How are Southern Baptist churches and ministers managing in the age of escalating health care costs, confusion and uncertainty about Obamacare in a time of stagnant or declining church membership and revenues?
A recent article, not yet available online, describes and decrys the “alarming rate” at which churches are shifting the costs of benefits from churches to ministers. The shift seems to mirror the trend of small businesses dropping health coverage for their employees. The vast majority of SBC churches are, economically viewed, small businesses with one, perhaps a couple of full time employees.
Having been on Medicare for a couple of years, I am not closely attuned to what the general practices are in this area, nor to what shifts the churches around me are managing. My limited, anecdotal experience and that of some of the church consultants I’ve read lead me to make these observations:
- Many churches continue the practice of providing a bottom line compensation package and leave it to the minister to apportion that as he wishes between cash salary (and housing allowance), insurance coverage, and retirement contribution. I asked a friend whose church is seeking a pastor, an average-sized single staff church, what their compensation was going to be. He said the church could manage about $50,000 but would negotiate from there. If the new pastor has a family and plans to provide insurance coverage on his pay, his take home pay is going to be rather meager.
- Many churches are foregoing salary increases and shifting increasing amounts to cover premium costs. Every church I served agreed to pay my family health coverage. God bless them for doing so and they were good to their word. The reality over the last 10-15 years, though, was that the rapid and substantial rise in insurance costs were such that raises in cash pay were restricted. Do many pastors hear their leadership say, ‘Pastor, we can’t manage a raise in pay for you this year because of healthcare costs but we will continue to cover those’?
- Catastrophic coverage is all the church can manage for their pastor and family. I hear and read of deductibles ranging in the several thousands. I have been blessed to have good health and few expensive health care costs over the years but I didn’t feel like I had health insurance of much value until I hit Medicare age.
- Alternatives to traditional comprehensive health insurance are increasingly used by ministers and churches. I’m not all that acquainted with cost sharing plans that some of the brethren are using but they seem satisfied with it. Whether or not large numbers can be managed on these plans I don’t know.
I’m not optimistic about our Republican president, Senate, and House doing much to fix health care. It would be nice to be surprised by an idea that works in this area but it looks like this will be cobbled together and cast out into the marketplace with no assurance of success – just like Obamacare, I suppose.
Will ministers and churches see these in the future?
- Continued movement towards larger churches, partly because of the increasing expense of smaller churches carrying even one full time staff member.
- Less interest by seminary graduates in average or smaller sized SBC congregations. The traditional system of short-term pastorates in small churches as a way of gaining experience in ministry may be affected if churches are unable to pay a decent salary and pay the minister’s health insurance. MDiv holders whose church background is in larger than average, multi-staff congregations find yet another reason to avoid small, rural churches.
- More secondary church staff positions, because larger churches can better afford to pay full benefit costs associated with these. When an average-sized church near me interviewed senior pastor candidates they were surprised to find that those who were in associate staff positions were paid substantially above what the church could offer a senior pastor.
- Pastors with working spouses whose job provides the family health coverage will be preferred. There’s no mystery here. The minister whose wife has or can find a job as a public school teacher who can carry the family’s insurance will instantly be elevated in the search process, much like the pastor of earlier generations who wife could play the piano or organ. While it doesn’t sound very spiritual, I suspect it is reality.
- Closure and merger of smaller churches. I’m always skeptical of the predictions of large numbers of church closures or mergers of smaller churches. It may happen, though.
- Greater numbers of bivocational ministers, especially those who have job benefits. The church gets a pastor at a steep discount and is willing to adjust job demands accordingly.
I haven’t seen anyone providing much in the way of solutions to the problem of escalating health care and, concomitantly, health insurance costs but a few things are within the minister’s control:
- Be sure you take advantage of as large a housing allowance as possible. We might debate the constitutional merits of such, but it is lawful. You can take up to 100% of salary as housing allowance, so long as you follow the rules. See Guidestone’s Q & A page. If you have to spend more on health insurance, try and save as much as you can on taxes.
- Be informed about your health insurance costs before negotiating with a church. If the church offers a package that sounds reasonable be sure and factor in health insurance premiums. Absolutely clarify if the church expects you to pay this by using some of the “package” they offer. Surprisingly, I hear of ministers who fail to ask about this in the search process. This and all agreed compensation should be put in writing by the church. It is not unspiritual to have conversations with the church and committee about these things. It is irresponsible not to have these conversations.
- Don’t neglect retirement contributions. You cannot afford to spend now thinking that you can save for retirement later. Do both. It can be done.
- If you are a lay leader, help your congregation to understand the value and responsibility of helping your minister to have adequate health coverage.
Are advantages being given on the basis of health care policy to larger churches, more affluent churches, churches in larger communities where there is an active job market for the spouse of the minister, churches that will be receptive to a minister who is already on Medicare, churches that have a bivocational minister, and churches in states with generous health care programs for dependents of lower income families?
Are disadvantages being enhanced on the basis of health care policy for smaller churches, less affluent churches, rural churches, churches in communities where good jobs are scarce, and (I hate to say it) most SBC pastors who have a single income family?
I would be curious what my colleagues are finding these days concerning health insurance costs and how this affects their role as a minister or as a lay leader in a church.
Free addendum and provocative question: Would a single payer health system be a boon to SBC churches as a whole?