Boards and Agencies
Boards and Agencies
Benefits Corporation
New Dawn Christian Community Services
Evangelical Theological Seminary
Historical Society
Camp ECCO
Twin Pines
BENEFITS CORPORATION
During calendar year 2012 we switched from Capital Blue Cross to Highmark (“Highmark”) Blue Shield for the active pastors group health insurance. In doing so we were able to keep the 2012 rates the same as 2011. The Highmark plan has a $2,500/single and $5,000/family deductibles with out of pocket maximums of $4,000/single and $8,000/family. The HRA remained in place which is limiting the employees out of pocket for covered services to $500. We ended calendar year 2012 with a cushion in the HRA of approximately $190,000. While this may seem like a substantial sum, the premiums charged to the churches cover the premium payable to Highmark and only 55% of the potential maximum HRA funding. The 2012 remaining balance in the HRA was rolled into the 2013 HRA funding and combined with the 2013 payments we will have about 86% of the potential maximum HRA funded before 2013 claims expense. The potential maximum HRA funding based on the current plan from Highmark is about $605,000. In 2009, our worst year for health insurance, our insurer paid out over $1.2M in claims. So while these numbers appear large, healthcare is very expensive, as we all know, and the probability of us incurring $605,000 in claims is not unreasonable. The EC Benefits Trustees have expressed the desire to reduce the premiums to churches if we continue to have good health insurance claims experience by reducing the amount of cushion held in the HRA. There are many factors that may or may not allow that to happen but the EC Benefits Trustees understand the financial condition of the local church and will do our best to manage risk and premium cost. The health plan census (plan participants) decreased by 6 from 2011 to 88.
The major provisions of the Affordable Care Act (ACA) will be enacted beginning on January 1, 2014. Two of the most significant changes will be the health insurance exchanges and offering health insurance to full time employees defined under the ACA as averaging more than 30 hours a week or 130 hours a month. These changes will affect us with our health insurance plan renewal on October 1, 2014. The EC Benefits Board along with our health insurance broker, PowerKunkle, is working through the potential impact these changes will have to our denominational group health insurance plan. Unfortunately, guidance or the practical application of the new law is slowly being released by Washington, so many of our questions do not have answers. And most likely there will be additional legislative and legal challenges to the ACA as January 2014 approaches that may or may not change the law. What we do know is that changes are coming that will affect our group health insurance plan but how drastic those changes will be is unknown at this time.
The premium for the Highmark Medicare Advantage PPO increased about 1.8% with some small increases in co-pays. This plan provides additional coverage beyond the basic Medicare coverage for retired pastors, spouses and widows. The number of participants in the Medicare Advantage and Medicare Supplemental plans decreased from 2011 by 5 to 129.
The 403(b) Defined Contribution pension plan had a positive investment return in 2011 of about $1,224,000 or about 10.4%. Contributions remained consistent from previous years at $477,000. The total number of active participants in the plan decreased to 174. Of the total participants in the plan two are taking advantage of the Roth 403(b) option. I would like to thank Jennifer Buehler, Wells Fargo Wealth Management, for her commitment and time spent working with our active and retired pastors and she is a tremendous asset for the EC Benefits Board.
The Housing Equity Account also had a positive investment return of 28.3% in 2012 and with contributions the account balance increased to $45,000. The number of participants is lower than we would like it to be but we are glad that a few pastors are taking advantage of the program. And I encourage pastors living in parsonages to consider opening a housing equity account or, if you have an account, consider making consistent small contributions.
The Manna Fund balance is $12,000 as of December 31, 2012 and there were no distribution in 2012. The income limits to qualify for a Manna Fund were recently changed to 150% of the federal poverty level as defined by the US Department of Health and Human Services, the current limits are $16,650 for a single and $22,650 for a couple. The Manna Fund was established to assist our retired clergy and surviving spouses and we know that we have retired clergy and surviving spouses that do have a financial need but they will not complete a Manna Fund application. If you are aware of any of our retired clergy or surviving spouses that could benefit from a Manna Fund distribution please encourage them to complete an application for assistance. Manna Fund applications are mailed to retired clergy and surviving spouses in April and an application can also be received from the Benefits Administrator at the EC Church Center.
The Disability Fund had a balance of $347,000 at the end of the year up by about $2,000 from 2011. Three disability claims were paid in 2012 totaling $32,493 in paid benefits. The fund also distributed two death benefits of $5,000 each, one to the LeFever family and one to the Wilhelm family, per the disability fund policies.
The Benefits Corporation also administers the Defined Benefits Plan for the National Conference. This is an unfunded liability of National Conference. At the end of 2012 there were 40 pastors and surviving spouses receiving monthly pensions of approximately $7,200. We lost 3 members from the Defined Benefit Plan in 2012.
A financial audit was completed by Hamilton and Musser, PC on the records of the Benefits Corporation. There were no significant discrepancies noted by the audit. Our appreciation and thanks to the church treasurers that responded to the audit confirmation requests.
Trustees: We had one trustee resignation during the year and an election will be held at the Annual Corporation meeting to re-elect two incumbent trustees. The EC Benefits Board has two open lay trustee positions. If there is anyone interested in serving as a trustee please contact Frank Schock, President, EC Benefits Corporation. The EC Benefits Corporation trustees are dedicated, active and knowledgeable and vital to the operation of the EC Benefits Corporation. Their service is appreciated and they cannot be thanked enough.
Employee benefits are going to be a continual challenge. Circumstances in the marketplace and regulatory changes are going to adversely affect our group. Please be sensible with your health and saving for retirement. The accumulation of small purposeful positive and proactive steps will create large future gains. The current issues we are experiencing are not going to disappear nor become less important. By helping yourself, you are helping your denomination.
Frank Schock, President &
Kevin Henry, Controller
NEW DAWN CHRISTIAN COMMUNITY SERVICES
What a year! The Lord certainly blessed New Dawn this past year in many ways, some of which I am sure we have yet to realize. Since the acquisition of StoneRidge in 2000, there has not been a year marked with as much excitement and change until 2012. With our significant renovation at Poplar Run and our partnership in ministry with Church of God, we have enjoyed the Lord’s blessings as we seek to serve His kingdom through our service to seniors.
Perhaps the best place to start with some of the change that took place is at the top. Our Board of Trustees had allowed several Board appointed positions to remain open in preparation for the affiliation with Church of God Home. With the majority of all legal filings approved in late 2012, we received authorization from our legal counsel that we could fill those positions with several Church of God Board Members to our Board with no concern over a conflict of fiduciary responsibilities. At our November meeting, Frank Arva, Harry Boswell, Ron Kearns and Kevin Richardson were approved by the Board of Trustees. Frank, Harry and Ron each have 20 plus years of service as a Trustee with Church of God Home, each having served as President over their Board of Trustees. Kevin, who is Executive Director of the Eastern Regional Conference of the Churches of God, will serve with no term limit but by virtue of his position, similar to Bishop Hill. These four men participated in their first meeting in February 2013, and have already made an impact on our ministry.
Our Leadership Team has also transformed during 2012 and into 2013. With the ever-competitive market for Independent Living, Personal Care and Skilled Nursing Residents we determined our emphasis needed to change from branding our communities to a more focused sales effort at the individual level. This change of direction saw the departure of our VP of Sales & Marketing, as he desired to pursue a career in branding and marketing strategies as opposed to sales. That position will not be replaced on our New Dawn Senior Leadership, as sales will take place at the community level and not the senior management level. We did, however, add a VP of Operations and Chief Operating Officer to our team. Carson Ritchie, prior President and CEO of Church of God Home, assumed that role on January 1, 2013, and is currently transitioning his office and responsibilities.
We have also made some changes to the staffing inside New Dawn, as we added the management responsibility of Church of God Home into the mix. Sherry Heim will serve as our Director of Development and Public Relations, a position she held with Church of God Home. Three other Church of God Home business office staff will be joining New Dawn as we finalize our transition plan. Much of this was moved ahead of schedule when we signed a Support Services Agreement on January 1, 2013, to manage Church of God Home until the affiliation becomes legally final. We are still awaiting final regulatory approval for the official “legal” date of the affiliation to be effective.
CHURCH OF GOD HOME
The affiliation with Church of God Home was one of the two primary Strategic Plan goals in 2012. We worked diligently throughout the year to assure all filings were prepared and in place with the desire of completing all required work and assuming control by January 1, 2013. While not all legal approvals were completed by that date, integrating our IT structure, human resources and the business offices was a necessity. We were able to complete the transition of these three departments by January 1, which allowed us to execute the support services agreement mentioned previously. We are in essence functioning as one company at this time. Both locations, Myerstown and Carlisle, now have an Executive Director/Administrator to handle all campus concerns allowing strategy and mission to be handled by the New Dawn management team.
PHYSICAL PLANT
If you have had the opportunity to drive by or visit StoneRidge Poplar Run in the past few months you experienced the enormity of the Main Street Project. Phase I was finally turned over March 1, 2013, with a few odds and ends to complete. This has obviously been the other primary Strategic Plan Goal in 2012. With Phase II underway we will continue to focus on this project until completion, which is expected by the end of December 2013. We have made significant changes to our amenity space and totally changed our dining for Independent Living Residents. As I write this report it is fair to say our Residents are going through an adjustment period. We have assured them this will probably last for at least 60 days, a time that feels like forever to them. Fortunately, they are excited about the new offerings and the opportunities it provides for the community.
We also completed during 2012 our required upgrade to the sprinkler system at Towne Centre. We are still awaiting final approvals from the state as some minor changes are made to one or two areas. In addition to the sprinkler, we now are faced with some necessary upgrades to the elevator as the system no longer has available parts. It has served us well, but being 40 plus years of age does have its disadvantages when talking about mechanical equipment.
Poplar Run and Towne Centre’s personal care and skilled nursing facilities both need significant cosmetic makeovers. We are currently evaluating these cosmetic changes with other changes necessary in our delivery of care to ensure those changes do not conflict. We will be evaluating in earnest these areas during 2013 to outline our strategy moving forward.
SKILLED NURSING
Our skilled nursing facilities again achieved our desired ratings from the nursing home rating system. Poplar Run achieved a 5-star rating and was just recognized in a US News & World Report publication. Towne Centre achieved a 4-star rating, which is what we previously communicated as our goal. Both facilities received excellent scores on our quality indicators, which is where we measure the delivery of care to our Residents.