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.
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Free addendum and provocative question: Would a single payer health system be a boon to SBC churches as a whole?
“The minister whose wife has or can find a job as a public school teacher who can carry the family’s insurance…”
Not sure what it is like in Georgia, but our school insurance to cover the family requires a very hefty contribution from the employee. But the principle in general is effective. A preacher friend of mine (who is bivocational and works for a school principle) has recently undergone much in the way of healthcare due to cancer. He told me “if it hadn’t been for my wife’s company insurance we would owe millions.” She had been an administrative assistant in a sort of nationwide company for many years.
“works for a school district” rather than what I typed. Like the SmartPhones, my SmartMind also does “auto incorrect”.
Great post.
Your last question is intriguing indeed. I would guess that in some cases it would benefit the pastor and in other cases the church’s bottom line. Depends on how the church structures the pastor’s package now and then. If he currently receives a lump sum as his “package” and divides it up himself, it would benefit the pastor, as long as he gets to keep the same lump sum. If the church decides how much it will provide toward healthcare and his salary is completely separate from that, the church may determine that the savings is theirs. I guess it really depends on the church.
First let me address the post-article question: No. A Single-payer system is socialistic and will be worse than the Obamacare boondoggle. It interferes with an individuals right to make their own health choices. It will ration care and flood the system creating a physician shortage nightmare because of low reimbursements. Most importantly, it shifts much of the interaction a church can have with a person while providing for their needs and ministering to them. When the government takes over, the church and people loose our role in providing physical and spiritual care to many because they no longer will need anyone but the government. It is really becoming that way now and would be worse with a single-payer system. Our family does not have insurance. We pay cash at the time of service. We are not wealthy and I have a few significant health issues requiring regular care. I have styed home and raised my children no bringing in a second income. We pay the healthcare tax each year and still come out better than buying insurance we could never afford to use because of the high deductibles and premiums. We do have to drive older cars and live in an inexpensive house. We are fortunate to be sure, but it can be done for many. For some this proves impossible leading an opportunity to the church for ministry. Also, we must consider this is an issue of conscience for some. Currently, only certain recognized religious groups are included in the exceptions to coverage. The SBC is not one of them. Apparently, they lump us all together thinking we are like Catholics in that we all apply doctrine and principles exactly the same. Healthcare sharing ministries are an option, but it isn’t really all that affordable. I have looked into it. It still fails to address the conscience issue because a few people I know believe that they still would be relying on a “plan” of sorts and not God and that it is akin to gambling. Not my belief, but that of some. The Republican’s have one policy which they are hoping to pass making some significant changes to the way we buy healthcare. It will formerly roll-out next month and I look forward to seeing it passed with by-partisan support. (1) It will allow individuals and companies to form groups to negotiate discounted premiums just like any employer;… Read more »
I forgot to say that a single-payer system might help the church. The ACA was supposed t do that, but it has proved to exponentially increase costs. But, it might be a more steady and predictable expense. I am completely against it in any fashion. It has ruined healthcare in every country where it is king. Many Canadians come to the US for care along with people from England and France when specialized surgery is needed. We still have the best. Let’s keep it that way if we can afford to do so.
To add a couple of things:
I find that health insurance costs and very high in comparison to our income, and also that we are penalized by the IRS for not having it ($1390 this year). I have never had a secular job or a church that paid our insurance. It doesn’t affect my role as a minister (e.g., a consideration in a call), other than to the extent it affects life in general.
We have some friends who are using an alternative to traditional comprehensive health insurance. I don’t exactly understand it, but it is some kind of Christian group health sharing. They seem to be very well pleased with it.
I’m using Christian Healthcare Ministries (CHM). We could have signed up for insurance with the ACA after I started this job I suppose but it’s one grand mess that I’m not sure I want to get involved with. Christian health sharing programs are one of the only ways to keep from paying for a lot of services that I don’t need like drug addiction treatment, etc.
I wouldn’t mind having a more traditional kind of insurance but first I want to wait it out and see what the new administration does to “fix” our current system.
Put me in the category where my package increases have gone towards benefits instead of take home income. It has been my choice to do so. It’s difficult never getting a “raise” but insurance is a priority for us as I’m part of my wife’s group plan. Our rate increased 25% this year beginning in March. Thankfully the church will cover my increase.
One of the huge disadvantages now is that as dual employed, we must pay income taxes on money doled out for insurance. There is no longer a deduction for it. That results in me having $9000 more a year that is taxable. Think of the pastor with a stay at home wife and three kids. That’s 15/20,000 more a year we’re required to pay taxes on. This applies to anyone who is self employed as well due to changes in the law in 2016 due to ACA.
I have no clue what the answer is. Sadly, I don’t think Washington does either