facts and possibilities pat haines, senior vice president, benefits todd ingves, director,...
TRANSCRIPT
![Page 1: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/1.jpg)
Facts and Possibilities
Pat Haines, Senior Vice President, Benefits
Todd Ingves, Director, Information Management
![Page 2: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/2.jpg)
2
Objectives
• Serving MORE• Serving BETTER• Serving the CHURCH
![Page 3: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/3.jpg)
3
The Plan NOW
• Benefits• Funding
![Page 4: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/4.jpg)
4
Income Security: Retirement
• Defined Benefit Pension Plan• Credit accrual• Experience apportionments• Asset based• 11% dues
![Page 5: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/5.jpg)
5
Income Protection for Members and Survivors: Death and Disability
• Continued medical coverage and Pension Plan credit accrual during disability – no cost to employer
• Education benefits for dependent children under age 25
• Asset based• 1% dues
![Page 6: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/6.jpg)
6
Asset-Based Funding
Employing Organization12% Dues
Pension Plan11%
Death & Disability1 %
Short-TermInvestments
Pension, Death & Disability Benefits Paid to Members
Board of Pensions Balanced Investment
Portfolio
2014
Dues Paid$75 million
Investment Earnings$448 million
Benefits Paid$344 million
![Page 7: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/7.jpg)
7
In Sickness and In Health:Medical Plan
• PPO + Pharmacy • National networks: Blue Cross Blue Shield,
Catamaran and Cigna Behavioral Health• Member cost sharing through income-based
copayments and deductibles• Emphasis on wellness and prevention:
![Page 8: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/8.jpg)
8
The Economics of Healthcare
• Self-funded• Pay-as-you-go• Inherent volatility• 1% of the population = 30% of the expense• Cost contributors: Lifestyle choices, age• 23% / 24.5% dues, depending on family status
![Page 9: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/9.jpg)
9
Pay-As-You-Go Funding
Employing Organization23% / 24.5% Medical Plan
Dues
Medical Benefits Paidfor
Members
2014
Revenue$179.6 million
Benefits Paid$180.8 million
![Page 10: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/10.jpg)
10
Supplemental and Optional Benefits
• Supplemental Death and Disability• Dental• Long-Term Care• Retirement Savings Plan
![Page 11: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/11.jpg)
11
Actuarial Forecasting: Art and Science
• Key factors• Revenue: enrollment; salary increases;
investment return• Expenses: enrollment; third-party costs;
compliance; plan design; TREND
![Page 12: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/12.jpg)
2015 – 2017 Forecast (October 2014)(in millions; rounded)
2015 2016 2017Revenue $187.5 $185.5 $183.4
Expenses $189.8 $196.8 $203.8
Balance ($2.3) ($11.3) ($20.4)
Prior Reserve
$52.5 $50.2 $38.9
Remaining Reserve
$50.2(26.7%)
$38.9(19.9%)
$18.5(9.1%)
![Page 13: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/13.jpg)
2016 - 2017 Forecast (March, 2015) (in millions; rounded)
2016 2017Revenue $181.4 $177.8
Expenses $184.1 $188.6
Balance ($2.7) ($10.8)
Prior Reserve
$61.1 $58.4
Remaining Reserve
$58.4(31.7%)
$47.5 (25.2%)
![Page 14: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/14.jpg)
Demographics
![Page 15: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/15.jpg)
15
Who Can Participate?
• Called and installed teaching elders are mandated
• All other church workers must work at least 20 hours a week in an eligible church service
• Includes non-mandated teaching elders and lay workers
![Page 16: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/16.jpg)
Who Actually Participates?
MANDATED TEACHING ELDER
NON-MANDATED TEACHING ELDER
LAY
50%
16%
33%
5,6001,700
3,700
![Page 17: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/17.jpg)
Mandated Teaching Elders
• 5,600 members at 4,700 employing organizations
• All serving at local churches
Average age 52 17.5 years of service
![Page 18: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/18.jpg)
Non-mandated Teaching Elders
• 1,700 members serving 1,400 employing organizations
• Approximately half are serving local churches and half serving agencies/mid councils/other employers
Average age 5518 years of service
![Page 19: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/19.jpg)
Lay Employees
• 3,700 members (36% non-exempt, 64% exempt) serving 1,100 employing organizations
• 62% serving churches, 20% serving agencies
Average age 51 10.5 years of service
![Page 20: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/20.jpg)
20
Employing Organizations
LOCAL CHURCH
OTHER EMPLOYER
MID COUNCIL
AGENCY
90%Employers
79%Members
7% Employers
8% Members
2%Employers
5%Members
>1%Employers
8%Members
![Page 21: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/21.jpg)
Congregations with Plan Members
CONGREGATION SIZE250 or less
3700Churches
1.1 Average Members
1100Churches
1.7 Average Members
CONGREGATION SIZEBetween 251 and 500
CONGREGATION SIZE501 or more
700Churches
4.1Average Members
![Page 22: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/22.jpg)
22
Churches and Employing Organizations
75%
20%
3%1%
1MEMBER
2 - 5MEMBERS
6 - 10MEMBERS
More than 10MEMBERS
For churches and employing organizations covering members in the Traditional Medical Plan
![Page 23: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/23.jpg)
Demographics
Small Churches
Large Churches
Lay Members
Mandated Teaching
EldersNon-
Mandated Teaching
Elders
Agencies
Church Affiliated
Organizations
Mid Councils
![Page 24: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/24.jpg)
Medical Plan Challenges
![Page 25: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/25.jpg)
Medical Claims Cost Trend
2009 2010 2011 2012 2013 20140%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
6.4%6.7%
8.9%
3.8%
7.1%
3.4%
Claims Cost Trend
Linear Trend
![Page 26: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/26.jpg)
Cost Drivers
• Demographics• Chronic conditions• High-cost claimants• Prescription drugs
![Page 27: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/27.jpg)
Chronic Conditions
DIABETES HYPERTENSION(High Blood Pressure)
HYPERLIPIDEMIA(High Cholesterol)
6.8% 21%21%
"The only way to keep your health is to eat what you don’t want, drink what you don’t like, and do what you’d druther not.”- Mark Twain
![Page 28: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/28.jpg)
High Cost Claimants
1% of Medical Plan population responsible for 30% of Plan costs
Conditions include cancer, musculoskeletal and heart disease
Often complex cases with multiple co-morbidities
20% repeat rate over three-year period
![Page 29: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/29.jpg)
Prescription Drugs
• Specialty drugs are less than 1% of prescriptions but account for 33% of drug costs
• Includes treatments for cancer, Hepatitis C, and rare conditions
• Specialty cost trends are significant and show no signs of abating
• Generic inflation also a growing concern
![Page 30: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/30.jpg)
Cost Controls
• Vendor contracting• Call to Health initiative• High-cost claimant case review• Stop loss insurance
![Page 31: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/31.jpg)
31
Challenges
• Managing rising medical costs
• Keeping up with changing healthcare landscape
• Providing meaningful benefits at reasonable costs
![Page 32: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/32.jpg)
Stability and Transition
![Page 33: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/33.jpg)
33
2016: Stability and Transition
• Board actions• March
• Apportionment• Disability reserves• Disability cost of living increase
• June• Medical dues• Alternate dues method
![Page 34: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/34.jpg)
34
2016 Dues Methods
Medical Member Only 23%Family 24.5%
Pension11%
D&D1%
Traditional Dues Method 2015/2016
Mandated, Non-mandated, Lay
MedicalNo Coverage Member Only
2016 ABP RatesMbr. and PartnerMbr. and ChildMember and Family
Pension11%
D&D1%
Alternate Dues Method 2016
Non-mandated, Lay
![Page 35: Facts and Possibilities Pat Haines, Senior Vice President, Benefits Todd Ingves, Director, Information Management](https://reader030.vdocument.in/reader030/viewer/2022032801/56649de45503460f94adb936/html5/thumbnails/35.jpg)
35
Your Charge: Possibilities
• Reminders• Overall objective of Board of Pensions• Covenant with teaching elders• Context of facts and values• Wide range of benefits
“Start by doing what's necessary; then do what's possible; and suddenly you are doing the impossible." - St. Francis of Assisi
"The possibilities are numerous once we decide to act and not react." - George Bernard Shaw