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Costs up, but pension board introduces new benefits


From PCUSA NEWS <PCUSA.NEWS@ecunet.org>
Date 19 Jul 2000 13:36:44

Note #6129 from PCUSA NEWS to PRESBYNEWS:

19-July-2000
00266

Costs up, but pension board introduces new benefits

Medical benefits coverage extended, seminary debt relief planned

by Jerry L. Van Marter

Philadelphia -- Many more church employees will be eligible for medical
coverage under the Presbyterian Church (U.S.A.) Board of Pensions (BOP)
benefits plan and Presbyterian seminary students may be eligible for grants
to relieve their educational debt after the Board's directors moved the two
new programs forward at its July 15 meeting here.

	Non-mandated employees eligible for medical benefits coverage

	The new "Affiliated Benefits Program" -- which begins Aug. 1 -- will enable
employing organizations in the PC(USA) to provide medical benefits coverage
for their employees whose participation in BOP's pension and medical
benefits plans is not mandated by the "Book of Order." Benefits for
non-mandated employees who are already enrolled in the benefits plan are not
affected.
	Currently, only installed pastors serving churches are required to
participate in the benefits plans administered by the Board.  The new
program will make non-installed ministers, lay pastors, tentmaker pastors
and lay employees eligible for the Board's medical benefits coverage without
having to participate in the Pension Plan.
	"We really have no idea how many people will take us up on this," said
Margaret Mellen, the Board's senior vice-president for health care design,
"but we're always looking for ways to make the benefits plans available to
more servants of the church."
	Board members and staff were pretty clear that one of the main reasons for
the new program is that only one of the 10 seminaries of the PC(USA) --
Columbia Theological Seminary -- now participates in the Board's benefits
plans. Conversations with the other seminaries about how to secure their
participation have been going on for several years.  The Rev. Bob Smith,
special assistant to BOP president Robert W. Maggs Jr. said that several
seminaries have expressed interest in participating in the Affiliated
Benefits Program.
	In addition to medical benefits, church employers can choose to offer their
employees the Board's medicare supplement, death and disability, retirement
savings, dental and long-term care insurance programs.

	Seminary students may get educational debt relief 

	After receiving overwhelming encouragement from participants at regional
consultations this spring, the Board moved ahead with a plan to provide
grants to ministers to help pay off their seminary debt.
	According to the Rev. Paul Stavrakos, BOP's vice-president for church
relations and assistance, the average debt level for seminary graduates is
between $20,000 and $25,000 — double what it was 10 years ago. "Debt causes
stress and our ministers serving churches don't need any more stress. The
program fits in with our assigned responsibilities and addresses an issue of
denominational importance."
	Under the proposal, 50 grants of up to $10,000 each would be available each
year for five years.  To be eligible, ministers would have to be endorsed by
their presbyteries and would have to agree to serve their congregation for
three years.  Preference would be given to ministers serving churches of
less than 150 members with an annual budget of less than $80,000.
	The Board's Assistance and Retirement Housing Committee endorsed the
formation of  a task force to finalize the program by next February's BOP
meeting, with a start-up date of June 1, 2001 for the new program.  The task
force will include representatives from the Board, Churchwide Personnel
Services in the National Ministries Division, the Committee on Theological
Education in the Congregational Ministries Division, the Association of
Executive Presbyters, and the Governing Body Relations Office of the General
Assembly Council and the Office of the General Assembly.
	Board member Ross Spencer of Inverness, Ill., sounded the only note of
caution. "I don't want seminaries ducking their responsibilities to help
their students or to just sit on their pots of endowments," he said. 
Stavrakos said he agreed, noting, "That's why the Committee on Theological
Education is in on the task force designing this."

	Rising health care costs parallel national trends

	Since the crisis days at the turn of the 1990s, when the medical fund
balance neared a $20 deficit, dues increases, cost containment and benefits
reductions had succeeded in replenishing the fund balance.
	But with rising prescription drug costs, hefty increases in Health
Maintenance Organization (HMO) renewal rates and above-average catastrophic
(more than $50,000) claims last year, the Board was told to expect the
medical fund balance (contingency reserve) to decline by $7.2 million this
year and a whopping $16.7 million in 2001 — to $24.6 million.
	But with a targeted reserve level of $23 million and continuing
expectations of double-digit health care cost inflation, the losses must be
stopped.  The first casualty will probably be the 0.5 percent dues credit
employing organizations have received the last two years.  "Unless something
changes dramatically, they (the dues credits) are gone," Mellen said
frankly, adding that at the February 2001 BOP meeting, Board members "will
have to look at deductibles, co-pays, the prescription drug program and
out-of-network differentials (the extra costs plan members pick up if they
opt for medical providers outside the Board's HMO and PPO — Preferred
Provider Organization) networks. Our costs are going to mirror national
trends."
	A dues increase -- medical dues have held steady at 16 percent for a number
of years -- was not broached at this meeting.

	"Blues" PPO network rapidly expanding

	With HMO subscription rates rising and their cost-controls seemingly
waning, the Board took a massive step to expand its participation in PPOs,
which provide plan members with more choices and deeper discounts.
	In January of this year, the Board contracted with Highmark Blue Cross Blue
Shield to provide a PPO program in Pennsylvania, Delaware, and Puerto Rico. 
The early results are good, Mellen told the Board, with an average 51
percent discount on covered services.  And the renewal fee of $32.82 per
member per month for 2001 is just a 4.2 percent increase over 2000, compared
with an average increase of 15 percent for the 42 HMOs with which the Board
has contracts.
	As a result, the Board approved an expansion of the Blue Cross Blue Shield
("The Blues") PPO arrangement to 17 additional states and the District of
Columbia, effective Jan. 1, 2001.  The new states to be added to the Blues
PPO network are California, Florida, Illinois, Kentucky, Maryland, Michigan,
Missouri, New Jersey, New York, North Carolina, Ohio, South Carolina,
Tennessee, Texas, Virginia, Washington and West Virginia.
	The Board voted to renew its existing HMO contracts, although some HMOs are
indicating their intent to terminate contracts, primarily for low
participation reasons. Board member Linda Crawford of Novi, Mich., said, "A
lot of things around HMOs are going to shake out in the next 12-18 months."

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