For the first time in five years, the Presbyterian Church (U.S.A.) Board of Pensions’ (BOP) Medical Plan dues are going up.
At it’s June 23-25 meeting here, the board voted to raise Medical Plan dues by three-quarters of a percentage point in each of the next two years. Thus, dues will rise from 19.5 percent to 20.25 percent in 2012 and to 21 percent in 2013.
Michael Fallon, the BOP’s vice-president for finance, told the board June 25 that Medical Plan reserves at the end of 2011 are projected to be above the 20-33 percent [of current year claims and expenses] range that is the BOP’s guideline for such reserves. “But without changes,” he said, the reserve level will drop below the 20 percent bottom of the range by 2012 and below zero by the end of 2013.”
The two-step dues increase “…spreads the pain,” said BOP director Alan Ford. BOP director Paul Volker, a physician, agreed. “I appreciate the two-year phase-in,” he said. “It helps churches with their planning.”
The Rev. Brian Ellison, a board member who also serves on its Healthcare Committee said, “I want to counter any misperception that any healthcare increases are related to domestic partner benefits. We must go out of our way to reinforce the message that this has nothing to do with domestic partner benefits but reflects healthcare costs and healthcare costs only.”
It also helps the board avoid possible confusion by not announcing a 1 percent dues increase at a time when it is considering a request from the 219th General Assembly to explore extending benefits to same-gender domestic partners. The Assembly authorized the board to raise Pension Plan dues by 1 percent if necessary to fund such an expansion.
The dues increase was part of a package of changes to the Medical Plan the board approved as it prepares for the full rollout of federal health care reform in 2014.
Vice-President for Benefits Patricia Haines said she’s confident that as many as two-thirds of Medical Plan members will likely qualify for some kind of government subsidy under the state-based health insurance exchange system created by the reform legislation, “so wholesale changes to our plan don’t make sense right now.”
In the meantime, the package of Medical Plan changes include (in addition to the dues increase):
- An increase in the minimum Medical Plan dues basis ― currently 65 percent of the median salary for pastors in the church, or $34,385 ― to a flat dollar amount of $38,000 in 2012 and $40,000 in 2013;
- An increase in the maximum Medical Plan dues basis ― currently 200 percent of the pastors median, or $105,800 ― to a flat dollar amount of $117,000 in 2012 and $124,000 in 2013;
- An increase in the annual deductible, effective Jan. 1, 2012, from 1 percent to 1.25 percent of effective salary for in-network services and from 2 percent to 2.50 percent of effective salary for out-of-network services
- An increase in the in-network office co-pay for specialists from $35 to $45, effective Jan. 1, 2012 (the primary care physician office co-pay remains unchanged at $25);
- Effective Jan. 1, 2013, an increase in the annual family co-payment maximum from 4 percent to 5 percent of effective salary for in-network and from 12 percent to 15 percent for out-of-network.
Seminary student dues are also going up, commensurate with the raise in the minimum dues basis for active plan members. For instance, member only coverage will increase from $318.06 monthly currently to $364.17 in 2012 and to $396.67 in 2013. For member and family, coverage will rise from the current $558.75 per month to $641.25 in 2012 and to $700.00 in 2013
Monthly subscription dues for the Affiliated Benefits Program and for early retirees ― excluding Medicare Supplement subscribers ― will go up 7 percent on Jan. 1, 2012.
The board authorized staff to report back in October on the Medicare Supplement subscription charge for 2012, with the stipulation that “any increase not exceed $10 per member per month.” Haines said that a 2012 financing change to the prescription drug portion of the Medicare Supplement Plan allows the BOP to receive larger subsidies from the federal government than in the past, “which should help slow the rate of increase in Medicare Supplement dues.”
In other news, the board:
- Heard a report from its Investment Committee that the BOP’s Balanced Investment Portfolio increased 6.5 percent to $7.3 billion for the five months ended May 31, 2011. The Pension Plan remains fully funded;
Voted to discontinue the Middle Governing Body Grant Program pilot offered through the board’s Assistance Program. “The Assistance Program’s other grant programs are currently adequately funded. However, increased Christmas Joy Offering income or other new gifts are necessary to meet the financial assistance needs of Presbyterian pastors, other church workers, and their families in the future,” said the Rev. Peter Sime, the BOP’s vice-president for assistance, CREDO program and funds development.