Whether you’re an established megachurch with multiple campuses or you’re a small local church in a tight-knit community, it’s equally important to provide a benefits program for full-time staff. But with rates going up by 10 to 20 percent every year, it can be a challenge for smaller churches to keep up.
The result? Understaffed churches, bare-bones programs and unsatisfied employees.
But it doesn’t have to be this way.
Small and mid-size churches can take several steps to leverage the body of Christ to enhance their employee benefits programs. To learn these steps and discuss them in detail, Church Executive recently partnered with Louis M. Gallucci, COO of Enterprise Risk Strategies, LLC and a consulting partner of Missio Benefits, to host a webinar: “Bring the benefit back to your employee benefits program.” In it, Gallucci explained how aggregation and partial self-funding can be used to significantly lower premiums, streamline administration and provide control over content plan and design.
Gallucci’s presentation explained how — by coming together through aggregation models — churches can spread out the risk taken on by insurance companies by shouldering it themselves and partially self-funding. Though that can sound scary to those who are already struggling with the cost of their current plans, the webinar goes on to show how the aggregation model benefits everyone and not only reduces risk, but cost as well.
Gallucci illustrated the details of these benefits, including the note that this model allows churches to choose from plans that are not subject to state-level laws, so they don’t have to fund a plan that goes against Christian values.
To learn more about these benefits and the structure of an aggregation model, view the webinar on the Church Executive website.
— Reporting by Skylar Griego
QUESTIONS? Readers ask, an expert answers.
If a church opts to do a partially self-funded plan, doesn’t that mean it takes on a lot more risk?
Gallucci: If you’re small, yes. If you’re a small church, the reason you’re not doing that is because the risk would be catastrophic. So, the answer is ‘yes’ if you keep your current paradigm.
But if you aggregate, and actually adopt a model of unity where you bring a bunch of faith-based organizations together, you’re now in the same realm as the really, really big Christian ministries. Think about some of the churches we mentioned in the webinar: Compassion, Focus on the Family, Navigators, Young Life, Wycliffe, Samaritan’s Purse — the list goes on and on. They’ve all objectively weighed and measured partially self-funding, and pretty much universally come to the conclusion that the risk is well worth the reward. They’re all adopting that model.
The answer is, as an individual in your current paradigm, one large claim could blow up the whole program because you don’t have a sufficient spread of risk. But in a model of unity, walking as a body — as it pertains to benefits — is sustainable and represents a marked improvement in a ministry’s ability to steward healthcare.
What if a church has missionaries abroad? Are there any plan options for them?
Gallucci: Yes. Different aggregation models offer different types of benefits and structure. Missio Benefits, definitely; it can be both global and domestic. Missio Nexus, at its roots, was a missionary agency association, so they offer global and domestic healthcare, dental, life, disability, etc., and it’s all administered through a cloud-based, benefits administration system.
If you’re in a traditional paradigm — where you’re not aggregating — global benefits are available, as well, and those programs are offered through Aetna International, Cigna Global, UHC Global, IMG, GeoBlue, and others. There’s a lot of vendors out there if you’re going to stay just as one group and not aggregate.
What type of flexibility does a church have if it joins an aggregation model?
Gallucci: Well, it’s a lot more flexible than a traditional model. I’ll define that a little bit.
You’re going to have flexibility as far as plan design. You’re not going to have to compromise as it pertains to moral objections. You’re actually going to have data — real data — which you have zero of in your current model (or if you do get some, it’s a joke). It’s like, ‘Here’s your total claims and your total premium.’ And you might think, ‘Okay, thanks. What does that mean?’
You’re going to have flexibility around the technology and how you administer the plan, so gone are the days of paper forms and age-banded rates. You’re actually going to be able to be more efficient in how you manage your program via technology that’s typically afforded to the biggest of the big Christian organizations.
There are no state-level regulations, which is actually a big benefit. Depending on the state you’re in, there could be certain requirements for which you have no say in the matter. If you’re going to a partially self-funded plan — a church plan, or something like that — that all changes.
Then, you have a tremendous amount of flexibility into how your plans are structured, the underlying eligibility rules, and all sorts of things.
So, I would suggest you can’t even compare the two, honestly, because it’s a completely different paradigm.
What are the first steps toward investigating these aggregation plans?
Gallucci: Working with your local broker or consultant would be the first step. We’re huge believers in relationships and honoring those relationships. Wherever you are, there’s amazing people, and a lot of them are believers. It’s pretty easy to find someone who’s like-minded who does insurance planning.
Start there, and if you haven’t done so yet, do a full RFP — not just, ‘Hey, we’re with UnitedHealthcare, and let’s look at the other options UnitedHealthcare offers.’ Actually engage the market.
I would suggest the time is right in the U.S. now, whenever your renewal’s coming up. Weigh and measure your current paradigm. If it’s a fully insured ACA plan, great. Look at all the vendors. Look at all those plans. Look at all the networks. Look at contribution schedules, or have your broker do that for you. You’re actually paying them. If you didn’t know this, you’re already paying them through commissions, and they live and breathe this kind of thing all day long. They’re experts. Have them objectively weigh and measure the traditional model, and then ask them to go out and look at some aggregation models. There’s a ton of those. With just a quick Google search, you can find a bunch of PEOs. You can find MEWAs. Association health plans are becoming more and more common.
Then, see what the outcomes are and move forward as the Lord leads, based on price, administration, all those kinds of factors.
How big of a group would a church need to be for an aggregation model to be beneficial?
Gallucci: Well, with most aggregation models, a church can be any size. With Missio Benefits, you can have one employee — so you could be really, really small — and that’s fine. With our models, everybody gets the same rates. Everyone has access to the same plans, just as if you were locations in a big employer. It effectively turns the Body of Christ into one of the largest employers in America.
If you, as an individual entity, are interested in partially self-funding or something similar, the ‘juice’ has to be worth the ‘squeeze,’ so to speak. I would suggest around 500 employees would need to be enrolled in your program — not 500 eligible, 500 enrolled. You need the spread of risk to create predictability and sustainability. That’s what makes the model work.
Don’t mainline denominations do a form of aggregation already? Most seem to use regular insurance company offerings. Are you approaching them, as well as individual churches?
Gallucci: Oh, certainly — and you’re right. There’s a particular denomination that’s actually a client of ours, Christian Missionary Alliance, or CMA. They have a benefits program they offer their churches. A lot of denominations do that. My father is a pastor in the Missionary denomination, and they have a benefits option for some parts of the country, but not all. So, it’s a mixed bag as far as what denominations do.
I would suggest this, though: the Body of Christ is massive. We’re powerful. We just choose not to walk in our strength as a body. What I mean by that is, there are literally hundreds of thousands of Christian employers in America.
I’ll say that again: there are hundreds of thousands of churches, Christian schools, nonprofits and missionary agencies who employ people with benefits packages. That risk is all over the world, global and domestic. What happens with denominations — though they can be great — is that sometimes, with a denominational-type program, you get a limited risk pool; so, you only have so many eligible groups. I personally have no issue with that, as long as you get sustainability through critical mass.
But for me — as an individual, a party of one — I don’t want to turn benefits into what’s happened with denominations. I want to leverage the strength and size of the Body of Christ to change normal. I want to impact this country for the glory of God. I want Fox News and CNN to be talking about what the faith-based community is doing and how it’s totally changed normal.
What do you think of PEOs? Are they a good option, and if so,
Gallucci: Yes, PEOs are great. Depending on the aggregation model, a PEO might be fully insured. It might be partially self-funded. So, there are different types of PEOs.
A lot of them tend to be fully insured, which still can offer a lot of advantages, because you can get the big, fully insured group versus you on your own as a church or a ministry. PEOs generally offer a lot; they essentially become your HR department, so they do your payroll. They do your handbooks. They do all sorts of things, and benefits is one of them. So, yes, they’re great options.
“Bring the benefit back to your employee benefits program”
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Just objectively weigh and measure pros, cons, costs, administrative costs and risk, and make sure to do this with wise counsel and with your broker — maybe with others you trust, as well — and then move as the Lord leads.
I’m here to tell you that there are options out there that the vast majority of Christian organizations don’t even have on their radar. This is all about putting money back into ministry. If we can give our people better plans, attract and retain people who love the Lord and are committed to serving, and not have that be a compromise for their family and put more money into ministry, then shoot — why aren’t we considering that?
How does a nationwide aggregation model handle network issues?
Gallucci: There’s no perfect network, right? But there are really, really good ones.
With Missio Benefits, we use a global / domestic program that’s pretty broad. We use Cigna domestically. They’re our administrator for medical and pharmacy. And we use the best, broadest network they offer on a national basis, their Open Access Plus network. They’re obviously one of the biggest insurance companies in America; but it’s not perfect, so there can be times when frustrations are expressed about it, especially if a faith-based group is in a rural area.
Again, no network is perfect. But with the right aggregation model — if it’s self-funded or partially self-funded — if access to care is an issue, you can just isolate cities or zip codes and force the administration so that 100-percent of the claims are processed in-network. You can be very creative and serve those areas of need that way. Generally, when you do that, there’s a load to the rates, because that’s not priced for in the general pricing; but there are ways to deal with that that make sense.
If a church joins an aggregation model, can it keep its broker?
Gallucci: In some cases, the answer is no. In others, the answer is yes.
Here’s our thought: we think that relationships are really important and that to do the right thing, it’d be nice if you don’t force a faith-based organization to terminate a relationship. Here, we want to honor brokers and consultants. We welcome them into the program. We want them to receive compensation for what they do.
Now, in aggregation, like I said, you’re getting all the technology and tools. So, a lot of the times when you join those programs, your broker or partner will have 95-percent less work; most of their work will be shifted into the program. But they can still be paid, and you can still honor that relationship and have boots on the ground.