By Erik Alsgaard
At the June Annual Conference session, BWC members will hear about changes to clergy health insurance and vote on the 2017 budget. These items were discussed at the Pre-Conference briefing on April 30.
Participants in the Baltimore-Washington Conference’s HealthFlex health insurance plan will have more options to meet their health insurance needs in 2017 under new provisions adopted by the Conference Board of Pensions and Health Benefits and outlined at the April 30 Pre-Conference Briefing. The new options are offered by the United Methodist General Board of Pension and Health Benefits in Illinois, and replace the current plan, which will no longer be available in 2017.
Under the changes, participants will have more choices, according to the Rev. Jackson Day, chair of the BWC’s Board.
“Insurers believe that offering consumers more choice and more responsibility will help reduce the rate at which health costs grow,” Day said. “Therefore, the HealthFlex plan developed by our General Board will offer six different plans rather than the one at present.”
For those who prefer minimum change, Day said, the BWC’s Board has made sure that one of the plans is as close to the current plan as possible. “We have worked closely with the General Board and our own consultants to minimize the impact that rising costs of health care may have on plan members,” Day said.
Currently, all full time clergy members of the BWC must be enrolled in the conference’s health insurance plan, called HealthFlex, which currently has only one option.
The per-pastor cost to local congregations for health insurance will remain at $840 per month, Day noted, regardless of the choices made by participants. This is not a “premium” but a share of the overall plan cost. The Board of Pensions and Health Benefits considers it very important to keep this amount the same for all congregations so that health care cost considerations do not intrude on appointment decisions, Day said.
Day noted that plans are now identified by colors, with Bronze, Silver, Gold and Platinum plans designed to cover 60, 70, 80, and 90 percent, respectively, of health care costs. The BWC’s current plan is considered a “Gold” plan, Day said. Participants who opt for this plan will see little change in the personal premium costs that they pay. Different options will offer differing degrees of coverage and health savings or health reimbursement accounts. A clergy family with few health issues may choose a plan offering less coverage, but with a greater health savings or health reimbursement account from which future expenses can be paid.
Day also observed that a greater degree of choice will require more detailed decision making by participants as they make their choices for 2017. The Board of Pensions and Health Benefits will be holding an orientation session On Wednesday, June 1, at 8 p.m., at Annual Conference. Additional sessions will be held in the fall.
All of the new plans offer the same network of providers and the same prescription drug formularies, according to a chart provided by the General Board of Pension and Health Benefits.
At the Pre-Conference Briefing, the Rev. Ann Laprade, chair of the BWC’s Council on Finance and Administration, celebrated outstanding stewardship and giving in 2015 while looking forward to 2017.
“2015 was amazing,” Laprade said. “Apportionment income was up 1.8 percent, or $245,000. Total income was up 0.9 percent, and expenses were down 0.6 percent, or $111,000. At the end, we achieved the goal of all non-profits: We spent on ministries what was budgeted, and the net income for 2015 was zero.”
In 2015, she added, the overall collection rate for apportionments was at a 15-year high, 91.7 percent.
For 2017, CFA is recommending a 17.75 percent benevolence factor and the 92.0 collection rates, the same as for 2016. “This will result in an apportionment income decrease of $112,000 to $14.2 million,” Laprade said. “This is a 0.8 percent decrease and it ties directly to the observed decrease in the apportionment base.”
Laprade said that the 2017 budget request is “flat” from 2016, and would be the fifth year in a row.
The 2017 budget, however, will not be a “typical budget,” Laprade said. That’s because the Conference Board of Pensions and Health Benefits found it possible to implement a “significant strategic shift in how we can fund Retiree Medical expenses in 2017,” she said.
The BWC has a surplus of $28.3 million in a fund created and set aside to fund clergy who are under what is called the “Pre-82” retirement plan. Part of that surplus — $1.5 million – will be used in several ways in the 2017 budget, if approved. Part of the $1.5 million will be used to pay down debt on the loan for the BWC’s Mission Center in Fulton, and the new dining hall at West River Center.
“Four years of debt reduction at an average rate of $700,000 per year will shorten our loan from 13 years to 6 years, save $1 million in interest, and enable a 15 percent reduction in the budget at the end of the 6 years,” said Laprade.
The remainder of the $1.5 million will go towards replenishing reserves, providing needed salary and benefit increases, including the creation of a new position for a new Center for Clergy Excellence ($275,000), paying increases in General Church apportionments ($90,000), and other budget expenses.