Board announces zero increase in health insurance premiums



e-Review Florida United Methodist News Service
      
 

Board announces zero increase in health insurance premiums
 
By Jenna De Marco | Aug. 31, 2009 {1074}
 
While the nation debates the best way to provide and fund health care, the Florida Conference is finding solutions, particularly in the area of health-care costs.

Active clergy, laity and retired participants in the Florida Conference health insurance plan will see no increase in their premiums next year, thanks to aggressive action by the Conference Board of Pension and Health Benefits.

After experiencing several years of double-digit increases in premiums charged by insurance providers, the conference board began exploring ways to stabilize rates. The board’s recommendation and subsequent decision by the conference several years ago to adopt a “self-funding” model for health insurance is the primary reason those rates are stabilizing, said Mickey Wilson, Florida Conference treasurer.

Self-funding enables the conference to be a lower-cost provider than outside insurers because “we are not interested in making a profit” from health insurance, Wilson said.

With self-funded programs, organizations collect premiums and use that revenue to pay health insurance claims. A third-party administrator is often needed, however, to handle claim payment details. Ideally, the amount collected from participant premiums meets or exceeds what is needed to pay all claims, which has occurred so far in the plan, according to Wilson.

Conference revenue from health insurance premiums is approximately $16 million to $17 million per year, which has been “sufficient,” Wilson said, to pay all outstanding claims and a portion of anticipated claims. Any excess funds have gone into a reserve account, which could be used in 2010 if needed to help maintain the zero-percent increase.
 

The less we have to spend on insurance, the more we can use for God’s work.” 

Shane McIntosh

The conference also purchases “stop-loss” or “excess carrier” insurance coverage, Wilson said, in the event that claims exceed revenue. This ensures that “we haven’t exposed the conference assets” beyond the extent of the revenue, he said.

“To deliver a zero increase for active participants in this day and age is almost unheard of,” said Wendy McCoy, director of the conference’s human resources and benefits department. “To do the same for retirees — who, statistics show, use the health insurance plan more than most — is completely unheard of.”

The conference will continue to use United Healthcare as its plan administrator, McCoy said, and “all the provisions of the plan remain the same into 2010 as they were in 2009.”
 
“We negotiated with several insurance companies to get a better deal for our participants. As a result, United Healthcare reduced their administrative fees, which gave us better pricing and, in part, contributed to savings for next year,” she said.

The board conducted an external review of health insurance administrators to ensure the conference has the best plan available. In selecting a plan administrator, board members went through “an arduous and a very committed process” involving research, review, prayer and discernment, said the Rev. Barbara Riddle, chairwoman of the conference board.

Board members spent about 40 hours each reviewing materials and attending meetings, McCoy said, and were “conscientious” about giving the process the time and attention it required.

The board includes health insurance professionals, bankers, attorneys, physicians, private industry benefit professionals and clergy experienced in the area of health benefits. They redesigned the funding method and in 2007 recommended that the conference self-fund the program, rather than continue purchasing coverage from an insurance company.

“The Florida Conference is fortunate in that of the approximately 350,000 members, there is a large pool of qualified and experienced laity and clergy members who are willing to take time from their families, businesses and congregations to provide their expertise to the various committees on which they serve,” McCoy said. “This is especially true of the members on the Conference Board of Pension and Health Benefits.”

To deliver a zero increase for active participants in this day and age is almost unheard of. To do the same for retirees — who, statistics show, use the health insurance plan more than most — is completely unheard of.”

Wendy McCoy

The board’s decision to use the self-funded insurance model “was good work,” according to Shane McIntosh, chairman of the board’s health insurance subcommittee.
 
The 5,000-plus employees and dependents in the health insurance program are a statistically significant number, McIntosh said, making it possible to “predict with very good certainty what our claims experience should be.”

Those claims were well below expected for the first year of the plan, McIntosh said, even with rising medical costs, which he estimates at about 7 percent per year.
 
Michele Maier, chairwoman of the Preacher’s Relief Board and a pension and health benefits board member, said she is “thrilled” the health insurance premiums are stabilizing. By not passing any increases on to clergy, “we are helping people that deserve to be helped,” she said.
 
Additional improvements to the health insurance program could be possible in the coming years, according to both McIntosh and Maier. Some ideas include promoting more widespread use of health risk assessments and offering wellness programs, nutrition counseling, smoking cessation incentives and alternative plan designs. Identifying additional program cost savings should be under consideration too, McIntosh said.
 
“The less we have to spend on insurance, the more we can use for God’s work,” McIntosh said.

Graphic by Greg Moore

The zero increase in rates applies only to health insurance and not to the optional dental insurance plan. Those who elect to participate in the dental coverage will incur a “modest increase” in premiums, McCoy said. The conference anticipates improved dental insurance benefits, however, as it switches from its current insurance carrier to a new provider, she said.

A webcast providing specific details about the conference health and dental insurance programs is Oct. 27 at 10 a.m. Individuals may access the webcast that day at http://www.flumc.org. Open enrollment for all participants begins Oct. 26 and runs through Nov. 8.

News media contact: Tita Parham, 800-282-8011, tparham@flumc.org, Orlando

*Parham is managing editor of e-Review Florida United Methodist News Service.
**De Marco is a staff writer for e-Review Florida United Methodist News Service.




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