UMC Clergy, Conferences and Health Reform

Report
UMC Clergy, Conferences,
and Health Reform
General Board of Church and Society Health Organizers Call
May 10, 2013
Jackson H. Day, D. Min, MPH, Chair
Board of Pensions and Health Benefits
Baltimore-Washington Conference
Status Quo
(Baltimore-Washington Conf.)
• Group Health Plan – Healthflex – is
mandatory for appointed clergy plus
conference staff and elective for others (i.e.
congregational lay employees).
• Sponsored by Conferences and paid for by
Congregations and Active Clergy or
Conference and Retired Clergy.
2
Affordable Care Act Overview
(From 40,000 Feet)
Effective January 1, 2014
• For the poor: Expanded Medicaid up to 135% of Federal
Poverty Level
• For the employed: Health Insurance Marketplaces with tax
subsidy up to 400% of Federal Poverty Level
(In 2104 = $97,815 for family of four, $47,401 for individual)
• For employers providing insurance currently: penalty for
stopping insurance if 50 or more employees
• For employees currently insured by employer: must
continue with employer plan if cost for individual plan is
less than 9.5% of household income.
Immediate Impact to HealthFlex
• BWC Healthflex meets all ACA tests – Does your
Conference Plan?
- Affordability Test – the single participant rate is less
than 9.5% of household income. (current rate is
$76/month or $912/year)
- Minimum Value Test – BW Conference current plan is
considered a “Cadillac Plan” and far exceeds the
minimum value required
- Since HealthFlex is mandatory for our ¾ and Full-time
churches, our clergy will NOT be eligible for going to
the Marketplace for health insurance in 2014
4
2014: The Road Not Taken
• Our Board had to ask: Would it make sense
starting Jan 1, 2014 to introduce the Health
Insurance Marketplaces into our healthcare
coverage for some or all of our active clergy?
• The General Board and Annual Conference Boards
around US asked the same question.
• To my knowledge, all have chosen the status quo
for 2014
• The reason: There are still too many unknowns to
make a decision.
5
Marketplace Notices
• HHS wants there to be maximum exposure to
knowledge of the Health Insurance Marketplaces.
• Each local church will need to provide notice to their
pastor and staff about the Marketplace/Exchanges
- Deadline has been slipping. Latest is October 1, 2013
- HHS will provide guidance on how to format the notice
- BWC Board of Pensions will provide churches with a cover
letter whose purpose is to ensure that everyone knows that
the mandatory group policy will continue in 2014 and clergy
are not eligible for the health insurance marketplaces.
- All clergy will also receive a copy of this template to ensure
notice is given.
6
Issue: Who is the Employer?
• “God” may be theologically correct, but it doesn’t work for the
IRS.
• If Conference, current plan is large employer and cannot be
cancelled without penalty.
• If Local Congregation, some but not all pastors could be eligible
for health insurance marketplace at subsidized rate.
• Since congregation provides W2, consensus is moving toward
congregation as employer, but this is by no means settled since
UMC Conferences have hire and fire responsibility.
Issue: Many Conferences Have
Multiple Marketplaces
• Health Insurance Marketplaces are state-based.
- BW Conference clergy live in MD and DC (state-run),
WV (federal-run), and PA (blend).
- Some Insurance Marketplaces will have a rich choice of
plans, others will not.
- Differing Marketplace options must be reviewed when
considering abolishing a conference-wide plan in favor
of plans that are better for some than others, based on
state of residence.
Issue: Can We Preserve
Equity in Appointments?
• Currently BW Conference requires the same premium from
congregations regardless of clergy age, family size or state of
residence.
• This permits the appointment process to focus on
congregation’s needs and pastor’s skills, not health insurance.
• Leaving health insurance up to the pastor and congregation
could change this and create harmful disparities to both pastors
and congregations in the appointive process.
• If conference collects funds from congregations and dispenses
to pastors for their own health insurance, there are unresolved
tax implications.
9
2015 Issue: HealthFlex Changes
Starting January 2015
 GBOPHB Will no longer offer B500 plan (BWC Status
Quo) administered by United Healthcare
 Options include:
2014
B500
2015
2016
B750
B1000
CDHP
B1000
CDHP
CDHP – Consumer Driven Healthcare Plan
 We will see more emphasis on consumer responsibility in
making health expenditure decisions, prompting
discussion on who actually makes these decisions.
 BW Conference Board of Pensioins and Health Benefits
has a taskforce that is studying all options for 2015
10
2015 Issue: Can Conferences
Retain a Group Plan Option?
• The more traditional group plans may be a better
option for highly paid clergy, clergy who cannot retain
their doctors in a new plan, and clergy who live in
states with a limited marketplace.
• But group plans have depended on mandatory
participation to keep their rates low by avoiding
“adverse selection.”
• Can a group plan be maintained on a voluntary basis
without costs becoming prohibitive?
Theoretical Options: 1
Continued Mandatory Group Plan
• Advantages
- continued control over health insurance program
- continued employer input over wellness programs
• Disadvantages
- may be more costly to some or all congregations and
clergy
- may incur tax penalty if deemed a “cadillac plan”
- congregations and/or clergy may attempt to break out
and go to Marketplaces on own, prompting sanctions
from conference or abandonment of group plan.
Theoretical Option 2:
Conference abandons health coverage
• Permitted to some extent by 2012 Discipline, ¶639
- Must continue to provide administrative support
- Must recommend appropriate and adequate level of Church
financial support
- Must continue to provide health and wellness programs to
fulltime clergy and lay employees
• Clergy then seek individual health insurance plans
through Health Insurance Marketplaces and receive
some level of congregational reimbursement as
arranged with congregation at compensation-fixing
time.
Theoretical Option 3:
Conference mandates Individual Plans
• Conference exercises Disciplinary responsibilities as
identified in Option 2.
• Conference mandates that clergy will obtain
individual health policies at a certain level and
congregations will reimburse at a certain level
• Conference standardizes congregational
reimbursement level so as to facilitate ease of
appointment transfers.
• Conference does not handle health insurance funds
Theoretical Option 4:
Conference Collects and Funds Plans
• Standardized Congregational Contribution identified
in Option 3 is collected into a Conference-wide
funding pool from which reimbursements are made to
individual clergy for their payments for health
insurance premiums.
• This funding arrangement may or may not be a taxfree Health Reimbursement Account or Health
Savings Account.
Theoretical Option 5: Hybrid -Continued Group Plan with Higher Rates
• Continue to offer a Group Plan, but make it optional.
• Raise the participant rates to enable clergy under 400%
FPL household income to qualify for insurance in the
Marketplace and take advantage of the subsidies
• Provide all clergy with a standard reimbursement paid by
the church to cover the increased participant rates and any
tax implications
• Best guess is that “half” of clergy will opt into the
Marketplace to take advantage of the subsidies which will
result in a personal savings with “similar” coverage
• Conference would pay a 10-15% higher Group Plan rate
since the plan is not mandatory, but there are “half” the
participants to cover. The standardized cost per church
direct billing is reduced.
Navigators
• The Health Insurance Marketplaces will offer a large variety of
choices of health insurance plan.
• Many will find this confusing and overwhelming. Health Reform
provides for “navigators” to help guide consumers through the
process.
• Some states have already confirmed grants to agencies to
provide Navigators throughout the State. Maryland has
awarded 6 grants, and each grantee has several subgrants.
• Navigators will be provided through federal grants in States with
federal or partnership Health Insurance Marketplaces. HHS
issued a Request for Proposals on April 9 for these grants, and
interested groups have a deadline of June 7 for response.
• .
Information Currently Pending
Which Will Impact Decisions
• Projected rates for continuing mandatory or voluntary
group plans in 2015 and beyond
• Rates for Individual Plans under Health Marketplaces
• Impact of subsidies on total costs
• Tax status of Conference-sponsored HRA, HAS, or similar
arrangements.
• Employment and source of compensation of Conference
Staff as “Navigators” to assist clergy in making individual
decisions in health insurance marketplace.
Priorities for Clergy
Health Insurance
• BW Conference recognizes some change
must be approved for calendar year 2015,
and that there may be more than one option
to consider.
• What should the criteria be for selecting one
option over another?
• We are currently gathering inputs and invite
interested persons anywhere to make
suggestions!

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