Combining CAEA and AFBS insurance

This column is based on a question from Facebook: "Could someone PLEASE explain to me why ACTRA and Equity have been unable to combine their insurance policies?"

The easy answer: it's not that easy.

Our two plans work in very different ways, and with different guiding principles. CAEA and AFBS have certainly talked about amalgamation from time to time, but have not been able to come up with a mutually agreeable solution so far.

OK, so what about picking one or the other? Actually, this is a great way to illustrate the disconnect that any amalgamation has to overcome. Let's explore the idea of simply dropping the Equity plan and adopting AFBS's. The Bronze plan is their most affordable, so we'll look at that one.

Challenge #1: affordability.

Bronze AFBS coverage costs somewhere between $500-600 per year. The actual figure is somewhat higher than that, but AFBS has a variable subsidy system that covers part of the cost, so let's use $550 as a typical amount.

The median number of work weeks for an Equity member is somewhere around 10 per year. This also varies, but the figure is accurate enough to use as a ballpark example. This means that a notionally "average" member pays approximately $150/yr for their existing Equity insurance. Conversion to the Bronze plan could be managed by either paying a top-up of $400, or by raising the insurance premium from $16/wk to $50/wk.

The financial adjustment itself would be easy enough to implement.

However, according to the insurance survey, the premium level affordable for the greatest number of Equity members was less than $15/wk. Unless the median number of work weeks miraculously triples, that's a serious affordability gap to have to bridge.

Challenge #2: universality.

All Equity members in good standing have extended insurance coverage for all weeks of work, and basic coverage year round. ACTRA members have similar basic coverage, but only about half of their members have extended coverage while working.  The rest have not worked enough to become eligible for insurance and/or cannot afford to top up their premium accounts. Equity members have current insurance for the work they are doing today; ACTRA members work today toward eligibility for insurance in the future.

In the insurance survey, about ⅓ of Equity members reported having active AFBS coverage, with half of those being at the Bronze level.  By combining incomes and premiums, there is no doubt that more Equity members would be able to afford at least Bronze coverage, and some members already at that level could move up to Silver or Gold.

We'd need bilateral income stats to nail down a precise number, but drawing on member-reported income data from our 2007 general survey, it's likely that roughly 50-60% of all Equity members would be able to afford some level of AFBS coverage if the premiums from both associations were combined.

However... The flip side is that somewhere around 40% of Equity members would almost certainly lose their existing coverage. Because those members would be (by definition) at the lower end of our income spectrum, their ability to top up their contributions to maintain coverage would be limited.

Challenge #3: coverage types and levels.

Trying to compare group insurance plans is like trying to compare apples and elephants, so I'll just highlight some of the items most mentioned by our members.

AFBS Bronze coverage differs from the our base plan in several areas we know to be of importance to Equity members. It does not offer disability coverage, nor orthotics, and coverage for massage and other physical therapies is roughly half of that under the CAEA plan. There is also nothing comparable to our Health and Wellness Benefit until members have over $4000 in their AFBS account. That said, the Bronze plan does offer year-round coverage, 50% dental coverage up to $400, a biannual eye examination allowance, and an option to purchase dependent coverage. In a combined plan, these differences would affect the 50% of Equity members likely to be covered at the Bronze level.

Whether the Bronze mix of coverages is "better", "worse", or "worth it" depends greatly on individual needs and income. However, Equity members wishing to retain all their current coverage after a shift to AFBS would need need to buy in at the Silver level, at the cost of an additional $350/yr, plus a separate disability premium.

Conclusions?

There is no global conclusion to be drawn here, other than showing that combining the two plans would be no easy task. The AFBS plan was built to serve ACTRA members, their incomes, and their work circumstances; ours was built to serve our members, our incomes, and our work circumstances. Even opting to simply abandon one in favour of the other has some pretty significant ramifications, ranging from improved coverage through to total loss of coverage.

Does this mean it can't happen, or that there is no way to do it that doesn't have a significant downside? No. The results from our insurance survey have freed us up to explore a range of options that we did not have before. Also changes made by Equity in 2003, and AFBS in 2006, have created new flexibility in each system that might make combination more feasible.

Staff will be shopping around new plan options derived from the survey results and AFBS will certainly be approached. Who knows? This may turn out to be the last time the "why can't we" question ever needs to be asked or answered.