Facing staggering deficits, the SAG-AFTRA Health Plan is raising thresholds and profit thresholds for coverage to come January 1st. “While while this restructuring will preserve the entry into an excellent health plan for most of our participants, the changes will be devastating for some,” the plan said today in a letter to participants, noting that those who lose coverage because they do not meet new earnings requirements may be eligible for coverage under Obama’s care.
“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. We must prevent this from happening,”; the letter said. . Last year, the Plan paid nearly half a billion dollars to provide coverage for 65,000 participants and their families.
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Under restructuring, premiums will increase to $ 375 per quarter to cover one participant; at $ 531 per quarter for one participant with one dependent, and at $ 747 per quarter for one participant and two or more dependents. Under the new earnings thresholds, participants under the age of 65, for example, will now have to earn at least $ 25,950 – including seasonal income and residuals – over a 12-month basic winnings period to qualify. Otherwise, they will be able to qualify working 100 days over a basic profit period under the specified contracts.
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“It is no secret that over the past few months, we have been living through tremendous physical, emotional and financial pressures that have had a particularly severe impact on our industry,” the letter reads. The SAG-AFTRA Health Plan has not been immune.
“Throughout our history, the Plan has provided high quality health coverage for hundreds of thousands of participants and their families. However, the high cost of health care, the global pandemic, and the closure of the industry have created an urgent need for the SAG-AFTRA Health Plan to be restructured.
“We have all seen the headlines – the cost of healthcare continues to grow exponentially. This is not just an isolated area of the healthcare industry. Across the table, prices are rising. Relentless inflation has doubled annual U.S. health care spending over the past decade, and we have seen particularly sharp increases in Health Plan benefit costs in just the last two years, as illustrated below:
“We have worked diligently to try to control the rising costs of healthcare by negotiating better contracts and reducing costs within our control. Examples of this include negotiating $ 30 million in savings from our pharmacy beneficiary contract each year. 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 do more with less.Last year, only 8 cents every revenue dollar was spent on Plan operations, leaving more money to pay for participant benefits.
However, despite our success in managing costs within our control, the growing costs of health care have resulted in volatile deficits, requiring the use of our reserves to fund current expenditures. Last year, we paid nearly $ 468 million in expenses to 65,000 of our participants and their subordinates. That marks a $ 82 million increase in health care-related costs in the last two years alone.
“The increase in health care costs has also increased the Health Plan subsidy of participant costs (ie, the health care costs covered by the Plan in excess of employer contributions and participants’ premiums). While premiums and contributions have remained relatively sustainable, the Health Plan subsidy has increased dramatically.
“The reality is that employers ‘contributions and participants’ premiums do not cover the cost of care. Without restructuring the Health Plan, 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 stocks. We must prevent this from happening. “
Noting that the implementation of the Affordable Care Act (ACA) “has changed 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 low-income families.
“While the restructured Plan will have a single, higher eligibility threshold, those previously eligible for lower-level coverage might actually be eligible for similar or better coverage – at a lower cost or without dependence on household income – through ACA exchanges These opportunities are only available to those who do not have health coverage or are eligible through their employer or Plan.
“We understand that no one welcomes the cessation of changing health coverage – even if similar, less costly alternatives are available – but it is important to note that those participants who lose Plan coverage may still have good opportunities. , affordable health insurance.
“We acknowledge that any change is now difficult and we want to assure you that, in exploring all the options, we have obsessed over the details, exhausted every alternative and worked tirelessly to reduce costs within our control. “We know that every choice we make affects the people who depend on us. While difficult, these changes are necessary to safeguard the financial sustainability of our Plan, now and in the future.”
The bulletin notes that the Plan is also providing improved COBRA coverage for those who lose their SAG-AFTRA coverage. “While we have taken great care to create eligibility thresholds that many of our participants can meet, we acknowledge that some will no longer qualify,” the paper says. “That’s why we’re introducing a new long-term benefit, designed for performers who work consistently in the industry but who can work and earn less than anticipated over a given year. Here’s how it works New COBRA Extended Career Benefit When you are unable to maintain eligibility for the next benefit period, you may choose to continue to cover your SAG-AFTRA Health Plan through COBRA. Extended – and choose COBRA on time – 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 will be able to navigate “way forward successfully and we will continue to support you throughout this change – as we have for decades.”