SAG-AFTRA Health Fund Seeks Dismissal of Actors' Suit Over Plan Changes

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The SAG-AFTRA Health Fund is asking a California federal judge to dismiss a suit brought by some of its members over recent changes to the insurance plan.

In December, a group of actors led by Ed Asner sued the SAG-AFTRA Health Fund and its board of trustees for breach of fiduciary duty and violations of the Employee Retirement Income Security Act (ERISA). Their suit claims premiums have skyrocketed and medical coverage is being stripped from elderly guild members under the guise of a COVID-19-related restructuring. They allege the changes really stem from the poorly executed 2017 merger of the SAG and AFTRA health plans and that union negotiators were kept in the dark about the plan's precarious financial situation.

The health fund on Tuesday filed a motion to dismiss the complaint, arguing that the role of the plan and trustees is that of a settlor, not a fiduciary.

"It is well-settled that plan sponsors do not act as fiduciaries when they make decisions concerning the structure or design of the plan, including — as challenged here — decisions to merge plans and to amend the plan to provide less generous benefits," writes attorney Myron Rumeld in the motion, which is posted below. "Accordingly, these types of decisions cannot be challenged under ERISA’s fiduciary liability provisions. ... Plaintiffs likewise have no viable claim for fiduciary breach premised on the SAG-AFTRA Trustees’ decision to amend the Plan to change benefit eligibility requirements."

Further, it argues that there's no affirmative responsibility under ERISA to make disclosures to union negotiators and, even if there was, it's "preposterous" to argue that not sharing the financial condition of the plan prevented the union from negotiating higher contributions from employers.

"Among other things, it ignores the inherent implausibility of the notion that the Union negotiators would somehow have been able to persuade the employers to increase their contributions enough to counteract projected deficits of $141 million and $83 million in 2020 and 2021, respectively, when the television/theatrical employers had already agreed to 'up to $54 million,' — a sum the Union believed to be 'transformative,'" writes Rumfeld. "It also ignores the simple fact that, since the overwhelming majority of Union members do not receive any benefits from the Plan, the Union would have had to cut wages or compromise wage increases or other contract terms for all members for the sake of generating greater contributions to the Plan for the minority of members that qualify for the Plan."

The health plan also argues that a breach of fiduciary duty complaint under ERISA isn't the way to purse an age discrimination claim and that the age-related claims separately fail because the relevant plan changes were based on "retiree and pension status" not age.

A hearing is currently set for May 3.