsidy of the Health Plan of Participant Costs (that is, health care costs covered by the Plan more than employer contributions and participation premiums). While premiums and contributions have remained relatively stable, the subsidy from the Health Plan has grown dramatically.
“The reality is that employer contributions and participation premiums do not cover the cost of care. Without organizing the Health Plan, we are projecting a deficit of $ 141 million and $ 83 million in 2021 this year, and, by 2024, the Health Plan is projected to run reserves. We must prevent this from happening. ”
Noting that the implementation of the Affordable Care Act (ACA) “has caused the way health insurance works in this country,” the Plan said that “participants may not be aware of the very affordable options available to individuals and families with a low income.” income.
“While the restructured plan will have a single, higher eligibility threshold, those who were previously eligible for lower-level coverage may in fact be eligible for similar or better coverage – at lower or no cost, depending on household income – through the ACA exchanges. These options are only available to those who do not have health coverage if they are eligible through their employer or the Plan.
“We understand that no one welcomes the disruption of changing health coverage – even if comparable, cheaper alternatives are available – but it is important to note that those participants who lose plan coverage may still have good, affordable health insurance options.
“We recognize that any change is difficult at the moment and would like to assure you that, while exploring all options, we are obsessed with the details, have used all alternatives and acted unreasonably to reduce costs within our control. We know every choice we make affects people who depend on us. Although difficult, these changes are necessary to protect the financial sustainability of our Plan, now and in the future. “
The newsletter notes that the Plan also offers enhanced COBRA coverage for those who lose their SAG-AFTRA coverage. “While we have taken great care to determine qualification thresholds that many of our participants may meet, we recognize that some are no longer eligible,” the newsletter said. “That’s why we’re introducing a new advantage in the long term, designed for artists who are constantly working in the sector, but who may be working and earning less than expected in a given year. Here’s how the new COBRA benefit for extended career works. If you are unable to maintain for your next benefit period, you may choose to continue coverage of SAG-AFTRA Health Plan by COBRA. And, if you qualify for our new COBRA extended career benefit – and choose COBRA in the short term – you will pay a reduced premium of 20% of the COBRA rate. ”
“In the coming weeks,” the Plan told participants, “we will provide you with detailed information, tools and resources to help you plan for these changes. We are confident that together we can successfully navigate the way forward and you will continue to support this change – as we have for decades. “
