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The SAG-AFTRA health plan and its trustees have been sued in federal court by Ed Asner and nine other senior participants over upcoming benefit cuts and plan eligibility.
Asner, a six-time Emmy winner, is the lead plaintiff in the class action lawsuit, which was filed in Los Angeles on Tuesday. The lawsuit alleges two counts of breach of fiduciary duty, one count of participation in a prohibited transaction and one count of non-disclosure of information to plan members.
According to the lawsuit, Asner, 91, a former SAG president and current member of the SAG-AFTRA national board, will lose his coverage even though he had more than $ 25,950 in annual income covered with residual income and session earnings because it will will not meet the new session earnings qualification threshold that will take effect in 2021.
A representative for the plan said: “We have just received a copy of the complaint filed this afternoon and are in the process of reviewing it.”
The lawsuit was filed three months after the health plan announced in an email to members that it would increase the eligibility income cap from $ 18,040 per year to $ 25,950, effective Jan.1. Directors said at the time that without restructuring, the plan projected a deficit of $ 141 million this year and $ 83 million in 2021.
Opponents estimated that the changes eliminated the coverage of about 11,750 out of 32,000 participants, including 8,200 top performers. The quarterly cost reserved for participants will be $ 375, increased by $ 300; the participant plus a dependent will cost $ 531 plus $ 348 per quarter; and participant plus two or more dependents will be $ 747, up from $ 375 per quarter.
Changes to the plan have also come about, as many of the 160,000 members of SAG-AFTRA have not been able to generate income since the COVID-19 pandemic struck in mid-March and resulted in the shutdown. of virtually all productions. The health plan is administered by a board made up of an equal number of union and employer trustees.
The lawsuit alleges administrators mismanaged the plan, which was created in 2017 by merging the SAG health plan with the AFTRA health plan. He notes that the SAG Health Plan was created in 1960 to provide health coverage to all SAG members with seed money from SAG performers, ceding all of their TV residue for films. made before 1960.
“Now the same artists who made these huge sacrifices have been abandoned by the pension plan and health plan,” the lawsuit alleged. “They are being eliminated from health coverage by the health plan following the merger, on January 1, 2017, of the SAG health plan with the AFTRA health plan, which, according to union leaders, would position the new health plan “ financially viable for all members for years to come and would strengthen the overall financial health of the plan while ensuring comprehensive benefits for all members.
The lawsuit alleges that the trustees should have revised the operation of the plan before announcing the “drastic” changes in August.
“Administrators blame the COVID-19 pandemic for the suddenly urgent need to impose benefit cuts and remove thousands of participants from SAG-AFTRA health coverage,” the lawsuit said. “This blame ignores the readily available facts and measures that could have remedied such a one-time event without dramatically ending SAG-AFTRA health coverage for predominantly older participants, including many artists who waived their right to residues of films prior to 1960 to start SAG pension and health plans for all members. “
The lawsuit noted that the plan is expected to continue to have a reserve fund of more than $ 250 million at the end of 2020, funded in part by participants who will be cut from continued SAG-AFTRA coverage. He alleged that the cuts were “unfairly and unlawfully” discriminatory on the basis of age, in part because of the sanction imposed on participants 65 years of age or over who received their vested pension.
“These participants do not receive any credit on income covered for residual income towards the new threshold of $ 25,950 for eligibility for SAG-AFTRA health care, but they continue to have contributions made to the plan and contributions calculated on based on residual income and session earnings at the same rate as younger participants, ”he said.
The lawsuit said that prior to the 2017 health plan merger, the SAG-Producers pension and health plan “unconditionally” promised surviving spouses coverage for life as long as the surviving spouse did not marry.
The lawsuit also claims that the trustees of the SAG-AFTRA health plan – which include former SAG chairmen Richard Masur and Barry Gordon – knew soon after the plans merged that the health benefit structure was unsustainable. However, the directors did not disclose this information to members of the union’s bargaining committees on the most recent successor contracts for the advertising contract, a new Netflix contract and the prime-time TV contract, approved in June with $ 54 million of the $ 318 million in earnings goes to the health plan.
“Much less drastic and fair adjustments were available for a one-time event like Covid-19, such as an increase in hijackings,” the lawsuit alleges.
“The SAG-AFTRA health plan trustees, many of whom were involved in contract negotiations and approvals by the SAG-AFTRA National Council, failed to disclose members of the union negotiating teams to the non-health plan administrators. and the national SAG-AFTRA. Board of Directors, or members, the funding structure needed to support the health benefit structure, impending benefit cuts or insufficient negotiated contract terms to support the health benefit structure, ”says the trial.
“Non-fiduciary negotiators lacked information material on funding terms and the relative value of contributions versus salary increases or embezzlement needed to maintain the benefit structure,” the lawsuit alleges. “Members of the bargaining committee of the non-health plan administrators’ union and SAG-AFTRA national board members and members lacked information indicating that contracts were insufficient to support the benefit structure and to assess performance. value of negotiated conditions. Members of the SAG-AFTRA National Council, administrator of the health plan, did not disclose information relating to the approval votes of the SAG-AFTRA National Council, did not recuse or abstain from voting and have voted to approve contracts.
The lawsuit seeks “such fair or remedial relief as the Court may deem appropriate, including the reinstatement of SAG-AFTRA health benefits for plan members affected by unwarranted benefit cuts.”
Besides Asner, the other plaintiffs are lead artists Michael Bell, Raymond Harry Johnson, Sondra James Weil, David Jolliffe, Robert Clotworthy, Thomas Cook, Deborah White and Donna Lynn Leavy, as well as Audrey Loggia, widow of actor Robert Loggia. Jolliffe is the vice president of the Los Angeles local SAG-AFTRA and a longtime leader of the union’s progressive first wing.
The defendants named in the lawsuit are the SAG-AFTRA Health Plan, the board of directors and individual directors, including Gordon, Masur, SAG-AFTRA National Executive Director David White, SAG-AFTRA General Counsel Duncan Crabtree-Ireland, SAG Contracts Director Ray Rodriguez and Carol Lombardini, president of the Alliance of Film and Television Producers – which serves as the bargaining arm for studios and networks in negotiations with industry unions.
Other appointed directors are Daryl Anderson, Helayne Antler, Timothy Blake, Jim Bracchitta, Ann Calfas, John Carter Brown, Eryn M. Doherty, Gary M. Elliott, Mandy Fabian, Leigh French, J. Keith Gorham, Nicole Gustafson, James Harrington , David Hartley-Margolin, Harry Isaacs, Marla Johnson, Robert W. Johnson, Bob Kaliban, Sheldon Kasdan, Matthew Kimbrough, Lynn Lambert, Shelley Landgraf, Allan Linderman, Stacy K. Marcus, John T. McGuire, Dian P. Mirowski, DW Moffett, Paul Muratore, Tracy Owen, Michael Pniewski, Alan H. Raphael, John E. Rhone, Marc Sandman, Shelby Scott, David Silberman, Sally Stevens, John H. Sucke, Kim Sykes, Gabriela Teissier, Lara Unger, Ned Vaughn , David Weissman, Russell Wetanson and Samuel P. Wolfson.
Nearly 20,000 people have signed a petition on change.org titled “Roll Back SAG-AFTRA Health Plan Changes” since August. In September, the health plan announced an 80% reduction in COBRA premiums for participants who are no longer eligible for coverage as of October 1.
The lawsuit was brought by Neville L. Johnson, who was representing plaintiffs in a dispute over how unions handled foreign royalties, including the late Ken Osmond’s 2007 class action lawsuit against the Screen Actors Guild, claiming that SAG had overstepped its authority to collect foreign royalties without disclosing collection agreements. The action was settled in 2010.
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