Jeremy Fuster | April 10, 2023 @ 4:38 PM
The SAG-AFTRA Health Plan has reached a $15 million settlement on a class action lawsuit filed in December 2020 by 10 members of the actors guild, including the late former SAG president Ed Asner, who died in 2021.
As part of the agreement, SAG-AFTRA will pay $15 million to older members of SAG-AFTRA who lost their coverage in the guild's health plan due to changes made in 2020 that raised the amount of annual earnings required to qualify for the plan and removing members' ability to count residuals towards that earnings threshold.
The trustees of the health plan at the time said that such changes were necessary to keep the health plan solvent, as the plan's funds were falling during the COVID-19 pandemic and were projected to run out by 2024. A Medicare Advantage marketplace through healthcare vendor Via Benefits was set up to allow those who no longer qualified to seek alternative coverage.
But the plaintiffs in the class action suit argued that the changes violated the Employee Retirement Income Security Act (ERISA) as members were not informed of the financial problems the health plan faced during SAG-AFTRA's mutual bargaining agreement negotiations in 2020 and that the changes also were a form of age discrimination as they affected senior members of the guild who had already received their pensions.
As part of the settlement, which can be read here, the $15 million will be made available to “senior performers” who lost their coverage in the SAG-AFTRA health plan because of the earnings requirement changes and will make additional payments of up to $700,000 per year for certain senior performers who no longer qualify through 2030 based on their residual payments.
In addition, SAG-AFTRA's health plan trustees have agreed to a new system to ensure better transparency of the plan's finances to members ahead of contract negotiations with Hollywood studios, the next of which is set to take place this summer. A formalized process will also be created to quickly notify members of any future changes that need to be made to the plan's structure to ensure its financial security.
“As reported to the Court, the attorneys for the class recommend the settlement because they believe it provides substantial monetary relief to Plan participants who were adversely affected by the 2020 Plan amendments as well as structural changes that will inure to the benefit of all Plan participants, and avoids the risk and costs of continued litigation,” read a statement from the attorneys for both sides of the lawsuit.
“The Class Participants who brought this complaint, on behalf of performers who were negatively impacted by the 2020 benefit changes, feel this settlement is a beginning to reestablishing trust and benefits. Defendants…maintain that the 2020 changes, including those that affected Senior Performers, were necessary to preserve the financial health of the Plan and the Plan's continued ability to continue to provide high quality benefits to the greatest number of participants, and that the changes have achieved precisely that result,” the statement continued.