At its June 29 meeting in Philadelphia, the Board of Directors of The Board of Pensions of the Presbyterian Church (U.S.A.) approved an increase in Traditional Program dues, effective January 1, 2014, and a change to the medical dues model, effective January 1, 2015. The direction for medical dues for 2014 and 2015 was determined by the Healthcare Committee at its special meeting in Dallas on May 23. This recommendation was made to the Board of Directors, which authorized the applicable amendments to the Medical Plan.
The direction for medical dues and other changes to address the Medical Plan’s funding requirements over the next two years was communicated following the May 23 meeting and is available on healthcare.pensions.org.
The Directors approved changes to the Medical Plan for 2014, and, where indicated, for 2015:
Traditional Program Medical Dues
2014: The current medical dues model will continue, with dues for the Traditional Program increasing from 21 percent of the member’s effective salary in 2013 to 23 percent in 2014.
Seminary student dues also will increase. (See Seminary Student Dues chart below.)
2015: A new medical dues model will take effect, with dues for the Traditional Program set at24.5 percent for members with covered partners and/or dependent children and 23 percent for member-only coverage. (Member-only coverage would likely be used in situations where members are single or other coverage is available for covered partners and/or dependent children, such as when the covered partner has employer-sponsored coverage.) Employing organizations would have the ability to share with the member none, some, or all of the additional 1.5 percent dues charged for covered partners and/or dependent children.
Deductible
2015: The annual medical deductible for covered services provided in network will increase from 1.25 percent of the member’s effective salary to 1.5 percent in 2015. Members will have the opportunity to reduce their 2015 deductible to 1.0 percent by completing certain “Call to Health” actions in 2014. (See “Plans for ‘Call to Health’ Initiative Discussed,” in this issue.)
The deductible for covered services provided out of network will continue to be 2.5 percent of the member’s effective salary through 2015.
| 2015 ANNUAL HEALTHCARE DEDUCTIBLE PERCENTAGES | |||
| Annual Deductible* | 2013 and 2014 | 2015 (when member completes health actions in 2014) | 2015 (if member does notcomplete health actions in 2014) |
|---|---|---|---|
| Member | 1.25% of member’s effective salary | 1.0% of member’s effective salary | 1.5% of member’s effective salary |
| Member’s eligible family, in the aggregate | 1.25% of member’s effective salary | 1.0% of member’s effective salary | 1.5% of member’s effective salary |
*Members with dependents are responsible for two deductibles, one for the member and one for all other family members combined.
Medical Minimum Participation Basis
2014: The medical minimum participation basis, also known as the dues minimum, will increase from $40,000 to $42,000 for 2014.
2015: The medical minimum participation basis will increase from $42,000 to $44,000 for 2015.
Seminary Student Medical Dues
2014: Medical dues for seminary students will increase effective January 1, 2014:
| 2013-2014 SEMINARY STUDENT DUES (MONTHLY) | ||
| Coverage Level | 2013 | 2014 |
|---|---|---|
| Member | $396.67 | $458.00 |
| Member and child(ren) | $613.33 | $702.00 |
| Member and covered partner | $613.33 | $702.00 |
| Member and family | $700.00 | $805.00 |
Generic Drug Copays
2014: Generic drug copays will increase:
$10 for a 30-day supply (currently $8)
$25 for a 90-day supply (currently $20)
Only the copays for generic drugs will change. The copays in 2014 for brand formulary and non-formulary drugs will remain the same.
The changes to dues and related actions approved by the Directors are expected to address the Medical Plan’s funding requirements, at least for the near term. The dues decision comes after much analysis, proposed design changes, and listening by the Board of Pensions and the Healthcare Committee to feedback from those parties — members, mid councils, and churches and other employing organizations — that would be affected by any of the several dues options under consideration. All constituents were encouraged to provide feedback about the options to the Board through a feedback feature on healthcare.pensions.org as well as by any and all other available means, including discussions with the Board’s Regional Representatives. The Board compiled the comments heard at the Regional Benefits Consultations as well as the comments, suggestions, and questions received through the website and shared these with the Healthcare Committee.
Responding to a concern expressed by many constituents of the plan, Healthcare Committee Chair John W. Hamm noted that the Board of Pensions and its Directors are “truly concerned about the financial stress being experienced throughout the denomination.” The changes approved by the Board of Directors “reflect an attempt to be both sensitive to these concerns and responsible stewards of the plan,” he said.
Patricia M. Haines, the Board’s Senior Vice President, Benefits, said that the dues and related actions “introduce change incrementally, balance the concerns of many, and ultimately give members and employers some degree of flexibility and control.”
Dues for Affiliated Benefits Program and Medicare Supplement Plan Remain Unchanged in 2014
Affiliated Benefits Program (ABP)
After hearing a report on ABP enrollment, experience, and demographics, the Directors concluded that, for 2014, no dues increase will be necessary for active and continuation members of the ABP, including early retirees (i.e., those not yet eligible for Medicare). Dues for the ABP will remain at the 2013 level.
| 2013-2014 ABP DUES (MONTHLY) | ||
| Coverage Level | Active | Continuation (Post-Employment) & Early Retiree |
|---|---|---|
| Member | $624 | $636 |
| Member and child(ren) | $926 | $945 |
| Member and covered partner | $1,281 | $1,307 |
| Member and family | $1,668 | $1,701 |
Medicare Supplement Plan
Milliman Inc., the Medical Plan’s actuary, and Board staff presented a summary and analysis of the Medicare Supplement Plan’s historical and recent medical and prescription drug experience. The summary included a report on the effect on forecasts of the prescription drug program’s conversion to a qualified Part D plan. The Directors concluded that no dues increase will be necessary for the Medicare Supplement Plan in 2014. Dues for the Medicare Supplement Plan will remain at the 2013 level.
| 2013-2014 MEDICARE SUPPLEMENT DUES (MONTHLY) | |
| Traditional participants | $218 |
| Limited-income members | $145 |
| Affiliated Benefits Program participants | $305 |
Plan Amended To Comply with Additional Requirements of Healthcare Reform Law
The Directors approved amendments to the Benefits Plan to ensure that it continues to comply with the Patient Protection and Affordable Care Act (ACA). Each of the following changes takes effect January 1, 2014, and will be reported to the 221st General Assembly (2014).
Eliminate Pre-Existing Condition Limitation for Adults
Beginning in 2014, health plans and insurers may no longer deny coverage to anyone who has a pre-existing condition (that is, a medical condition that occurred before the person was enrolled in his or her current health coverage). The Board had previously eliminated the Medical Plan’s pre-existing condition limitation for children under age 19.
Eliminate Annual and Lifetime Treatment Reimbursement Limitations for Essential Benefits
As of January 1, 2014, health plans must fully remove annual and lifetime dollar limits to coverage for essential health benefits — 10 categories of benefits that all plans participating in a health exchange must cover (includes such things as emergency room care, outpatient services, mental health and substance abuse services, prescription drugs, and lab services.)
The amendments to the Medical Plan will remove the annual maximum reimbursement limits for essential health benefits.
Modify Annual Limits for Out-of-Pocket Costs
Under the ACA, each year the federal government will establish a dollar cap on the out-of-pocket costs a plan can impose on its members for essential health benefits provided in network. Once a member reaches the maximum limit, health plans, including the Medical Plan of the PC(USA), must pay 100 percent of allowed charges for medically necessary services. For 2014, the ACA-prescribed out-of-pocket maximums are
- $6,350 for member-only coverage;
- $12,700 for family coverage.
Under the government’s definition, these out-of-pocket costs include doctor visit copays, member deductibles, and copayments. (To compare the out-of-pocket maximums prescribed by the ACA to the Medical Plan’s current copayment maximums, based on effective salary, refer to the 2013 Healthcare Deductibles and Copayment Maximums chart in Guide to Your Healthcare Benefits.)
The amendments modify the Medical Plan so that the annual copayment maximum for medical costs for essential health benefits will not exceed the limits required by the ACA. Beginning in 2014, the plan’s healthcare service providers will track these separate out-of-pocket maximums for members in addition to tracking members’ progress toward meeting their copayment maximums under the Medical Plan, as they do now.
Although unlikely, if a member’s share of covered costs reaches the ACA’s out-of-pocket maximum before the Medical Plan’s copayment maximum, the plan will reimburse the member’s eligible medical expenses at 100 percent for the remainder of the year.
Reduce Waiting Periods for Medical Plan Enrollment; Require Compliance with Applicable Nondiscrimination Rules
Amendments to the employment classification rules of the Benefits Plan, effective January 1, 2014, will reduce the waiting period for enrollment to the period that will be allowed under the ACA — 90 days from the date of eligibility for coverage. (Currently, the Benefits Plan permits churches and other employing organizations to require all non-mandated teaching elders and/or lay employees in an employment classification to wait up to a year before enrolling them for full participation in the Medical Plan Traditional Program.)
Recognize State and Federal Government-Based Medical Coverage for Terminated Members or Early Retirees
The Medical Plan’s continuous coverage requirement applies to members who terminate or retire before age 65 and wish to preserve the right to enroll in the Medicare Supplement Plan when they
- reach age 65;
- are eligible for Medicare; and
- otherwise qualify for enrollment in the Medicare Supplement Plan. (See Medicare Supplement coverage on pensions.org.)
Effective January 1, 2014, the continuous coverage requirement for these members will be expanded to include coverage in a qualified health plan, as defined by the ACA.
In effect, these amendments to the Medical Plan recognize state exchanges (or state marketplaces) and federal government-based medical coverage as acceptable alternatives to Medical Continuation coverage, giving these members more coverage options.
