What churches need to know about the Affordable Care Act
Beginning today, churches have new options for purchasing health insurance for their ministers and staff.
By Gary Skeen
With the Health Insurance Marketplace now open, what do church leaders, pastors and administrators need to do to comply with the Affordable Care Act?
In planning and evaluating health insurance coverage for the 2014 calendar year, there are three options:
-- Continue to purchase coverage in the open market just like in the past, be it an individual or group plan, based upon number of employees participating.
-- Go to the new Exchange Marketplace as a small group (SHOP.)
-- Go to the individual market place for individual or family coverage.
Like any benefits decision, we recommend that you explore all of the options available to your staff. Review your current insurance plan(s). Explore the SHOP as a way to create a new group plan or just to compare rates with what you are currently offering.
As you evaluate the SHOP you will need to select a preferred plan and indicate what the church would like to contribute but withhold confirming a decision until your staff finalizes their search on the individual marketplace. Let your employees go to the exchange and review the plans available to them.
Using this process, your church and staff are in a position to consider the best way to move forward for the majority of your staff. We have provided a chart to help compare the advantages and disadvantages of each option.
Most anticipate some increase in premium for the new minimum coverage requirements, wellness coverage and the removal of lifetime and annual limits. However, overall healthcare spending has decreased in the last few years and many insurers have already adjusted for these changes.
The exchanges hopefully will bring more participants and competition to the market and lower costs for everyone. Recent projections indicate lower rates and should be an encouragement to your staff to start the conversation. Projected rates by state are available on the HHS website.
For most churches this is both a financial decision that includes budget limitations and an attempt to take care of valued church employees. Can your church explain its benefit strategy? My experience is that most churches have taken the most expedient and lowest-cost solution because there were so many barriers to a group solution.
The question for the church is: What role does the church want to play in caring for staff and their healthcare, this year and into the future? The answer raises more questions: What is best for your entire staff? As the SHOP exchange improves in the next few years, will you be able to maintain an influence for all the staff, not just ministerial staff, but clerical and custodial? What is the appropriate level of funding or participation?
Medical coverage protects both the church and the employee and their family from a medical crisis within the faith community. How we prepare for serious medical conditions demonstrates how we care for those in our faith family.
The SHOP exchange may prove to be a valuable tool in not only allowing the employer to select and provide healthcare coverage at reasonable rates. It may also allow the church to assume a more active role in selecting and providing healthcare coverage for their staff.
The individual exchange assumes the employer is not providing a solution for medical coverage and that the individual is looking to the exchange to find coverage and make it affordable. Many ministers will be eligible for tax credits and possible subsidies for out-of-pocket cost because of low salaries. Premium costs are based on the household adjusted gross income, and housing allowance is excluded from those calculations.
This is a year of huge change for the way everyone does benefits. As a small church or employer, you may be able to shed the burden of providing medical insurance coverage. Or you may determine that just as the church cares for its members, so shall we care for our staff, and decide to actually play a larger role in providing for everyone. It’s a choice every church should educate itself about, talk about extensively and pray about.
If we can be of service in this process, we at the Church Benefits Board stand ready to help every step of the way.
OPINION: Views expressed in ABPnews/Herald columns and commentaries are solely those of the authors.