LCMS Convention Workbook St. Louis, Missouri — 1983, Page 153

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ADMINISTRATION AND PROGRAM IMPLEMENTATION 153

does not possess the extensive resources necessary to provide
the many thousands of dollars that may be required today for
health care, disability, retirement, and survivor benefits. How-
ever, benefits potentially totalling several hundred dollars for
a worker and the family of a worker are available from the
Worker Benefit Plans because of the large group enrollment.
This is because almost all the congregations and agencies of
The Lutheran Church—Missouri Synod participate in the
Worker Benefit Plans.

The Worker Benefit Plans are an important element of a
worker’s financial protection. They are intended to supplement
other important aspects of such protection; namely, Social
Security and personal programs, such as insurance, savings,
and investments. A good floor of benefit protection is provided
an individual and his family through participation in both the
Worker Benefit Plans and the Social Security program. The
Worker Benefit Plans, which are similar to the majority of
employer-sponsored group plans in industry, provide benefits
which give consideration to the benefits provided by the Social
Security program. The reason for this is that insurance
actuaries, in the past as well as at the present time, indicate
even with the cost of Social Security going up, that it is not
possible to secure all the protection afforded through the Social
Security program at a lower cost elsewhere. Therefore the
Worker Benefit Plans by giving consideration to Social
Security benefits has enabled the cost of benefit protection, for
the Synod’s congregations and agencies as well as the indivi-
duals serving them, to be the lowest cost possible for the entire
group of workers covered.

Administration

Pursuant to the adoption of the recommendations of Task
Force II by the 1981 convention, the Board of Managers of the
Worker Benefit Plans was expanded from 7 to 11 members.
New members appointed by the Board of Directors were Mr.
Kenneth Guebert, Mr. Harlan Klotz, and Mr. Gregory Smith.
As stipulated in the provisions adopted, Dr. Norman Sell, the
Treasurer of the Synod, is also a member of the Board of
Managers. The other members serving on the board are Dr.
George Beto, Rev. Gerhardt Bluhm, Mr. Julian Hoffmann, Mr.
Ralph Niedert, Mr. Richard Peters, Dr. Fred Spurgat, and Mr.
Harvey Wilkening.

Also, during the biennium, Mr. Ralph Niedert was re-
appointed to a term of two years, and the terms for Mr. Richard
Peters and Dr. Fred Spurgat were extended for one year to meet
the newly adopted provisions for terms for appointed board
members.

The Board of Managers continued its past practice of
meeting quarterly during each of the years of the last biennium.

In addition to the regular full-time staff, the Board of
Managers in the administration and evaluation of the benefit
plans and programs regularly consults with the plans’ actuary,
insurance consultants, investment adviser and managers,
legal counsel, and auditor.

Communications

The major changes made in the Concordia Plans as of Jan.
1, 1982 (realignment of the benefits among the plans, monthly
enrollment eligibility, and benefit increases), were shared with
employers and members through two issues of a “Benefits
Updater.” It was felt the changes were too many and too
complex to be communicated only through the regular
channels—thus, the “Benefits Updater.” The initial issue was
published during the summer of 1981, with a second issue
during the winter.

Information about the changes in the plans was also spread
during 1982 with the mailing of a “Summary Plan Description”
of each plan to all members and employers. The summary plan
descriptions are short booklets, written in everyday English,
that explain the plans.

In addition, each employer was provided a copy of the
actual plan document of each plan so that it could be readiily
referred to by them and their employees. Previously each
member was provided such copies, but since reference to them
is generally infrequent, it was felt the considerable cost of
printing and mailing those lengthy plan documents was not
warranted.

The “Benefit Plans Bulletin” produced each quarter for
members and employers contains helpful and interesting
information about the benefit programs. One issue each year
contains the ‘“‘Annual Report,” which includes financial
information about the plans.

A “Personal Statement of Benefits” is sent to each worker
about May 15 of each year, and it continues to be a most
appreciated item of communication. The computer-prepared
report shows benefits of the Synod’s benefit programs as they
relate directly to each worker and family. A comparison of the
reports from one year to the next reflects how individual and
family financial security continues to be enhanced through
increased protection and benefits.

The staff of the Worker Benefit Plans conducts plans
presentation meetings for groups of members or employer
representatives to review the programs and to provide answers
to questions concerning them. This is done when the number
attending and the circumstances justify the ex pense of sending
a representative.

As of Jan. 1, 1983, a toll-free 800 telephone number was
installed to further assist members and employer represent-
atives in communicating with the Worker Benefit Plans office.
It has been used extensively, and reactions to it have been
positive.

Concordia Health Plan

The Concordia Health Plan is a comprehensive major
medical plan. After satisfaction of a calendar-year deductible,
the plan pays a major portion of the medical and dental costs
incurred by members and their enrolled dependents. Protection
for each covered person ranges up to a lifetime maximum of
$500,000.

—Currently coverage is provided for almost 55,000 indivi-
duals—20,000 members and their dependents. The 20,000
members include 3,000 retirees as well as 17,000 members
enrolled through more than 5,800 congregations, schools,
and agencies in the United States.

—Health care benefits during 1981 totaled $23,533,374, and
for 1982 $25,579,064. The number of claims paid in 1982
was 112,775. A “claim” is all of the bills received on any
date for a claimant (patient).

—The yearly income of a health plan should cover the
benefits as well as expenses paid that year, and maintain
a small fund balance. To assure this, an actuarial review
of the Concordia Health Plan is conducted each year.
Data provided by the plans actuary, based on the actual
plan experience and the economic trends applicable to
medical costs, indicated the need to increase the contribu-
tion rates on Jan. 1, 1982, by 15% to assure that income
would cover the anticipated benefits and administrative
expenses. After increasing rates for several years without
changing the benefits, the Board felt it was necessary to
not only increase the rates, but to also increase the

-deductible amount required to be satisfied by the member.

The individual deductible changed to $200, from $100,
and the maximum family deductibe became $400, rather
than $200. In addition to increasing the deductibles, the
contribution rates were increased approximately 10%
effective Jan. 1, 1983. In this manner, both the member
and the employer shared in the ever-increasing costs of
medical care.

Feeling that continuing to increase rates year after”
year for the health coverage is not possible forever
(although this trend has been established for the past
years and seems applicable for the near future for all
health programs), the Board of Managers has directed the
staff to study what cost containment measures or strate-
gies might be instituted. It is felt that this is needed to help
alleviate the ongoing impact on the Health Plan of the
skyrocketing costs of medical care. These studies are
currently in progress.

—For the past 17 years, medical expense claims were
processed manually. However, on April 19, 1982, the
process of converting the handling to a computer began.
A period of 18 months of analysis of Concordia Health
Plan provisions preceded this date, and the process of
analysis and review continues. ‘In the beginning” there

Se eee en eee