ATTN: Health Insurance Increases!

 

Related: OKUMC announces emergency health insurance contribution increase for local churches

Q&A on Health Insurance Increases

1. What does it mean to say that our health-insurance plan is self-funded?

In 1999, our Conference voted to pay our own health costs. This means that any time one of our participants incurs a cost for health care or prescription drugs, our Conference pays that as a claim. We rent the Blue Cross Blue Shield network in Oklahoma so we receive the same discount BCBS receives in claims cost. We pay an administrative fee to BCBS for this privilege. The premiums paid by our participants and the contributions made by the local church must cover the cost of all claims and the administrative costs for running the program.
 

2. What do clergy pay toward the cost of their health care?

Clergy pay a monthly premium from their pre-tax income. They elect their premium cost based on their enrollment in the health plan. In 2019, there are three plans clergy can choose, all utilizing the BCBS networks. One plan is designed to operate as a PPO, one operates as HDHP, and one really only provides coverage in case of a catastrophic health event. This last option is available so we can comply with the ACA and is only recommended if participants have another primary coverage. As an example, clergy enrolled in the PPO plan as a single participant pay $282/month. In that same plan, clergy + family pays $902/month.
 

3. What part of the cost is covered by clergy contributions and what part is covered by church contributions?

In looking at the overall cost of the plan, the Board of Pension and Health Benefits has tried to set premiums and church contributions so that it is split evenly. We’ve tried to have clergy bear 50% of the cost and churches bear 50% of the cost. In 2018, those percentages are: 53% clergy premiums, 22% local church contributions, 25% uncovered costs (losses).
 

4. Why did our church see an increase on our bill from the Annual Conference from 2014-2017 if the church contributions were not increasing?

In 2013, our Annual Conference approved a shift from apportionments to direct billing of local churches in order to receive the church contributions. This began in 2014, when 25% of the church contribution was received through direct billing and 75% was received through apportionments. In 2017, this rollout was complete and all the church contributions were received through direct bill. So, the amount your local church saw on your monthly bill from the Annual Conference did increase, but the income from the apportionment line item decreased. In effect, the local church contributions have been revenue neutral for our plan over the last five years.
 

5. Who is on the Board of Pensions and Health Benefits?

Brenda Reed	Charles Bauman
Robert Duran
David Battles	Kyle Kiner
Shawn Rutledge	Charla Gwartney
John Alberts	JD Ward
Randy Compton	Mark Jardine
Jill Hudson	Sarah Thornhill
Darwina Marshall	Chris Tiger
Todd Huckabay
Bob Long Representative of GBOPHB
Bill Junk Representative of GBOPHB

 
 

6. What happens if my church can’t pay the additional amount?

The Board and the Cabinet recognize that this increase for appointed full time clergy will be difficult for many of our local churches. If these changes have a significant impact upon the church’s ability to pay the full compensation and benefits for the current pastor or in future appointments beginning July 1, 2019, please contact your District Superintendent to discuss the impact and options.
 

7. We can’t keep paying higher costs for health insurance. What is being done to lower costs?

The Board of Pension and Health Benefits is considering moving back into a fully insured plan to reduce the uncertainty in claims cost. This proposal will likely come to Annual Conference in 2019, but wouldn’t take effect until Jan. 1, 2020. Through wellness incentives, we’ve tried to address the chronic health situations clergy face due to the unique stressors and realities of our profession. So far, we’ve not been able to see a 1-to-1 correlation between wellness incentives and reduced claims cost, but it has significantly reduced our revenue for the plan. Through making Kempton Preferred Providers available to participants in our PPO plan, we were hopeful that procedures normally accessed through BCBS providers would cost our plan less. So far, our claims costs indicate that Kempton has provided another alternative for our participants to elect for medical procedures. We’ve not seen any reduction in claims cost from BCBS, but the high utilization of Kempton has cost our plan a lot more. At the end of the day, there is only one way to lower costs for self-insured plans and that is to lower use of benefits.
 

8. Why don’t we quit providing health insurance for our full time clergy?

The ACA requires us to provide health benefits. If we choose not to provide health insurance, we will have to provide a cash stipend for the purchase of health insurance on the open market. This stipend is considered taxable income which would negatively impact the participants. In addition, the stipend would need to be at least $12,000/year which wouldn’t save the local church any money. Unfortunately, health care and prescription drugs are extremely expensive and the costs continue to rise. We recognize the importance of our clergy’s physical health as they seek to serve God’s kingdom and the United Methodist Church. We want to provide the best benefit for the lowest cost, but even the lowest cost is a lot of money.