Comprehensive Protection Plan€¦ · Voluntary Transition Program (VTP) • Associate members are...
Transcript of Comprehensive Protection Plan€¦ · Voluntary Transition Program (VTP) • Associate members are...
Comprehensive Protection Plan Proposed Changes 2015 Conference Forum
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Agenda
Proposed Changes
• Plan Eligibility
• Disability Benefit Amount and Offsets
• Mental Nervous Limitation
• Voluntary Transition Program Eligibility
• Other Benefits
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Transition to General Eligibility
General Eligibility
• Full-time clergy and local pastors earning more than 60% of DAC/CAC
Special Arrangements
• Part-time clergy (excluding part-time local pastors)
• Full-time clergy earning more than 25% of the DAC/CAC but less than 60% of the DAC/CAC
• Clergy on an a leave of absence (LOA)
General Eligibility
• Full-time clergy and local pastors* • Plan sponsor can elect coverage
for ordained clergy and/or part-time local pastors with ¾-time or greater appointments*
• Plan sponsor to elect continuation of coverage (voluntary leave, sabbatical leave, medical leave and attend school)
Special Arrangements
• Not available * Plan comp must be greater than 25% of DAC/CAC
Current Benefit Proposed Change
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Eligibility—Rationale
Rationale
• Streamline plan eligibility/premium structure
• Current special arrangement premium structure (3.4% or 4.4% of DAC) is too costly in comparison to compensation levels
• Greater flexibility and cost effectiveness available through UMLifeOptions
for those no longer covered under CPP (fully insured long-term disability [LTD] and death benefit plan)
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Eligibility—Consideration
Conferences may elect to provide comparable LTD and life insurance coverage through UMLifeOptions for clergy who are no longer eligible
Clergy A Age 53/ $28,201
$2,216 $184 $157 $32 $4 $377
Clergy B Age 42/ $14,244
$2,216 $46 $55 $11 $4 $116
Clergy C Age 62/ $35,000
$2,216 $272 $375 $75 $4 $725
½ time UMLifeOptions
CPP (Required SA)
LTD (60% Benefit)
$50k Participant
$10k Spouse $5k Child Total
UMLifeOptions Premium
Not a guarantee of future costs
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Minimum Disability Benefit and Offsets
Participants Enrolled in CPP Under General Eligibility
• Disability benefit equal to 70% of plan compensation or 40% of the DAC, whichever is greater
• Social Security Disability Insurance (SSDI) offset applied until benefit is equal to 40% of the DAC
Participants Enrolled Under Special Arrangements • Disability benefit is 70%
of plan compensation
• Entire SSDI offset applied to benefit
Eliminate the 40% of the DAC Disability Benefit Minimum
• Resulting LTD benefit equal to 70% of plan compensation
• SSDI award applied to benefit
— No imputed SSDI offset applied Participants denied due
to medical reasons Participants denied if they
do not have enough service
• Imputed offset for participants that opt out of SSDI
• Healthcare allowance would not be considered Other Income
Current Benefit Potential Change
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Rationale
• Disproportionate benefit for some participants — Full-time clergy with low compensation—
could exceed 100% of pre-disability, since disability benefit is a minimum of 40% of DAC
— Clergy do not have the full “actual or hypothetical SSDI offset” applied—since benefit would be “bumped up to minimum”
• Benefit calculation the same among all participants regardless of eligibility provision
Minimum Disability Benefit and Offsets
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Considerations
Minimum Disability Benefit and Offsets
Currently Receiving Disability Benefit Grandfathered under current plan provision,
since disability benefit could be reduced as a result of this change
New Participants (Date of disability 01/01/17 and after)
Disability benefit calculated under new plan provision
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Mental Nervous Limitation
24-month limitation for certain treatable and returnable mental health conditions (identified by diagnostic ICD-9 codes)
• Benefits terminate June 30 following end of limitation term
• Participants still need to meet definition of “disability”
• Claim will continue to be evaluated for limitation
Claims no longer identified by specific ICD-9 codes
Benefit Potential Change
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Rationale: • Current use of ICD-9 codes is proving difficult
— Doctors don’t update ICD-9 codes for ongoing claims — Code application is inconsistent for new claims
• Industry has moved away from focusing on limited set of specific ICD-9 codes; limitation being either: — Applied broadly to all Mental Nervous (MN) claims — Focused on appropriate care
• October 2015: ICD-9 is being replaced by ICD-10 — No guarantee that codes will be the same; some will be retired,
and new ones will be introduced — Change-over will magnify difficulty with identifying “treatable”
and “returnable” by codes alone
Mental Nervous Limitation
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Standards of Care
All Physical and Mental Health Conditions
Current Benefit Potential Change
Standards of Appropriate Care Requires participants to be under the care of a physician (non-family member) that specializes in the treatment of the disabling condition
Standards of Appropriate Care Industry Standard of Appropriate Care
Minimum levels of care for disabling conditions
• Mental health: American Psychiatric Association Practice Guidelines
• Physical conditions: Each condition has own guidelines
— Example: Asthma—National Asthma Education and Prevention Program— Expert Panel Report 3: Guidelines for the
Diagnosis and Management of Asthma
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Rationale:
• Limitation based on standards of appropriate care for all conditions is considered more reasonable and prudent
• General limitation would better align with ¶162(X) of The Book of Discipline: “Right and a responsibility to obtain care appropriate to their condition”
Standards of Care
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Voluntary Transition Program (VTP)
• Associate members are not eligible
• Participants on Voluntary Leave of Absence are not eligible
• Clergy placed on Honorable Location are not eligible for the program
• Allow associate members to be eligible
• Allow clergy on a voluntary leave of absence for up to 24 months be eligible for VTP
Current Benefit Potential Change
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New Honorable Locations and Returns
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90
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
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New Honorable Locations Returns to "Active"
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Honorable Location <65 402 434 485 506 542 565 572 581 584 583 603 614 622 615 600 603 611 602 589 573 New Honorable
Locations 77 60 65 46 54 42 37 34 35 25 40 27 26 24 25 23 45 31 35 32
Returns to "Active" 16 18 5 18 10 14 20 12 12 9 10 4 9 8 9 4 9 6 8 6
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New Personal Leaves and Returns Data As of December 31 of Each Year
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20
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60
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2009 2010 2011 2012 2013 2014
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New Personal Leaves Returns to "Active"
2009 2010 2011 2012 2013 2014
New Personal Leaves 67 103 78 78 66 68
Returns to "Active" 2 15 27 36 32 38
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Clergy request a voluntary leave of absence to discern their next steps
• Program will allow graceful exit if choose not to return to active service
VTP—Rationale
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VTP–Statistics
Number of Participants 12
Gender Male (11) – Female (1)
Average age 53
Average years of service 17
Average payout $29,610
Voluntary Transition Program—as of March 2015
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Educational Benefit
Other Benefits
Current Benefit Potential Change
• Benefit based on attending post-secondary school on a full-time basis, regardless of grades received
• Benefit is equal to 20% of the DAC — Paid regardless of cost
of class/school Half paid in lump sum Remaining balance paid in
equal monthly installments
• Benefit amount not changing
• Benefit administration and payout to change — Benefit paid out in
proportionate partial lump sums At beginning of semester,
trimester, quarter, etc. After school certificate
is received and full-time enrollment is verified
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Financial Impact―VTP
Honorable Location
Personal Leave of Absence
Average number of clergy 25 77
Average number of returns 6 30
Plan total: transitional benefit (net returns)
$551,760 $1,364,880
Conference total: health insurance (assumes no repayment)
$125,000 $235,000
Average VTP payout: $29,040
Average transitional period: six months
Average six-month health insurance premium: $5,000 (single coverage)