SARS-CoV-2, also known as the coronavirus or COVID-19, caught the world off gaurd in early 2020. As world leaders and health experts tried to work together to find a strategy to contain it, it raged on. More than two years later, it’s no secret that the ripple effect of the COIVD-19 pandemic went far beyond the health implications. It ushered in new levels of fear and distrust that led to divisiveness – even in the Church. It strained the global supply chains that impacted the economy. And it created instability in the labor market. Dubbed the Great Resignation, the quit rate among employees reached a 20-year high in November 2021. A recent Pew Research study found several contributing factors pointing to the exodus of employees from the jobs, and as expected, lack of pay is at the top of the list, with 63% citing low pay as their reason for leaving.
Health Care Costs
Interestingly, not too far behind low wages as a primary reason for employees leaving their job was not having good health benefits at 43%. To retain your top performers, your church needs to provide quality health benefits; and that means addressing this sensitive topic when creating the church budget. As health benefit costs continue to trend upward, the temptation for any church financial team is to find ways to lower the costs. Unfortunately, most attempts to decrease the cost of health insurance negatively impact the employees. The employee either encounters higher monthly premiums reducing their take-home pay or receives less health care coverage – both are horrible options. Before your church reduces coverage or increases premiums, consider this data from SHRM (Society for Human Resource Management), 56% said that health care coverage is a primary factor when deciding if they will stay in their current job.
Is Providing Health Insurance Mandatory
Let’s get this out of the way; there is no one-size-fits-all when it comes to offering benefits. In fact, per the ACA (Affordable Care Act), businesses with less than 50 employees do not need to provide health insurance. And, if you want to get deep into the weeds, employers with over 50 employees may choose to pay the ACA fine rather than provide health care insurance. But, the data shows that employers that provide quality, affordable health insurance have a better chance to retain their best employees.
How Much Should the Church Pay
Even though there is no one-size-fits-all approach, there are considerations when determining health benefits for a church budget.
- Most insurance carriers require the employer to pay at least 50% of the premium.
- On average, the employer pays about 80% of the premium, and the employee pays the other 20%.
- If your church offers group coverage to any full-time employee, it must also offer it to all full-time employees. (A full-time employee is anyone working 30 or more hours per week.) In other words, don’t discriminate – even if it’s for the Lead Pastor.
- Use a broker and compare your benefits annually. Most churches do not have the resources to properly invest the time necessary to shop for rates or health care plan options. Good brokers provide multiple plan comparisons, help with open enrollment, and assist when questions arise about claims and coverage.
As churches continue to navigate the ripples of the COVID-19 pandemic, including the Great Resignation, don’t lose your most talented, top performers needlessly. Annually review the health benefits offered to your staff. Compare plans and rates and when increases happen, make sure too much of the burden doesn’t fall on the employee by using the standard ratio of 80/20. And be sure to include the employer portion of the benefits in the budget. Health insurance benefits may be a line item that shows as an expense on the ledger, but not it is not as costly as losing your top talent.