Pension Fund Announces Discontinuation of Churchwide Healthcare Coverage for Active Plan Participants
INDIANAPOLIS (June 17, 2016) - Following a two-day board meeting and receipt of an analysis of participation, financial status and future trends, the Board of Directors of Pension Fund of the Christian Church (Disciples of Christ), Inc., acting as trustee for the Christian Church Health Care Benefit Trust (CCHCBT), voted to authorize the discontinuation of health care programs (medical and dental) for active employees effective Dec. 31, 2016. Medicare health programs remain unaffected by this decision, and will continue to be offered to retired ministers and lay pensioners.
'We are confident this is the right choice for our Churchwide Healthcare plan participants and is good stewardship for the ministries of the church,' said Pension Fund President James Hamlett.
In reaching this difficult decision, directors took into account today's health care market, projected rate increases of up to 25% (if the active programs were to continue), and the continuing decline in the number of participants. After exploring many options, the Board came to the conclusion that in today's health care market, the open market provides for more affordable and competitive plans than what CCHCBT would be able to offer.
Trustees also celebrated that over its 45-year history, CCHCBT has fulfilled many of the goals set forth when it was established, including addressing the rise in medical costs and offering portability of plans. Today, those needs can be met outside of Churchwide Healthcare while providing a more cost-effective health care plan specifically tailored to meet individual or family needs. Trustees believe:
- Participation in a private health insurance pool or a public health pool (Health Insurance Marketplace or state exchanges) provides greater cost sharing than can be provided through the small group covered by Churchwide Healthcare
- Subsidies available through exchanges makes coverage more affordable for those who qualify
- The elimination of preexisting conditions as a requirement for coverage makes it possible for people to move from state-to-state with a guarantee of health coverage availability
- There are no health care programs with universal rates today (all are based on the age of the primary participant)
- Although little can be done by any one person to combat medical inflation, the wider groups allow for a spreading of costs and, therefore reduce the rate of increase as compared with Churchwide Healthcare
This decision is not a reflection on the financial position of Pension Fund of the Christian Church. The CCHCBT operates as a separate Trust from the Pension Fund's retirement programs, which remain financially Strong, strategically Smart and programmatically Secure. This decision is a reflection of the changed environment for health care coverage and emerging trends.
Employers with two or more employees will have two options: Find or establish a new group plan for their employees, or discontinue offering health care as a tax-free employee benefit (in which case employees will need to seek their own insurance). If an employer elects to discontinue the employee benefit, Pension Fund recommends the employer provide a 'benefits bonus' or stipend to offset part or all of the cost of the employee's coverage. Such stipend would be taxable income and should not be tied directly to the cost of insurance, nor should it be paid to an insurer. Additionally, for employers with only one employee, the employer can reimburse or pay premiums for that employee on a pre-tax or after-tax basis.
Pension Fund, acting as trustee of CCHCBT, is committed to pointing employers and employees to resources that aid in finding quality, affordable health benefit coverage options. Employees will either receive coverage from their employer under a new group plan or need to secure coverage on their own through the following means:
- Private insurance through a local broker
- Coverage through a public exchange (the employee may qualify for a subsidy)
- Secure coverage through their spouse's employer plan
- Seek assistance in securing coverage through an online broker advocate (in the near future, Pension Fund will recommend one to assist you)
Pension Fund staff will host two conference calls regarding Churchwide Healthcare on Monday, June 20, and a webinar with the same information on June 24. Please find more information at www.pensionfund.org/healthcarechanges.
During its two-day board meeting, the Board also received reports from staff regarding retirement program investment performance, reserve levels for each of the financial programs, market projections for the immediate future. Board reports showed total assets available for benefits increased modestly during the first quarter even after taking into account the disbursement of nearly $30 million in benefits. Directors also received the audited financial statements for the year ended Dec. 31, 2015. Retirement savings programs and the Pension Plan remain fully funded on an actuarial basis.
Pension Fund of the Christian Church (Disciples of Christ), Inc. provides pension and retirement savings accounts for clergy and lay employees of congregations, regions, general ministries and church-related colleges and seminaries of the Stone-Campbell/Restoration Movement. Pension Fund manages over $2.8 billion in net assets on behalf of those serving in the United States, Canada, Puerto Rico and related international ministries.
Note: The material contained in this document is for informational purposes only and is not to be construed as tax, financial, legal or health care advice. Please consult your financial and/or health care advisor to find out how the Christian Church Health Care Benefit Trust (CCHCBT) plan change might impact your individual situation. This is based on information available today and is subject to change based on future developments.