The RCA Insurance transition into a voluntary plan has one aspect that deserves our scrutiny and discussion. More here:
It’s those final “Oh, by the way…” sentences in RCA Today press releases that grab one’s attention. So it was with the recent BOBS announcement about the RCA insurance transition:
After paying out claims, any remaining RCA program insurance reserve will be set aside in an endowment or board-directed reserve. The income from the remaining reserve will be utilized to continue to offer RCA leaders benefits that will not be available on the state and federal marketplaces, including access to the robust and highly regarded wellness program.
Considering the fact that this insurance program reserve totaled about $10,000,000 as of 2012 reporting, it is worth the effort to parse this statement a bit.
• “After paying out claims…” – Is it not standard practice to pay out claims from insurance premiums paid in during the current year? Will not such premiums be collected in 2013 as usual? Has it not also been the experience of the RCA insurance program for the past several years that premiums collected have been more than sufficient to meet the total claims [hence the growth of the reserve funds over that same period]? Is there reason to suspect any different, more negative experience in 2013 that will require dipping into the reserve to cover current claims or residual claims?
• “…any remaining RCA program insurance reserve will be set aside in an endowment or board-directed reserve.” Let’s consider for a moment the source of the funds that have been collected in this “remaining RCA program insurance reserve.” Churches and program participants paid in premiums at a rate over the past decade that allowed the accumulation of this reserve, which has now grown to a considerable sum. The stated purpose for which the funds were collected was to provide mandated insurance coverage for participants. In some cases monies were collected to satisfy the “Covenant of Care” mandate, even though church staff did not participate in the RCA plan. The accumulation of funds in the reserve was not incidental to the stated purpose for payments; it was accumulated to give assurance that, even in a bad year of excessive claims, all claims could be paid. Now that the insurance mandate is ending, so is the intended purpose for which reserve funds were collected from churches and participants. The appropriate, even moral, next step would be to return the funds to the churches and participants who paid in the funds, saying “Here is your money back, the excess which we collected but thankfully did not have to use.” Those who were the source of the reserve funds thought their money was to be used for the stated purpose of satisfying insurance claims and not for any other purpose. They were not being solicited for donations to an internal RCA endowment; they were purchasing a mandated commodity that will no longer be made available in the same way. Even if BOBS has a legal right to change the fundamental purpose of the reserve, they have a moral obligation to obtain the consent of the “donors” to alter the purpose of the fund. That the funds were collected under a mandate of program participation only strengthens that moral obligation. The size to which the reserve fund has been allowed to grow makes this a significant decision. Ten million dollars rebated to about one thousand organized churches would mean $10,000 for each church’s 2014 budget.
• “The income from the remaining reserve will be utilized to continue to offer RCA leaders benefits that will not be available on the state and federal marketplaces,…” – They are apparently talking about the weight-reduction, stress-reduction, walking and clergy coaching networks being continued as a permanent part of the RCA infrastructure. But one must ask whether such programs are not already available to RCA leaders in the open marketplace; everything from Weight-Watchers to Zumba. My own health insurer enrolls me in the Y’s Silver Sneakers program, provides weight and stress-reduction counseling and nutritional guidance for free and bugs me until I use them. And that’s the usual industry practice. Does BOBS really need to duplicate such programs and incur that ongoing expense year in and year out? Note also that BOBS intends to use only the income from the reserve for this purpose. The principal of the reserve would continue to be unused and unusable for other denominational needs without the consent of the BOBS Board of Directors. Not only would the purpose of the reserve funds be re-directed, the funds would be put under lock-and-key in perpetuity.
• “…including access to the robust and highly regarded wellness program.” – The RCA wellness programs mentioned above would not continue without fee. Only access to the programs is being talked about. The adjectives “robust and highly regarded” seem excessive given BOBS own Wellness Survey Report of last Fall. RCA folks who were eligible to participate [whether they actually did or not] were sent a survey that garnered over 200 responses about the program—an 11% response rate. In rough numbers, that comes to 200+ persons responding and 1,650 others who did not bother to respond—an 89% non-response rate. That response is less than “robust”. Less than 6% of that 11% regarded their health as sub-par, which indicates that their motivation was not health-remedial but health maintenance. There was an indication by over 80% of the respondents that financial incentives played a role in their interest. About 70% of respondents were clergy, male and over 51 years of age; a narrow spectrum of the general population. What could possibly be said from the published survey results is that the programs are favorably regarded by those who utilize them, but we are not told how many people actually participated. One cannot conclude that the RCA programs are any more effective than what is currently available to RCA folks in their local areas. So what is the sense of BOBS continuing in this business at all?
With the dissolution of the mandatory insurance program, BOBS loses its primary reason for existing. It handles pensions, but that is primarily oversight of the contracted services with Fidelity. When a pension participant has a concern, it is Fidelity with whom one deals, not BOBS. There will be a voluntary insurance program shared with the CRC, but the expectation for its future is limited. Note that there is no call to carry over any part of the accumulated reserve in order to cover any excess claims from the joint program being established. If BOBS and its CRC counterpart anticipated the shared program to succeed over time, then that would have been a logical part of the setup. So what remains to BOBS after 2013 are the wellness programs, which are largely contracted out, and a $10,000,000 reserve fund that has outlived its stated purpose.
Perhaps the BOBS Board, the GSC and the General Synod can follow the example of the US Internal Revenue Service. Few would call the IRS their friend, but when it collects excess monies from those of us who are mandated to pay in, the IRS has a policy and practice of returning those excess monies back to those who paid. One trusts that BOBS has records of which churches and individuals participated during the years the reserve was accumulating. From those records it should be possible to figure out an equitable distribution for rebating the reserve funds. Churches and participants would then have a direct choice of how to use that rebate cash most effectively given their local circumstances.
A more generous option might be to invest the remaining reserve with established anti-poverty funds such as Oikucredit, so that the monies might help Third World people improve the lives of their families. Such funds have operated successfully for decades, embody Christian values and give a consistent financial return. This would be a significant investment that would send a message to us and to all God’s people that the RCA was serious about following the mandates of Jesus regarding treasures on earth and in heaven.
It is an eye-of-the-needle choice that churches have in front of them—if they would insist on claiming that choice. Churches could say nothing and create jobs for BOBS. They could demand a rebate and give temporary relief to their stressed budgets. Or jobs could be created for the poor over the coming decade. Or there might be other solid options. But first and foremost, there must be a dialogue on the disposition of the accumulated reserves. It is a significant decision that requires discussion and discernment, rather than being an accomplished fact that is merely announced in a press release.