This is a response to Rich Siegel’s letter in “The Musicians’ Voice“
Currently, there are almost 2,000 members who qualify for 802’s health insurance. Well over half of them are on Plan A, almost 700 qualify for Plan B and around 50 have chosen the comprehensive HMO option, which includes hospitalization. On average, members are using the plan more and more each year and costs are increasing, resulting in substantial losses (see recent issues of Allegro for details).
Members are using the plan, including hundreds of musicians who regularly do club dates. In fact, just by doing around three union club dates per month, a musician, along with his or her spouse or domestic partner, and dependents up to the age of 19 (or 23, if still in school), could qualify for basic coverage through Plan B.
Mr. Siegel’s suggestion that the union explore the idea of allowing employers to pay musicians directly or donate an equal sum of money to a union-endorsed charity in lieu of making health benefit contributions, would, if enacted, violate hundreds of negotiated collective bargaining agreements, undermine additional agreements, and ultimately destroy the entire HBP. Many of our contracts force us, directly or indirectly, to give every employer any deal we give to one specific employer. The master Club Date Agreement has one of these “Most Favored Nations” clauses. Therefore, if any single club date employer were allowed to forgo making health benefit contributions, then every club date employer could stop making contributions, and musicians would lose coverage and the HBP would dissolve.
In the case of alternate payments either directly to musicians, or to endorsed charities, the HBP still would be irreparably harmed. The reason the HBP offers plans at significantly reduced group rates is because the union negotiates contracts that require contributions on behalf of all musicians. Insurance companies like ULLICO (the one used by Local 802’s HBP) have actuaries who are well aware that some employees will have other coverage, or will not use the plan for various reasons. This group dynamic is precisely why the HBP offers plans at such low rates. Allowing individuals to opt in or out of the plan is called adverse selection, which nullifies any group rate discounts (in theory, those who remain in would be statistically more likely to use the insurance, which would bankrupt the HBP).
Let’s consider the costs of the plans. Even with the coming increase in cost of Plan A to $1,075 in employer-contributions over a 6-month period (this increase takes effect Jan. 1, 2003), the monthly cost will still be less than $180. Other than certain highly subsidized plans, I do not know of any health insurance, certainly not family coverage that includes prescriptions and gives you the option of going to a doctor of your choice (without any referrals), or staying within a network (one of the largest in NY) for a lower co-pay, available anywhere for anything even close to this price. For Plan B, the monthly figure will remain at $66, also for family coverage with the same flexibility, but with a much lower coverage cap ($5,000 per individual per year, compared to $50,000 for Plan A).
A lack of hospitalization coverage has been the complaint about the HBP raised most often by members. To address this issue, the HBP now offers residents of New York City, Long Island and Westchester the option of purchasing, at a significant discount, comprehensive HMO coverage, which includes hospitalization, once they qualify for Plan A or Plan B. Along with hospitalization, the HMO affords members virtually unlimited coverage for reasonable and customary care, and few out-of-pocket costs – in exchange for less flexibility. Therefore, if a musician can manage to get enough work even for Plan B, he or she does have the option of purchasing much more comprehensive coverage, at a rate that is far more affordable than what can be found on the open market. An obvious drawback to this HMO is that it is not available to New Jersey residents, despite our efforts to arrange coverage for these members.
Ours is a democratic union, and if a strong majority of members really did have affordable insurance elsewhere and had no use for the Local 802 HBP, we eventually would phase out contribution requirements, and the HBP would come to an end. However, as stated previously, more and more members actually are increasing their usage of the plan; this comes at a time when costs are increasing and, according to Physicians for a National Health Program (PNHP), the number of uninsured Americans has risen to 15 percent, or over 40 million.
Clearly, what is needed is universal coverage, but the realization of a rational, single payer, national health care system seems ever more remote. Senator Hillary Clinton’s modest efforts were soundly defeated in 1994, and as recently as in the Nov. 5 elections, voters in Oregon gave a resounding “no” to a proposal for a single payer, universal coverage system for state residents.
EMPLOYERS MUST PROVIDE
We are all left with the only tenable option – continuing to force employers to provide health coverage. All contributions to the HBP help keep costs down, and the plan can only operate at rates significantly lower than those found on the open market by counting on some over funding, and on contributions for people who will not use the plan. In other words, to operate, the HBP needs contributions of over $400 for musicians on Plan B (but less than $1,075), and over $1,075 for musicians on Plan A. In fact, the HBP actually must pay our insurance company, ULLICO, an amount that far exceeds $400 every six months for Plan B, and $1,075 for Plan A. This over payment is compensated for by employers whose contributions occasionally over fund some musicians’ accounts, and also end up funding the accounts of musicians who will not use the plan. Employers in all areas of the union, from club dates to Broadway to recordings, are required to make these necessary contributions.
Most employers vehemently resist paying benefits, even though they are paid only on a proportional basis. For example, a Saturday night club date currently pays just $21 ($18 in some cases) toward a musician’s HBP, yet many employers blame this relatively small contribution for a decline in their work. It is true that unethical undercutting is rampant in the club date field. To address this, the Organizing Department must work to continually increase union density by forcing more employers into the union fold, thereby creating a more level playing field. However, it is difficult to accept the notion that doing the right thing by paying $21 in health contributions will force an employer to lose a job or go out of business. For most bands, the $21 per musician, which often is reduced further for program employers, probably represents a total cost of less than $100 for a Saturday night gig. Given that many employers charge clients upwards of $1,000 or more per musician, including many of the very same employers who raise the loudest objections to the $21 in required HBP contributions, most complaints about untenable costs simply are not justified.
While Mr. Siegel suggests foregoing HBP contributions and instead paying musicians directly or contributing to a union-endorsed charity, earlier in his letter he maintains that these very costs make filing jobs “prohibitive.” This contradiction is indicative of the fact that for many employers, the misperception that $21 in health contributions is unnecessary and untenable remains. Perhaps we need to do a better job of explaining how the HBP operates, and why it is necessary to require contributions for all musicians on a job, and for all employers in a given field.
However, further education about the HBP will not help the many musicians who currently fail to qualify for either Plan A or Plan B simply because they cannot find union work. The solution to this problem is to organize more nonunion employers, so that health benefit contributions become part of an accepted level playing field; simply part of doing business in this town for all employers. We encourage musicians to call a union rep, or a member of the Organizing Department, to discuss the possibility of organizing any nonunion work for which they are hired. Together, 802 reps and organizers have an excellent track record of helping musicians win pension and health benefits without jeopardizing anyone’s job.