Health Insurance Coverage for Major Label Artists via SAG-AFTRA

Wednesday, November 18, 2015

In a May 2003 agreement brokered by AFTRA, the nation’s four major record labels and approximately 1,200 of their subsidiary labels agreed to make health benefits available for all artists on their rosters. The centerpiece of the agreement is an innovative structure that guarantees access to health insurance under the AFTRA Health Plan to all AFTRA covered royalty artists under exclusive contract to a label. Visit this page to learn more about this agreement, which was re-ratified in May 2008, and whether you qualify for coverage.

The agreement has since been updated, as AFTRA merged with the Screen Actors Guild in 2012 and is now SAG-AFTRA. In August 2015, SAG-AFTRA renegotiated the terms of their health & retirement (H&R) deal with major labels, increasing the cap on health insurance contributions made to artists on behalf of labels and including streaming royalties in the H&R eligibility requirements.

The agreement, which is part of the SAG-AFTRA Sound Recordings Code, covers both royalty artists and session vocalists performing on sound recordings. The centerpiece of the original agreement was an innovative structure that guarantees access to health insurance under the AFTRA Health Plan to all AFTRA covered royalty artists under exclusive contract to a label. That insurance is now provided by SAG Pension & Health in addition to AFTRA Health & Retirement, depending on your job title.

Here’s how it works. If an artist has a royalty contract, which most major label artists do, the label makes special contributions to SAG-AFTRA’s fund on behalf of the artists under exclusive contract based on royalties earned, even if unrecouped, and including all those micropennies netted from streams. So if you sold $150,000 worth of records in a 6-month accounting period, but you still have $375,000 in recording costs on their books, you won’t be seeing a royalty check yourself. However, the label will make a contribution to SAG-AFTRA based on the $15,000 you earned.

What does this do? The payment doesn’t mean you get your health insurance for free; it merely makes you eligible for SAG-AFTRA’s plan, meaning that the labels are meeting the minimum earnings eligibility requirements on your behalf. Once you are eligible, you can then sign up for SAG-AFTRA’s plan as an independent or upgrade to their family plan, but you’ll still have to pay the monthly premiums.

According to the SAG-AFTRA Code, as long as your label continues to pay the annual lump sum contribution, and you continue to pay the required participant premium, you will continue to be covered for the period that you are a covered roster artist.

If your label representatives do not provide you with this information when you sign your contract, or you’re unsure about whether your label is a signatory to the SAG-AFTRA Code, talk to AFTRA’s health insurance representatives at 323-937-3631 or webpage [at] aftrahr [dot] com.

Read SAG-AFTRA Sound Recordings Code language

Read SAG-AFTRA’s press release on 2015 ratification