The Board of Pensions, saying it is listening to the criticism it has received regarding a proposed change in the dues structure for its medical plan, has announced it will postpone action on the proposal and is reconsidering its recommendations.
The board had been set to vote on the proposed recommendations at its March 7-9 meeting. Instead, the board will consider a revised proposal in March and vote on that in June. The new proposal likely will include a “more evolutionary, multi-year approach” to phasing in any changes, and will try to balance the need for cost-sharing (meaning that members might pay some of the cost of medical dues for their partners and dependents) with the financial burden that places on pastors drawing lower salaries and serving small churches, and on younger pastors with children.
The original proposal, announced in October, would have paid for only 65 percent of the cost of dues for partners and dependents – with the additional 35 percent of cost to be paid by the employer, the plan member, or a combination of the two. In making that original proposal, the board cited a looming shortfall in the plan of about $28.6 million in 2014, although it now says the medical plan’s year-end finances at the end of 2012 were somewhat better than expected.
Here is the text of the Board of Pensions’ Feb. 11 announcement regarding its plans to revise the proposal:
Healthcare Committee Postpones Providing Recommendation to the Board of Directors for 2014 Medical Dues
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.
The Board of Pensions is committed to both keeping you informed and listening to comments, questions, and concerns as it works through the difficult issue of providing quality healthcare coverage to members through employers. As always, you can email or call the Board at [email protected] or 800-773-7752 (800-PRESPLAN), respectively, about this or any other benefits-related matter. You also can contact your regional representative.
Thank you for understanding that, for all of us at the Board of Pensions, being good stewards of the Benefits Plan, on behalf of our members, is our mission, and we take seriously the trust and respect placed in us.