Faced with a staggering deficit, the SAG-AFTRA Health Plan is increasing the premium and income threshold for insurance until 1 January. “Although this restructuring will maintain access to a great health program for the majority of our participants, but the changes will upset some ”. The plan said today in a letter to participants, noting that people who lose coverage because they do not meet the new income requirements may qualify for coverage under Obama Care.
“Without restructuring the Health Plans, we expect a deficit of 141 million dollars this year and 83 million dollars by 2021, and by 2024, the Health Plan is expected to depleted reserves. We must prevent this from happening, ”the letter wrote. Last year, the Plan spent nearly half a billion dollars providing coverage to 65,000 participants and their families.
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Under the restructuring, premiums will increase to $ 375 per quarter for a participant’s coverage; up to $ 531 per quarter for a participant with one dependent and up to $ 747 per quarter for one participant and two or more dependents. Under the new income threshold, for example, participants under the age of 65 will now have to earn at least $ 25,950 – including seasonal and residual income – over a 12-month basic income period to eligible. In addition, they will be able to qualify by working 100 days within the basic income period under designated contracts.
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“It is no secret that over the past several months, we have lived under the extraordinary physical, emotional and financial pressures that have had a particularly heavy impact on our industry,” the letter wrote. . SAG-AFTRA Health Plan is not immune.
“Throughout our history, the Plan has provided high-quality health insurance to hundreds of thousands of participants and their families. However, the continued high cost of healthcare, the global pandemic and industry shutdown created an urgent need for the SAG-AFTRA Health Plan to be restructured.
“We’ve all seen headlines – healthcare costs continue to grow exponentially. This is not just an isolated area of the healthcare industry. Across the board, prices are rising sharply. Relentless inflation has nearly doubled U.S. annual healthcare spending over the past decade, and we have seen a particularly strong increase in Health Plan benefit costs. over the past two years, as illustrated below:
“We have been working diligently to try to control the growing healthcare costs by negotiating better contracts and keeping costs under our control. Examples of this include negotiating a savings of $ 30 million from our pharmacy benefit management contract in 2017 and an additional $ 29 million savings with the new contract for 2021. We also has worked continually to lower his operating costs, looking to do more with less. Last year, just 8 cents per dollar of revenue was spent on the Plan’s operations, leaving more money to pay for participant benefits.
“However, despite our success in managing costs under our control, increasing healthcare costs have resulted in unsustainable deficits, requiring the use of reserves. to finance our current expenses. Last year, we paid out almost $ 468 million in costs to our 65,000 participants and their dependents. This marks a $ 82 million increase in healthcare costs in just the past two years.
“The increased cost of health care has also increased the Health Plan’s subsidy to the cost of the participant (ie, the health care costs covered by the Program exceed the user contribution amount). employment and insurance premiums of participants). While premiums and contributions have remained relatively stable, the Health Program’s subsidies have increased significantly.
“The reality is that employers ‘contributions and participants’ premiums do not include care costs. Without restructuring the Health Plan, we expect a deficit of $ 141 million this year and $ 83 million by 2021 and by 2024, the Health Plan is expected to run out of resources. Reserve. We have to prevent this from happening ”.
Noting that the implementation of the Affordable Care Act (ACA) “changed the way health insurance works in this country,” the Plan said, “participants may not know about Affordable options for low-income individuals and families.
“Although the Restructured Plan will have a higher single eligibility threshold, those who previously qualified for coverage at lower tiers may actually qualify for coverage. similar or better – at a lower cost or for free depending on household income – through ACA Exchanges. These options are only available to people who do not have health insurance or are not eligible through their employer or the Program.
“We understand that no one welcomes disruption of health insurance change – even if similar, less expensive alternatives are available – but it’s important to note that participants Those who have lost their insurance plan may still have good, affordable health insurance options.
“We realize that any change right now is difficult and want to assure you that, by exploring all the options, we were obsessed with the details, using up the options. Replace and work tirelessly to reduce costs under our control. We know that all of our choices affect those who depend on us. Difficult but 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 improved COBRA coverage for people who lose their SAG-AFTRA coverage. “While we have been very careful to set qualifying thresholds that many of our participants can meet, we are noticing that some will no longer qualify,” the newsletter wrote. . “That’s why we are introducing a new long-term benefit, designed for performers who work continuously in the industry, but those who can work and earn less than expected. In a certain year. Here’s how COBRA New Career Expansion benefits work. When you are unable to maintain eligibility for your next benefit period, you may choose to continue SAG-AFTRA Health Plan coverage through COBRA. And, if you qualify for our New Career Expansion COBRA benefit – and elect COBRA on time – you’ll pay the premium down to 20% COBRA rates. “
“In the coming weeks,” the Plan told the participants, “we’ll give you insights, tools and resources to help you plan for these changes. We are confident that together, we will be able to successfully navigate the road ahead and will continue to support you through this transformation – as we have for decades. “