The long-running strikes by the Writers Guild and SAG-AFTRA are having a devastating impact on union health plans throughout the entertainment industry. With a lack of contributions and a slew of claims pushing its Health & Welfare reserves to the breaking point, IATSE Studio Mechanics Local 476 in Chicago is taking drastic measures, including freezing banked hours and changing eligibility while threatening to leave many of its 2,000 members without coverage.
“I’m unable to pay the self-pay rate, and I’ll get kicked off the plan on October 1st and lose all my banked hours,” a Local 476 member posted on social media earlier this week. “My wife’s pregnant too and due in February.”
Local 476, representing crew members who work on films and TV shows shot in the Windy City, might be the canary in the coal mine for what’s to come. According to a September 8 letter sent to members by the local’s Health & Welfare Fund, which acknowledges the “unprecedented job loss and economic suffering” created by the strike-related production shutdown, employer contributions to the much larger health plan covering IATSE’s West Coast locals “are reportedly down $150 million” during the strikes.
Employer contributions to the local’s health plan – which is not part of IATSE’s West Coast Motion Picture Industry Health Plan or its National Benefits Fund – are based on hours worked, and with little or no work, reserves for the Local 476 plan are quickly drying up, and trustees have had to take action to keep it going.
“As we are all well-aware,” the letter says, “the ongoing WGA and SAG-AFTRA strikes are having a detrimental impact on bargaining unit work, and as a direct consequence, on the Local 476 benefit funds. Due to the strike, work is down more than 510,000 hours as of August 31, 2023, compared to August 31, 2022. Obviously, the strike started in May, and hours were on track to beat 2022 numbers up until May.”
The letter notes, however, that “the recent impact” of the strikes “is severely understated – hours worked for July and August were approximately 10,000 hours. Based on the 510,000 hours deficit alone, the Health & Welfare Fund is down more than $3.4 million in contributions. This is not surprising and not limited to our Funds. The West Coast IATSE locals, for example, are reportedly down $150 million in Health & Welfare contributions.”
The letter goes on to tell participants that “the Local 476 office would be remiss to not acknowledge the extreme hardship you and your families are facing. The work stoppage brought upon us by the WGA and SAG-AFTRA strikes has created unprecedented job loss and economic suffering. It is also impacting our benefit funds and has most dramatically impacted our Health and Welfare fund.
“We understand that the added Health and Welfare expense many of you are facing adds to the stress, concern, and uncertainty. It is the priority of this office as the union negotiating for these benefits in contract negotiations and, for some, as Trustees, to secure the health plan now and into the future. To accomplish this, difficult measures had to be taken. However, we want to give assurances that we hear and feel your anger, frustration, concerns, and questions over the recent changes. We are doing everything within the power of the office to achieve a favorable, equitable, and prosperous outcome.”
“Since the strike started and the majority of the Health & Welfare participants are not working, medical claims and prescription claims have sky-rocketed at a time when almost no contributions are coming into the Fund,” the letter says.
Even in normal times, work can be irregular, and the Fund allows participants to bank hours and self-pay as long as they’ve worked 30 days in the previous year. “When a participant uses banked hours, there is no money coming in to the Fund – but the participant continues eligibility,” the letter notes. “This has been happening since the strike started, but the impact over the last four months is becoming more than the Fund can withstand.”
“At this time,” the letter continues, “Health & Welfare reserves are at all-time lows and the Board of Trustees has had to implement cost-saving measures in an effort to maintain financial solvency.” The letter goes on to say that “There may need to be further changes.”
Changes to Local 476’s health plan include a freezing of banked ours that could normally be used as credit towards the hours needed to qualify for health insurance during work slowdowns.
“Use of banked hours will be frozen for the fourth quarter of 2023, and the first quarter of 2024,” the letter says. “While participants will still accrue banked hours in accordance with the normal plan rules, participants will not be able to use banked hours to maintain eligibility.”
The local’s health plan is also making it harder to qualify for coverage. “Initial eligibility requirement is being changed from 300 hours during one quarter to 600 hours during two consecutive quarters,” the letter says. Co-pay for prescription drugs is also being increased significantly.
“These changes would not have been made if they were not absolutely necessary to preserve the fund, including the banked hours members have worked so hard for,” the letter says, noting that the trustees are “working with all service providers to try and cut costs and take any other available action.”
The local’s pension fund, however, is not in trouble.
Deadline reached out to Local 476 but has not heard back. Attempts also were made to reach the Motion Picture Industry Health Plan.