Board of Trustees Approves Initial Health Plan Changes to Address Healthcare Inflation

We are all aware that the nation is in the midst of a healthcare crisis. Healthcare inflation has been raging for the past several years; the United States Government endured the largest shutdown in history, largely over health care subsidies, and more recently announced double digit increases in Medicare premiums. Our Health Plan is not immune to these factors.

The current healthcare inflationary environment presents a unique challenge to the Health Plan in that it has outpaced the negotiated wage increases on which contributions are based for the last several years. Furthermore, healthcare inflation is forecast to continue to outpace wage increases for the foreseeable future. Contributions on compensation are the Health Plan’s largest source of funding and, as a self-funded plan, the Health Plan relies on these contributions to pay benefits.

The Health Plan’s reserves, which were built up over the past two decades, are the intentional result of the judicious design of our benefit structure, prudent oversight and cost management by the Board of Trustees, and contribution increases negotiated by the DGA over the past few decades. This careful planning positioned the Health Plan to withstand the impact of the pandemic and the strikes, while also making benefit improvements, including infertility benefits, expanded abortion care and related travel benefits, and palliative care benefits. These efforts have resulted in the Health Plan remaining the best funded plan with one of the finest levels of benefits in the industry.

While the reserves have allowed us to sustain our current level of benefits despite benefit expenses exceeding contribution income, these losses are projected to continue this year and compound in the coming years. Unless addressed, the Health Plan’s reserves will be depleted by the end of this decade.

Accordingly, the Board has taken the initial steps outlined below to address these challenges. The Board of Trustees does not make benefits changes such as these without considerable deliberation and forethought. Future changes are being given the same careful consideration, with the main goal being to preserve the vitality of the Plan for years to come for you and your families.

Increase in minimum age for beginning Certified Retiree coverage from age 60 to 62, effective April 1, 2026

For decades, the Health Plan’s rules for Certified Retiree coverage have remained in place without change. During that same time, however, work patterns have shifted so that it is now common for careers to extend well beyond age 60 (the age at which participants currently may begin Certified Retiree coverage). Recognizing this change, the Health Plan will adjust the age at which you may begin Certified Retiree coverage. Currently, to qualify for Certified Retiree coverage:

• you must be at least age 60,
• have at least 20 years of Earned coverage; and
• must have retired from either the DGA–Producer Basic Pension Plan or DGA–Producer Supplemental Plan.

Effective April 1, 2026, the minimum age that a qualified participant may begin Certified Retiree coverage will increase from 60 to 62. All other requirements will remain unchanged.

Elimination of non-network inpatient benefits, effective March 1, 2026

The Health Plan contracts with Anthem Blue Cross to provide a broad network of inpatient facilities in the United States from which participants may choose to receive services. These network facilities have agreed to charge contracted, discounted rates, thereby reducing costs for both you and the Health Plan. Non-network facilities, on the other hand, may charge any amount they choose, which results in higher costs for both you and the Health Plan.

Given the extensive inpatient network offered by Anthem, the Health Plan will terminate coverage of all non-network inpatient benefits in the United States effective March 1, 2026 (Presently, more than 99% of inpatient claims paid are incurred at network facilities.) This means that, except for Emergency Services as defined beginning on page 66 of the March 2025 Health Plan Summary Plan Description, all non-network inpatient services, including hospitalizations, mental health and chemical dependency treatments, etc., must be provided at an Anthem network facility to qualify for coverage under the Health Plan.

For a list of network inpatient facilities, please visit our Provider Finder at www.dgaplans.org/networkproviders.

Increase in the annual deductible, effective January 1, 2027

The Health Plan’s current annual deductible has remained unchanged since 2009, despite a significant rise in healthcare inflation over the intervening period. Given the rise in healthcare costs, the Health Plan’s annual deductible will increase beginning in 2027.

Effective January 1, 2027, the Health Plan’s annual deductible will increase from $325 per person/$975 per family to $400 per person/$1,200 per family. This means that, beginning January 1, 2027, you must pay out-of-pocket for Covered Expenses up to these amounts before the Health Plan will pay any benefits. Your annual deductible resets each Plan Year (which for the DGA–Producer Health Plan is the same as the calendar year) that you are covered.

The current deductible of $325 per person/$975 per family remains in effect for calendar year 2026.

Increase in minimum earnings required to qualify for Health Plan coverage

Effective with earnings periods beginning on or after January 1, 2026, the minimum earnings required to qualify for Health Plan benefits will increase from $39,820 to $41,215 for the DGA Choice Plan and from $129,150 to $133,670 for the DGA Premier Choice Plan. This 3.5% increase aligns with the most recent wage increase negotiated by the DGA in its Collective Bargaining Agreements and is consistent with past annual increases.

The Trustees’ objective in making these changes is to protect the participants’ benefits, while making judicious decisions about where cost savings can be achieved.

How You Can Help

Three Tips for Being a Prudent Healthcare Consumer

With healthcare inflation forecast to persist for the foreseeable future, you can take some simple steps today that not only help preserve the Health Plan’s limited resources, but also save you money on out-of-pocket costs:

1. Use a network provider. To find them, go to www.dgaplans.org/networkproviders.
2. Shop around for the best price for planned services. Use Anthem’s price estimator and comparison tools available in the Anthem Blue Cross online portal (visit www.anthem.com/ca) and Sydney Health mobile app.
3. Compare prescription drug costs using online tools like the CVS Drug Cost and RxCompare (visit www.caremark.com). Sometimes, you can get a lower price by NOT using your prescription drug benefits. Visit www.dgaplans.org/rxsavings.