CHICAGO, IL (September 27, 2006) – Bethany Benefit Services medical insurance rates this coming year will increase five percent, defying predictions by some analysts calling for national group medical insurance rates to increase on average by 12 percent in 2007.

The Covenant program provides coverage for pastors, employees of local Covenant churches and regional conferences, conference centers and camps, Covenant pastors who work for voluntary employers of the Covenant Pension Plan, and denominational offices. Medical coverage is available for employees who work at least 20 hours a week.

The program is administered by Bethany Benefit Services on behalf of the Evangelical Covenant Church.

“We were delighted that we were able to hold the line and have no increase in the rates during 2006,” said Dean Lundgren, vice president of finance. “However, we knew it would not be realistic to expect rates to remain unchanged for an additional year, given the increasing costs of medical care.

“Given the predictions for rate increases for other plans – expected to average 12 percent – we believe the five per cent increase in the Bethany Services plan is reasonable and will reduce the potential expense to local churches in 2007,” Lundgren added.

Put in dollar terms, the lower rate is projected to collectively save local Covenant churches $700,000 in premiums the churches otherwise would have had to pay, had the 2007 Bethany rate matched the projected 12 percent national average increase.

Among the reasons for the more attractive rate are a better-than-anticipated claims experience rating and cost-savings initiatives resulting from the recent change to Blue Cross/Blue Shield and Delta Dental plans.

“We recognize that any increase puts a burden on individuals and local Covenant churches, as well as regional conference and denominational budgets,” Lundgren explained. “However, the increase could have been much higher without the diligent efforts of the Board of Pensions and Benefits, our benefits staff, and especially the work of Elliott Johnson (director of finance) in negotiating changes that constrained cost increases.”

Johnson notes that rate increases from group insurance plans nationwide, tracked over the past five-year period, have increased at a pace four times that of the Bethany Benefit Services program. The top line in the accompanying chart shows the national trend - the lower line reflects Bethany increases during the same period. As the chart indicates, Bethany’s rates during this period increased 8 percent in 2003, 5 percent in 2004, 5 percent in 2005, 0 percent in 2006, and 5 percent in 2007 – a total of 25 percent. National group plans on average increased rates 98 percent during the same five-year period.

A recent article in the Boston Globe newspaper put the issue into clear perspective for Massachusetts residents: “The state’s four major health insurers plan premium increases of more than 10 percent for most of their insurance products in 2007, the seventh consecutive year of double-digit hikes,” the article reports. “It’s becoming increasingly difficult for employers to offer health insurance for employees when the rates have essentially doubled in the last seven years.”

The Bethany Benefit Services rate-setting process involves a detailed review of claims and premiums data, independent rate calculations by a health actuary and an outside consultant, a review by Covenant financial leaders, and respective approvals by the Health Insurance Committee and the full Covenant Board of Pensions and Benefits.

The new rates become effective January 1, 2007. A letter explaining the changes is scheduled to be mailed to those covered by the program.