Obamacare fight spells trouble for church insurance

President Barack Obama greets doctors and nurses following his remarks about health care reform at the White House in 2010. (Official White House Photo by Chuck Kennedy)

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WASHINGTON (RNS)—An “all-or-nothing” effort to repeal Obamacare could doom efforts to tweak the health care reform bill to fill a gap for church health insurance plans.

Without a fix, United Methodist Church leaders say some of their churches could drop current coverage for employees once President Obama’s signature Affordable Care Act fully takes effect next year, according to Colette Nies, spokeswoman for the denomination’s General Board of Pension and Health Benefits.

obamacare signs bill400President Barack Obama signs the health insurance reform bill in the East Room of the White House, March 23, 2010. (RNS / Official White House Photo by Chuck Kennedy)Under the 2010 Affordable Care Act, more than 50 percent of United Methodist clergy would qualify for tax credits available to lower- and middle-class families to purchase insurance. But because of the way the law was written, those tax credits cannot be used toward insurance plans churches can offer through government-run exchanges.

“The concern is that the church plans won’t be viable if everyone who can get a tax credit leaves and goes to the state exchange,” said Timothy Jost, a professor at Washington and Lee School of Law, who studies health care.

Since many churches are small—with one pastor and a few lay employees—they will not be required under the Obama plan to provide coverage. If a church drops coverage, that would free—or force—employees to seek the lower-cost insurance with the government exchange.

obamacare mark pryor200Small churches that fall outside the large-employer mandate may conclude they should drop health coverage and guide employees to purchase insurance on their own through government-run exchanges, where subsidies would apply, Nies said. Leaders of church-run health plans believe it would disadvantage church employees who have more tailored coverage.

“We cannot estimate how widespread this would be, but given the income demographics of the UMC workforce, it could be substantial,” Nies said.

Churches ‘overlooked’

United Methodist leaders praised the passage of the 2010 Affordable Care Act because it aligned with the denomination’s values. But leaders say churches were overlooked in the fine print.

Before the health care law was passed, denominations like the United Methodist Church may not have understood all of the implications of the health care law, said John Lomperis of the Washington-based Institute on Religion and Democracy, a conservative think tank.

“It is not even clear that they even took the time to carefully read the health care bill before so energetically endorsing it and lobbying for its passage,” he said.

obamacare chris coons200A bill under consideration would assure that employees insured under church plans could use the same tax credits offered to people on government exchanges. In June, Democratic Senators Mark Pryor of Arkansas and Chris Coons of Delaware introduced the Church Health Plan Act of 2013, aimed at allowing church employees to apply for tax credits. More than 1 million pastors and other church employees could be affected by the change, the senators argue.

“At this moment, we’re not expecting to get a vote,” said Ian Koski, a spokesman for Coons. “The dedication of Senate and House members to repeal it entirely instead of working with us to fix it has disincentivized Republicans from working with us on it.”

Koski also suggested Republicans might have another incentive to block the legislation: Pryor is running for re-election as a Democrat in a decidedly red state.

Guidestone supports new bill

The bill has received support of many denominations, including the Southern Baptist Convention, despite a push by some of its leaders to repeal the entire act. Leaders within the SBC’s medical plan provider, GuideStone Financial Resources, insist church health plans will be at a disadvantage in the health care marketplace.

“We don’t think passing this legislation has to be inconsistent with those who hope for eventual repeal,” said Rodney Miller, general counsel at GuideStone. “We’re dealing with a law that’s on the books in the here and now.”

Even with widespread support across aisles, supporters assume the bill will die. House Republicans already voted 40 times to repeal Obamacare.

Many religious groups have objected to the health care law, but much of the controversy has focused on the mandate that will require some religious organizations to provide contraception coverage at no cost to employees.

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