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The Brethren Benefit Trust Board weighs compassion

with responsibility in the face of rising medical costs

Jan. 17, 2001 (Elgin, Ill.) —

Insurance premium adjustments and long-term care, an extra one-time payment for Pension Plan retirees, and a renewed commitment to social activism through investments were a few of the topics discussed by the Brethren Benefit Trust Board, Nov. 17-18, at Hidden Valley, Pa.

Dominating much of the Board's discussion during its fall meeting were the ever-increasing costs of medical insurance premiums and prescription drugs. This situation increasingly is causing hardships for employers, employees, and retirees. For the past two years, BBT has softened the blow substantially for individuals in the Brethren Medical Plan who have received the highest increases - retired pastors.

"Two years ago the board approved providing a supplement to retirees as a transitional benefit they could use to help hold down costs," said Jeff Garber, director of Brethren Insurance Plans. The balance of the $550,000 allotted for 1999 and 2000 will be used to offset 2001 premium costs for Medicare primary retirees, resulting in a 9.85 percent across-the-board reduction. Without the supplement, some retirees in the plan would face a 68-percent increase in their 2001 insurance premiums.

Since rising health care costs may be the norm for years to come, the BBT Board and staff voiced concern that the continued use of a supplement for retired pastors could, in effect, be interpreted as an entitlement. As an alternative, staff proposed a solution that Board members agreed could provide some relief, at least for the short term: In addition to the premium reduction for retired pastors in 2001, retirees over age 65 in the Brethren Medical Plan may now also apply to BBT's Church Workers Assistance Plan for a grant up to the full amount of their insurance premium.

"We realized there is already a program in place to make funding available to those in need," said Don Fecher, Brethren Pension Plan director.

"Some do not need the subsidy though others need it very much," said Wil Nolen, BBT president. Nolen stated that one challenge going forward would be to clearly communicate to plan members that the Church Workers Assistance Plan is not an automatic source of support, but rather a ministry that requires initiative on the part of those who need the assistance. Board chair Ann Quay Davis added, "Philosophically we want to give more of this supplement to those who really need the help rather than automatically making it available to everyone in the plan."

Working to be both compassionate to those with the greatest need and responsive to the Church of the Brethren Annual Conference directive that BBT provide high-quality coverage and affordable premiums for all who are in the Brethren Medical Plan, Board members and staff agreed that a longer-term solution is required. "We're at a point where we need to do some things differently to stabilize our plan to make us more attractive to insurers," said Garber.

Strategies that will be explored by staff include changing from a group plan with one flat rate to a plan that offers a variety of coverage and deductibles or to one that offers graduated rates, depending on age, gender, geography, or other criteria. Staff will also look into possibly increasing the co-payment for prescription drugs.

Long-term care insurance

Another insurance-related item discussed by the Board pertained to the possibility of offering long-term care insurance for pastors, which BBT staff is exploring.

The results of a survey conducted last year show a strong interest by ministers in having long-term care insurance. Of 800 surveys sent to members of the Ministers Insurance Group, 469 were returned. Sixty-two percent of the respondents indicated they would consider purchasing long-term care insurance. Of those, a clear majority were interested in a low-cost plan that offered coverage for themselves and their spouses, which would provide both inflation protection and coverage for pre-existing conditions. More than half of those interested said they would pay an annual premium of up to $500.

One unanswered question is whether the level of interest indicated by the survey would translate into an adequate level of participation if the plan were offered on a voluntary basis rather than being a required part of the pastor's package of insurance benefits, said Jeff Garber. BBT will draft a Request for Proposal (RFP) to gather more information about the costs and benefits for such a plan.

Effecting change through corporate investing

BBT renewed a strong Brethren commitment to social responsibility in mid-2000 when it became a full member of the Interfaith Center on Corporate Responsibility, which is composed of nearly 300 faith-based organizations that use their investment holdings to influence responsible changes within corporations. BBT's investment holdings total more than $300 million from its Foundation, Insurance, and Pension ministries. Because BBT recognizes socially responsive investing as an important direction in which to continue, staff member Will Thomas will devote an increasing portion of his BBT staff time to work with Walden Asset Management of Boston on shareholder concerns, said Daryl Deardorff.

Two mutual fund options — the Walden/BBT Domestic Social Index Fund and the Walden/BBT International Social Index Fund — were launched in 1999 to provide all Brethren and other individuals who uphold similar values with two investment opportunities that promote social justice, human rights, and a clean environment. "With the help of Walden Asset Management, we have more capability to become an active shareholder in socially responsible issues," said Dick Pogue, BBT Board member and Investment Committee chair.

Pension Plan adjustments

Annuitants in the Brethren Pension Plan as of Sept. 1 received an additional one-time payment equal to 50 percent of their monthly benefit. These checks were mailed on Dec. 15.

In a related item, the Supplemental Income Fund for Equitable Annuitants will receive an adjustment for the 2000 calendar year in the amount of $186,716. This will be distributed to fund annuitants no later than Feb. 15. This fund, which BBT administers, provides supplemental retirement income to some current and former General Board staff who at one time were ineligible as lay members to participate in the Brethren Pension Plan.

Are you an e-Brethren?

The launch of the Brethren Press e-commerce Web site on Dec. 1 is at the heart of what eMountain Communications can provide for the denomination, said Nevin Dulabaum, director of Communications and Information Services. As more Brethren transition to 21st-century technology, eMountain can meet a variety of their needs, from listserv e-mail discussion groups to CD-Rom resources, Web site design and hosting, and full-service e-commerce with secure credit card transactions, Dulabaum explained. He added that the potential exists as well to become an ecumenical leader by providing these same services to other faith-based groups.

Brethren Press' new Web presence, www.brethrenpress.com, was developed by eMountain Communications throughout 2000. With the addition this month of secure credit card transactions, the site features dynamic search features, e-mail notification of each purchase, and multiple shipping addresses. "This site represents the first of many e-commerce sites eMountain expects to develop and host," Dulabaum said.

Other business

Brethren Foundation

The Board heard a report from Brethren Foundation staff. Highlights included-

· the adding of nine Asset Management Services clients during 2000 with investments totaling $672,000; $13.7 million was also added by existing clients.

· the decision to change its short-term money manager from Bank of America to LaSalle Bank.

Brethren Pension Plan

The Board approved forming a pension plan retirement committee to oversee the request of Mediation Services of Tippecanoe County, Inc., to participate in the Brethren Pension Plan, effective Jan. 1. Mediation Services, for which Lafayette (Ind.) Church of the Brethren serves as a governing member, meets Pension Plan guidelines as a qualified church-controlled organization.

Communications and Information Services

Wil Nolen introduced Nevin Dulabaum as director of BBT's newly merged Communications and Information Services departments. Dulabaum then -

· gave a demonstration of BBT's new Web site, located at www.brethrenbenefittrust.org.

· described a new resource being developed jointly with Brethren Press, an interactive Brethren Heritage CD-Rom that is scheduled for release by July 2001.

Employee Financial Services

Following reports by Don Fecher, director, the Board -

· approved increasing the retired church worker income guidelines by 2.5 percent. To qualify for a grant, income may not exceed $24,000 for couples or $18,000 for singles.

· approved housing allowance exclusions up to 100 percent of pension income for retired pastors for calendar year 2001.

Finance Department

The Board heard reports from Finance staff, learning that -

· total expenses for 2001 are projected to be just below $3 million, with total revenue over expenses of $189,084.

· a switch from fund accounting to a cost accounting system was scheduled to be implemented on Jan. 1. This will better reflect the actual cost of particular ministries by more accurately allocating staff time and overhead spent on various BBT activities.

Insurance Plans

Staff reported that its long-term disability insurance carrier was to change from Reliance Standard Life to UnumProvident on Jan.1. The switch will result in additional benefits, including an Employee Assistance Program and a childcare benefit for those on partial disability.

General

In other business, the Board—

· renamed BBT's Audit Committee. The new name, the Budget, Audit, and Review Committee, reflects its expanded role in reviewing budget and reporting results to the Board.

· responded to a questionnaire from the Annual Conference Review and Evaluation Committee asking official Church of the Brethren agencies to comment on the effects of the Church of the Brethren General Board's 1997 redesign.

· approved April 21-22, 2001, as the Board's next meeting dates, to be held in Elgin, Ill.

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Last modified: February 14, 2001