[Episcopal News Service] As Congress continues to fight over the Affordable Care Act, the Church Pension Group and the Episcopal Church Office of Government Relations are urging legislators to pass a bill to rectify what they see as a church-related glitch in law.
The Affordable Care Act is meant to make preventive health care — including family planning and related services — more obtainable for uninsured Americans.
Currently low- and middle-income individuals and families who are not otherwise eligible for affordable public- or employer-sponsored coverage will be able to apply for subsidies in the form of tax credits to help them buy private health insurance through newly established health insurance exchanges. Enrollment in the plans those exchanges offer is due to begin Oct. 1 and coverage and subsidies begin in January.
However, according to the law and its current implementing rules, unlike most health plans, church health plans may not offer their plans on state or federal health insurance exchanges. Thus income-eligible clergy and lay enrollees in church health plans do not have access to those tax credits based on their premiums.
The Church Pension Group and the Office of Government Relations support The Church Health Plan Act of 2013 (Senate Bill 1164), which would allow eligible employees to continue to purchase insurance through church plans and have access to the same premium tax credits available to employees who purchase coverage from for-profit health plans through the exchanges, also known as the Health Insurance Marketplace.
However, the bill does not give special tax treatment for clergy and lay employees who are eligible for the credits as the AFL-CIO recently requested for its members. The labor federation wants multiemployer union health plans to have access to the premium tax credits, and also maintain the tax-free treatment of contributions to their health plans, a benefit not otherwise provided to individuals who receive the premium tax credits through the Marketplace. The Obama administration has denied the AFL-CIO request.
The Church Pension Group estimates that about 6% of clergy and 16% of lay employees currently enrolled in The Episcopal Church Medical Trust’s plans would qualify for a “meaningful premium tax credit if the Act were passed,” Frank Armstrong, senior vice president and chief actuary for the Church Pension Group, told ENS in a written response to e-mailed questions.
The Medical Trust provides a variety of healthcare coverage offerings to Episcopal clergy and lay employees. The Medical Trust administers these offerings, contracting with leading healthcare carriers (i.e., UnitedHealthcare) and paying them a fee to provide access to their provider networks and claim payment services.
Armstrong noted that an employee can qualify for premium tax credits if he or she has household income between 100% and 400% of the Federal Poverty Level (about $24,000 to $94,000 per year for a family of four in 2014, according to information here.)
In addition, they must be able to show that they do not have access to affordable health coverage through their employer. Coverage is defined as affordable when the required employee contribution for self-only coverage does not exceed 9.5% of household income. The employee would also have to purchase coverage through the health care exchanges and file a tax return (joint if married) to get the tax credit.
Armstrong said that “exceedingly few” Medical Trust participants pay all or the majority of their health insurance premiums. “In fact, most employers pay all or the majority of single healthcare coverage for both clergy and lay employees, which is why so few would qualify for premium tax credits under current [federal] guidance.”
Jayce Hafner, domestic policy analyst for the church’s Office of Government Relations, told Episcopal News Service that “it seems unfortunate that the Episcopal Church, an organization that worked so hard for the passage of the ACA, should be excluded from [all the] benefits of this law.”
“Should the Church Health Plan Act of 2013 not pass, some employees of The Episcopal Church will lose some financial incentive to enroll in health plans that are tailored specifically for their profession,” she added, such as a special Medical Trust benefit to cover participation in “colleague groups” facilitated by clergy and licensed church counselors who work with church employees to address vocational and professional pressures.
The church’s advocacy for universal access to health care dates to at least 1994 when the General Convention passed Resolution A057 , which in part put the church on record as believing that access to “quality, cost effective, health care services [ought to] be considered necessary for everyone in the population.”
The Office of Government Relations sent a letter Sept. 26 to members of Congress urging passage of the Church Health Plan Act.
The Church Pension Group has posted information about the proposed Church Health Plan Act and a sample letter on its website for participants to use to write their U.S. senators to urge them to support the bill.
Two Democratic senators, Mark Pryor of Arkansas and Chris Coons of Delaware, introduced the Church Health Plan Act in June. Coons called the fix “a common sense issue.”
The Church Alliance – a coalition of 37 church-benefit boards covering mainline Protestant denominations, two branches of Judaism, and Roman Catholic schools and institutions, which provide health care benefits for more than one million clergy and lay workers, also supports the Senate bill. The Episcopal Church belongs to the alliance.
However, chances of the bill’s passage are tied up in the political in-fighting that surrounds the federal health-care law that opponents have dubbed “Obamacare.”
“It’s a complicated scenario in Congress. Some members of Congress are recognizing that the ACA, while comprehensive and effective, needs some improvements and they are trying to iron out these kinks,” Hafner said. “However, there are other members of Congress who are strongly against the ACA, and would sooner keep the law the way it is and work to repeal it, rather than work to improve it. These actors are making it difficult for other members to update, enhance, and progress the ACA.”
And on Sept. 12, in its 41st vote against all or parts of the Affordable Care Act, the U.S. House of Representatives passed No Subsidies Without Verification Act (H.R. 2775). The bill opposes a July regulation issued by the federal Department of Health and Human Services (HHS) giving state-run health insurance exchanges some flexibility when examining whether people are qualified for the insurance premium tax credits. Republicans say the flexibility will allow ineligible people to qualify for the credits and the Obama administration says the regulation is being misinterpreted. The act is expected to die in the Senate.
Meanwhile, Republican majority leadership in the House of Representatives has said it is willing to shut down the federal government by refusing to grant it borrowing authority past the end of September unless the ACA is stripped of its funding. Again, it is unlikely that such a move would survive a vote in the Democrat-controlled Senate. On Sept. 25, the Senate made progress towards passing a version of the House bill that keeps the government open but does not remove funding for the ACA.
Other possible impacts
Some observers have predicted that if the tax credits are not extended to eligible clergy and lay employees, low- to middle-income clergy and lay employees will try to leave denominational plans and purchase coverage in the exchanges. Others have wondered if some employers will strongly suggest that they do so to relieve their own costs of providing coverage.
“If an employee is able to provide certification that he or she qualifies for a premium tax credit, this would be considered an allowable [Denominational Health Plan] opt-out,” said CPG’s Armstrong, reiterating that the CPG thinks “exceedingly few” Episcopal Church clergy and lay employees will qualify for the credits.
Armstrong noted that Episcopal Church Medical Trust participants who opt to buy coverage through the Marketplace will lose any employer contributions currently being made toward the cost of their insurance; and any premium payments made by the employee toward the Marketplace coverage cannot be made on a pre-tax basis.
Plus, those people who are income-eligible would likely need to “buy up” in order to obtain a Marketplace plan that provides the same coverage the employee has now through the Denominational Health Plan, according to Armstrong. Most Medical Trust plans are classified as “gold” or “platinum” and also provide ancillary benefits such as vision coverage, employee assistance plans and health-advocate service but the premium tax credits will be based on the cost of the Marketplace “silver” plans.
(A short explanation of the “metal levels” is here.)
“There are other tax and financial consequences to consider as well,” Armstrong said. “We strongly suggest that each employee speak with a financial or tax advisor during the decision process.”
Meanwhile, according to Armstrong, “the Medical Trust is not overly concerned about the potentiality of church employers urging their employees to opt out of the DHP in order to relieve the employer’s expenses” because of the anticipated small number of employees involved.
“Furthermore, unlike for-profit companies, the Medical Trust has the church’s and our participants’ best interests at heart and we believe that church employers feel the same way,” he said.
A related issue as the implementation of the Affordable Care Act approaches is a part of the law that allows employers with fewer than 50 full-time equivalent employees during a specific measurement period to stop offering health coverage to their employees without being penalized under the so-called Employer Shared Responsibility provision of the ACA. The Obama administration has delayed implementation of that provision until 2015.
Armstrong said that eventual enactment of that provision would not supersede the canonical requirements of 2009 General Convention Resolution A177 which established the Denominational Health Plan and required health benefits to be provided to eligible clergy and lay employees.
Read more about it
* For more information on how the premium tax credits work, go to this part of the federal government’s HealthCare.gov website.
* The Kaiser Family Foundation has a subsidy calculator here.
* The Consumers’ Union has developed state-by-state brochures explaining how the tax credits work and how to qualify for them in each state. They are available here.
– The Rev. Mary Frances Schjonberg is an editor/reporter for the Episcopal News Service.