Ed Asner’s Discrimination Lawsuit Against SAG-AFTRA Health Plan Settled Posthumously
A lawsuit filed against the SAG-AFTRA Health Plan, which claimed that changes to eligibility for benefits “illegally discriminated” against older members, has been settled. The suit was filed in federal court in December 2020 by former SAG president Ed Asner and nine other SAG-AFTRA members. The Health Plan, which had been facing staggering deficits, said that the changes were necessary to keep it from going broke.
Asner died in 2021, but a federal judge allowed the case to continue.
Plaintiffs filed the action in December 2020, following the Plan’s August 2020 announcement of major changes to the benefit structure and eligibility requirements that, in effect, eliminated Plan health coverage for certain Plan participants age 65 and older and pushed them to Medicare coverage. Plaintiffs claimed that breaches of fiduciary duties by the Plan’s trustees caused losses in Plan assets that led to the changes.
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In a joint statement, attorney for both sides said today that the “under the terms of the settlement agreement, participants known as ‘Senior Performers,’ who no longer qualified in 2021 for the same health coverage from the Plan that was available to them before the 2020 changes will receive monetary relief worth $15 million, less any Court-approved attorneys’ fees and costs. The Plan will also allocate an additional amount up to $700,000 per year for eight years (in 2023-2030 for a maximum of $5.6 million) into the Heath Reimbursement Accounts of certain Senior Performers who no longer qualify for active health coverage from the Plan. Those allocations will be based on the residual earnings of those Senior Performers.
“In addition, the Plan has agreed to implement certain changes for the next four years that will inure to the benefit of all Plan participants. These changes include formalizing the process by which periodic disclosures to SAG-AFTRA are made concerning the Plan’s projected financial condition for purposes of anticipating whether additional changes to the Plan will be needed as well as in advance of various collective bargaining negotiations; and the retention of an additional consultant to explore the prospects of cost-cutting measures, beyond those that the Plan has consistently implemented since its inception, while ensuring benefits are protected.
“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. 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 have similarly agreed to the settlement for the sake of avoiding the time and expense of litigation. They 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.”
If the court approves the settlement, as is expected, it will direct the parties to send a formal notice of the settlement to all Plan participants and give them an opportunity to present their views in advance of a final hearing, where the court will decide whether to approve the settlement.
The saga of the Plan’s sagging fortunes began in 2018, six years after SAG and AFTRA merged, though they maintained separate health plans until those also were merged on the first day of 2017. The new SAG-AFTRA Health Plan finished that first year with an $18 million surplus, with reserves of about $500 million. But fueled by the skyrocketing cost of health care and a growing demand for health services, the Plan suffered a $48 million deficit in 2018, a $50 million deficit in 2019, a projected deficit of $141 million this year and another projected deficit of $83 million in 2021 if the trustees failed to act to stem the flow of cascading shortfalls.
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