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BOARDS & AGENCIES
Benefits Corporation
Evangelical Theological Seminary
Historical Society
Camp ECCO
Twin Pines
BENEFITS CORPORATION
The discontinuation of the much debated, respected and ignored pastor health insurance mandate will be presented for approval by the members of the EC Benefits Corporation at the corporation’s annual meeting during the May 2016 National Conference. If approved, the removal of the mandate will eliminate the requirement that full time assigned pastors must be enrolled in the denominational health insurance plan, effective January 1, 2017. It has been determined that the current structure of the denominational health insurance is a controlled group plan that falls under a different set of rules than a traditional employer based plan. As such, the EC Church is not bound by the Affordable Care Act (ACA) rules that employers who have above a certain number of employees must provide health insurance. The denominational health insurance plan is, in simple terms, a group of small employers that joined together to purchase health insurance, not a large employer plan. Over the past few years there were many questions of how our health plan and the denomination’s organizational structure fit into the ACA requirements and through a variety of sources we are confident that removing the health insurance mandate will not cause the EC Church to be in violation of the ACA. However, pastors and churches that choose to leave the denomination’s sponsored health insurance plan must maintain compliance with the ACA.
Compliance Issues to Consider
- A church cannot purchase a health insurance plan for their pastor tax free unless the church has established a section 125 employee benefits plan. Please seek professional assistance to establish a section 125 employee benefits plan.
- A church cannot reimburse a pastor for the cost of an individual health insurance plan tax free. The church cannot pay the health insurance company directly to avoid the income tax burden on the pastor.
- A pastor not in the denomination’s health insurance plan cannot participate in the denomination’s Flex Spending Account (FSA) plan.
- A church cannot reimburse a pastor for any out of pocket health care expenses (e.g. co-pays, deductibles or co-insurance) tax free without a section 125 plan that authorizes the creation and employer funding of an HRA or HSA plan.
- A pastor is not eligible for a premium subsidy from the ACA marketplace because health insurance is available from the denomination.
- If a pastor chooses to leave the plan he cannot rejoin the plan until the plan’s open enrollment period of August and September and the coverage effective date will be the start of the plan year October 1.
Please be a wise and prudent consumer if a decision is made to leave the denomination’s health insurance plan. There are multiple health insurance plans that are less expensive than the denomination’s plan however less expensive plans usually have fewer benefits. Be very careful with any financial calculations undertaken to determine the cost of a health insurance plan, review the network of providers and the drug formulary available with the plan, what are the plans co-pays, deductibles and co-insurance amounts and any potential income tax implications (applicable payroll taxes will add 25%-30% to the cost of a health insurance plan).
All of these factors must be compared against a pastor and his family’s current level of healthcare utilization. If a pastor and/or a family member has a particular health condition that requires regular medical services, a plan with a higher deductible will have a lower premium cost, but the higher out of pocket cost for the pastor may negate the premium savings.
It is very important and required that the church and pastor both agree on any action by the pastor to exclude himself from the denomination’s health insurance plan. Churches are not permitted to require a pastor to leave the denomination’s health insurance plan. Pastor’s cannot be financially harmed or their health harmed by a church’s directive on health insurance.
The cost of health insurance or the costs of healthcare services are not going to get less expensive. The current trend to control healthcare costs is to motivate insurers to manage their health and be wise spenders of their healthcare dollars. That trend will continue and employers are implementing some unique programs to encourage change in their employee’s health and their healthcare spending. The EC Church health insurance plan with its above average benefit level is insulating plan members from this trend as well as our smaller size and geographic spread. Previous versions of wellness initiatives have generated little success on the physical health of the denomination’s pastors and our healthcare costs. However, technology and the never ending increases in healthcare costs are slowly making some of these new initiatives attractive to groups with our unique variables. A few pastors have made some significant gains in their health and they are congratulated for their accomplishments. They will all repeat the same story of how much better they feel with weight loss, a healthy diet and exercise.
The health plan census (plan participants) decreased by nine (9) during 2015 to 67.
With the approval of the Covenant and the approval by the members of the Benefits Corporation at the May 2015 National Conference the cost of the denominational sponsored Freedom Blue plan will be fully born by the retiree effective January 1, 2020. The cost of a Medicare Supplemental plan is a function of the amount of reimbursement that Medicare will pay to an insurance company to administer a Medicare Supplemental plan and cover some of the claims of the participant. As with most government expenditures in recent years Medicare is reducing the payments to administrators of Medicare Supplemental plans thus increasing the cost of the plan. An anomaly occurred in 2016 with a decrease in the cost of the Freedom Blue premium from $211 per person per month in 2015 to $197 per person per month. Decreases in future years are not likely.
The EC Benefits Trustees have communicated the possible changes to the Medicare Supplemental plan and the reimbursement phase-out schedule to the retirees affected by the change. On the positive side, there are multiple Medicare Supplemental plans available to retirees and depending on health conditions and geographical location; plans with a $0 monthly premium are available. Not every retiree would benefit from one of these plans but lower cost plans are available albeit with lower benefits. The Manna Fund is available to assist retirees with basic living expenses of which a Medicare Supplement plan would qualify for reimbursement. The Manna Fund is a renewable source of funds that may require fund raising to meet the needs of retirees. The current Freedom Blue plan will continue as long as there is sufficient participation to keep the plan active.
The premium for the Highmark Medicare Advantage PPO decreased about 7% with no changes to benefit levels. This plan provides additional coverage beyond the basic Medicare coverage for retired pastors, spouses and widows. The number of participants in the Medicare Advantage and Medicare Supplemental plans decreased during 2015 by 21 to 84.
The 403(b) Defined Contribution pension plan had a negative investment return in 2015 of about $136,000 or less than 1.0%. Contributions remained consistent from previous years at $484,000. The total number of active participants in the plan decreased to 153. Of the total participants in the plan three are taking advantage of the Roth 403(b) option. I would like to thank Jennifer Buehler, Wells Fargo Wealth Management, for her commitment and time spent working with our active and retired pastors. She is a tremendous asset for the EC Benefits Board.
The housing equity account also had a negative investment return of less than 1.0% in 2015 but with contributions the account balance increased to $68,000. The number of participants is lower than we would like, but we are glad that a few pastors are taking advantage of the program. And I encourage pastors living in parsonages to consider opening a housing equity account, or if you have an account, consider making consistent small contributions.
The Manna Fund balance is $59,160 as of December 31, 2015 and there were no distributions in 2015. The Manna Fund received $10,336 in contributions from individuals and churches. The income limits to qualify for a Manna Fund distribution were recently increased to 200% of the federal poverty level as defined by the US Department of Health and Human Services. The current limits are $23,760 for a single and $32,040 for a couple. So far in 2016 eleven requests for assistance from the Manna Fund were received and four met the eligibility guidelines and are receiving financial assistance. The Manna Fund was established to assist our retired clergy and surviving spouses. We know that we have retired clergy and surviving spouses that do have a financial need but they will not complete a Manna Fund application. If you are aware of any of our retired clergy or surviving spouses that could benefit from a Manna Fund distribution please encourage them to complete an application for assistance. Manna Fund applications are mailed to retired clergy and surviving spouses in April. An application can also be received from the Benefits Administrator at the EC Church Center.
The disability fund had a balance of $384,000 at the end of the year, down by about $23,000 from 2015. There was one disability claim paid during 2015.
The Benefits Corporation also administers the Defined Benefits Plan for the National Conference. This is an unfunded liability of National Conference. At the end of 2015 there were 36 pastors and surviving spouses receiving monthly pensions of approximately $6,500.
A financial audit was completed by Hamilton and Musser, PC on the records of the Benefits Corporation. There were no significant discrepancies noted by the audit. Our appreciation and thanks to the church treasurers that responded to the audit confirmation requests.
An election will be held at the Annual Corporation meeting to re-elect Deborah Zerbe as incumbent trustees. The EC Benefits Board has one pastoral position and four open lay trustee positions. If there is anyone interested in serving as a trustee please contact Frank Schock, President, EC Benefits Corporation. The EC Benefits Corporation trustees are dedicated, active and knowledgeable and vital to the operation of the EC Benefits Corporation. Their service is appreciated and they cannot be thanked enough for their service.
Employee benefits are going to be a continual challenge. Circumstances in the marketplace and regulatory changes are going to adversely affect our group. Please be sensible with your health and saving for retirement. The accumulation of small purposeful positive and proactive steps will create large future gains. The current issues we are experiencing are not going to disappear nor become less important. By helping yourself you are helping your denomination.
Frank Schock
EVANGELICAL THEOLOGICAL SEMINARY
AHEAD OF THE CURVE
Many of us like to brag about being “ahead of the curve.” What does that phrase mean? Well, if you’re playing baseball, it means that a batter has recognized, nearly instantaneously, that an incoming pitch is a curve ball and has made the necessary adjustments to hit it where the ball will be when it crosses the plate, not where it appears to be coming when it leaves the pitcher’s hand. To be ahead of a curve ball requires keen eyesight, lightning flash instincts, and considerable experience. Doing that on a consistent basis is, indeed, something to brag about.
The phrase, however, comes not from baseball but from statistics. A “normal distribution” of data tends to clump toward the center, with fewer results at the extreme ends of the spectrum. Illustrated on a graph, this distribution looks a tad like a bell (or at least so thought early statisticians who didn’t get out much!). In the 1960s George Rogers developed a bell curve illustrating the life cycle of innovation (see below), in which he calculated (roughly) how the general population responded to opportunities for innovation. In this bell curve, being “ahead of the curve” means that one is an “innovator” or “early adopter”…and something of a rarity.
Innovation has not typically been a hallmark of theological education. I have noted on more than one occasion that the kind of higher education we have adopted and institutionalized in the United States is an industrial model, created to meet the needs of the industrial revolution in the late 19th century. As the clergy became increasingly professionalized, theological education followed suit, moving toward an almost exclusive focus on the awarding of graduate degrees within an academic environment far removed from the churches its alumni were to serve. “Seminary” has been done this way for so long that we remember no other way to train clergy.
Well, this has finally begun to change, but only slowly. Cultural, demographic, and economic trends that began provoking fresh innovation in other sectors of higher education a generation ago have now caught up with theological education as well. There’s nothing like what Daryl Conner called a “burning platform” to motivate change! All of a sudden, seminaries like Evangelical are becoming quite creative, for to not do so would mean certain, perhaps even sudden, demise.
Innovation for the sake of survival may be necessary, but we have a greater motive for creativity than that. If the purpose of a seminary is to serve the Church, as we fervently believe, then it is incumbent upon the leaders and faculty of a seminary to be ahead of the curve—to be very much like a baseball player at bat, anticipating what is to come, making adjustments even before the ball is thrown, so as to have one’s bat at the right place at the right time to make contact. Preparing ministers for service in the Church of the 20th century is of dubious value in the second decade of the 21st century. Insisting on “the way things have always been done” reflects a poor reading of history as well as a shortsightedness regarding what God is doing in our own generation.
Your seminary, therefore, has become very innovative in recent years. We have had to, yes. But we have wanted to, even more. We’ve wanted to because you need us to. We’ve wanted to because our creative Creator God is always innovating, using people and resources that we would be tempted to overlook or cast aside to accomplish his mission in the world, the missio Dei. Following are four areas in which we are now ahead of the curve, anticipating as best we can where the culture and the Church are going, so we can prepare you, clergy and laity alike, to serve God well.
LEARN WHERE YOU SERVE, NOT JUST IN A CLASSROOM
The factory model of education developed in the industrial revolution took students out of their natural environments and put them into artificial environments called classrooms. There’s nothing inherently wrong with this, and classrooms will have a place for centuries to come. But we believe that, when possible, learning should take place within the context in which it is or will be practiced. For Evangelical Seminary, that means that we’re turning learning to the churches.
For instance, our new Master of Arts in Ministry program, launched just this past fall, is half online and half on-ground. The on-ground portion is not at our campus in Myerstown nor even at our classroom sites in Harrisburg or Lancaster. Students and faculty meet for six 5-day residencies at churches in this region, each church selected because it does well the ministry practice being taught for that course. The leaders of the church become part of the teaching team for that residency. The point is to ground the education in a collection of local communities of believers and to allow practitioners to stand alongside academics in the teaching of ministry.
This program is new but we’ve been doing “learn where you serve” in other ways for some time—our marriage and family therapy students hone the skills learned in the classroom by service in one of our marriage and family counseling centers, for instance. But it’s safe to say you’ll be seeing more of this in the years to come, perhaps to the point where the “campus” may be a central administrative hub but not the focal point of the learning experience.
We are ahead of the curve in learning where one serves, and intend to remain so.
BE INFORMED, NOT JUST TAUGHT
By making ministry preparation an academic venture, our forefathers ran the risk that we would eventually be content to merely fill the minds of students with worthwhile knowledge, or even teach them useful skills, without also asking them to be formed in the character of Christ. One can grade a paper but cannot easily evaluate a student’s piety, so over time the expectation to become spiritually mature was neglected and we focused on academic achievement. To do well in seminary was to be smart and to know the right answers, not to be good and know the right questions.
Fortunately, the Evangelical Congregational Church is deeply rooted in the pietistic tradition, which refuses to accept this kind of imbalance; therefore, your Seminary has tapped into the richness of your own story to again emphasize spiritual formation as a key and necessary component of what we do. We cannot force anyone into greater spiritual maturity, but we can create the space, provide the resources, and offer incentives for a student to seek it.
We have therefore built spiritual formation into our entire curriculum on a program-by-program basis—sometimes by requiring courses in it and sometimes by requiring students to meet one-on-one with trained spiritual directors and to journal on what they’re learning about themselves and God. We’ve also developed a Master of Arts in Spiritual Formation and Direction to provide specialized training for those who will lead spiritual formation ministries in congregations or serve as spiritual directors for others. Our brand new Certificate in Spiritual Direction is, as far as we can determine, the very first such program for evangelicals on the entire East Coast.