At the 2006 General Convention, Resolution A147, titled, “Study the Costs and Issues of Healthcare Benefits for All Clergy,” was passed in both Houses:
Resolved, That the 75th General Convention endorse the Church Pension Group’s proposal to conduct a church-wide study of the costs and issues surrounding the provision of healthcare benefits to all clergy and lay employees serving churches, dioceses and other church institutions and to report their findings to the 76th General Convention; and be it further
Resolved, That all dioceses, parishes and other church institutions are urged to cooperate with the conduct of this study by responding to requests for data regarding employee census and healthcare costs; and be it further
Resolved, That this study will include an analysis of the potential for a mandated denominational healthcare benefits program and other viable alternatives, culminating in a recommended solution and an actionable implementation plan.
The potential benefits of a mandated denominational health plan are potentially quite considerable. The first is simply making the actuarial risk pool much wider, and so spreading the risk. Since insurance rates are based on the average risk for any member measured against the total risks of all member, the more members in a group the better the average risk, and so the lower the cost of insurance. Historically, while the Church Medical Trust was willing to handle the negotiations, the costs were based on each diocese alone. That has made for some significant differences between dioceses with many clergy and those with few.
Mandating participation in the plan, and including lay employees, would also increase the pool. Historically, a diocese, or even an individual congregation could opt out of the plan, if Council or Vestry thought they could get a more economical deal. And since the plan to date has only included clergy, adding lay employees would certainly add members.
Let’s look at what the Church Pension Fund has proposed. The specifics are proposed in Resolution A177. The resolution, along with background and supporting information, is found in the Report to General Convention of the Church Pension Fund (it’s a long report, with a lot of valuable information; but keep scrolling down until you get to the discussion of the health plan).
The resolution is in three sections. The second section is a canonical change to implement the plan, while the third has to do with funding. The details of the proposed plan itself are in the first section:
Resolved, the House of _______ concurring, That this church establish The Denominational Health Plan of this church for all domestic dioceses, parishes, missions, and other ecclesiastical organizations or bodies subject to the authority of this church, for clergy and lay employees who are scheduled to work a minimum of 1,500 hours annually, in accordance with the following principles:
1. The Denominational Health Plan shall be designed and administered by the Trustees and officers of The Church Pension Fund, following best industry practices for comparable plans;
2. The Denominational Health Plan shall provide that, subject to the rules of the plan administrator, each diocese has the right to make decisions as to plan design options offered by the plan administrator, minimum cost-sharing guidelines for parity between clergy and lay employees, domestic partner benefits in accordance with General Convention Resolution 1997-C024 and the participation of schools, day care facilities and other diocesan institutions (that is, other than the diocese itself and its parishes and missions) in The Denominational Health Plan;
3. The Denominational Health Plan shall provide benefits that are comparable in coverage to those benefits currently provided by the domestic dioceses and parishes of this church;
4. The Denominational Health Plan shall provide equal access to health care benefits for eligible clergy and eligible lay employees;
5. The Denominational Health Plan shall provide benefits through The Episcopal Church Medical Trust, which shall be the sole plan sponsor for such benefits and continue to be operated on a financially sound basis;
6. The Denominational Health Plan shall have a church-wide advisory committee that is representative of the broader church and appointed by The Church Pension Fund, and such church-wide advisory committee shall receive an annual report about the status of The Denominational Health Plan;
7. For purposes of this Resolution, the term "domestic" shall mean ecclesiastical organizations and bodies located in the United States, including the Dioceses of Puerto Rico and Virgin Islands;
8. The Church Pension Fund shall continue to work with the Dioceses of Colombia, Convocation of American Churches in Europe, Dominican Republic, Ecuador Central, Ecuador Litoral, Haiti, Honduras, Micronesia, Taiwan and Venezuela to make recommendations with respect to the provision and funding of healthcare benefits of such dioceses under The Denominational Health Plan; and
9. The implementation of The Denominational Health Plan shall be completed as soon as practicable, but in no event later than by the end of 2012;…
Let me point out what I consider the most significant paragraph of this section, and, indeed, the most significant phrase in that paragraph:
2. The Denominational Health Plan shall provide that, subject to the rules of the plan administrator, each diocese has the right to make decisions as to plan design options offered by the plan administrator, minimum cost-sharing guidelines for parity between clergy and lay employees, domestic partner benefits in accordance with General Convention Resolution 1997-C024 and the participation of schools, day care facilities and other diocesan institutions (that is, other than the diocese itself and its parishes and missions) in The Denominational Health Plan; (emphasis mine)
So, there won’t be a single denominational health plan, in the sense that every eligible person in every diocese will be participating in the identical plan and paying the identical rate. There will be a single plan in the sense of being a single plan administrator and plan sponsor – the Church Medical Trust of the Church Pension Fund - but that’s not really a “single plan.” Moreover, look at all the things that an individual diocese can make choices about: “plan design options; cost-sharing guidelines; domestic partner benefits; and the participation of schools, day care facilities and other diocesan institutions.” That begins to look like there could be an awful lot of variation from diocese to diocese.
That doesn’t mean there aren’t simplifications and cost savings to be had. These are addressed in the Report itself, but some stand out. First, it would still bring all eligible clergy and lay employees into one large pool, or at least a small number of pools larger than we use now (according to the report at least one as small as 15 households!). It would further balance the risks in the pool by keeping younger, healthier participants in the pool with us graying members, instead of allowing individual congregations with younger folks to simply opt out, and skew the average age.
It will also reduce the number of plans, In conversation with an employee of the Church Medical Trust, our diocesan deputation was told that when first looked at there appeared to be more than 200 separate plans purchased in the Church. However, when characteristics were compared it turned out there were more like seven plans – but purchased from many different companies at many different prices. By focusing on the characteristics of the plans, the Church Medical Trust can negotiate with national companies and get national, or at least regional prices – and so better than an individual diocese might get.
Still, this will indeed be controversial. First, in the current optional plan there are certainly some dioceses doing quite well. They may find it hard to sacrifice for the benefit of dioceses doing more struggling. Small congregations will want to know as much as possible about how this will affect costs. Paying for heath insurance for clergy has become one of the most difficult costs for some congregations, and for dioceses that have a high percentage of such congregations. And of course there will be those who simply dislike the thought that the Church would mandate the plan (or anything else, for that matter).
And it probably won’t reduce what we’re paying now. The opportunity for savings – and it’s a big opportunity – is in reducing how fast our costs grow. That’s hardly insignificant. The Report estimates a savings over the first six years of the plan of $134 million. Still, that’s not immediate relief, but future savings.
This is an important plan for the Episcopal Church, and for the health of clergy and lay employees and their families. It is likely to be the most ambitious plan undertaken in this Convention, regarding health or anything else. I would encourage all Episcopalians to attend to this. Read the Report and the Resolution. Talk to your parish treasurer, and make sure he or she is also involved. Then, make sure to let your bishop and deputies know about questions and concerns. This will affect our life together in ways we will be much more aware of than most of us are of the Anglican Communion. It may not have the theological import or panache that other issues and resolutions have; but this Report and this Resolution will shape how the Church does business for a long time to come. We need to give it the attention that it deserves.