2020 Health Rates Memo

TO:                   WNCC Clergy & Congregations
FROM:              R. Mark King, Conference Treasurer                              
RE:                    Health Benefit Rates 2020
 
The Conference Board of Pension and Health Benefits upon recommendation from the Health Benefits Subcommittee of the Board has approved the 2020 rate schedule for our Conference Active and Retiree Health Plans.
 
The board works very diligently in its responsibility to care for the clergy and their families of our conference.  It also considers the impact that premiums and charges to the local churches makes.  We are in a covenant together to care for each other with responsible stewardship but also appropriate and necessary benefits
 
The Western North Carolina Conference manages a self-funded health and dental plan.  This has been our practice for a number of years even as alternatives have been and continue to be researched.  We are the insurance company.  Third party administrators, Healthgram and PharmAvail, assist in managing our plans.  Our constituency is the conference clergy under appointment and retired as well as lay staff employees in the conference and district offices.  Dependent coverage for the active plans is also a part of the mix.  We pay claims as they are incurred, according to the coverage in the plans.  2018 was a hard year for medical claims that outpaced our premiums by over $3M.  Our pool is aging and shrinking which requires additional strategies for cost constraints.  We continue to encourage all of our clergy to participate in the Virgin Pulse wellness initiative.
 
In preparing for the 2020 rates, we studied the claim history for the past twelve months, the current stop-loss scenarios, copays and deductibles, the trending for health care costs in our state (trending between 8 and 12%), costs of certain pharmaceuticals that could be eliminated or directed to alternatives and/or generic brands and other factors.  Because those on the Active Basic Plus Plan have claims and draw benefits at higher payouts than the Active Basic Plan, the recommendation from the Health Benefits Committee recommended approved by the Conference Board of Pensions is an incremental rate increase between the plans.
 
IF YOU DON’T NEED TO MAKE ANY CHANGES BETWEEN PLANS OR ADD/DELETE DEPENDENTS, DO NOTHING!  BUT IF YOU DESIRE A PLAN CHANGE OR ADD/DELETE DEPENDENT COVERAGE, A NEW ENROLLMENT FORM IS REQUIRED!!!!!
 
DUE DATE:  December 1, 2019
 
ACTIVE AND RETIREE RATES FOR 2019
 
The Conference Board of Pension and Health Benefits, on recommendation of the Health Benefits Committee, has approved the following rates for 2020 for our active and retiree plans.  You will note an increase in the active health rates of 7% for the Active Basic Plan and 10% for the Active Basic Plus Plan for clergy/employee coverage as well as dependent coverage.  We have also modestly adjusted certain co-pays for both specialized physician and non-preferred pharmaceutical brands.  Once again, we are pleased to announce that the Retiree Plan will see NO increase for 2020.
 
For 2020, we are again offering a third plan option for the active health plan.  This plan is a Health Savings Account (HSA) option that allows clergy and dependents to set aside a pre-tax amount that can be used for deductibles and co-insurance.  The HSA itself must be set up with a third party institution arranged by the clergy insured and is not a part of the Annual Conference’s program.  HSA plans require, by law, a high deductible health plan and we are tailoring our offering to accommodate.  However, if this plan is chosen, participants must bear in mind there is no co-pay and they are responsible for the total cost of their health expenses up until the deductible.  Then the conference plan begins coverage, based on co-insurance amounts and limits, after the deductible has been met.  The deductible can be funded through the HSA.  As a component of this third option, the conference will “seed” the HSA, upon satisfactory evidence of all requirements fulfilled with the third party, based on the following:  $500 per year for individual clergy, $1,000 per year for clergy with spouse or children, $1,500 per year for family. Churches likewise can seed the HSA.  Additionally, as an incentive, we will offer a credit of up to $400 for the personal contribution that each clergyperson pays. 
 
The following rate table has been approved as the billed rates for 2020.



*Church amount will be reduced by clergy contribution based on salary scale.  Additionally, for the HSA plan, the church will still be reduced by the clergy contribution amount even with the credit of $400.
**Clergy who opt for Basic Plus pay the difference between two Active Plans ($4,430 in            addition to their clergy contribution per salary scale).
***Under age 65 Clergy choose one of the Active Plans; they do not qualify for Retiree Plan
**** This range is on a sliding scale with years of service, from 99% to 61% of the premium.
 
For retirees, the premium is based on the number of years of service in Western North Carolina Conference.  For example, a retiree prior to 1/1/2003 is billed 60% of the total premium.  This is based on the action of the 2002 Annual Conference, incorporating a sliding scale rate for health benefits in conjunction with the years of service.
 
Please also bear in mind that since 2010, as approved by the 2009 Annual Conference, the clergy do contribute a percentage of the health benefit rate to the plan, thereby reducing the cost of health benefits to the local church.  With the addition of plan options in 2015, pastors also contribute the differential in cost (premium) if they choose the Basic Plus Plan.  (Pastor’s Contribution to Health Benefits document can be found on the Conference administrative website, benefits page.
 
 
FLEXIBLE SPENDING ACCOUNTS & HEALTH SAVINGS ACCOUNT
 
As introduced in 2016, the Conference will again be sponsoring a Flexible Spending Account Plan for each of our clergy persons eligible for and participating in either the Basic Plan or the Basic Plus Plan of our active health plans in 2020.  YOU CANNOT PARTICIPATE IN BOTH HSA AND FSA arrangements.  Therefore there is no FSA option with the HSA Plan. 
 
In order to offer this benefit for the whole conference, we have received compliance directives from the general counsel at Healthgram, who administers our insurance and FSA plans, that in order to offer the Conference FSA Plan, it must be the ONLY FSA plan for those covered by our Health Benefits to participate.  This is because the health insurance plans are a part of the WNCC’s Section 125 Cafeteria Plan and thus the only avenue to offer a valid FSA arrangement. 
 
Our plan, as managed by Healthgram, fully complies with the Internal Revenue Code Section 125.  Furthermore, the conference pays the fees for administrating this plan—something we DO NOT pass along to the churches and agencies.  Finally, the plan goes along with the clergyperson regardless of appointment changes. 
 
For lines 2b, 2c, 2d and 2e of the Clergy Compensation forms, only those who are participating in Conference benefit options (dependent health coverage, life insurance, medical and dependent flexible spending accounts) will be allowed to complete and submit the appropriate amounts on those lines. This is due to these items falling under the Conference’s Section 125 Plan.
 
If you have any questions regarding the above or other benefits related items, please contact Dale Bryant, the Conference Benefits Administrator or myself as your Conference Treasurer either via phone or email.  As with last year, look for an instructional video to be posted on the Conference Web-Site highlighting our benefit plans.
 
NEW 2020 ENROLLMENT FORM REQUIRED
EVEN IF YOU ARE ENROLLED IN AN FSA FOR 2019.
 
 
ALL FORMS DUE TO TREASURY SERVICES
 
BY DECEMBER 1, 2019