BBT makes new requirement in effort to save Brethren Medical Plan.

A financial crisis in the Brethren Medical Plan has prompted Brethren Benefit Trust (BBT) to initiate a new requirement for the denomination's 23 districts. The Brethren Medical Plan is a denominational health insurance plan for pastors and employees of congregations, districts, and Annual Conference agencies. The plan was put into place more than 50 years ago and is administered by BBT.

BBT has instituted a requirement that each district must have at least 75 percent of its congregations committed to participating in the plan by Aug. 31, 2006. The requirement makes church employees in each district eligible as a group. A district that does not meet the requirement, and its pastors and church employees, will not be eligible for the plan after Dec. 31, 2006. The requirement will not be applied to retirees, congregations whose employees work less than 20 hours per week, or congregations whose employees are insured through spouses' employer group plans. By committing to working toward the requirement, all of the districts ensured that their congregations received a reduction of the increase in the 2005 rates for the plan, which BBT recently reported to plan members through its "Insurance Update" newsletter. The new requirement was communicated to the districts by BBT in late August.

The new requirement, the result of a decision made by the BBT board in July, was at the top of the Board's agenda again in November. Board members engaged in an extended conversation about the Brethren Medical Plan with about 30 pastors and church board chairs from Northern Indiana and South/Central Indiana Districts at Nov. 19-20 meetings in Middlebury, Ind. Two members of the Pastoral Compensation and Benefits Advisory Committee also were present.

The Brethren Medical Plan is in a "death spiral" created by greater numbers of high-risk participants, BBT president Wil Nolen said in October when he updated the General Board about the status of the plan. Pastors and other church employees have not been signing on in great enough numbers to maintain a good spread of risk, he said. A high number of pastors in the plan are considered high risk and "aren't insurable anywhere else," Nolen added.

In addition to the continuing loss of participants, claims have exceeded premiums in 2003 and 2004. As a result, cost of premiums has risen. With more claims than premiums, in 2003 and 2004 BBT spent $1.3 million from its insurance reserves to subsidize the plan. Seeking a solution to the crisis, BBT also found out that no commercial insurance carriers will fully insure the plan because of its aging membership and poor claims history.

Six years ago BBT ended its longterm practice of self-insuring the plan, deeming it not fiscally responsible to retain all liability for claims, the BBT newsletter report said. BBT then offered coverage through for-profit medical insurance companies MAMSI and Blue Cross/Blue Shield. Two years ago BBT moved back to a self-funded model through the Congregational Employee Plan administered by Mennonite Mutual Aid.

BBT hopes that the new requirement for districts will revitalize the Brethren Medical Plan, as pastors and church employees and their families return to the plan and help stabilize risk, the BBT newsletter said. Mennonite Church USA stabilized its denominational medical plan through a similar 75-percent participation requirement for districts, BBT reported. Benefits of the Brethren Medical Plan emphasized by BBT hinge on key components of mutuality and "guaranteed issue": employees of Church of the Brethren congregations, districts, and agencies, and their spouses and children, are automatically eligible for coverage without having to pass risk assessment or screening for pre-existing medical conditions.

"My hope is that no districts and no pastors are cut off," Nolen told the General Board, emphasizing that he was confident that districts will be able to meet the requirement even as he faced sharp questions about the move. He expressed understanding for small congregations that feel unable to pay for health insurance for pastors, as well as pastors in districts that are not well represented and therefore in danger of losing insurance. Defending the requirement as "not an unrealistic objective," he reported that three districts already have met it and several others are close. "This is the church plan," Nolen said. "Each district has to own it as its plan. All the entities of the church have to own it to make it successful."

More information about BBT and the Brethren Medical Plan is available at www.brethren.org, click on Brethren Benefit Trust.

Source: 12/03/2004 Newsline