SAG-AFTRA Health Plan To Pay $15M To Wrap ERISA Suit

Santa Clara, CAThe SAG-AFTRA Health Plan has agreed to pay $15 million to settle a proposed class-action lawsuit alleging violations of the Employee Retirement Income Security Act (ERISA). The ERISA lawsuit, initially filed in 2020 by late actor and former SAG president, Ed Asner, and nine other defendants claimed that the health plan improperly denied or terminated benefits to older performers who were entitled to them.

The settlement was reached after mediation, and the parties involved have agreed to resolve the matter without admission of liability or wrongdoing. The settlement will be funded by the health plan's reserves and will not affect members' benefits or premiums.

The SAG-AFTRA Health Plan provides health and retirement benefits to over 30,000 performers and their dependents. The SAG-AFTRA Health Plan lawsuit alleged that the health plan violated ERISA by improperly denying or terminating benefits to members who were entitled to them, failing to adequately disclose plan provisions, and failing to provide adequate notice of benefit denials or terminations.

At the heart of the Health Plan members' allegations was that the annual earnings amount necessary to qualify for participation in the plan had been raised, and members' residuals were no longer able to count toward that annual earnings threshold. As such, senior members in the Plan were effectively shut out of the plan. SAG-AFTRA Health Plan trustees at the time said that the changes were made in order to keep the health plan solvent--but plan members had not been informed of this.

ERISA is a federal law that sets minimum standards for retirement and health plans in the private sector. It requires plans to provide participants with certain information about the plan and its funding, and sets fiduciary standards for those who manage and control plan assets.

The settlement is significant because it underscores the importance of compliance with ERISA's requirements. Plan administrators must ensure that they are providing participants with the benefits to which they are entitled, and that they are following the proper procedures for providing notice and disclosing plan provisions.

In a statement, the SAG-AFTRA Health Plan said that it was pleased to have resolved the matter and that it remained committed to providing high-quality health and retirement benefits to its members. The settlement must still be approved by a federal judge.

Overall, the settlement serves as a reminder to plan administrators to ensure that they are in compliance with ERISA's requirements and to take seriously their fiduciary responsibilities to plan participants.

The case is Asner et al. v. The SAG-AFTRA Health Fund et al., case number 2:20-cv-10914, in the U.S. District Court for the Central District of California