Transcript RHIF Task Force Update

Our Clergy Covenant:
“Blest Be The Tie”
Gathering of All Clergy
Afternoon Presentations
Our Clergy Covenant:
“Blest Be The Tie”
Afternoon Updates
• 2014 conference budget
• Presentation on ACA
• What ACA means for churches and
clergy
• Report from TF on retired clergy
insurance subsidies
Our Clergy Covenant:
“Blest Be The Tie”
Afternoon Updates
• 2014 conference budget
Our Clergy Covenant:
“Blest Be The Tie”
2014 Conference Budget:
CFA proposed $13.2 Million
2013 Session adopted $13.9 M
Leadership Table revised $13.7 M
Revisions:
+$300,000 pension reserves
+ $200,000 tithe income estimate
Our Clergy Covenant:
“Blest Be The Tie”
“Fun Facts” about pensions:
Indiana Conference pension liability = $91
million (highest of any Conference).
But right now we are at 115% funded
position.
Our Clergy Covenant:
“Blest Be The Tie”
“Fun Facts” about insurance:
Indiana Conference retiree health
insurance liability = $29 million.
This is being funded on a year-by-year
basis in our conference budget.
The Affordable Care Act (ACA)
• Expands health insurance coverage to an estimated 25 million Americans; leaves 25-30
million uninsured (depending on how many states expand Medicaid)
• Creates new exchanges/marketplaces and provides subsidies for those w/o health
insurance and with incomes between 100-400% of FPL to purchase insurance
• Will cost $1.1 trillion over 10 years according to the CBO
• Allows states the option to expand their Medicaid programs to persons earning <133% of
FPL; about 50% of all potential newly insured
• Employers (except smallest businesses) must offer “affordable” insurance or pay penalty
($2-3k/employee if one employee accesses the exchange/marketplace)
• Individuals must purchase health insurance or pay fines (up to 2.5% of income)
• Restructures health insurance market
–No denial of coverage for preexisting conditions
–No annual or lifetime caps on expenses
–Limits on premium differences based on age/health status
–Requires coverage of preventive services w/no co-pays or deductibles
The Affordable Care Act (continued)
• Reduces Medicare payments to providers & reduces DSH payments to hospitals
(hospital cuts of $155B/10 yrs; DSH cuts of $34B/10 yrs)
• Creates Independent Payment Advisory Committee to recommend spending cuts
and cost savings for Medicare
• Creates demonstration and pilot projects to encourage experiments in health
delivery system change and payment reforms
– Accountable Care Organizations (ACOs)
– Bundled Payment Program
– Center for Medicaid and Medicare Innovation (CMMI)
• New taxes and fees
– Increases Medicare payroll tax on wages and investment incomes of those
earning $200K or more annually;
– 2.3% tax on medical devices;
– fees on Pharma and health insurance industries
– 40% excise tax on “high value” health plans (2018)
Medicaid Expansion Key Part of ACA Coverage Expansion:
Indiana Will Not Expand Medicaid in 2014
7/16/2015
11
Implications of Not Expanding Medicaid
in Indiana
Who Will Operate the ACA’s
Health Insurance Exchanges?
7/16/2015
13
The ACA’s Health Insurance Exchanges
• Health insurance exchanges are a
central part of coverage
expansion in the ACA
• Exchanges will extend health
insurance to as many as 24
million Americans
• More than 800,000 Hoosiers will
be able to access the exchange
• A large majority of expected
exchange purchasers will be
eligible for federal subsidies to
purchase health insurance
• Unclear what rate of uptake will
be in first year
All of Indiana1
(92 Counties)
Total Population
6,516,000
(All People)
Exchange-Eligible
(Excludes Employer-Sponsored
and, Medicare 65+)
Subsidy-Eligible
(Includes only 100-400% FPL)
1-Exchange-Eligible market data for 19 non-filed markets were not available, therefore numbers of Exchange-Eligible and
Subsidy-Eligible populations for these 19 counties has been scaled to be proportional for the rest of the state.
Sources: American Fact Finder, Stats Indiana, MDwise and Stonegate Analysis14
845,000
763,000
Exchange Member Profile
• At least 2/3 of Exchange members will be previously
uninsured
• Up to 1/3 of Exchange membership will be:
– Individuals who lose their employer-based
coverage
– Individuals for whom their premium contribution
would exceed 9.5% of their income
– Individuals who would otherwise purchase
insurance in the Nongroup insurance market
Source: Kaiser Family Foundation
15
Health Insurance Exchange Plans
 Health Insurance Exchanges = “Marketplace”
 Provide premium subsidies to individuals with incomes between 100% - 400%
of FPL
Plan Levels of coverage are:
Bronze Level
• 60% of
Covered
Expenses
Silver Level
• 70% of
Covered
Expenses
Gold Level
• 80% of
Covered
Expenses
Platinum Level
• 90% of
Covered
Expenses
Subsidies calculated against second lowest Silver Product premium.
All Exchange Plans must offer 10 categories of “Essential Health Benefits”
Insurer Participation
in the Exchange
• Four plans have been approved by IDOI
 Anthem: Statewide
 MD Wise: Mostly Statewide
 Celtic (MHS/Centene): Northern Indiana
 PHP: Central to Northern IN
• Anthem offering Narrow Network with
Community Health
• IU Health in MDwise plans only
17
The Exchange Web Portal
Enrollment for Individual Market
• Open Enrollment Periods:
– Initially: Oct. 1, 2013 - Mar. 31, 2014
– Annually, 2014 and after: Oct. 15 – Dec. 7
• Initial Open Enrollment Period:
If you enroll during the Initial Period:
Your coverage is effective*:
On or before
December 15, 2013
January 1, 2014
Between the 1st and 15th day of
January – March
First day of the following month
Between the 16th and the last day of
December – March
First day of the second following month
* Some exceptions may allow for earlier effective dates, such as loss of minimum essential
coverage, gaining or losing eligibility for premium tax credits, etc.
Status of Open Enrollment
• Millions of consumers have been unable to
use healthcare.gov since its Oct. 1 launch due
to software and hardware problems.
• One third of users trying to complete an
application on the website have been able to
do so.
• About 700,000 people have completed
applications for coverage — a key step before
people can begin shopping for insurance
plans.
7/16/2015
20
What ACA means
for churches and clergy
ACA and INUMC 2013
Exchange Notices
• October 1, 2013
• Ongoing requirement for new hires
 October 1–December 31, 2013—on date of hire
 After December 31, 2013—within 14 days of
hire
• General Board Toolkit available for conference and
churches—www.gbophb.org
Summary, Helpful Hints, FAQs, Template Notice
ACA and INUMC 2014
• Conference Health Plan still in place
• Full time active clergy remain Mandatory
• For planning, Conference needs “household
income” information from clergy to design a
health plan that meets affordability standards
and avoids penalties.
ACA and INUMC 2014
• Modified adjusted gross income (MAGI) =
taxpayer’s adjusted gross income (AGI) (Code
§62)
Form 1040 line 37 (last line of Page 1)
Form 1040A line 21
Form 1040EZ line 4
 Clergy will be able to input via website
ACA and INUMC 2014
Employers required to report value of
health coverage on employees’ W-2s
• January 2013 on many W-2s
• Temporary exemption for:



Employers in church plans (unless church plan is
subject to ERISA)
Small employers (fewer than 250 W-2s)
Multiemployer (union) plans
• IRS may end the exemption upon notice
• No earlier than 2014
ACA and INUMC 2014
Employer Shared Responsibility
• Also called employer mandate or pay or play rule
Delayed until 2015
• Applies only to large employers
 Large employer averages 50 or more full-time equivalent
employees (FTEE)
 Small employers (<50 FTEEs)—exempt
RULE SHOULD NOT APPLY TO MOST CHURCHES
ACA and INUMC 2014
Covered Employees
 Large employers must provide
“affordable coverage” with “minimum value” to:
• Full-time employees (FTEs) (30+ hours/week)
• Dependent children (up to age 26) of FTEs
• Or else pay a penalty
• Not required to offer coverage to employee’s spouse
Small employers: exempt
ACA and INUMC 2014
Counting Employees (small employers: exempt)
• Full-time: 30 hours/week (130 hours/month)
• Part-time employees (PTEs)
 Counted to determine if employer is subject to the rule
• Employees on paid leaves are counted
 Vacation, jury duty, disability, leaves of absence
• Seasonal employees may be excluded
 Fewer than 120 days per year
• Variable-hour employees
 Complex rules
ACA and INUMC 2014
Employer Aggregation
• Controlled Group rules Code §414(c) apply
 Generally “lump together” closely affiliated employers
• Tax-exempt organizations
 Common control (80% shared board members)
 Uncertainty about how applies to churches
• Shared Responsibility Rule:
– “good faith” standard for churches
 IRS Notice 89-23: 80% shared directors, or
one employer provides at least 80% of operating funds of
another (plus: some common management)
ACA and INUMC 2014
• If your church has 50 employees
• Contact Brent Williams at
brent.williams @ inumc.org
• Workshop with Consultant – Feb/Mar 2014
ACA and INUMC 2018
Cadillac Plan Tax
• Applies to the value of plans
in excess of certain thresholds
 40% excise tax on plan’s value in excess of:
• $10,200 for individual coverage
• $27,500 for family coverage
• Conferences should already be planning
for containing costs by 2018
 HealthFlex has been phasing out more generous plan designs
ACA and INUMC
• For more information go to the General Board
of Pension and Health Benefits Website
gbohph.org
Center for Health/Health Care Reform
Retiree Health Insurance Funding
Task Force Report
RHIF Task Force Update
DECISION OF THE 2013 ANNUAL CONFERENCE
• Every retired clergy aged 65 and older receives Medicare
Insurance
• The Indiana Conference provides a subsidy of $5 per service year
per month (maximum of $150/month for 30 years) to both the
retired clergy and spouse to purchase one of two Medicare
Supplement plans offered through our Indiana Conference
• Surviving spouses get free insurance for one year after the death
of a clergy, and then a subsidy of $250/month for life to purchase
a Medicare Supplement plan through the Indiana Conference
RHIF Task Force Update
CONCERNS HEARD AT 2013 SESSION OF AC
• Maintain the subsidy for surviving spouses
• Don’t eliminate subsidy for retired clergy and
spouses (past, present or future)
• Desire to provide a subsidy to participants
who financially need it the most
• Not enough advance information
RHIF Task Force Update
PENSIONS HAVE IMPROVED AND INCREASED
• Because of the actions of the General Conference and the
2013 Indiana Conference, the opportunity to pre-fund
one’s retiree health cost is now available.
• Participants who retired in earlier years need more
subsidy to purchase one of our Medicare Supplement
Plans
• Growing number of retired clergy is placing increased
obligations on the Indiana Conference
RHIF Task Force Update
TASK FORCE REACTIVATED
• After the 2013 Session, Bishop Coyner re-activated the
Task Force to study this issue further and bring
recommendations to the 2014 Session
• Task Force membership consists of retired clergy (3), a
surviving spouse, representatives from Foundation, Board
of Pension (3), Staff (2), an insurance consultant, former
pension staff, HR professional, and a benefits educator
RHIF Task Force Update
• The Affordable Care Act has only one provision that impacts
Medicare – decreasing the size of the Donut hole for prescriptions
• The average age of our clergy and spouses who are on our
Medicare Supplement plans is age 80
• There are less expensive Medicare Supplement plans available,
with different coverage than our two options - one of our
recommendations may be a referral to the Conference Board to
consider other options.
• The Compassion Fund is available to assist participants with our
Medicare Supplements
RHIF Task Force Update
THE TASK FORCE IS CONSIDERING SEVERAL OPTIONS FOR THE FUTURE
ONE OF WHICH IS THE FOLLOWING FROM GEORGE HUNSAKER
For all persons enrolling in a Conference Sponsored Medicare Supplement:
•
We will maintain the $250/month subsidy for all surviving spouses after their one year of free
insurance following the clergy death
•
All participants who retired prior to 1990 will continue to receive $5/month/service year subsidy
for up to 30 years of service
•
All participants who retired in 1990 thru 2004 will receive $4/month/service year subsidy for up
to 30 years of service
•
All participants who retired in 2005 thru 2015 will receive $3/month/service year subsidy for up
to 30 years of service
•
All participants who retire in 2016 and beyond will receive $2/month/service subsidy for up to 30
years of service
PLEASE PROVIDE REFLECTIONS
• IN YOUR PACKET IS A RESPONSE FORM
• PLEASE COMPLETE AND PLACE IN BOXES AT
REAR OF MEETING AREA
• OR EMAIL YOUR REFLECTIONS TO
[email protected]