January 12, 2010
By Mary Frances Schjonberg

Against the backdrop of the health-care reform debate across the United States, the Episcopal Church has begun changing the way it provides employee healthcare benefits.

The General Convention in July (via Resolution A177) gave the Episcopal Church Medical Trust, an affiliate of the Church Pension Fund (CPF), three years to implement the new program. Dioceses, congregations (including cathedrals, parishes and missions) as well as other official church agencies are required by the resolution and the canonical changes it included to provide benefits to all clergy and lay employees who work 1,500 hours (30 hours a week) or more per year in the church's domestic dioceses (including Puerto Rico and the Virgin Islands). Employees who work 20 hours or more a week may voluntarily participate according to guidelines their employers will set.

The previous General Convention endorsed a CPF proposal to study the feasibility of such a plan. CPF said in its report to the Anaheim meeting that the church as a whole could save $134 million in the first six years after replacing the current voluntary and fragmented system with the denominational health plan (DHP). The report also said that such a plan would mitigate inequities between lay and clergy employees and would improve employees' access to health insurance.

The Episcopal Church Medical Trust, a part of the Church Pension Fund, currently administers approximately 19 health benefit options for 87 of the church's 101 domestic dioceses. Updated research indicates there are another nearly 30 plans being used by 14 dioceses not in the Medical Trust as of January 2010. More than half of those dioceses are talking with the Trust about possibly joining in 2011.

Jim Morrison, CPF's executive vice president for health, life and risk management services, told ENS recently that dioceses participating in the denominational health plan will be able to choose from an array of health plan options through the Medical Trust. Research completed during the feasibility study showed that an array of just seven plans could match the benefits offered by more than 100 different diocesan plans – without increasing the out-of-pocket costs for 95 percent of church employees covered by those plans, according to Morrison.

"That will enable us over the next three years to provide the best possible access, vendors and carriers that will provide the best discounts and allow for maximum control and choice at the local level," he said, adding that the dioceses know their circumstances better than the Medical Trust and should be able to make their own choices.

The organization is trying to balance diocesan autonomy and choice with the requirement for a denomination-wide health plan set by Convention.

"We've said we're not the health benefits police," Laurie Kazilionis, Medical Trust vice president for account management, said in an interview. "We want to win dioceses and groups on price and service."

"We want to give them a lot of local control, but also give them an enormous amount of support … [with Medical Trust doing] the lion's share of the work," she added.

In the transition, Morrison said, the Medical Trust will emphasize not so much required participation, but the soundness of the business decisions involved. However, he and Kazilionis said, the requirement of participation is still present.

Morrison said the issue comes down to the question "Are they Episcopal or not?"

"Adhering to the canons is part of being an Episcopal parish or institution. That ultimately is the issue. If you're not Episcopal, then you don't have to follow the canons. It's no more, no less than that," he said. "If you're Episcopal, then you're a part of the church, you're a part of what the canons say and … you'll want to follow them. Because the Medical Trust is part of the church, we're going to do our best to provide dioceses and parishes with benefits and services that are equal to or better than what they current have, at costs that are equal to or lower than what can be found in the marketplace."

A long-term healthcare benefits solution for non-domestic dioceses, largely comprised of Province IX, continues to be developed under the leadership of Jim Morrison and Tim Vanover who was the project manager for the feasibility study. While that work is underway, CPF is launching a new financial assistance program starting 2010 to help with employees of those dioceses with emergency and catastrophic health care expenses. Those dioceses include Colombia, the Convocation of American Churches in Europe, Central Ecuador, Dominican Republic, Haiti, Honduras, Litoral Ecuador, Micronesia, Taiwan and Venezuela.

In January, five new "regional relationship managers," based in the church's provinces and responsible for about 20 dioceses each, began having conversations with every diocese. The goal is to determine how best to help those dioceses and parishes that do not currently participate to move into the Medical Trust while making every effort to support local leadership throughout the transition, Kazilionis and Morrison said. During the second half of 2010, the Medical Trust will continue that enrollment work and help participating groups renew their coverage.

The regional managers, all of whom have Episcopal Church work experience, are Lou-Ann Milton (based in Amesbury, Massachusetts for Province I and III), Garth Howe (based in San Diego, California for Province VIII), Toni Marie Sutliff (to be based permanently in Denver for Province VI and VII), the Rev. Rusty McCown (based in Birmingham, Alabama for Province IV) and Rose Lawson (based in New York City for Province II and V).

Dioceses select plans they and their parishes will offer employees from those provided by the Medical Trust through Aetna, Cigna, Empire BCBS, UnitedHealthcare and Kaiser, where available. Premiums would differ across the church because of regional differences in health care costs and plan differences.

The Medical Trust has already helped the church and its employees save money under the denomination-wide plan. The average rate increase in 2010 for participating church employers is 5.7 percent, according to the Medical Trust, compared with a U.S. average of 9 percent.

"This is early evidence that leveraging our size, and using that size to negotiate with our product partners, can yield substantial sayings for the church," the organization said in a recent newsletter.

In addition, the Trust says that its research into the feasibility of a denominational health plan showed that paying closer attention to the well-being of employees is important for cost-containment. Effective Jan. 1, those insured through the Medical Trust's plans will have no co-pays on annual in-network physicals and eye exams, and those with dental insurance are entitled to three free cleanings and related exams each year.

"We're really focused on wellness. One of the best ways we're going to reduce costs is to increase the health and wellness of our members," said Kazilionis. She added that "the bottom line is that we need to convince the Episcopal Church's employees to take better care of themselves."

That convincing includes a video interview with Presiding Bishop Katharine Jefferts Schori that was recently sent to diocesan leaders and posted on the CPG website in which she urges employees to recognize the reality that they cannot take care of the people of the church if they don't take care of themselves.

Saying that "we don't want it to become a bureaucratic, stogy organization," Morrison said the Medical Trust will track the effectiveness of the transition. A denominational health plan advisory work group of participants and providers will meet periodically to look at cutting-edge issues in health care and offer feedback on the work of the organization. The Trust also plans to survey parts of its membership every 12-24 months to gather the same sort of feedback, Morrison said.

By early next year there will be a benefits registration system for all employees who work 20 hours a week or more as a way "to better understand what their various employee benefits are and with that the health plans that they have," according to Morrison. He added that the point is not to gather information on individuals for information sake, but rather to collect "the necessary information to deliver … competitive products and service at competitive prices."

"We're going to try to stay as nimble as possible," Morrison said.

Episcopal News Service
The Rev. Mary Frances Schjonberg is national correspondent for the Episcopal News Service.