An agreement with major studios announced Wednesday by the Writers Guild of America will result in TV and film writers paying more for their medical bills.
In return, the studio will put in a record $321 million to maintain the screenwriters’ health fund. The medical plan change is the centerpiece of a four-year agreement signed over the weekend by the WGA and the Federation of Motion Picture and Television Producers.
The WGA East and West boards unanimously approved the agreement on Tuesday, and will ask member states to ratify it in a vote later this month.
The WGA Negotiations Committee told members on Wednesday that it was “proud of the results achieved in these negotiations, which were made possible by your support.” “Our most important accomplishment was getting the health plan back on a sustainable track after facing severe pressure from industry contraction and runaway health care cost inflation.”
Studio officials emphasized that this contract is the largest increase in the medical insurance system’s history. The infusion is about five times the $65 million the studio provided in 2017, the last time health funding was a major issue.
The deal also includes an increase in streaming residuals, increasing the “success bonus” for the most popular streaming shows from 50% to 75% of base residuals. It also increases most minimum fees by 1.5%, 3%, 3%, and 3% annually over the four-year period, and includes several provisions designed to prevent producers from demanding “pro bono work” from writers.
In other areas, the agreement largely maintains the status quo. Regarding artificial intelligence, AMPTP agreed to continue meeting with the WGA and to notify the guild if it licenses an author’s work for AI training. However, the studio did not agree to pay the screenwriters for AI training, as requested by the union.
The agreement also maintains boundaries around minimum numbers for television staff, which was a key element of the 2023 writers’ strike. AMPTP had sought to relax the requirements to allow “mini-rooms” for a limited time of four weeks before a show was greenlit, but the WGA stuck to the terms of the 2023 agreement and largely scrapped them.
Substantive changes primarily concern health care. The WGA’s health fund has suffered a total deficit of $200 million over the past four years due to a decline in film and television production and rising health care costs. At this rate, the fund’s reserves will be depleted within three years.
The union joined with the goal of extracting more money from employers, recognizing that writers would also have to be paid more money.
“We are trying to manage our cost curve,” a WGA spokesperson said, adding that costs within the network have increased by 13% annually since 2019. “These changes are an attempt to plan for sustainability. The goal was to maintain choice, maintain high quality, and keep out-of-pocket costs as low as possible.”
The studio’s top priority in negotiations was a contract extension, aiming to obtain a longer contract term without the threat of a strike. They initially asked for a five-year contract, but ultimately agreed to a four-year deal.
They also agreed to increase health insurance contributions from 13% of writers’ total compensation to 16.75%. The studio also agreed to increase the revenue cap used to calculate these donations. These changes are projected to be worth $280 million over four years. In addition, the parties agreed to transfer $41 million from paid parental leave benefits to medical insurance.
For writers, insurance premiums, deductibles, and out-of-pocket maximums will increase. The WGA also agreed to increase the income threshold for compensation by 10%. The guild also agreed to major reforms to its “extended coverage” system, which allows writers to earn points to stay on the plan for up to five years while they’re not working.
The writer currently pays zero monthly premiums for individuals and $50 a month for families. The new agreement increases premiums to $75 for individuals and $200 for families, which is still lower than current SAG-AFTRA premiums.
Out-of-pocket maximums will also increase from $1,000 to $2,500 per person. The deductible increases from $400 to $500 for individuals and from $1,200 to $1,500 for families.
Currently, the income threshold for coverage is $46,759. The WGA has agreed to increase its standards by 10% starting July 1, 2027.
The agreement also makes it harder to earn extended coverage points and sets the minimum annual covered earnings limit at $200,000. Under the current system, writers only need to reach the minimum amount of $46,759 to begin accumulating points. This reform won’t affect people who currently use points to conduct interviews, but it will dramatically slow down the rate at which writers accumulate points in the future.
The partnership will also establish Centivo, a new lower-cost healthcare option with a narrower provider network.
The WGA also sought to address “unpaid work,” where writers submit multiple drafts before receiving compensation for the “first draft.” Companies remind producers that only they can request rewrites, but this is intended to discourage producers from requesting rewrites. The deal also gives TV pilot screenwriters greater flexibility and prevents companies from holding them exclusively or in so-called “first positions” without compensation.
The deal also includes new higher minimum rates for “Page 1 Rewrites,” which are more extensive than rewrites and polishes.
The ratification vote will begin on April 16th and end on April 24th.
