Pension Board wrestles with health insurance costs
For the Oregon-Idaho Conference Board of Pensions, providing health insurance for clergy and lay employees is always a struggle of two competing needs. Their goal is to provide the best possible benefits to participants while controlling costs for churches. This is not an easy task in the changing health care environment of the 21st century. They work to balance the demands and requirements of state and federal law, the General Board of Pension and Health Benefits, disciplinary rules, conference rules, church needs, and the needs of the plan participants.
When they surveyed church leaders and plan participants, they found the same challenge. Both groups want plan participants to get high level benefits, and both groups want to keep costs low.
Heath insurance in the United States has been a changing market in the last several years. The Board has been challenged by rising costs while churches have been coping with the impacts of economic downturn. Rates charged to the Conference are based on health care costs and past experience, and the Board has been seeing Oregon-Idaho’s experience rate rise at a drastic rate. Claims ratios climbed from 91% in 2013 to 107% in 2014. They jumped further to 148% in 2015. These have resulted in overall rate increases of 5% in 2016, and 12% for the coming year, 2017. This 12% rate could have been higher, if not for a rate increase cap set by the General Board of Pensions and Health Benefits.
In the current year, 2016, the Conference Board of Pensions was able to structure the insurance charges so that churches did not see an increase in their bill. Participants were asked to increase their co-premium by $25.
As the Board has looked ahead, they see that the time has come for a major shift. “Over the years in Oregon-Idaho, the Annual Conference has felt that providing high value benefits for our clergy and lay staff is important,” says Board chair Rev. Danna Drum, “in part, because our salaries have typically been lower than other conferences. For many years when health insurance costs increased, local churches paid the difference through higher monthly billing rates. Unfortunately, we have reached a point where that way of doing business is no longer possible.”
In its February meeting the Board reviewed many options and voted to pursue a two-year transition plan. For 2017 they will continue the existing two options for participants: The Preferred Provider plan (PPO) and the Consumer Driven Health Plan (CDHP). To hold the billed rate to churches at the same level as the past two years, the CDHP will become the default plan. If a participant elects to use the PPO plan, there will be a $100 per month charge in addition to the current co-premium of $25 or $75.
In 2018 a larger change will come. The Board is finalizing the details of moving to a plan that offers more choice for participants. The Healthflex Exchange is sometimes referred to as a “cafeteria plan” because of its choices. It continues to use the buying power of the General Board of Pension and Benefits, and the group protection of the 29 annual conferences and other sponsors joined together in Healthflex, while offering choices for participants. This is not the same as state or federal exchanges that have been created by the Affordable Care Act.
“We have maintained the level of benefits as long as we could; longer than many other conferences"
- Peg Lofsvold
The Board also will continue the wellness program that works to improve member health, with the secondary benefit of containing costs.
These plan changes do not affect retirees. Retirees receive an allocation, based on years of service, which they can use to purchase their own insurance to supplement Medicare benefits.
The board recognizes that these are major changes and plans a series of communications and dialog sessions with plan participants. “We have maintained the level of benefits as long as we could; longer than many other conferences,” says Cascadia District Superintendent and Board member, Rev. Peg Lofsvold, “But now we have to make an adjustment to control costs for local congregations.”
“With nearly 300 people covered by this plan, we take these changes very seriously,” adds Drum. “We want to invite both the participants and the Annual Conference into conversation with us so that those voting on the recommendation, those who support local church budgets, and the plan participants fully understand the challenges we face and the opportunity for stability with new options. We are inviting them into a time of prayerful listening and conversation with us in the next few months.”
The Board wants to hear your questions and comments and will use them to help shape further information they share about the upcoming changes. In the next few weeks they will be providing further details about the options available to the conference, details of the proposed changes, and what those changes will mean for churches and plan participants.
To forward questions to them, they have set up an online message center. Use this link to share your question or comment and they will try to answer it in a future article, mailing, or dialog session.Part 2 of this series is a Frequently Asked Questions document.
The board also sent this letter to plan participants and local ministry leaders