TV and film writers will be paying more for their health care in a deal with the major studios unveiled Wednesday by the Writers Guild of America.
In return, the studios will kick in $321 million — a record sum — to keep the writers’ health fund solvent. The health plan changes are the centerpiece of the four-year contract reached by the WGA and the Alliance of Motion Picture and Television Producers over the weekend.
The boards of WGA East and West unanimously approved the deal on Tuesday, and will ask the members to ratify it in a vote later this month.
“We are proud of what we achieved in this negotiation, made possible by your support,” the WGA negotiating committee told members Wednesday. “Our most significant accomplishment was restoring our health plan to a sustainable path after facing severe pressure from industry contraction and runaway healthcare cost inflation.”
A studio-side source emphasized that the deal is by far the largest increase in history for the health plan. The infusion is about five times larger than the $65 million the studios gave in 2017, the last time the health fund was a key issue.
The contract also includes an increase in streaming residuals, with a “success bonus” for the most popular streaming shows going from 50% of the base residual to 75%. It also includes annual increases of 1.5%, 3%, 3%, and 3% in most minimum rates across the four years, as well as some provisions meant to discourage producers from demanding “free work” from writers.
In other areas, the deal largely preserves the status quo. On artificial intelligence, the AMPTP agreed to continue to hold meetings with the WGA, and to notify the guild if it licenses writers’ work for AI training. But the studios did not agree to pay writers for AI training, which had been a union demand.
The deal also holds the line on TV staffing minimums, which were a key element of the 2023 writers’ strike. The AMPTP had sought to relax the requirements in order to allow for limited, four-week “mini rooms” before a show is greenlit, but the WGA stuck to the terms of the 2023 deal that all but abolished them.
The substantive changes mostly pertain to health care. Due to the decline in film and TV production and spiraling health costs, the WGA health fund has run deficits totaling $200 million over the last four years. At that rate, the fund’s reserves would have dried up within another three years.
The union came in with a goal of extracting more money from the employers, while acknowledging that writers would also have to pay more.
“We’re attempting to address the cost curve,” said a WGA spokesperson, adding that in-network costs have gone up 13% per year since 2019. “The changes are trying to set the plan up for sustainability. The goals were preserving choice, maintaining high quality, and keeping out-of-pocket costs as low as possible.”
The studios’ top priority in the negotiation was a longer contract term — aiming to get a longer period without the threat of a strike. They initially sought a five-year agreement, before settling for four.
They also agreed to raise their health contributions from 13% of a writer’s gross compensation to 16.75%. The studios also agreed to raise the earnings caps used to calculate those contributions. Those changes are projected to be worth $280 million over the four-year term. In addition, the parties agreed to shift $41 million from the paid parental leave benefit to the health plan.
For their part, writers will see increases in premiums, deductibles and out-of-pocket maximums. The WGA also agreed to a 10% increase in the earnings threshold to qualify for coverage. Additionally, the guild agreed to a major reform of the “extended coverage” system, whereby writers accrue points that allow them to stay on the plan for up to five years while they are not working.
Writers currently pay zero monthly premiums for individual coverage, and $50 for a family. Under the new agreement, that will increase to $75 for an individual and $200 for a family, which is still lower than the current SAG-AFTRA premiums.
Out-of-pocket maximums will also increase from $1,000 per person to $2,500. Deductibles will increase from $400 to $500 for individuals, and from $1,200 to $1,500 for a family.
The earnings threshold to qualify for coverage is currently $46,759. The WGA agreed to raise that threshold by 10% starting on July 1, 2027.
The deal also makes it harder to accrue extended coverage points, setting a floor of $200,000 in covered earnings in a year to qualify. Under the current system, a writer need only hit the $46,759 minimum to begin accumulating points. The reform will not affect those currently using their points to obtain coverage, but will dramatically slow the rate at which writers accumulate points in the future.
The deal also establishes a new, lower cost health option — Centivo — which will have a narrower network of providers.
The WGA also sought to address “free work,” whereby writers submit multiple drafts before getting paid for their “first draft.” Companies will remind producers that only the company may request a rewrite, which is meant to discourage producers from asking for them. The deal also provides greater flexibility for writers of TV pilots, preventing companies from holding them exclusively or in so-called “first position” without payment.
The deal also includes a new, higher minimum rate for a “page-one rewrite” — which is more extensive than a rewrite or a polish.
The ratification vote will open on April 16 and close on April 24.
