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What The Church Health Plan bill would fix in the PPACA

What The Church Health Plan bill would fix in the PPACA

An employee’s loss of incentive to stay in a plan designed with the employee’s profession in mind is an effect that reasonable people might agree is undesirable. The question is, couldn’t employers of other kinds of workers make equally compelling arguments for health plans tailored for their employees’ needs? If so, shouldn’t the church as servant to the community be pursuing a comprehensive fix? Or, if none exists, no fix at all?


There is broad ecumenical support for a bill, The Church Plan Act of 2013, that would amend how the Patient Protection and Affordable Care Act applies to church health benefits plans. That support for amending the PPACA includes The Episcopal Church, as Mary Frances Schjonberg of ENS reports:

Jayce Hafner, domestic policy analyst for the church’s Office of Government Relations, told Episcopal News Service that “it seems unfortunate that the Episcopal Church, an organization that worked so hard for the passage of the ACA, should be excluded from [all the] benefits of this law.”

“Should the Church Health Plan Act of 2013 not pass, some employees of The Episcopal Church will lose some financial incentive to enroll in health plans that are tailored specifically for their profession,” she added, such as a special Medical Trust benefit to cover participation in “colleague groups” facilitated by clergy and licensed church counselors who work with church employees to address vocational and professional pressures.

And,

The Church Pension Group estimates that about 6% of clergy and 16% of lay employees currently enrolled in The Episcopal Church Medical Trust’s plans would qualify for a “meaningful premium tax credit if the Act were passed,” Frank Armstrong, senior vice president and chief actuary for the Church Pension Group, told ENS in a written response to e-mailed questions.

The aim of the PPACA is to have every American covered by good affordable health insurance either through an employer plan, a qualified health planoffered by an insurance company on the health exchanges or through government-provided health insurance. Proponents of the PPACA have been clear from the start, however, that it would create both winners and losers.

Under the PPACA, if your employer provides a health plan you cannot opt out of the plan if you are full time. Also, individuals covered by an employer plan are not eligible for the low income tax credits that effectively reduce premiums for insurance purchased on the health exchange.

The PPACA was not intended to benefit employers. The Episcopal Church as an organization is in the same position as any other employer. The Episcopal Church’s support for the PPACA was based on the promise that it would extend affordable insurance to many Americans not covered under an employer-based health plan.

The summary of the bill states:

Amends the Patient Protection and Affordable Care Act (PPACA) to include qualified church plans, established and maintained for employees or their beneficiaries, by a church or by a convention or association of churches, as qualified health plans that provide essential health benefits packages.

Excludes such plans from participation in American Health Benefits Exchanges established by states.

Allows such plans to: (1) differentiate premiums using methods and criteria consistent with those used to assess charges and payments to other qualified health plans based on PPACA risk adjustment requirements and regulations concerning rates and payments, and (2) develop additional methods and criteria to define and account for the actuarial risk associated with the prohibition against qualified church plans enrolling a larger number and more diverse pool of enrollees as long as such additional methods and criteria are consistent with the risk adjustment methods.

Provides standards for deeming an employer participating in such a plan as an eligible small employer for purposes of the income tax credit for employee health insurance expenses.

Deems an individual receiving minimum essential coverage under such a plan to: (1) satisfy the individual responsibility requirements of the Internal Revenue Code, and (2) qualify for premium tax credits and reductions in cost-sharing if the household income requirements are met.

In short, a church health plan would be subject to the regulations and benefits of health exchange plans except they would not be offered to the public on the exchanges. The tax credit incentives for low income part time employees of the Episcopal Church to opt of the denomination wide health plan would be removed by allowing them to take the credits without opting out.

The employees to which the choice to opt out of the church plan applies will “qualify for premium tax credits and reductions in cost-sharing if the household income requirements are met” either way under the bill. However, there may be other employees of the church who under the PPACA would not be eligible to opt out. This bill would make them eligible for the premium tax credits and reductions in cost-sharing (co-pays). That is a benefit someone not employed by a church would not receive. ENS did not report how many of the “6% of clergy and 16% of lay employees currently enrolled in The Episcopal Church Medical Trust’s plans [who] would qualify for a ‘meaningful premium tax credit if the Act were passed'” would lose some financial incentive to enroll in the Medical Trust plans as compared to how many would simply gain a tax credit.

In addition, the bill would relieve any weakening of support for the Denominational Health Plan mandated by General Convention that might occur if employees who could not opt out perceived they would be better off if they were allowed to go onto the exchange. Most, after all, are in fact employed at parishes which would not be obligated under the PPACA to provide health insurance.

The church’s view is that it is undesirable for an employee to not enroll in “health plans that are tailored specifically for their profession, [with benefits] such as a special Medical Trust benefit to cover participation in ‘colleague groups’ facilitated by clergy and licensed church counselors who work with church employees to address vocational and professional pressures.” A loss of incentive to enroll in these plans is a consequence of the PPACA. The Church Health Plan bill would remove that loss of incentive. And it would benefit employees of the church who become eligible for tax credits that presently are only available if you purchase insurance on the exchange. It is not at all clear that it is the second effect that is most significant to advocates of the Church Health Plan bill. And that is a benefit the creates government discrimination in favor of church plans.

An employee’s loss of incentive to stay in a plan designed with the employee’s profession in mind is an effect that reasonable people might agree is undesirable. The question is, couldn’t employers of other kinds of workers make equally compelling arguments for health plans tailored for their employees’ needs? If so, shouldn’t the church as servant to the community be pursuing a comprehensive fix? Or, if none exists, no fix at all?

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Chris H.

I am sorry for your situation, Kevin. We knew in this area that was what was going to happen to some of our churches before the GC vote, but the vote went through, so we also knew the church as a whole didn’t care, or believed those people/positions were expendable. I know it hurts you and others, but in both the ACA and Church Plan TEC accepted that some were going to be hurt and accepted that outcome, so I really don’t think it fair for the church to be looking for exemptions for what it promoted.

One of the church secretaries who knew she’d be cut just got a better job with another charity. Hopefully if the worst comes you too will get something even better out of this. Prayers for all those falling through the cracks.

Chris Harwood

Kevin Montgomery

Based on the information we got, employees working 30 hours or more cannot opt out of the DHP unless they are covered by a spouse’s plan or can certify that they would be able to receive the premium tax credit (PTC). However, one cannot get the PTC unless the plan offered by the employer would make the employee pay more than 9.5% of income. Even at the highest premium plan in the DHP with a maximum 25% employee contribution, it would still be less than 9.5%. Currently, the parish is reimbursing 100%. Unfortunately, the premiums for the DHP are extremely expensive (over $800 for the highest premium plan, $539 for the lowest but with the parish providing over $2000 for an HSA), particularly compared to what I as a fairly young, healthy person can get on my own. So it’s not a question of the plan not being good; it’s a matter of a parish not being able to afford an exorbitant premium and thus not being able to keep an employee full-time (or at all).

Chris H.

The problem of workers paying more for church coverage or parishes not able to afford it was brought up before GC voted to require the Church plan and the church decided it wasn’t enough to stop it. If it really is only 6% and 16%, I’d say these were just the unfortunate ones caught in that decision. Also, whenever other companies or groups tried to get exemptions from ACA TEC has never been sympathetic. How many here have considered all those companies or those trying to stop enactment evil? ‘Fraid TEC should just buck up and pay it, because it IS giving the church advantages that others don’t get. Otherwise the church looks just like those other groups. The alternative is to get GC to reverse the mandate on church insurance and make sure the church plan is so good that members don’t want to opt out.

Chris Harwood

John B. Chilton

Kevin,

Thank you for reporting your experience.

It would be quite interesting if the ACA requires what General Convention expected: that full time clergy and lay employees be covered under the Denominational Health Plan.

That seems to be true, however. Under the ACA all of the individual health plan market is handled through the health exchanges. In order to buy on the exchanges you have to say you cannot obtain health insurance through your employer.

The next layer is that your employer has to make insurance affordable to the employee (no more than a defined percentage of income). The employer must either reduce the premium or raise pay. Or terminate the employee.

I’m no expert, so if I’ve got that wrong someone please set me straight.

Kevin Montgomery

First, let me preface this by saying that I do support the ACA overall. However, I have to admit that it actually isn’t going to benefit me. I currently work as a full-time parish administrator at a small church. Luckily, they’ve been able to afford to keep me full time and to reimburse me for my insurance premiums. Under the ACA (at least as I understand it so far), I can no longer opt out of the DHP; but the church can’t afford the premium, which is actually at least 3 times what I’d pay getting it on the exchange. (I’m still fairly young and healthy.) Unfortunately, it doesn’t look like I’m going to have the option of staying full-time and getting health coverage since we might not even be able to keep the current reimbursement plan. (That’s still an open question right now that we’re trying to work out with the diocese.) Again, while I do support the law overall, some people (and parishes) are indeed losing out under it in its current arrangement.

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