I should preface this review of a somewhat painful education with the proclamation that some of the people I enjoy most in the world are insurance agents and brokers. With that said, I think I would rather hear that the 60 Minutes film crew and the IRS were in the lobby asking for me than to go through the process of evaluating my insurance coverage and putting it out to bid. I think I would rather negotiate a new deal on a copy machine (okay, maybe not that … but close).
Over the last five years I have had Workers’ Comp attorneys make decisions that took my mod rate to 127% (we are back at .70 now, five years later). I’ve experienced a health insurance broker go under and leave us with tens of thousands of dollars in unpaid medical bills. And then came “Obamacare.”
Here are some of the things that I learned:
In 2008, an independent contractor and friend, Joe, was cleaning one of our church buses. He was told not to walk on top of the bus but ignored the facility director’s directions. He tragically fell to his death. He and his family attended our church and we stood with them during a terribly sad ordeal.
I was later contacted by our insurance company, one that we had been working with for decades. They informed us that an attorney had contacted them, asking for Workers’ Compensation money.
We stood with the family during this time, as we had for years—financially, as well as emotionally—but this claim seemed odd to me. Joe had his own company. He always invoiced us for his work and had been doing this for years. He had never received W2 income of any kind from the church and was not an employee.
My insurance company agreed with my assessment, but the company attorneys felt that they might lose in court; they settled with the plaintiff for $27,000. I strongly opposed their action and was astounded to find that they had reserved $200,000 (for potential further legal action that never took place) from this event and increased our mod rate by more than sixty percent. This event stayed on our record for years, costing us thousands of dollars before it fell off.
I was appalled at my lack of input and influence over the action of my insurance company and their defense of my rates.
- You really have very little control over Workers’ Comp costs. To the degree that you control payroll and create the safest environment you can, you impact Workers’ Comp.
- I learned that Workers’ Comp can extend beyond your own employees and that I may not have a voice in Workers’ Comp litigation.
In 2010, we researched our insurance options and made some major changes. We established an HRA with a very high deductible with Blue Shield, joining a group of independent churches that our broker had formed to give low rates that were not available to us as a nondenominational church. We did our due diligence, shopped around and made the best decision. At first we saved thousands of dollars.
Within twenty-four months of joining the program, we were informed that the group coverage was no longer available, retroactively to the prior month. During that month, they accepted our $17,000 monthly premium payment yet told us that our claims may not be paid.
We scrambled to obtain coverage for our employees; we ended up directly paying hospital bills amounting to more than $20,000.
With these types of experiences taking place—and the uncertainty of the “Affordable Care Act”—I have continued my education in providing health care for my employees.
After more than a year of research into various options for health care, we decided to enter into an agreement with Christian Healthcare Ministries.
CHM is a voluntary cost-sharing ministry based on the premise that the New Testament teaches that Christians should carry each other’s burdens.
It is not a health insurance company. They are a group of thousands of Christians across the United States and around the world. The group shares each other’s burdens in the area of health care costs, pray for each other and encourages one another.
In the last twenty years, members have helped each other by sharing more than $1 billion in medical costs.
We chose the Gold level of service from CHM, but members have the option of three participation levels: Gold, Silver or Bronze. Monthly financial gifts assigned to each level are the shared funds used to meet medical costs. We added a premium called Brother’s Keeper which gives us unlimited catastrophic coverage—rather than the $100,000 limit at the Gold level.
Each month, members receive a statement (Member Gift Form) with the amount of their voluntary sharing financial gift. The amount is sent directly from one member to another through an escrow account that is audited according to Generally Accepted Accounting Principles (GAAP), as is required by federal law. CHM staff members then process members’ submitted medical needs so that other members can pay their medical bills.
This medical expense sharing program is similar to Medi-Share and Samaritans Ministries, with one big difference. They process the billing, saving our pastors the headache of doing a huge portion of the paperwork—which is not their strong suit.
Our first year estimate of premium savings, based on our historical cost analysis, is more than $100,000.
Prior year Premiums Christian Healthcare
We set up each of our employees that are eligible for health coverage with $500 in their own HRA account. We fund this account to the same degree that we did with our previous HRA. Since we already had HRA accounts that the employees were familiar with, they are aware of the things that are covered under the program and know we are in compliance with state and federal laws.
One of the best advantages is that this program is recognized by the federal government; we are not under the Affordable Care Act stipulations and restrictions.
What I Learned
I have learned, and continue to learn, that change is inevitable; you must be nimble—no matter the size of your church. You research, pray, and count on the Lord to make up your lack.