Shock Move: SAG-AFTRA Health Plan Jumps Premiums to Avert $141M Deficit

The SAG-AFTRA Health Plan is undergoing significant changes to address financial challenges. Starting January 1, premiums and earnings thresholds for coverage will increase. This restructuring aims to maintain access to quality health coverage for most participants, though some may experience disruptions. The Plan assures members that those who lose coverage may qualify for alternative options under Obama Care.

The health plan is facing substantial deficits, with a projected shortfall of $141 million this year and $83 million in 2021. Without restructuring, the Plan's reserves are expected to be depleted by 2024. Last year alone, nearly half a billion dollars were spent to provide coverage for 65,000 participants and their families, highlighting the urgent need for financial adjustments.

Under the new structure, premiums will rise to $375 per quarter for single coverage, $531 for a participant with one dependent, and $747 for those with two or more dependents. Additionally, participants under 65 must earn at least $25,950 annually or work 100 days under specified contracts to qualify for coverage. These changes aim to stabilize the Plan's finances while still offering coverage options.

Healthcare costs have been increasing rapidly, contributing to the Plan's financial strain. The cost of healthcare in the U.S. has nearly doubled over the past decade, with particularly sharp rises in the last two years. Factors such as the global pandemic and industry shutdowns have further exacerbated these costs, making it challenging to sustain the current health plan without changes.

The Plan has taken proactive steps to control expenses by negotiating better contracts and reducing operational costs. Notable savings include $30 million from a pharmacy benefit manager contract in 2017 and another $29 million from a new contract in 2021. Additionally, only 8 cents of every revenue dollar were spent on operations last year, ensuring more funds were available for participant benefits.

Participants who no longer qualify for SAG-AFTRA coverage due to the new thresholds may find affordable alternatives through the Affordable Care Act (ACA) Exchanges. These options are available to individuals and families who lack other coverage, offering similar or better benefits at lower costs based on household income. The Plan encourages members to explore these ACA options to maintain their health coverage.

To support those who lose their SAG-AFTRA coverage, the Plan is introducing improved COBRA coverage. The new Extended Career COBRA benefit allows performers who may not meet eligibility requirements to continue their coverage at a reduced premium of 20% of the COBRA rate. This benefit is designed for those with fluctuating work and earnings, providing a safety net for continuous coverage.

The SAG-AFTRA Health Plan's restructuring is a necessary step to ensure its long-term viability amidst rising healthcare costs and financial deficits. While changes in premiums and eligibility may be challenging, the Plan remains committed to offering affordable and quality health coverage options. Participants are encouraged to review the new benefits and explore ACA alternatives to continue their health coverage seamlessly.