CRSP DEFINED BENEFIT ANNUAL COST

6,903 6,504 6,200

5,118

4,092

2011 2012 2013 2014 2015

In 5 yrs, reduction in cost of 40.7%!For 2015, reduction of 20%!

In 5 yrs, reduction in cost of 40.7%!For 2015, reduction of 20%!

GUIDING PRINCIPLES• Cost effectiveness within premium rates for local churches

• Cost effectiveness within the pastor’s contribution

• Concern for adequacy of coverage

• Cost effectiveness of the plan itself (controlling what can be managed)

• Care for the pastors and their dependents

• Maintaining equality within the appointment-making system for all pastors and churches

OPTIONS CONSIDERED

• Maintenance of conference health plan as self-insured plan as is

• Closing down the self-insured plan and contracting for a fully insured plan

• Closing down the self-insured plan, asking church to provide taxable salary increase

• Options within the current plan to benefit from cost savings

• Options to current plan’s funding structure, including additional sharing of healthcare costs with participants

PROPOSED PLAN FOR 2015 ( IF PETITION 2, PART 2 IS APPROVED)

• Added two choices for healthcare plan – basic and basic plus – with additional cost to participants for basic plus

• No changes in covered services from current plan; cost sharing in the costs of medical claims will change with the basic plan

• Cost participation differential within the two plans for copays, out of pocket maximums, deductibles, and coinsurance

• Slight change in formulary due to change in pharmacy benefit managers

• Plan premium reductions overall

PREMIUM COMPARISONFOR PROPOSED PLAN

2014Premium Participant Rate

2015Premium Participant Rate

(Based on basic plan)Percentage decline in rate

From 2014 to 2015

$ 13,788 $ 10,200 - 26%

PREMIUM COMPARISON FOR PROPOSED PLAN AND PENSION COST (DB PORTION)

2014 2015Percentage

decline

Healthcare $ 13,788 $ 10,200 - 26%

Pension (DB) $ 5,118 $ 4,092 - 20%

Total $ 18,906 $ 14,292 - 24.4%

RESULTS FROM CLERGY SURVEY REGARDING SPOUSAL COVERAGE ELIMINATION

• Of approximately 775 invited, 503 responses were received, or 65%.

• Of respondents, 85.6% responded affirmatively that their spouses were covered by healthcare insurance, with 43.3% insured with their own employer and 34.7% were covered under the WNCC plan.

• Of persons responding to the elimination statement, approximately 83% either strongly disapproved or disapproved of the statement regarding elimination of the spousal coverage offering within the WNCC healthcare plan.

INFORMATION POINTS RELATED TO JONES PETITION• IRS regulations, effective January 1, 2014, have declared that the

employer reimbursement of premiums to employees (if a group plan is not provided) must be treated as taxable income, for both income tax and self-employment purposes.

• These regulations further create penalties for employers who engage in such a practice, a penalty assessed at $100 per day for each participant to whom a reimbursement is paid, for an annual cost of $36,500.

• Increases in taxable income would impact the cost of pension benefits to the churches, as some of these are based on a percentage of salary.

INFORMATION POINTS RELATED TO JONES PETITION• Current healthcare insurance program phase-out costs, or run-off of

claims, was reported in our year-end audit as $784,182. Anticipated receipts would not fully cover this amount nor be timely in collection for the payment of these claims within six months of year end.

• As an employer with greater than 50 persons, this proposal would cause the Conference to be non-compliant with the Affordable Care Act as no group health plan would be secured for the Conference lay staff. The same would impact churches with more than 50 full-time employees.

INFORMATION POINTS RELATED TO JONES PETITION• Flexible spending arrangements and the salary reduction for premiums

paid would no longer be allowed for our pastors under IRS regulations.

• The life insurance provided to each clergy at no cost is not anticipated within this proposal and would be discontinued.