Actor Ed Asner and nine other members of the Screen Actors Guild and the American Federation of Television and Radio Artists sued the trustees of the union’s healthcare plan Tuesday contending that benefit cuts announced in August are age discrimination and a violation of federal law.
The lawsuit, filed in federal court in California, accuses current and former trustees overseeing the SAG-AFTRA Health Plan of making improper benefit changes that are taking coverage away from almost 12,000 union members, most of them seniors, who have paid into the plan for years.
“They can’t get away with this,” said Asner, 91, in a video prepared to coincide with the lawsuit. “This is criminal.” Asner, a former president of SAG, is best known for his role as Lou Grant on “The Mary Tyler Moore Show.”
The SAG-AFTRA plan has about 33,000 participants, but only two-thirds will continue to receive promised benefits as a result of the cuts, the lawsuit said. The plan’s changes also significantly raised the earnings threshold for healthcare coverage eligibility and eliminated the SAG plan’s previous practice of providing secondary healthcare coverage for members with 20 years of vested pension credit, the lawsuit said.
Residuals, meaning money earned from rebroadcast of past work, are a significant source of income for entertainment industry veterans. But under the recently announced cuts, residual income earned by participants 65 or older will no longer count toward the new eligibility minimum for coverage under the plan if those members are taking a union pension. And those members must still pay into the plan based on their residuals at the same rate as younger participants.
For those continuing to be covered under the plan, insurance premiums will rise substantially when they go into effect next year, the plaintiffs said. For example, a participant with two or more beneficiaries will pay almost $750 quarterly, up from $375 previously. The changes affect all performers, including stunt professionals, voice-over artists, stand-ins and dancers.
When they announced the benefit cuts, the trustees told participants they were the result of rising healthcare costs and coronavirus-related production shutdowns that have devastated the entertainment industry.
But many members aren’t buying it. Actors Whoopi Goldberg, Morgan Freeman, Shirley Jones, Mark Hamill, Martin Sheen and other affected SAG-AFTRA members joined Asner in the video, expressing outrage about the reduced healthcare benefits that will affect them and so many of their rank-and-file colleagues and decrying the union leadership that brought about the cuts.
“I paid into the health plan for my whole career,” Goldberg said in the video. “I’m really pissed about it. Really pissed.”
Carol Kane also appeared, saying, “It’s obscene.”
The SAG Health Plan was created in 1960 to provide health coverage to all Screen Actors Guild members. To provide funding for the healthcare and pension plans, all SAG performers surrendered their television residuals for movies made prior to 1960. Now, some of the same performers who gave up those earnings are being eliminated from health coverage under the plan changes, the lawsuit said.
“I think of the elders who paid into the Health Plan their entire careers,” said Frances Fisher. “They were promised lifetime coverage if they were vested; that promise was broken. Now, where will a 70-year-old stuntperson get work because their residuals no longer count?”
The SAG and AFTRA unions merged to form SAG-AFTRA in 2012. Problems with the SAG-AFTRA Health Plan began in 2017, the lawsuit says, when trustees of the SAG health plan approved a merger with the AFTRA plan. For years, the SAG plan had larger contribution rates than the AFTRA plan, the lawsuit said.
Shortly after the health plan merger, according to the suit, the trustees learned that the financial structure of the combined plan was unsustainable, but they did not tell participants.
The lawsuit contends that the trustees had two years to shore up the health plan without “dramatically ending SAG-AFTRA health coverage for primarily older participants.” For example, negotiations of three recent union contracts could have directed more funds into the health plan, some members said.
Representing the plaintiffs in the case are Steve Schwartz and Robert Kriner, Jr. of Chimicles Schwartz Kriner & Donaldson-Smith. In a statement to NBC News, they said the lawsuit seeks to restore health insurance coverage for all SAG members and to hold the trustees of the plan accountable.
SAG members were told the 2017 health plan merger “would strengthen the overall financial health of the SAG plan while ensuring comprehensive benefits for all participants,” the lawyers said. “In fact, the disastrous merger resulted in the loss of health coverage for thousands of elderly SAG performers, their spouses and children, in the middle of a pandemic.”
The trustees’ approval of the two plans’ merger in 2017 violated federal law because they did not put participants’ interests first, the lawsuit said, a duty under the Employee Retirement Income Security Act of 1974.
For example, the trustees did not conduct a thorough analysis of the impact the merger would have on participants before it occurred, said Edward Siedle, a pension expert and lawyer who conducts forensic investigations of troubled pensions.
“Health care plan mergers raise complex issues, can create serious problems and conflicts, and can result in loss of benefits for members,” Siedle, who is working for the plaintiffs in the case, told NBC News. “In this case, there was no such report and no full and fair disclosure that would have enabled SAG and AFTRA members to intelligently evaluate the probable negative impact on the members’ health benefits.”
The suit against the SAG-AFTRA trustees follows another legal action in 2017 against overseers of the American Federation of Musicians and Employers’ Pension Fund. That case centered on allegations of inappropriate investments made by the pension, which was underfunded, and was brought by the same lawyers representing the SAG-AFTRA plaintiffs.
That case settled in October with $18.3 million paid into the pension fund by insurers for the defendants. Two of the SAG-AFTRA trustees being sued Tuesday were also defendants in that case.