08/05/2014

Portico Adjusts 2015 Health & Disability Rates to Meet Community Needs

At its July 31 – Aug. 2 meeting in Minneapolis, Portico Benefit Services’ board of trustees voted to approve Portico’s recommendations regarding 2015 contribution rates. Health and disability contribution rates will increase, and survivor and retiree support contributions as well as all ELCA-Primary health deductibles, copayments, out-of-pocket limits, and wellness dollar incentives will continue unchanged. Rate adjustments will take effect Jan. 1, 2015.

As a ministry of the ELCA, Portico is responsible for analyzing past claims experience and market trends annually to ensure that enough money is collected in the coming year to meet the benefit-related needs of this faith community. That requires adjusting rates so Portico can pay the expected 2015 claims of plan members, cover the plans’ administrative costs, and maintain adequate reserves.

Health Plan

Due to higher than expected 2013 and 2014 health claims incurred by plan members and their family members, as well as expected increases in future health care costs, the 2015 ELCA-Primary health contribution rate will increase by 11%. Like last year, contribution amounts will also be adjusted due to changes in age and defined compensation.

Importantly, this rate increase preserves the fundamental cost-sharing design of the health plan. For the Gold+ option, that means 80% is paid by the plan through sponsor contributions, and 20% is paid by the plan member through out-of-pocket costs.

"Last year, nearly every plan member used health care," said Steve Knutson, Portico’s director of health products. "And our self-insured plan, our shared pool of health plan dollars, paid for it. We’re grateful to be able to meet the needs of those serving this church ― especially those dealing with serious medical issues. But higher claims require us to raise our projected costs for the coming year so we can maintain the pool."

While this year’s health benefit increase is unusual for Portico, Knutson emphasizes that it isn’t unusual in the marketplace. “Since 2007, Portico’s average health contribution rate increase has stayed well below the average U.S. employer rate increase, saving millions of dollars for ministry,” said Knutson. "We don’t yet know how Portico’s 2015 health plan rate increase will compare to 2015 commercial rates. It could again fall below the national average, or the fact that our community needed higher than average care during 2013 and 2014 could bring us on par with the national average for 2015."

As required by the Affordable Care Act, Portico is again required to pay health care reform-related fees, the largest being the Transitional Reinsurance Fee, which requires self-insured plans like the ELCA Health Plan to pay $44 per covered individual or about $1 million in 2015. These fees help create funds to subsidize health care exchanges. By design, these fees are lower than last year, meaning that the exchanges will have less financial support as they set rates for 2015.

Like last year, Portico will apply the 2015 rate based on defined compensation, a member’s age, and employer’s geographic location. These practices help spread costs among organizations of greater and lesser means, and support a diverse population of rostered leaders and other church employees.

Unlike the health care exchanges, which can charge a 64-year-old person up to three times more than a 20-year-old for the same health plan (3:1 age ratio), Portico will again limit the range between its highest and lowest contribution rates to a 2:1 age ratio.
Disability Plan

Portico is also reinstating the disability contribution (suspended in 2014) at 2.5% of defined compensation, higher than the 2013 rate of 0.8% of defined compensation. This increase is based on the number of members receiving disability benefits, their expected benefit costs, and the duration of their claims. In addition, it reflects a change to more accurately account for health care costs incurred by plan members receiving disability benefits.

Knutson affirms the value of the self-insured health and disability plans to this church and the enduring role wellness plays in the future of its leadership. "Portico will continue to partner with sponsoring organizations and plan members to enhance the well-being of our leaders. That is the single best way to minimize future cost increases and shape a more resilient church."

2015 Contribution Summary

Contributions paid by sponsoring employers:

ELCA-Primary health ― contribution amount will increase by 11% for each of the four health benefit options (Platinum+, Gold+, Silver+, Bronze+) and will also be adjusted due to changes in age and defined compensation

ELCA Medicare-Primary health ― will increase by 11% for the Standard option, and will also be adjusted due to changes in age and defined compensation

Disability ― will be reinstated after one-year suspension, set at 2.5% of defined compensation

Survivor ― no change; will remain 0.8% of defined compensation

Retiree support ― no change; will remain 0.7% of defined compensation

Retirement ― no change to required minimum amounts

Contributions paid by members eligible to continue coverage at their own expense:

ELCA-Primary health ― contribution amount will increase by 11% for each of the four health benefit options (Platinum+, Gold+, Silver+, Bronze+)

ELCA Medicare-Primary health

• Will increase by $23 to $309/month for the Economy option
• Will increase by $23 to $326/month for the Standard option
• Will increase by $23 to $382/month for the Premium option

Basic group life insurance for members on leave from call ― no change, will remain $7.50 per month

Disability coverage for interim pastors ― no change; will remain $25/month per $1,000 of coverage

More Information

Learn how the ELCA health plan strengthens this church.

If you have questions, please contact Portico at 800.352.2876.