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HSAs: High Stress or High Hopes?

Clergy are likely to see benefits increasingly reflect a changing healthcare landscape as costs go up and benefit providers react to the Affordable Care Act (ACA). According to the recent 2015 Denominational Health Plan Report published by the Church Pension Group (CPG), the benefits group is working to outflank rising healthcare costs and remain competitive with widely available healthcare plans.

Most dioceses, the report said, have since 2009 managed to reduce rates or keep rate hikes modest. According to Frank Armstrong, CPG’s chief operating officer, the benefits group has worked with other denominations and leveraged purchasing power to help rein in premiums. The Denominational Health Plan has also eliminated several plans and, working with Blue Cross Blue Shield, added several new options.

Still, as dioceses work with the issue of healthcare cost parity and ACA’s anticipated implementation of the so-called “Cadillac Tax” in 2020, healthcare options for clergy are shifting. Thus, CPG has expanded plans offered to reflect the current market as it brings dioceses in line with healthcare parity measures implemented at General Convention in 2012, the report said.

The 2012 healthcare parity resolution sought to even out cost disparities between dioceses, as well as benefit costs between clergy and full-time lay employees. As part of an account for cost parity, many churches are now offering high-deductible health plans (HD) and health savings accounts (HSA).

The Rev. Robert Black, rector of St. Luke’s Episcopal Church in Salisbury, North Carolina, enrolled his family in a high-deductible plan. “For us being young and healthy, the HD/HSA makes sense and allows us to build up, hopefully more often than not, the balance in our HSA,” Black said. “I wouldn’t switch back to a traditional plan, as it saves the parish money and makes more sense for us in the long run.”

Black’s family grew last year and saw additional out-of-pocket expenses with the HD/HSA plan. “But insurance is all about the long view and the risk,” he said.

The plan has worked for Black, whose family has not had greater expenses, apart from a new baby. However, others wonder about the viability of HD/HSA plans for those who anticipate regular medical expenses.

The Rev. Jacob Pierce, curate at the Church of the Holy Comforter in Charlotte, North Carolina, believes the healthcare parity measures are a good move for the church. “The church is doing the right thing by offering health insurance, period,” Pierce said. He added, “health insurance parity [across dioceses and among employees] is the right thing.”

Pierce said as dioceses move to more affordable HD/HSA plans, though, employees who anticipate regular, costly medical needs may struggle. Clergy formerly on so-called “Cadillac” plans could count on such medical needs being covered. Under HD/HSA plans, employees could burn through resources quickly before meeting deductibles and drain HSAs each year. “For a lot of people it’s not going to work,” Pierce said.

Dioceses may subsidize HD/HSA plans, Pierce said, which could help clergy who are obligated to obtain insurance through dioceses. Nevertheless, as costs rise, more churches are liable to look to high-deductible coverage.

The Rev. Ben Maddison has experienced the pinch of a HD/HSA plan. Maddison, a curate at St. Alban’s Episcopal Church in Waco, Texas, was diagnosed with Crohn’s disease while in seminary. With no generic drug available, his medication costs around $400 every month. Maddison said other clergy spend as much as $1,000 per month to treat Crohn’s.

“For otherwise healthy people it’s not a big deal, but you completely lose the value of an HSA every year,” Maddison said. He said he has spent $2,500 out of pocket this year to reach his prescription medication deductible.

The Diocese of Texas only offers HD/HSA coverage for clergy under 55, though Maddison said the diocese generously funds the account each year. He said he thought the diocese would intervene for an employee if healthcare costs became burdensome. “My concern is for other dioceses that don’t have the resources Texas currently has,” Maddison said. “They have resources, they’ve thought this through, whereas other dioceses don’t have that.”

Compared with HD/HSA plans held by those such as Maddison, “Cadillac” plans — those with the highest annual premiums and benefits — are set to be subject to a 40% excise tax in 2020 under ACA. CPG’s wider range of plans on offer are designed to help churches and clergy contain costs. The rise of more diverse benefit offerings, including HD/HSA plans, anticipates the implementation of the “Cadillac Tax,” the future of which is still uncertain.

CPG “continues to monitor future implications of the ACA,” Armstrong said. He also said the benefits group is “working actively with other denominations, in conjunction with the Church Alliance, to pursue favorable legislation for church-based plans.”

Whether churches would be exempt from taxes on costlier plans or not, the benefits group said the Episcopal Church is well-positioned overall, with costs competitive with or lower than the broader marketplace.

Though HD/HSA plans aren’t, in Pierce’s estimation, a one-size-fits-all solution, both Pierce and Black saw the moves toward health cost parity as a step in the right direction. While high-deductible plan options raise concerns for those anticipating medical expenses, Black said the advance of healthcare changes is a justice issue. “Everyone should have access to quality medical care that shouldn’t cause financial stress on a household,” he said.


Photo: Morguefile / cohdra


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