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For years, the National Writers Union (NWU) has stood for the proposition that self-employed writers are entitled to affordable health insurance at group rates, regardless of pre-existing medical conditions. But this spring, thanks to a combination of market forces and misplaced trust, the union finds itself facing the worst-case scenario: Outside of New York State, it can no longer offer group health insurance, and the rates for New York State residents are rising quickly.
On May 3, NWU president Jonathan Tasini sent out an e-mail that began, "We have disappointing news." He explained to members that Aetna, the union's only remaining carrier for health insurance, has refused to continue insuring members as a group, except New Yorkers, who are protected against such exclusion by law. As of June 1, premiums for all members will increase by up to 30 percent, and as of September 1, group coverage outside New York will expire completely. At that point, existing policy holders can choose to convert to individual policiesbut, Tasini warned, the premiums could be exorbitant. The union's dental-and-vision insurance plan is endangered as well.
No response has been heard from the estimated 2000 writers who will be affected by Aetna's cancellation of group rates. But the move is a severe blow to the union, which has yet to recover from the collapse of Employers Mutual, a phony health insurance carrier that bilked hundreds of members and left them with thousands of dollars of unpaid claims. On top of that, some 800 members recently lost their "media perils" insurance, which includes libel coverage, after the NWU's carrier asked to exclude applicants whose work was deemed too risky to insure.
While a cancer patient who relied on Employers Mutual is said to be paying out of pocket for radiation treatment and a diabetic is begging doctors for free drug samples, Tasini continues to put a rosy spin on the health insurance crisis, promising that the union is seeking a new carrier and asking members for their "support and patience." But many members have already sought insurance elsewhere. The only problem is that as freelancers, they have nowhere to run. Nationwide, insurance rates are going up.
"This is America, 2002," said Lowell Peterson, a lawyer who represents the NWU on insurance and other matters, in an interview before the May 3 e-mail went out. "It's the Wild West. George Bush is president and the number of people who are uninsured is growing exponentially. On good days, I think, no problem, we'll get a replacement carrier. On bad days, I think the political and economic realities have caught up with us."
In the past, insurance companies were more likely to insure groups indiscriminately, knowing they could profit by investing premiums in the stock market. But since the recession has set in, established insurers are more cautious, while bogus upstarts prey on small businesses and freelancers. Following the standard m.o., the phony companies offer "multiple employer welfare arrangements" (MEWAs), which claim to be governed by federal law. Before state watchdogs catch on, they divert premiums into their own accounts and fail to pay claimswhich is exactly what Employers Mutual is accused of by the U.S. Department of Labor. Company managers deny the charges.
Asked about problems with the NWU's libel insurance, Miryam Ehrlich Williamson, the NWU's vice president of internal organizing, echoed Peterson's lament. "Our members are smart enough to understand that this is beyond our control," she said. "We're talking about market forces and not choices the union is making."
Williamson explained that the union had been offering "media perils" insurance since 1999, most recently through a syndicate of Lloyd's of London. The policy, which covered copyright infringement and other legal actions in addition to libel, was a response to contracts that require freelancers to pay legal costs if the publisher is sued.
Last year, Williamson said, the NWU's broker for libel insurance began asking some applicants for writing samples, after which about 40 applications were rejected, including some who had not been asked for samples. Most of those rejected were either investigative reporters or writers who cover gay, lesbian, transgender, and bisexual issues. Just before the policy was to expire this March, the broker offered a proposal stipulating that no previously rejected applicant would be allowed to reapply. When Williamson said she could not decide on those terms within the deadline, the proposal was withdrawn, leaving members with no insurance. In a gesture of solidarity, the union recently adopted the position that "no member should be refused insurance on the basis of the kind of writing he or she does"though some members would prefer limited access to the insurance.
In dealing with health insurance, solidarity has not been the NWU's top priority. Some leaders feel the union should avoid taking responsibility for its members' woes, lest it be sued and damaged financially. Other believe accountability is the key. Local leaders are agitating for more disclosure from Tasini and Customer Service Solutions (CSS), the broker that continued pushing Employers Mutual long after several states had dubbed its practices illegal.
"I don't know that the union would be brought down by a little sunlight," said Mark Uehling, a longtime member of the NWU's Chicago steering committee. "To some extent, the situation is a reflection of the state of health insurance in this country," he said, "but the fact remains there was a long delay between when the union leadership became aware of the problems with Employers Mutual and CSS, and when they began communicating those problems to members. Jonathan Tasini is a great leader and I respect his ability to forge consensus, but he has not stepped up to explain his own role in this."
In mid April, the heads of several NWU locals released an ad hoc report that chronicles the health insurance crisis, from the union's collection of $300,000 in insurance commissions last year to the state investigations of Employers Mutual to Tasini's delay in warning members about the company, at a time when he was running for re-election. The report concludes that the national leadership was "at best, negligent, and at worst, actively participating in the defrauding of union members."
Peterson called the allegation that the union participated in the fraud "outrageous."
The official committee set up by Tasini to investigate the crisis has yet to release its first report, while the union continues to seek a new health insurance carrier. Peterson says several potential carriers have either rejected the union or been rejected, and there is "one good prospect" left. Williamson says a broker is looking for a replacement carrier for libel insurance.
The Voice is unaware of another group that sells libel insurance to freelancers at group rates. But those who need health insurance might consider the New York-based Editorial Freelancers Association. Its rates are rising, but unlike the NWU, the group takes no commission on the policies it sellsand seems to have drawn no complaints.