The Corinthian Plan (TCP), the health plan of Mennonite Church USA, continues in its mission to provide access to affordable group health coverage for eligible congregations. At the same time, the Insurance Marketplaces are in the third year as part of the implementation of the Affordable Care Act (ACA), the federal health care reform program.
To help you consider your involvement in the plan and to stay abreast of the changing healthcare environment, below are answers to common questions about the impact of the ACA on congregations who are participating in TCP in 2016.
Rather than provide group health coverage to pastors and staff, can a congregation provide financial assistance in the form of a salary increase or other compensation so they can purchase individual health insurance?
It depends how the financial assistance arrangement is set up, and there are consequences. More information is available at here.
Option 1: Indirect compensation: The congregation may simply give a salary increase, granting employees the option to use the additional salary as they wish, for a premium payment for individual health insurance or another purpose. In that case, the congregation should not be exposed to the excise tax, but the additional income must be reported on the employee’s W-2 and is subject to tax.
Option 2: Direct compensation: When compensation is specifically tied to making a premium payment in the individual health insurance market, such an arrangement is generally considered an employer payment plan, exposing both the congregation and employee to taxation. Because of this, direct compensation would be the least recommended.
It would require reporting the financial assistance as income on the employee’s W-2 and would be subject to taxation. The arrangement may also expose the congregation to an excise tax that could be as high as $100 per day per violation. An important piece to remember is that congregations acquiring health coverage for their pastor and staff through The Corinthian Plan would not be exposed to the excise tax or expose employees to additional income taxation.
Will the church staff who have benefited from TCP, because they had pre-existing
conditions, have access to health insurance under the ACA?
Access under the ACA means that no one can be turned down or be charged higher premiums based on a health condition as long as coverage is applied for during open enrollment or following a qualifying event. This is a significant change in the U.S. health insurance system and will allow those with serious health issues to apply for and receive coverage. This same benefit already exists within TCP. When we launched The Corinthian Plan, we asked congregations to make a commitment by either enrolling their staff or paying a waiver fee so their eligible employees could participate in the plan regardless of their health situation. By enrolling or paying a waiver fee, their staff also received access to ancillary benefits like life and disability insurance plans. Based on the ACA changes, recent renewals of TCP have included an open enrollment period, regardless of the church staff’s health situations, to match the ACA open-enrollment window. We have also reduced the waiver fee within TCP to encourage waiving congregations to continue to participate in this mutual aid program.
Will the ACA offer affordable health insurance to church staff?
The Insurance Marketplace created as a part of the ACA, includes subsidies for health insurance for qualifying individuals based on a sliding scale of income. This provides some level of support for lower-compensated pastors purchasing insurance through the Insurance Marketplace, especially those whose household income is under 400% of the Federal Poverty Level.
At the same time, The Corinthian Plan has continued to maintain good experience, and we have delivered very modest annual increases for several years. We believe the plan continues to be a good value for its participants.
Participating in The Corinthian Plan, the group plan for MC USA employees, allows continuity of coverage, if an employee moves from one MC USA congregation to another.
How would church staff enroll in the Insurance Marketplace?
If they pursue insurance through the Insurance Marketplace, the church staff would apply for and enroll in their own individual health insurance plan (for themselves and their dependents) from their state’s Insurance Marketplace.
Churches considering a Marketplace strategy should investigate the network access to ensure that important providers are included.
How would withdrawing from TCP and using the Insurance Marketplace affect other churches?
The Corinthian Plan is built on the idea that we share each other’s resources. When we have fewer people enrolled in the plan, the burden of helping churches that need a subsidy falls on fewer churches and increases their costs.
So, it’s critical to the success of TCP that as many congregations as possible participate in the plan and that new participants join whenever possible. In the event a congregation decides to withdraw from TCP, Duncan Smith should be contacted to help work through the details.
Is the church planning on continuing The Corinthian Plan into the future now that theACA is in effect?
Although we are entering the third year of the Insurance Marketplace, there continues to be uncertainty as to the number of plans available in each state, as well as cost and access to physician networks. A number of health insurance carriers have decided to no longer offer coverage through the Insurance Marketplace in 2016. In addition, there continues to be political controversy surrounding the ACA.
The Church Benefits Board that oversees TCP believes there is still too much uncertainty and anxiety regarding the ACA to abandon The Corinthian Plan when it is working well. Consequently, we ask congregations to continue with the plan as we further evaluate the situation and as the ACA evolves.
I have additional questions about the effect of ACA on TCP. Who do I contact?
Direct your questions to Duncan Smith at (866) 866-2872 ext. 34255 or at
DuncanS@mennoniteusa.org.