2015 active clergy benefits: Information for pastors and church officers

September 18, 2014

The Conference Board of Pension and Health Benefits (CBOPHB) met Sept. 9 to finalize the 2015 MAC Plan health insurance premiums and review other benefit plans. Here are the items the board approved:

2015 MAC Plan rates

MAC Plan rates haven’t changed since 2011 and, in 2015, they will remain the same as in recent years. Churches and active clergy will pay the same amount as they’re paying for 2014. Each year, the CBOPHB reviews actual claim costs, Blue Cross and Blue Shield fees, reinsurance fees, wellness program costs, and conference administrative costs to determine the amount to bill the churches and the plan participants.

However, a significant change in 2015 is that the conference share (the subsidy) will be paid by the MAC Plan reserves rather than being apportioned to the churches. This reduces the 2015 apportioned budget by about $350,000. In 2015, the $350,000 will go toward the total MAC Plan cost. Despite the change in the source of the conference subsidy, the amount billed to churches and active clergy will remain the same in 2015 as the amount billed in other recent years. But because the 2015 subsidy will come from MAC Plan reserves rather than conference funds, the way we understand and talk about the MAC Plan premium breakdown will shift (from 80 percent churches/10 percent clergy/10 percent conference) to church cost and participant cost.

This is in accordance with the 2002 legislation that states: “The premium cost for the pastor’s health insurance shall be subsidized by an amount to be determined by the CBOPHB and approved and paid by the Annual Conference. A portion of the premium amount to be paid by pastors under appointment to local churches shall be determined by the CBOPHB and approved by the Annual Conference. The remaining cost of the pastor’s health insurance is the responsibility of the local church(es) to which the pastor is appointed.” 

One of the main reasons for this change is to simplify compliance with the Affordable Care Act (ACA). Possibly starting with 2015 W2 forms, the ACA requires that the “value of health care” be included as an information item on the employee’s or pastor’s W-2. The simpler premium structure will make it easier to accurately record this amount on the W-2 form.

The 2015 MAC Plan premium chart, which includes participant and church costs for 2015, is available on the conference website.

Select Account fees

The CBOPHB approved using MAC Plan reserves to pay the Select Account monthly fee of $4.50 starting in 2015. (Select Account is the medical reimbursement plan under section 125 of the Internal Revenue Code.) Previously, the fee was charged to each pastor participating in the Select Account.

Adoption grant increase

The CBOP approved an increase in the grant awarded to clergy who adopt. For many years, the grant was $500—but starting in 2015, it will go up to $1,000. For details on the adoption grant, please contact Benefits Officer Jean Edin.

Other recent changes

Here’s a summary of other changes in benefit programs that have been implemented recently:

· The Clergy Retirement Security Program (CRSP) was modified Jan. 1, 2014. This resulted in a smaller bill to the churches (about $330,000 for the conference overall) and a smaller benefit for years of service after 2013.

· The 1 percent match for clergy who make a contribution to their United Methodist Personal Investment Plan began Jan. 1, 2014. In both 2014 and 2015, the match will be paid by the benefit reserves. About 95 percent of the Minnesota Conference’s active clergy are making or will make a personal contribution in 2014.

Status of benefit reserves

Conference benefit reserve levels remain strong due to investment earnings and stable health insurance claims. The reserve funds are being used to fund the retired clergy health insurance subsidy, the 1 percent match in the retirement plan (CRSP-DC), and the active clergy health insurance subsidy. The reserve funds are adequate to support the current level of funding. The CBOPHB, assisted by the Investment Action Team, seeks to fulfill its fiduciary duty through prudent management and monitoring of the reserve funds and the conference benefit plans. This includes annual evaluation of the use of the reserve funds.

Barbara Carroll is director of finance and administration, and treasurer, for the Minnesota Annual Conference of the United Methodist Church.

Minnesota Annual Conference of the United Methodist Church

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