Protecting Health Benefits for Non-Union Production Workers

Mary McDonnellBy: Mary McDonnell

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The Affordable Care Act (“ACA” or Obamacare) has been the subject of a great deal of speculation in the past month. While there is no clear vision on the various changes that may occur under the new administration, the ACA remains the law and employers must comply. Should Congress and the Trump Administration repeal the ACA, there still may be a transitionary period and state governments (especially California and New York) may continue to search for ways to ensure the workforce has access to employer-provided medical coverage.

The truth is that employers will likely continue to offer some level of health benefits, whether due to a federal or state mandate, or because their employees now have the expectation. It’s been evident that the entertainment industry has changed its tune on the importance of offering health benefits to its non-union workers, and will likely continue with this practice.

Entertainment Partners (EP) offers a robust large group health insurance plan option. Since the ACA became law, we have seen tremendous enthusiasm for our services from the industry. For example, many clients contribute more than the required contribution amount for their non-union workers (50% of the lowest cost premium for employee only). Additionally, we have fielded numerous requests from smaller employers requesting to join our program, despite not being required by the mandate.

So even if the employer mandate disappears, why do we think the entertainment industry will continue to offer medical insurance to their non-union production workforce?

  • Attraction. This is a fiercely competitive industry, and attracting the best talent is imperative, especially in episodic television. Since payroll is the largest line item on most employers’ balance sheets, attracting and recruiting new hires costs time and money. Offering health benefits is one way to get — and retain — the best production workers. So while employees in the industry will likely still compete to work on the best show, they may pause to make sure they are also getting good benefits.
  • Retention. In a recent survey, almost 90% of employees reported that should they lose their health benefits, they would search for employment elsewhere. Without coverage, your non-union workers may be eyeing other places that will offer them the medical benefits they need.
  • Morale and Productivity. It’s the right thing to do. Offering a health insurance option has been shown to increase loyalty, decrease absenteeism and improve employee health and morale; those with coverage are more likely to seek preventative care and live overall healthier lives.

Finally, the true financial cost of offering medical benefits is reduced by the fact that plan contributions are tax deductible for the employer. And, surprisingly, many non-union workers will not take advantage of offered plan(s). Some employees have individual plans, spousal/parental coverage or are millennials who would prefer to roll the dice. Consequently, offering medical coverage is unlikely to break the bank.

Mary McDonnell is Vice President of Benefit Solutions at Entertainment Partners. She can be reached at mmcdonnell@ep.com.

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