RCA Board of Benefits Services
Statement on Full Participation
Representatives of the Board of
Benefits Services (BOBS) have attended more than twenty-five meetings across
the church to discuss the full-participation medical insurance policy approved
by General Synod last June and now before the classes for vote. We have heard important concerns and
questions raised in these meetings. We
have also received written communications, including a letter from
representatives of Christ Memorial Reformed Church in
The full-participation proposal was offered to provide RCA ministers, their families, and lay employees with adequate medical insurance in these very challenging times. We continue to believe that a self-insured program is our best option and that full participation is an essential component. This proposed policy is grounded in Reformed theology—the Covenant of Grace/Covenant of Care—which calls us to provide for all who earn their living by serving the RCA, especially those who are most vulnerable.
The board offers the following brief comments in response to questions and concerns recently raised. The detailed rationale for the full-participation policy is included in the BOBS report to the 2003 General Synod (Minutes of General Synod 2003, pp. 277-296).
1.
Medical insurance is a key benefit provided by
all major denominations in the
2.
A self-insured plan offers the most
cost-effective option by avoiding insurance company profit margins; risk
charges; commission, sales, or marketing fees; and state premium taxes. Administrative costs for the RCA self-insured
plan are approximately 7 percent of premiums, a very low rate and well below
small-group or individual plans.
3.
With full participation the RCA program would be
large enough to be viable in today’s medical insurance environment. The RCA plan already has more participants
than 95 percent of all self-insured programs in the country. However, continued loss of enrollment will
seriously jeopardize the program’s long-term viability.
4.
We recognize that some pastors and consistories
or smaller groups may have less costly alternatives for their own insurance
needs now. Other RCA pastors, retirees,
or employees do not enjoy these options, and our covenant includes them. Even those now advantaged by smaller-group
rates have no guarantee that those rates can be sustained in a volatile and
escalating insurance market. Future
rates will be based on the claims history of that smaller group, not on affiliation
with a local or regional managed care provider.
The RCA medical plan compares favorably in costs and benefits with other
denominations. This comparison is the
most valid standard, because it factors in the crucial demographics of clergy
participants and enables BOBS to strike a fair balance between benefits to
pastors and costs to our churches.
5.
Smaller groups seeking medical coverage, such as
a classis, will risk higher premium rates due to smaller enrollment, more
volatile claims experience, and the need to accept participants who bring a
higher risk and therefore a higher cost.
Some groups may pay lower premiums initially, but these will not be
sustainable in the face of adverse claims experience and ever-rising costs. Also, groups of fewer than twenty
participants are not required to offer continuous medical coverage under
COBRA. Thus, the bridge to other
coverage is lost to those who retire before age 65, change employment, divorce,
suffer the death of the insured, or face the age limitation of dependent
children.
6.
HIPAA (the Health Insurance Portability and
Accountability Act) does provide for continuing medical coverage for
participants who move from one group plan to another. Although insurability is guaranteed, premiums
are not. A medical questionnaire may be
required of new applicants, and the group rate may increase based on medical
conditions revealed in the questionnaire.
The result can be unaffordable premiums that effectively bar
coverage. In addition, many of our
pastors will not easily find groups with which to affiliate.
7.
Without a denominational insurance program many
pastors who can’t affiliate with another insurance group will be forced into
the individual insurance market. If
coverage can be obtained, the pastor’s policy will be individually underwritten
and the premium will be based on the medical condition of the pastor and
family. If such commercial coverage is
unaffordable or unavailable, state-sponsored programs remain the only
option. Benefits vary greatly from state
to state, costs are usually high, and often there must be a gap in coverage as
a prerequisite to eligibility. While
HIPAA does provide a degree of insurance portability for group participants, it
does not guarantee affordability. No
smaller group or individual insurance plan will enable a pastor to relocate in
response to a call as seamlessly and effectively as the RCA insurance program.
8.
RCA medical coverage for retirees provides far
more than “medigap” coverage. Prescription drugs account for about 70
percent of medical benefits paid to retirees.
Currently, no supplemental insurance program equals the RCA medical
plan’s prescription drug benefit. The
recently enacted Medicare drug program will not eliminate the need for
supplemental prescription drug coverage.
A continuing RCA medical plan will review and modify the drug program
over time to maintain our excellent coverage and supplement drug benefits for
retirees in light of new Medicare provisions.
9.
Any alternative medical insurance program based
on a smaller group or individual coverage will leave some pastors, families,
and church employees vulnerable to catastrophic costs or uninsurability. Pastors who are disabled or without charge,
who retire early, or who are between calls will likely find themselves and
their families without insurance coverage.
The RCA medical insurance program is crucial for their continuing
care. If the RCA medical plan is
terminated, the only revenue source available to provide their coverage will be
assessments.
In summary, BOBS has explored many options, and we remain convinced that a covenantal RCA insurance program provides superior coverage at a competitive cost for all the servants of the church. We will continue to seek savings wherever possible and a fair balance between costs to participants and to consistories. Given the change and uncertainty in the medical insurance marketplace, a denomination-wide program will be more faithful and effective over time than forty-three classis-based plans or nine hundred congregation-based plans. Fragmentation into small-group or individual coverage may be cheaper for some in the short term. Such disunity will not provide the availability, consistency, parity, or portability of our current RCA plan or reflect the covenantal theology on which it is based. In the end, fragmentation will likely result in higher medical costs for the insured and a continuing RCA obligation to pay the cost of those left out. We respectfully urge the classes to approve the full-participation medical insurance policy.
The Board of Benefits Services
Reformed Church in
Jack
Dalenberg, director
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