Board of Pensions won’t change medical dues model until 2015
May 28, 2013
The Board of Pensions recognizes both the difficult economic circumstances faced by many Presbyterian Church (U.S.A.) congregations and councils and the importance of ensuring the continuity of Medical Plan protection to those who serve the Church — protection that continues to require increasing revenue to support healthcare expenses. After several months of soliciting and listening to feedback on proposals to change the medical dues model of the Traditional Program, the Board recognizes how critical the timing of any change is to all those involved, from mid council representatives to churches and plan members. As a result, the Healthcare Committee of the Board’s Board of Directors May 23 determined that the dues model should not be changed until 2015.
At a meeting in Dallas, the committee:
- reviewed the three options for restructuring the medical dues model of the Traditional Program;
- considered the feedback on those options gathered from the Board’s various constituencies; and
- received updated financials on the Medical Plan.
After opening in prayer and giving informed and thoughtful consideration to all of the above, the Committee voted to recommend that the Board retain the current medical dues model for the Traditional Program in 2014, with a 2 percent dues increase, to 23 percent. (This selection has been previously communicated as Option A for 2014.)
The Committee further determined to implement a change to the medical dues model beginning in 2015 by selecting Option C. Due to retaining the current model for one additional year, the dues under Option C in 2015 would be 24.5 percent for “full family coverage” and 23 percent in cases where member-only coverage is selected. (Member-only coverage would likely be used in situations where the member is single or where other coverage is available for covered partners or dependent children such as when a covered partner has employer-sponsored coverage. Also under this model, the church or other employing organization could share none, some, or all of the 1.5 percent difference in dues for members with full family coverage.)
The Committee directed Board staff to prepare the recommendations needed to implement the new medical dues model in 2015, including the necessary amendments to the Benefits Plan and new Administrative Rules. The Committee is expected to review these at its June 28 meeting and prepare a formal recommendation, which it will take to the Directors at the full Board meeting on June 29.
Also on May 23, in response to comments from across the Church to find ways to mitigate dues increases while ensuring the plan’s continued viability, the Committee approved the following recommendations, which will go to the Board of Directors on June 29:
- Increase the generic drug copay for up to a 30-day prescription from the current $8 to $10 in 2014, and the mail-order charge from $20 to $25 for 90 days.
- Increase the medical minimum participation basis from the current $40,000 to $42,000 in 2014 and to $44,000 in 2015.
- Reduce the deductible from 1.25 percent to 1 percent of effective salary in 2015 for those members who comply (in 2014) with “Call to Health” actions; the deductible for all others in 2015 would be 1.5 percent.
Patricia M. Haines, the Board’s Senior Vice President, Benefits, led the Committee through a review of the three medical dues options before they selected a final direction. They expressed an acute awareness of the impact any decision in this matter will have. They have been intent on selecting an option that is as manageable as possible for members and employing organizations while also ensuring the viability of the Medical Plan.
“We looked at preserving the essence of community while giving employing organizations some degree of flexibility in 2015,” Haines said after her presentation. “Our intention has never been to set one group of members against another, and we are aware of the struggles that both the small and larger churches are facing.”
Before selecting a direction, the Committee also heard from Susan Reimann, the Board’s Vice President, Communications and Public Relations. Ms. Reimann reported on feedback from the Board’s various constituencies regarding the three medical dues options.
This year, the Board built time into the agenda for the Regional Benefits Consultations (RBCs) to listen to the voices of the Church on the proposals and dedicated a website to this topic, healthcare.pensions.org, including a link for providing feedback.
“We’ve received a lot of feedback since these proposals were first put forth, and not just through letters and emails,” Ms. Reimann said after her presentation. “People have tweeted and blogged and talked to Regional Representatives about what concerns them,” she said. “Participants at the RBCs were particularly passionate, especially about timing. We believe that waiting until January 1, 2015, to change the dues model gives the Board the time to work to support mid councils and churches, as well as members, through this time of change.”
Mid council representatives at the RBCs urged the Board to retain the current dues model, labeled Option A, at least through 2014. Should a new dues model be approved in June 2013, they said, presbyteries would need more than the several months remaining in the year to implement changes.
The Committee recommendation answers that concern about timing. Medical dues would increase in 2014 to 23 percent of effective salary, from 21 percent this year, and cover members, covered partners, and dependents under the Traditional Program. As is true now, churches and other employing organizations would fully pay the dues on behalf of each member enrolled in the Traditional Program.
Under Option C in 2015, churches and other employing organizations would be billed 24.5 percent of effective salary for medical dues on behalf of members with full family coverage and 23 percent for medical dues in cases where only the member is covered — who might be single or choose single coverage because his or her dependents have coverage through another plan. Under this new model, the church or other employing organization would have the option to share none, some, or all of the 1.5 percent difference in cases where the member selects full family coverage. Again, the decision to share any portion of the 1.5 percent of effective salary would remain with the church or other employing organization, with consideration of any policies set by the presbytery.
Traditional Program members would continue to share responsibility for the cost of coverage for medical services through copays, deductibles, and copayments, as they do now.
John P. Cookson of Milliman Inc., the Board’s medical actuary, presented updated financial projections for the Medical Plan before the Committee considered its recommendation. His presentation included information about additional catastrophic claim payments made in the first quarter of 2013 for expenses incurred in 2012, noting that “this is the reason we continue to refer to our financial summaries as forecasts.”
“The catastrophic claims that the Board received in Q1 of this year for expenses incurred in 2012 remind us of why it is so important that we keep appropriate reserve levels,” Haines said after Cookson’s presentation. “Being conservative, keeping robust reserves — that’s critical to the plan’s viability and to ensuring that all members can count on the coverage being there when they face unexpected medical expenses.”
After the full Board of Directors has acted on the medical dues recommendation, the Board of Pensions will communicate more fully. A communication plan is being developed in response to requests by RBC participants that whatever the dues model choice, the Board has in place the tools to assist mid councils in working with churches to understand and implement any changes.
The Board remains committed and accessible to all those it serves. The feedback function on healthcare.pensions.org is available 24/7. Members may also call 800-773-7752 (800-PRESPLAN) to speak with a member service representative or send an email email@example.com. Employing organizations and mid councils can contact their Regional Representative.