Union Health Plans to Merge

New Plan Will Offer Hospitalization

Volume CVII, No. 7/8July, 2007

Bill Dennison

There is good news on the horizon: Local 802 is improving its health plan and adding hospitalization. The new plan, which will add or restore many benefits to members, will begin with the Oct. 1 coverage period.

The plan will allow all members — not just Broadway musicians — the chance to earn hospitalization coverage. As many members know, this had been a serious flaw in the union’s health plan previously.

The complete details will be arriving in a letter mailed to all Local 802 health participants. Look for new plans such as “Plan A+” or “Plan A+ with hospitalization.”

As part of the health plan overhaul, Local 802’s Theatre Sick Pay and Hospitalization Fund will be merged with the union’s Health Benefits Plan. The combined funds will start with assets of nearly $7 million and will be called the Local 802 Health Plan.

The concept of merging health plans was broached during the recent Broadway negotiations as a way to shore up and strengthen the union’s weakened health plan. The strategy was reviewed and supported by fund attorneys and advisors.

Prior to the merger, the Sick Pay and Hospitalization Fund had assets of $4.7 million and was continuing to produce a growing surplus.

Unlike sharply increasing medical insurance costs, hospitalization insurance premiums had remained somewhat constant over the last decade.

This year, however, those premiums shot up over 30 percent.

The merger and the increased contributions from the Broadway settlement, which includes guaranteed escalators for the first two years, are expected to keep the new merged fund in good shape for the next period, even given expected increases in both major medical and hospitalization costs.

In addition, given that each fund has had to retain separate union and employer attorneys, actuarial advisors and separate administrative functions, there are expected to be some immediate savings.

The merger will be completed this summer.

During and after the merger, all of the benefits currently available through the Sick Pay and Hospitalization Fund will remain in place and will be fully paid as per the terms of the Broadway agreement.

This includes continued hospitalization coverage for all those who held a Broadway chair prior to March 5, 2007, and continued sick pay benefits with maintenance of all accrued credits.

In the coming weeks every health plan participant can expect to receive a mailing from the Local 802 Health Fund with details of the available benefit options and eligibility levels.