PARISH ADMINISTRATION & FINANCE ENEWS
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2018 Open Enrollment Reminder – October 15 - November 2
Open Enrollment has begun! Please be aware that the CPG discontinued 2 plans this year, Anthem PPO 80/60 and Cigna Open Access Plus – In Network. These plans will be replaced by equivalent coverages. Anthem BlueCard PPO 90 and Anthem BlueCard PPO 80 will take the place of Anthem PPO80/60. Cigna Open Access PPO 100 will take the place of Cigna Open Access Plus – In Network.
All current members are encourage to visit the CPG Open Enrollment site. If members do not visit the site and are currently enrolled in one of the plans not being offered, they will be transitioned into the following plans.
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Current Plan
Cigna Open Access Plus – In Network
Anthem PPO 80/60
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2019 Plan
Cigna Open Access PPO 100
Anthem BCBS BlueCard PPO 90
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What’s the deal on Medical Insurance in 2019? For Parishes? For Employees?
by Louis Fuertes
Part 1 – What’s the deal on Medical Insurance for parishes in 2019?
The
2019 Treasurers’ Newsletter
(which has been available on an internet access device near you since October 2) presents the premiums for the different medical, dental and life insurance coverages that are available to eligible ECCT employees* for 2019 (see table below). In a change from prior years, all medical plan choices will be made available to eligible employees either through Anthem or CIGNA. While there are some differences in health care providers in the CIGNA and Anthem networks, there are no differences in the plan terms (copayment amounts, deductibles, coinsurance %s, out-of-pocket maximums and annual premiums) for the Anthem and the CIGNA PPO 100 plan. The same is true for the PPO 90 plans offered by Anthem and CIGNA, and for the PPO 80 and the Consumer Directed/HSA plans offered by the two carriers. This change from prior year practice allows eligible employees to select both the plan structure and the carrier network that is most effective for them. Choice is a good thing, right?
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This table is the starting point for understanding what “the deal” is for parishes as employers, but it is not the whole story. Parish vestries have two other (largely ignored) decisions to make with regard to their provision of medical insurance for eligible employees. Decision number one is “what percent of the plan premium will the parish pay?” Parishes are obligated to contribute at least 85% of medical plan premiums, although it appears that most parishes continue to cover 100% of plan premiums. Note that parishes also have the option of covering differing percentages of the premiums different medical insurance plans (e.g., 85% of the premiums for one plan choice, 95% of the plan premiums for two other plan choices and 100% of the plan premium for a fourth plan choice).
Option number 2 is more limited in scope but is worth mentioning nonetheless. For employees that elect the Consumer Directed Health Plan, parishes can elect to contribute amounts up to the legal contribution limit to their Health Savings Plans (“HSAs”).
Parishes must allow employees to select their health plans, but parishes can influence this choice by covering different percentages of the premiums for the different medical insurance plans offered to employees and by contributing to the HSAs of employees selecting the Consumer Directed Health Plan.
*Employees working at least 1,500 hours annually are entitled to Medical Insurance coverage
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Part 2 – What’s the deal on Medical Insurance for employees in 2019?
Most ECCT employees will be facing the need to evaluate plan details in 2019, because the plans that that 82% of employees selected in 2018 (the CIGNA Open Access In-Network plan and the Anthem 80/60 plan) were not made available to ECCT by the Church Medical Trust for 2019. ECCT has elected to make the PPO 100, PPO 90 and PPO 80 plans available to ECCT employees as potential replacements to the discontinued plans.
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The parish’s decisions on how much of the plan premiums it will cover (as discussed above, at a minimum of 85% up to 100%) certainly affects “the deal” on Medical Insurance for employees as does the parish’s policy with respect to HSA contributions for employees enrolled in the Consumer Directed Health Plan/HSA. More on these parish decisions in a moment, because the terms of the different plans affects the Medical Insurance deal for employees.
“The Medical Insurance deal” for employees simply means how much will employees be required to pay if the invoices from healthcare providers in 2019 amount to different dollar amounts in the horizontal axis of the chart below. The amount the employee will be required to pay is shown on the vertical scale of the chart.
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- If an employee is required to contribute a portion of the annual premium, that amount is shown on the chart as $X on the vertical scale. Said differently, $X is the minimum payment amount even if the employee generated $0 in invoices from healthcare providers in all of 2019.
- For the first $Y of health provider expenses generated by the employee (shown on the horizontal axis), the employee will be required to pay 100% of the invoiced amount ($Y is the “plan deductible” amount, which varies greatly from plan to plan).
- After the first $Y in provider invoices, the portion of additional charges that an employee must pay is a combination of the coinsurance and co-payment amounts that are shown in the chart as α%. The coinsurance percentage is communicated via the PPO number – the coinsurance % for the PPO 80 is 20%, it is 10% for the PPO 90 and it is 0% for the PPO 100.
- Lastly, when deductibles, co-payments and coinsurance amounts paid by the employee collectively reach $Z, the employee will have reached his/her “out-of-pocket maximum,” and all additional expenses will be covered by the insurance carrier.
The very complicated and sleep-inducing chart below summarizes the deductible amount ($Y in the chart above), and the maximum out-of-pocket amount ($Z in the chart above). Co-payment and coinsurance amounts (which together comprise α% in the chart above) are listed separately in the table.
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The table is further complicated by separate “in-network” and “out-of-network” amounts. For most employees, close to 100% of their routine invoices from healthcare providers will be in-network, but…
- Some employees will receive invoices from out-of-network specialists
- Healthcare expenses resulting from a motor scooter accident in Bermuda, a zip line miscue in Costa Rica or a fracture incurred at Stowe might also result in out-of-network provider invoices
Part of the plan selection challenge is that the total of invoices from healthcare providers next year is unknown to us. Still, a graph like the one below (assuming the parish covers 100% of plan premiums and all invoices are from in-network providers) can be created for a broad range of invoice amounts.
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Part 3 – Structuring a Deal for both Parishes and Employees
One potential problem with the “parish pays 100% of premiums” policy is illustrated by the last chart. Under this policy, the interests of the employee and the parish are not aligned
- Employee expenses are always lowest for the medical plan that is most expensive for the parish (the PPO 100)
- Employee expenses are always highest for the medical plan that is least expensive for the parish (the Consumer Directed Health Plan/HSA
This outcome is little changed if the parish covers 85% of premiums for all plans as shown below. As soon as invoices from healthcare providers exceed around $3,000, the most-expensive-for-the-parish PPO 100 is the least expensive for the employee. If invoices from providers exceed $4,000, the Consumer Directed/HSA Plan is the most expensive for the employee & least expensive for the parish.
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A policy of different premium contributions by the parish for each plan can create close alignment between the deals for parishes and employees. The graph below shows employee economics assuming the parish covered 100% of the premium for the Consumer Directed/HSA Plan, 95% of the premiums for the PPO 80, 90% of the premiums for the PPO 90 and 85% of the premiums of the PPO 100.
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Under this policy, the PPO 100 is the most expensive plan for both parishes and employees. The Consumer Directed/HSA Plan is still the lowest cost plan for parishes even when parishes cover 100% of the premium, and is the lowest or among the lowest cost plans for employees across many provider invoice ranges. Some Parishes might consider a policy of sharing premium savings with employees by contributing to their Health Savings Accounts. This has been the policy at The Commons for several years: the Consumer Directed/HSA Plan has been the lowest cost plan for employees in most scenarios.
A few last thoughts…
The examples in this discussion (Family coverage, 100% in network) remain valid for “Self +1” and “Self Only” coverage as well. The “100% In-Network” assumption is likely to cover most employees, but the findings are valid for other plausible In-Network percentages (95% and 90%) and even the rare circumstance of 80% In-Network/20% Out-of-Network (which might require medical adventures in Bermuda, Costa Rica and Stowe all in the same year).
As health insurance costs continue to be the fastest growing expense item for parishes and for us at The Commons, we encourage you to think about instituting different plan premium support percentages. For parishes still contributing 100% to plan premiums, it might be wise to move off that program in gradual steps over several years. At the same time, communicate clearly with employees about not only “the deal” for 2019, but also what is being planned for the next two or three years.
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HR Matters: Letters of Agreement or Employment
by Kayla Tubolino
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General Convention
passed a resolution
stating “that every diocese and ministry organization, in recognition of guidelines included in The Manual of Business Methods in Church Affairs, be requested to include a letter of agreement as part of a transparent hiring process for any church employee.”
Check out Title 1, Canon 7, ‘Of Business Methods in Church Affairs” for the full resolution (
here)
.
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There are two terms I use: Letter of Agreement and Letters of Employment and I do not use these terms interchangeably although in other organizations they could mean the same thing. When I refer to a Letters of Agreement I am referring to the agreement that takes place between three parties: cleric, bishop, and the parish. I use the term Letters of Employment when the agreement is between the employee and the employer (parish or ECCT).
This is important work for your parish to participate in. These letters set the tone for the working relationships and can clear up any uncertainty by spelling out specific policies for the employee. If you have old, outdated agreements or none at all here is a link for some important information to include in.
Here is a link to the HR-Manual.
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Donations and Bequests Monthly Participant Accounting Summary Reports
Donations and Bequests is pleased to inform you that U.S. Trust, Bank of America’s Private Wealth Management Division (“UST”) is in the process of working on a
new monthly Accounting Summary Report
and
online access
. The new report is tentatively scheduled to launch with the October 31, 2018 report and will be available November 2018.
The new report and online access will have the same level of information currently available and also;
- Asset Allocation breakdowns (in % and $s)
- Investment performance at the fund and overall church level
- Ability to download data to EXCEL
- Detailed information on current investment holdings as of month-end
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UST will provide D&B participants via mail and/or email with login IDs, temporary passwords and a “how to” booklet that can be used to access and navigate the new UST Veridium secure website. Once on the site, users will be able to retrieve the monthly Accounting Summary Report, see investment positions and access numerous standard reports in PDF and Excel formats.
Those D&B participants that are currently using the US Trust Online website to access their monthly reports will also now utilize this new UST Veridium website. The US Trust Online website will not be updated after the 9/30/18 reports are posted.
We encourage all participants to utilize these new information access and reporting capabilities. We think you will find them to be flexible and sophisticated. If your parish would still like to receive paper reports on a monthly basis, UST will continue to mail them on a monthly basis.
Donations and Bequests is committed to providing you and your parish with superior investment management expertise and consistently excellent service. If you have questions or concerns, please contact Theresa Dupont at
tdupont@episcopalct.org.
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Audit and Financial Review Compliance - Update
The Finance Office of the ECCT is reporting that only 40% of its parishes are in compliance with the submission of their 2017 Audit or Financial Review. This means that we have received Audits and Financial reviews from less than half of the parishes in ECCT.
While this may seem acceptable to some, it is a challenge when trying to maintain oversight of its fiscal health and welfare without these documents. Not to mention the time and energy the ECCT staff spend trying to nudge our churches into compliance.
Additionally, not submitting the Audit or Financial Review in a timely manner may cause an interruption or delay for a parish going through a transition, obtaining a Missionary Society Revolving Loan, or remaining in ‘Good Standing’ at ECCT’s Annual Convention.
The Finance Office maintains a list of CPA’s (Certified Public Accountants) or Independent Public Accountants that other churches in ECCT have used. Please contact
Karolyn Nicolaides
if you would like to receive a list of Certified or Independent Public Accountants used by other ECCT parishes.
ECCT is grateful for all of its parishes who have submitted their Audit or Financial Review on time. You have decreased our burden of niggling by 40%, thank you! To the remaining churches who have NOT submitted theirs yet, please do so! We would like to reflect your ‘good standing’ position at this year’s Annual Convention (October 27-28). You may review all Parish Financial Reporting Requirements on our website
here
.
* See Canon IV 2D - "Business Methods in Church Affairs"
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Convention to Vote on the Following Mandated Changes for Clergy Compensation in 2019:
- A 2.40% cost of living increase
- Minimum salary increases annually for each year of ordination up to twenty years. This year that proposed incremental increase is $782 for full-time clergy. It is recommended that the increase take effect January 1 rather than be tied to date of ordination to the diaconate.
- Remember to file a “change in compensation” form with CPG so that pensions are billed correctly. These forms are available through cpg.org
Reminders:
- Vestries must pass the “parsonage allowance” resolution for their clergy for 2019 BEFORE January 1, 2019. See page 8 of the 2019 Treasurers’ Newsletter for model resolutions. This is for the part of the clergy’s cash compensation set aside for IRS purposes, separate from any cash housing allowance that is paid. It does not affect the total amount paid by the church to the clergy, and vestries may not dispute the amount in the resolution. Clergy should then retain a copy of the vestry minutes that note the passage of this resolution for their tax records.
- Any DOWNWARD changes made to clergy compensation require a new Letter of Agreement, and thus the approval of the Canon for Mission Leadership and a bishop.
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Bishops' upcoming visitation schedule
October 21:
Ahrens - St. Philip's, Putnam; Douglas - St. Paul's, Windham
October 28:
Ahrens - St. Luke's, South Glastonbury
November 4:
Douglas - St. Mark's, New Britain
November 11:
Ahrens - St. Mark's, Bridgewater; Douglas - Grace, Hartford (150th Anniversary, not a visitation)
November 18:
Douglas - Grace, Trumbull
December 2:
Ahrens - St. Andrew's, Devon (Milford); Douglas - St. Mark's, New Canaan
December 9:
Ahrens - Old St. Andrew's, Bloomfield; Douglas - Christ Church, Stratford
December 16:
Ahrens - Holy Trinity, Enflied; Douglas - Trinity, Collinsville
December 23:
Ahrens - Trinity, Brooklyn
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2018 - 2019 ECCT Cycle of Prayer Now Available
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Parish admins invited to join a listserve
Want to chat with colleagues about ACS vs PowerChurch? Offer tips on more successful mail merges? Get suggestions on names for a new campaign?
Alison Hollo
, Senior Administrator for the Office of the Episcopate, invites parish administrators to forward her their names and email addresses to be added to an ECCT listserve for parish admins.
As a member of Bishops' Executive Secretaries Together (B+E+S+T), Alison has participated in their listserve and wants to make the same opportunity available for parish admins in ECCT.
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2019 Treasurers' Newsletter can be found
here
.
Included: Clergy Compensation, Insurance, Lay Pension, Church Records, Supply Clergy, Tax and other IRS information, and other management operations.
2018 Treasurers' Newsletter can be found
here.
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The next issue of the Parish Admin & Finance eNewsletter will be published mid-December.
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