| Clergy asked to participate in cost of health insurance
 Active
clergy will bear part of the cost of dependent coverage, while retired
clergy participation will increase depending on retirement date.
By Michael Wacht
LAKELAND — Delegates to the 2002 Florida
Annual Conference Event May 28-31 here approved two changes to the
clergy health insurance program that will help the conference save
money in the short term and improve the viability of providing
long-term health insurance coverage for active and retired clergy.
According to the resolution approved by
delegates, all churches will be billed a composite rate for each
full-time appointed pastor. Coverage for the clergy person will still
be provided by her or his church, but clergy will now be responsible
for part of the cost of coverage for their dependents, with churches
paying the rest.
Dependent coverage is optional. Clergy who
choose dependent coverage will pay a portion of the total cost per
month—$100 for one dependent or $200 for a family. Clergy couples
will be treated as one unit of coverage, rather than each having to
carry a full policy.
Retired clergy will be asked to increase the
amount they pay toward the cost of their premiums beginning in 2003,
depending on when they retired.
The Rev. Rod McClarnon, chairman of the
Conference Board of Pension and Health Benefits, told delegates
medical costs continue to increase by about 20 percent each year. The
average age of pastors also continues to increase. He said the average
age of those ordained, licensed and commissioned at the conference
event was 43.
“The older you are, the more you need health
care,” McClarnon said. “The older you are when you start, the more
expensive coverage is. Younger people don’t need as much health
care, so the dollars they pay in as premiums accumulate.”
The Rev. David Dodge, executive director of the
Division of Ministry, told clergy that “things are tough all over”
and even group insurance programs with millions of members are facing
as much as a 40 percent increase in their insurance premiums.
“We exert very little control over these
issues,” Dodge said.
Dodge said the blended rate churches now pay for
clergy health insurance is expected to increase 30 percent next year,
from $745 to nearly $1,000 per month. The new plan will reduce the
projected rate to between $800 and $825 per month.
The Rev. Ron Thomas, pastor at Melbourne’s
Sebastian United Methodist Church, said the proposal would cause the
youngest and newest pastors to bear the heaviest burden. He said
younger pastors are more likely to need family coverage, while at the
same time making lower salaries.
“This will make families survive on 10
[percent] to 15 percent less income with no viable option to replace
it,” Thomas said. “We ask pastors to faithfully serve where we’re
sent. There is no overtime because we’re considered on-call 24 hours
a day. We’re barred from seeking secular work.”
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Photo by the Rev. David Adams |
| The Rev. Warren Langer, pastor of Orlando's Sanlando United
Methodist Church, asked delegates not to transfer the burden of paying for
dependent health insurance "to those [younger pastors] who can least afford
it." |
The Rev. Warren Langer, pastor of Orlando’s
Sanlando United Methodist Church, proposed an amendment that would
have removed the active clergy’s participation in the dependent
coverage premiums. He said clergy income could not be compared fairly
to that of secular workers who earn similar amounts, because clergy
have to pay self-employment taxes, but are still employees so they don’t
get the same tax benefits.
“The churches that are large will try to
absorb the cost,” Langer said. “Small churches that pay the
minimum salary won’t be able to absorb the cost, and the burden is
then transferred to those who can least afford it.”
The Rev. Pam Stewart is appointed to an
extension ministry at the Olds Hall Good Samaritan Center, a
retirement center run by the Evangelical Lutheran Church. She said she
pays all dependant health care out of her salary. She said her current
salary is lower than what she would earn appointed to a local church
“plus longevity salary plus housing plus insurance plus continuing
education.”
“It’s incredible. I have no sympathy that
our clergy of the United Methodist Church in Florida cannot pay part
of our insurance.”
The Rev. Sue Haupert-Johnson, pastor of Tampa’s
Hillsborough United Methodist Church and former member of the Board of
Pension and Health Benefits, said she supported the change and would
not go back to her church and ask people who make less than she does
to pay for her family’s coverage.
Haupert-Johnson also praised the board’s hard
work. “I resent the us versus them attitude and the contempt
expressed,” she said. “Trust the people who sat on this committee
and looked at every option and agonized over this decision.”
Several delegates suggested insurance costs be
apportioned to churches, clergy participate on a sliding scale based
on years of service or compensation received, deductibles be raised or
the conference investigate multiple insurance companies that would pay
certain portions of claims. The suggestions were referred to the
Conference Board of Pension and Health Benefits for further study.
Some retirees increase participation in
coverage costs
Dick Klima, a vice president of AON Consulting
and a member of Palm Harbor United Methodist Church, told delegates
the Florida Conference has the second largest retiree population among
all conferences. The conference has 100 percent retiree health
coverage, as opposed to 26 percent in the general population.
AON Consulting is a worldwide consulting company
on employee benefits that works with the Florida Conference.
Klima said the conference is facing a $550,000
shortfall between the budget and the estimated cost of retiree
benefits in 2002. “We need retirees to start participating,” he
said.
Clergy who retired before 1985 will continue to
pay $10 per person covered per month. Clergy who retired after 1985
and before 1990 will pay 10 percent of their total monthly premium.
Clergy who retired after Jan. 1, 1990 with a
minimum of 10 years of service will pay a percentage of their total
premium based on their years of service in the Florida Conference.
Each person will get a 2 percent credit for each year of service up to
40 years.
Those with less than 10 years of service will
not receive any funding, but can purchase the insurance if they meet
eligibility requirements, and those transferring into the conference
will receive credit only for their years within the Florida
Conference.
The approved proposal also included designating
$15 million from the Deposit Account with the General Board of Pension
and Health Benefits to help fund the liability. Dodge said the account
contains $22 million that is undesignated, with the stipulation that
it must be used for retiree issues.
Dodge told delegates the proposal was necessary
to ensure there will be a retiree plan in the future. “If we don’t
take radical and decisive action now, the cost of this benefit will
outweigh our ability to pay,” he said.
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