AC OKs new ‘blended premium’ insurance

By Jessica Connor

FLORENCE—Next year, churches will pay what the conference is calling a “blended premium” for pastors—one flat rate regardless of the pastor’s insurance tier.

Instead of paying for the pastor’s exact tier amount—individual, plus-one or family coverage—the church will pay a flat $823/month cost. The Conference Board of Pensions and Health Benefits believes this will be a fairer, smoother way not only for churches to budget but for the Cabinet to appoint clergy, as well.

“We recognized from our office when a clergy has a qualifying event, like where they move from participant-only to family, that creates a budgetary difficulty, and also we were charged by the Cabinet to look for a way to equalize direct billing across churches, and this is one of the ways we recommend doing it,” said the Rev. David Anderson, conference pensions and health benefits officer.

Anderson said the conference has approximately the same number of clergy who are on participant-only coverage as on higher coverage, and the Cabinet had asked the BPHB to explore a way to remove the insurance cost out of the equation of making appointments, where they can solely look at the gifts and graces of the clergyperson going to the church and not have to factor in their insurance coverage.

“We’ve looked at every way to split this pie,” Anderson said. “We can leave it as-is…, we can equalize it across so there is not a disparity…or we can charge one fee to the church, like a participant-only fee, and bill the rest to the clergy, which would be an extraordinary cost. Those are our options. Or we go to an apportionment system. But we still think this is the most equitable way, where it's the same for everyone.”

Some in the conference opposed the change. The Rev. Steve King, pastor of St. John’s UMC, Batesburg-Leesville, proposed an amendment to the report that, as he noted on the floor, “amounts to returning to our current program.”

“We talked about a blended billing, but from my perspective it’s not an equitable way of handling these charges,” King said.

The amendment was called for a vote but did not pass. After several clarification questions from the floor, the body passed the blended premium.

Also approved were other significant changes to conference health and pensions coverage. Regarding health benefit premiums, the conference will see an increase of 5.5 percent, plus a shift from a five-tier insurance premium to a three-tier one, covering Participant Only ($225/month cost), Participant Plus One ($470/month) and Participant Plus Family ($622/month).

Herman Lightsey, chair of the BPHB, said last year had a 120 percent loss ratio, with the difference because of pooling with other Annual Conferences. The 5.5 percent increase is “good news, because it could have been much larger than 5.5 percent.”

Finally, regarding pensions, the past service rate will increase 2 percent for clergy who retired with pre-1982 service; they will now get a $735/year pension payment instead of $720/year. And when it comes to pension costs, there will be no increase in percentage for full-time or part-time clergy.

“We are in a constant change with insurance and pensions, but I will tell you if you take your program and you bounce it against the average corporate structure or government, your program is in very good shape,” Lightsey said.

While the nation is still adjusting to the Affordable Care Act and what it means in practicality, “We do not have a lot of big ups and downs,” Lightsey said. “All I can assure you is we renew our promise every year that your board and your staff will go in and look at everything we can look at.”

Anderson added, “We are a ministry, and we are in the ministry of caring for those who serve. That's what we’re here for; that's what we take seriously.”