Resolutely Reading: Health and pension reform

This is the third in a series of posts on the B, C, and D resolutions to be considered by the General Convention of the Episcopal Church this summer. It follows my series on the A resolutions of the “Blue” Book. The previous post in this series was about structural reform. Be sure to check out the index of all General Convention 2012 resolutions and the 7WD official position on them.

benefits costsIn a series that is certainly “inside baseball”, we have approached the inner sanctum. As church-geek readers will know, the 2009 General Convention approved resolutions reforming health insurance and pension requirements for lay employees and clergy. What sounded good at the time is not looking so attractive now that people have begun to make budgets that account for the provisions. Susan Snook has done us all a great service by blogging about the denominational health plan issues. Go read her post.

I’ll freely admit that this one is a stretch for me, on a couple of accounts, First, the details of pension plan administration (and health insurance too) and be intricate, and I may well have missed some of the finer points. So hopefully if I get something wrong here, a clever commenter will straighten us all out. Second, I perceive that plenty of people who otherwise love to go on and on about justice are suddenly singing a new song when it comes to reaching parity between lay employees and clergy. I find this frustrating. Is it so hard? We should treat our lay employees and clergy equally when it comes to benefits, save the IRS tax benefits that are reserved for clergy at present.

The provisions approved in 2009 would, in summary, require folks to receive pension benefits at about 20 works per week of scheduled work and health benefits at 30 hours of scheduled work. With regard to health insurance, there must be parity between clergy and lay folks. If lay people pay 20% of their premium cost, then that provision must apply to clergy, etc. On the pension front, it’s different. The Church Pension Fund requires clergy employers to pay in 18% of the annual compensation to a defined benefit plan. On the lay side, the plan requires 9% to either a defined benefit or a defined contribution plan.

I’m simplifying all this, but you get the idea I hope. CPG has more info available about both the pension plan and health insurance reforms.

At the present time, I’m skeptical that this is so complicated. Most of the objections are cost related. Sure, some congregations will be put in further financial distress by these provisions, but if this is the straw that breaks the camel’s back, let’s at least be honest that there was already a pile of straw there. And in the meantime, let’s not punish employees (usually lay folks now) because we’re too cheap to treat people well.

Clergy are often unhappy because in many places, they are being asked to pay a share of their health insurance premium for the first time. Again, color me unsympathetic. Pretty much everyone else in this country pays an amount (often 20%) of their health insurance premium. Why should clergy be different? This can be implemented slowly, over a period of 2-3 years. Or compensation can be increased. Or, here’s another idea. We can fully fund the lay health insurance premium. Then both folks pay 0%. There are lots of ways around this.

Other objections include the requirement to use CPG offerings. It makes sense to me to keep our clergy and lay employees in one national plan, because there will be cost savings overall, and we can ensure consistent offerings. Yes, there are less expensive choices out there, but they are often lower-quality plans (whether for retirement or health insurance).

There are some provisions in the resolutions we passed for institutions other than dioceses and congregations (e.g. schools). From the early feedback, it looks like we need to clarify a number of issues here. Let’s not delay the whole plan because we have questions about some institutions. Better to get most of us on board and fix the provisions for “other” institutions.

Oh, one more thing. Next time you hear someone say, without irony or awareness of complexity, that we are “not a national church”, ask them about provisions for clergy pensions and health insurance for employees outside this country. Yep, that’s right. For now, we are only worried about lay employees and clergy serving in the US. So much for international church.

Lastly, my hope is that someday, the health insurance issues here will be moot, because we’ll join the rest of the developed world and offer universal health care like every other developed country does. In the meantime, we need to do something both to ensure good care for our employees and to contain spiraling costs.

I’ve written before about my frustration with politics and the Episcopal Church. We love to tell other people what to do, but too often we are reluctant to implement more costly changes at home. Here’s a chance to put our money where our mouth is. How can we as a church talk about any kind of justice at all, if we’re not bringing justice to bear on our own employees? Is it worth keeping congregations open if it means laying a burden on the backs of our clergy and lay employees?

Yeah, I wish all this didn’t cost to much. I also wish someone followed me around with an espresso machine and served me chocolates and double espressos whenever I wanted. We all have to play the cards we’re dealt. Let’s get on with things.

So there are a bunch of resolutions out there to revise, rescind, or delay these provisions. Let’s have a look.

B001: Amend Canon I.8.1. Likely vote: YES.
This one revises the enabling canon for pension and health benefits, by removing reference to the 2009 resolution number and adding provision for revisions to take place this convention. It says, as revised in 2013, but I think they mean to say 2012. If it were up to me, I’d just say “as adopted by General Convention” without further reference to when. Because this way, we have to change this canon every time we tweak the plan. Here’s another consistent principle of mine: I don’t like lists of things or dates in our canons. Let’s leave ourselves some flexibility. Yet another reason to push for a total rewrite of our messy canons. But this is a digression, sort of. For now, since I suspect there will be tweaks to the provision for pension and health plans, this resolution will be necessary.

B002: Health and Lay Pension Plans. Likely vote: NO, unless amended.
The proposals from 2009 required participation by church-related institutions. Three problems have shown up since then. First, we’re not always sure what’s a church-related institution and what isn’t. That in itself is a giant hairball of a problem, because if we’re not sure about that, then we don’t know if any of our canons and policies apply, not just benefits plans. So let’s fix that before next General Convention, OK?

Second, some non-church organizations (e.g. schools) have industry standard benefits that the Episcopal Church would require departure from. While some provision was made for schools to stick with current plans, e.g. TIAA-CREF, there is not enough flexibility, apparently. As long as the alternative plan is industry standard and its benefits are comparable or better than what would be offered by the church, I’m OK with folks using other plan providers. We just need to guard against schools and other institutions going with cheaper alternatives only because they’re cheaper.

Third, some institutions have argued that these plans are onerous; that meeting these requirements would be too costly. Again, I’ll say, these plans require basic health insurance and pretty standard pension plans. If an institution can’t afford to treat its employees well, I have little sympathy for them. As long as we allow our own employers to be cheap with employees, we are enabling poor treatment of folks, and that’s not a value a church should be able to live with.

This resolution would do two things. First, it would delay the plan until 2016. Second, it would allow dioceses to decide whether schools and other institutions need to participate in the plan. On the first instance, I oppose a delay. That means three more years when our lay folks aren’t getting pension contributions, or three years in which they’re getting minimal contributions. I’d like to see any clergy folk at General Convention who vote yes for this donate their own pension contributions for three years to these (probably) low-wage employees who will need to wait for this benefit. However, I do favor letting dioceses decide whether institutions participate in the plan, because it seems that we’re not always clear whether or not a school, for example, is church-related or not. (The rector sits on the board, but the school is otherwise independent of a parish; is that church-related?) Let’s be flexible now, and then let’s clarify institutional status. So I can support the “institutional flexibility” part of this resolution, but I strenuously object to the delay.

B003: Increasing pension options for schools. Likely vote: YES.
The original proposal passed by General Convention allows schools to use TIAA-CREF instead of the Church Pension Group plans. This resolution expands the options to any plan, so long as the benefits are equal to or better than what’s offered by CPG. Makes sense. But again, we need to make sure we focus on that element — quality of benefits — rather than affordability. My experience is that churches and church institutions are notoriously cheap, and if they can get away with it, they’ll allow a cheaper plan just because it costs less.

C022: Healthcare. Likely vote: NO.
This one delays implementation of the health plans until “unfair regional differences and dramatic cost disparities between dioceses” are eliminated. That would be until the eschaton. We can’t wait. Part of the problem here is that the Church Pension Group went around and told us all about a “national plan” and sold us all on cost savings if we did this. As it turns out, health care costs have gone up, in some cases dramatically. CPG oversold this, no doubt about it.

My understanding is that, overall, cost increases have been less with a national plan than they would have been otherwise. That is, costs might have gone up 8% but without this plan, the increases would have been 12%. (Just made up those numbers, but you get the idea.) That’s cost savings, but not cost reductions. In some cases, health plan costs have gone up dramatically because the clergy were on lousy plans, and now they have to be on better plans. Better plans = more money. Boo hoo.

Bottom line is that, as I wrote above, I’m not in favor of a delay. People are sick — and in need of health care — right now. They shouldn’t have to wait three years. In the meantime, let’s work for national government health coverage. Let’s encourage dying congregations to be honest, and if this is what helps them see they can’t afford to continue, so be it. And above all, let’s do a better job of explaining all this going forward.

C027: Deferral of Implementation of Denominational Health Plan. Likely vote: NO.
This one delays implementation until 2016. What do folks think is going to happen by 2016? Somehow we’ll all win the lotto and be able to afford to treat our employees well? No, if institutions are precarious now, they’re not likely to improve by then. And meanwhile, folks will carry on without adequate health insurance. Also, this one lets institutions choose another provider of health care other than the Episcopal Medical Trust. Susan Snook has blogged about this, and this option would increase costs for everyone else. Basically it’s American me-ism taking over. If I can pay less, I will; I don’t care about you. Let’s keep everyone in the same plan, and let’s do it now.

C031: Study impact of GC2009-A177. Likely vote: NO.
Another delaying resolution, this one is focused on requirements for parity between lay employees and clergy. Why is this so complicated? Pick a number, 20%, 10% or 0% and make clergy and lay employees contribute the same amount.

C034: Revising Denominational Health Plan Mandate. Likely vote: NO.
Allows dioceses to opt out of the national plan. Again, there’s no sense of national solidarity here. With high participation, overall costs will be lower. Yes, that might mean that in some cases my costs could go up. But, as a Christian or even as a compassionate person, is my bottom line more important, or is the overall wellbeing of a large group of people more important? Cry me a river, Diocese of Ohio. Join the justice plan, and take care of your folks like the rest of the church.

C042: Extend implementation period for Lay Employee Pension Plan (LEPP). Likely vote: NO.
This one delays the lay pension plan for FIVE YEARS. Seriously. I’ll vote for this one if all of the clergy in the Dioceses of Louisiana who voted to send this to General Convention are willing to give up their own pension plans for five years. Nope? Exactly. Let’s not delay doing the right thing.

C047: Suspend and Reconsider GC2009-A177. Likely vote: NO.
Dudes. This one comes from the Diocese of Olympia, where they have the best espresso in the country. So how can these well-caffeinated people support the idea of delaying the denominational health plan? Their explanation, offered with the resolution, is that they won’t be able to have growing churches if they have to offer health insurance to their lay employees. I am not making that up. The denominational health plan would be guilty of “distracting the laity and clergy of all the congregations of the Diocese with multiple full-time employees from their Ministry.” So, here’s a question to ponder. What is more distracting, trying to figure out how to fit health insurance into the church budget, or showing up at the emergency room for health care because you can’t see a doctor since you have no insurance? What’s more distracting, finding a few dollars in a diocesan budget or making employees choose between food and prescriptions? Let’s find a way to treat our employees well, and let’s not use patronizing rhetoric if we’re going to try to get away with dodging our moral obligation to provide good benefits.

C068: Suspension of Denominational Health Plan. Likely vote: NO.
The title says it all. My feelings on the subject are well known.

C088: Delay GC2009-A177. Likely vote: NO.
This one comes from the Diocese of Newark, one of the most “justicey” dioceses out there. Irony abounds.

A note

People will say that implementation of these provisions will cause some congregations to fail. As I wrote above, I am unpersuaded by this claim. First of all, if the modest cost of a 9% lay pension plan is the make-or-break cost, it is really not the pension cost which is the problem. We have a bunch of congregations teetering on the brink of closure. They tend to be places in which a social club of familiar faces gathers to maintain a museum of a church building. There is no future in that kind of community, so helping them hasten their closure is doing them a favor. Denial is powerful among some communities.

I for one do not want to be part of a church that continues to exist by exploiting its clergy, its lay employees, or for that matter, its volunteers. Let’s do the right thing and face the music.

We need vibrant congregations. We do not need museum social clubs. The provision of employee benefits is likely to be a refining fire, separating the gold from the dross. That seems fine by me.

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16 Responses

  1. Jared Cramer says:

    Yes. Yes. Yes.

    Thank you for this post.

  2. Sarah Lawton says:

    With you on this one, Scott.

  3. Cole Gruberth says:

    However, I think we’re going to see both lay employees and clergy simply lose their jobs, well before many congregations choose to close.
    I fear the unintended consequences here.

  4. Scott Gunn says:

    Cole, you may be right. But congregations are not likely to get rid of their musicians or parish administrators entirely (unless they are precipitously near closure). What is more likely is the “clever” move of scheduling people to work 19 or 29 hours per week. But we can’t legislate a conscience. Ultimately, I hope vestries and others will step up and do the right thing.

    Of course, the real answer here is better stewardship.

  5. Elizabeth Anderson says:

    I’m certainly with you as far as the long term goal goes. But I do struggle with this. Yes, it’s a justice issue, but a resolution that is primarily going to hurt the poor is also a justice issue. I have no sympathy for people who could afford to give equal benefits to their lay employees and just don’t feel like it. But that’s different from places that genuinely can’t afford to.

    And not all poor parishes are otherwise struggling or failing parishes either. Some just happen to consist mostly of parishioners who are very poor. I get sensitive about this, because it’s the reality in my own parish. In some ways it’s a problem with our whole system, which seems to assume that every parish ought to be able to support itself based on the pledging of its members…but if those members are all really poor, then even if you have a lot of them, that may not do the trick.

    I’m not sure what the answer to this is. Of course, it’s not like we can afford any lay employees who work more than just a couple of hours, so in that sense it’s not an issue for us. But I still think there ought to be distinctions made between places that genuinely can’t afford to pay these benefits to lay employees, and places who just don’t want to. As a lay person who would love to work for the church somehow someday, if I were working in a place that was financially struggling, believe me, I would MUCH rather keep my job without benefits than end up losing it or having my hours greatly reduced because my employer couldn’t afford this.

    So I really am with you are far as the desirability of the goal, but right now I feel like this plan loses sight of where the poor fit in to all of this, and how to work with places that are financially struggling rather than just mandating something that may be impossible at the moment…..?

  6. Joel says:

    Having dealt with this issue in the corporate world as well as a lay leader in parishes(s), it is a matter of doing the right thing for our employees.

    If we purport ourselves to be followers of Christ, then it is incumbent on us to treat those are in our employ fairly, and with respect and dignity.

    I expect that if one were to delve a little deeper into the workings of parishes that say this is an undue burden on their finances, it would would be apparent this is only the tip of the “issues” iceberg.

  7. Susan Snook says:

    Thanks for the shout-out, Scott. I’m with you. I’ve posted a new, updated post on the Denominational Health Plan, which you can find here:

  8. Elizabeth says:

    Do you mean all clergy and lay or just presbyters? I thought our deacons did not get any benefits? Are they covered?

  9. Amma Kim says:

    How about clergy be mandated to get the 7.5% share of payroll taxes in every diocese as lay people do in the “real” world? That would be helpful and be a matter of parity. In my diocese clergy pay the whole 15% themselves and I don’t think a lot of lay people know this. This might allow for more clergy to be able to afford to pay a small portion of their health insurance. If we are going to compare, let’s compare apples to apples and not to oranges.

    • Scott Gunn says:

      Amma, that seems fair to me — though some clergy have opted out of social security. For most of my brief clerical career, I’ve received the 7.65% as you describe. Plus housing allowance.

      Elizabeth, not every diocese bans permanent deacons from receiving compensation. And even in places that do, they pay transitional deacons who begin working. The issue is not order, but compensation. So, yes, I meant all clergy, if they are paid.

  10. Amma Kim says:

    That payroll tax pay out could amount to even 20% or more of the cost of health insurance – even for the “Cadillac” plan as it is called in some forums… This is what I mean by comparing apples to apples. I don’t care for clergy being painted as greedy villains who have no concern for justice for lay people. I think it is irresponsible rhetoric and meant to divide. On the other side of the coin, there are some real inequities for many clergy. Living in a rectory can seem great on one hand – appears to be free housing though in reality it is included as part of the total compensation package and therefore actual salaries may be much lower than lay people with similar education and experience. Some clergy who must live in church owned housing often do not have equity in a house as they grow older, need to send children to college, etc. On the positive side, of course, clergy who do use a housing allowance to pay for their housing rather than living in a rectory get a tax break. I think these factors present a much more complex equation than you are suggesting.

  11. Scott Gunn says:

    Amma, I for one certainly didn’t intend to make clergy seem like greedy villains. However, it is true that lots of clergy have been saying — on social media and on blogs — that they should not have to pay any part of their health plan cost. Just seems out of touch.

    Your solution is good: create parity across the board. If I’d thought of it in the first place, I’d have added that. The world you describe (cost sharing of health plan FICA contribution) is exactly what I’ve been blessed to enjoy for the last few years.


  12. Amma Kim says:

    Thanks, Scott. I am glad you have been blessed. Some others have been blessed with full health insurance coverage instead…which amounts to about the same at the level of the bottom line. If those clergy are forced to begin paying for a significant part of their health insurance, no one will bat an eye about that lack of parity in terms of the payroll tax…clergy incomes will just go down. Some dioceses mandate tax payments like the rest of the world – others do not. I would be grateful for your willingness to consider this issue in the larger forums in which you take part.

  13. Chuck Till says:

    You’re understating the cost to “some” congregations. I’m a former Senior Warden of a parish whose lay payroll has been as high as seven persons, all part-time (for various reasons). Finding the money to cover their benefits is not a simple proposition. I suppose if your definition of a “pile of straw” is meant to encompass every congregation not established for 100 years with a fat endowment and fabulously wealthy parishioners, then so be it. Most TEC congregations are not, in fact, of that nature. I would argue that to the contrary, it is “most” congregations that will have a problem figuring out how to implement the policy if it is not changed… particularly at a time when the generosity of the baby boomer generation is in decline. The inevitable results of this policy, if unchanged, are: #1, reductions in salary to compensate for the benefits provided; #2, reductions in other ministries for which funds are no longer available; and #3, a pervasive myth of 19-hour workweeks, as implied in another response above.

  14. Scott Gunn says:

    Chuck, is it the health insurance portion or the pension portion that concerns you most?

    Pensions amount to a max of nine percent of lay compensation, so that ought to be doable.

    Health insurance (required for people working about 30 hours per week) is clearly going to be more costly. But I wonder what the alternative is? Telling people to go to the ER whenever they need medical care?

    I hear you — this won’t be easy in lots of places. Maybe some congregations will choose to keep their staff and treat them well (in keeping with our baptismal promises) and leave behind their costly buildings. Or maybe some congregations will lay off their staff and run their churches with volunteer labor. There are choices to be made. Not easy ones.

  15. Chuck Till says:

    Yes, it’s health insurance that’s the concern – or what one might more actually call employer-paid healthcare. To assume that these individuals are not currently covered is a mistake. Some are, some are not.

    I agree that everyone in the nation should have a baseline of healthcare. Philosophically I think it’s nuts that the mechanism chosen by the USA for this purpose is employer-paid healthcare. But my objection to the General Convention mandate is an apparent “let them eat cake” mentality with respect to the congregations that will get squeezed. It’s always easy to solve problems by mandating a solution at someone else’s expense.

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