Board of Pensions postpones vote on medical dues overhaul
Decision on funding spouse/dependent coverage delayed until June
February 11, 2013
The Board of Pensions of the Presbyterian Church (U.S.A.) is postponing a vote on a new dues structure for its healthcare plan until its June 2013 meeting.
Since a new proposal (informally called “DuesPlus”) — which would for the first time make spouse and dependent coverage optional and require employers or plan members or a combination of the two pay for it — was unveiled in October, the board has been inundated with criticism, most arguing that the flat-rate premium that would be charged for the additional coverage would most negatively affect small churches and young pastors with families.
A number of online petition drives have collected hundreds of signatures and church leaders — including former General Assembly Moderator John Fife — have weighed in publically with their opposition to the opposed changes.
In announcing its decision to postpone its vote on “DuesPlus,” the board’s Philadelphia staff said, “The Healthcare Committee has decided to reconsider portions of its proposal to better accommodate the thoughtful and heartfelt concerns you have raised and consider alternatives that seek to better balance the needs of all — members, dues payers, and the plan itself.”
The decision, the board said, was based partly on better-than-expected financial results for the healthcare plan in 2012. Nevertheless, the plan is projected to reach a deficit position of more than $28 million by 2014.
“Make no mistake, the times ahead are difficult ones, and we will continue to need to increase revenues in order to avoid decreasing benefit levels,” the board stated. “This is because, unlike the Pension Plan, the Medical Plan operates on a pay-as-you-go basis. Thus, every dollar paid in claims must be met with a dollar of revenue.”
Insisting there “is no easy answer” to the medical plan's financial difficulties, the board said “we believe that, as a result of the feedback provided by our members and employing organizations and the recent, more favorable financial forecast, we are on a path to achieving a better solution — one that still will provide a sustainable plan.
The revised plan will be presented to the board at its March 7-9 meeting in Philadelphia and is scheduled for a final vote June 27-29, also in Philadelphia, where the board is headquartered.
The full text of the Board of Pensions communication, dated Feb. 11:
Voices from throughout the Church have been responding to communications by the Board of Pensions about a potential restructuring of healthcare dues for the Medical Plan Traditional Program for active members. From pastors to mid council staff to churches and other employers, we have heard many voices through many channels. We want you to know that we are listening.
The Healthcare Committee has decided to reconsider portions of its proposal to better accommodate the thoughtful and heartfelt concerns you have raised and consider alternatives that seek to better balance the needs of all -- members, dues payers, and the plan itself. While the original medical dues recommendation and contribution assumptions were based on financial information available to the Board in October 2012, the year-end financial position of the Medical Plan is better than was anticipated. Although very good news, the lower-than-forecast expense-to-revenue ratio is not a total cure for the many challenges that face our Medical Plan. However, it will help in the design of a new proposal, as the overall cost-increase projections have lessened slightly.
The revised proposal will be shared with the full Board of Directors at the March meeting and a recommendation will be put forth for a vote at the Board's meeting in June.
As we work together to determine how best to restore the Medical Plan to fiscal health, we continue to believe that the dues payers -- the employing organizations --should have some flexibility in cost-sharing with their members, should they choose to do so. However, we recognize the need to reconsider the approach we take to designing this cost-sharing -- and the overall amount to be shared -- with particular consideration to smaller churches, members with lower salaries, and all dependents covered by the plan. And, we expect to pursue a more evolutionary, multi-year approach to any implementation actions, including rate increases and other changes.
Make no mistake, the times ahead are difficult ones, and we will continue to need to increase revenues in order to avoid decreasing benefit levels. (This is because, unlike the Pension Plan, the Medical Plan operates on a pay-as-you-go basis. Thus, every dollar paid in claims must be met with a dollar of revenue.) And although there is no easy answer to the Medical Plan's financial difficulties, we believe that, as a result of the feedback provided by our members and employing organizations and the recent, more favorable financial forecast, we are on a path to achieving a better solution -- one that still will provide a sustainable plan.
What happens next?
- The Healthcare Committee will reconsider the healthcare dues design and share the reconsidered approach with the full Board of Directors.
- The Board of Pensions will publish the spring 2013 issue of The Board Bulletin, which will include an article on the proposal.
- The Board of Pensions will use the Regional Benefits Consultations (RBCs) to share the proposal and solicit input from attendees.
- The Board will publish a Benefits Update to share the content of the RBC discussions with plan members, churches and other employing organizations, and other constituents.
- The Board of Directors will receive a recommendation from the Healthcare Committee for a vote at the June 2013 meeting.