PHILADELPHIA, Pa. — The Board of Directors of the Board of Pensions of the Presbyterian Church (USA), responding to multiple stressors including financial projections that the self-insured church plan faces an inflection point in 2014 putting its sustainability at risk due to rising healthcare costs, declining enrollment, an aging demographic and potential impacts of federal healthcare reform, approved significant changes to the medical plan at its meeting held Saturday in Philadelphia.
To comply with the requirements of the Patient Protection and Affordable Care Act the Board approved five amendments to the medical plan which will become effective on Jan. 1, 2014
- “eliminate the preexisting condition limitation for medical plan enrollment for adults age 19 and older,”
- “eliminate the annual and lifetime treatment reimbursement limitations for essential benefits,”
- “modify the in-network maximum copayment amounts,”
- “eliminate waiting periods,” and
- “recognize state and federal government-based medical coverage as acceptable forms of medical coverage for members who have terminated or retired from eligible service prior to eligibility for Medicare coverage.”
Additionally, the board approved several measures related to the dues structure of the medical plan.
- Increase the minimum dues basis to $42,000 effective Jan. 1, 2014, and to $44,000 effective Jan. 1, 2015.
- Increase the Generic Drug copayment from $8 to $10 (retail) and $20 to $25 for 90-day mail order scripts effective Jan. 1, 2014.
- Increase dues from 21 percent to 23 percent of effective salary effective Jan. 1, 2014, and an additional 1.5 percent (to 24.5 percent) for those whose coverage includes eligible family members effective Jan. 1, 2015.
- Increase the deductible for network and non-network medical costs to 1.5 percent of effective salary, effective Jan. 1, 2015.
The last item, increased deductible, can be greatly affected by the plan member through proactive participation in the board’s new “Call to Health” initiative.
Pat Haines said, “In 2014 members will be given opportunity to earn a deductible of 1 percent in 2015 if they comply with certain activities and actions. That’s lower than the deductible they’re paying today.”
She outlined the plan saying, “They must have a preventative exam and they must engage with an active health nurse if they are called.” They would also have to complete two of a list of five additional options: Complete a health assessment, have lab work and “know your numbers,” have a vision exam, participate in smoking cessation program (if you are a smoker), or if eligible, participate in CREDO program.
The bottom line is that in 2014 dues will rise to 23 percent of effective salary, coverage will include the full family and the church or employing organization will continue to bear the full responsibility. The minimum effective salary will also rise to $42,000 as will prescription co-pays.
In 2015 dues will remain at 23 percent for plan members with no covered spouse or dependents. For plan members with dependents (regardless of family make up: partner only, partner + children, or children only) dues will rise to 24.5 percent. The church could decide to pass along up to 1.5 percent of those dues but that will be negotiated between the plan member and the employing organization. The minimum effective salary will also rise to $44,000.
In 2015 when churches may consider passing along up to 1.5 percent of the cost of coverage to plan members with covered dependents, the potential annual “pass along” cost to Plan members is “$660 at the minimum salary level; $810 at the median salary and $1,880 at maximum salary,” Hamm said.
In the “dues plus” model that was proposed in 2012 the top value of full family coverage was estimated at $5700 annually. The BOP staff and directors have worked to craft a plan that, although not financially painless, is responsive to the concerns raised by presbyteries for “more time” to communicate and prepare churches for the changes.
Pat Haines said that these revisions are a “reflection of hearing, praying and working a little harder — and the by the grace of God some better financial forecasts.”
It was acknowledged that throughout the months and many avenues of feedback the board heard “a lot that older participants should, and are willing to, support the younger participants. There is a strong sense of community and commitment to the community nature of the plan,” Susan Reimann said.
The BOP heard from all levels but especially from presbytery representatives “give us time. We need time to have discussions. We need time to make decisions. We need time to communicate those decisions to churches. We are going to need time,” Reimann said, repeating what she has heard in several forms of feedback since October 2012.
The request for time, preservation of community nature of the plan and concern for the impact on call neutrality were all considered by the board. Churches will have until Jan. 1, 2014 to plan for the fiscal impact of the 2percent increase in dues plus the rise in minimum effective salary. And churches and their plan members will have an additional year to plan for who and how current dependents will be covered. Some may opt for healthcare exchanges under healthcare reform. Some spouses may opt for coverage from their own employer.
Much is uncertain. The question was asked, “What about 2016?” The answer from Healthcare committee chairman John Hamm was “You’re asking what’s going to happen 36 months from now and we have no idea.”
That is not an indication of lack of attention to the question but a genuinely dynamic national, denominational and financial environment.
One thing is certain, churches and plan members are going to receive significant communication from the BOP in the coming weeks and months. Information about dues restructuring, co-pays, deductibles, tax credits, and the Call to Health.
Read the Board of Pensions official post here in the summer edition of The Board Bulletin.
To read more of Carmen’s coverage from the BOP meeting:
Board of Pension summer meeting gets underway
Board of Pensions addresses unemployment and underemployment for seminary educated Presbyterians
Board of Pensions education: investing in uncertain times
As a member of the budget committee at First Presbyterian Church in Haddonfield, N.J., I recently learned that the medical insurance premium for the church’s staff is a 23%-24% of the person’s salary. This percentage was confirmed in the information given above.
Why is a medical insurance premium a percentage of a person’s salary? In almost all the cases, the premium is based on the extent of coverage, deductibles and number of people covered by the insurance. What relevance is one’s salary to health insurance?
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