Trustees of the Southern Baptist Convention Annuity Board approved a Jan. 1, 2001, rate increase for participants in the board’s Personal Security Program and Employer Security Program medical plans including Medicare primary plans. The action came during the July 31-Aug. 1 summer meeting in San Diego.
The Personal Security Program and smaller groups in the Employer Security Program will receive a 12-month rate increase of 22 percent. Larger groups in the Employer Security Program will also receive increases for 2001.
The increase is seen as a means of recouping losses, but Derrell Crimm, director of support services/annuity and insurance with the State Board of Missions, said he anticipates the additional cost will impose a hardship on some.
“I think it’s going to be difficult for a lot of pastors and churches alike,” Crimm said, “especially the guy who’s on a package (salary plan) and whose take-home pay will be reduced by the increase to his health insurance premium.”
Notification of the specific increases will be sent to employers before the middle of September.
Crimm cited figures indicating the Annuity Board lost $32 million last year in medical insurance.
“There has to be more money coming in to justify it,” he said. “They had to stop the loss.”
Quality issue
“A double-digit rate increases is significant for our participants, but it is needed to maintain the integrity of our medical products,” said Doug Day, managing director for insurance services. “This increase was necessary because of the rising costs of health care and prescription drugs, the high utilization of medical services by our participants and our claim expenses continuing to outpace our annual premiums.”
“We hope the recent changes in the prescription drug program and the introduction of two Medicare supplement plans in 2001 will help stabilize our medical plans and reduce future rate increases,” Day added.
Day also announced the introduction of several new insurance products in the coming months.
This fall the Annuity Board is making available a long-term care product to its participants. The coverage will be provided through the General Electric Capital Assurance Company, the long-term care division of GE Financial Assurance.
And effective Jan. 1, the Annuity Board will offer several dental plan choices to participants in the Personal Security Program.
Also scheduled for 2001 will be Individual Retirement Accounts (IRAs) for Annuity Board participants and their spouses.
“We plan to offer traditional, Roth and educational IRAs sometime in 2001,” said Jim Morrison, managing director for retirement services.
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