Direct billing: Raw deal

6/3/2008

Rev. Mike Childs
Guest Columnist

The Mississippi Conference has reached a financial crisis. Apportionments have risen higher than our churches can afford. One of main reasons for this is the rising cost of health insurance and pensions for our clergy. This alone now makes up about 46 percent of our apportionments, which leaves too few dollars for ministries. 

A proposal will be presented to the 2008 Annual Conference which offers a possible solution. This proposal is to simply remove health insurance and pensions from the apportionments and bill each local church directly for its own clergy’s health insurance and pension. This would be (at the present time) about $16,000 per clergy. This change would be made in four phases, and the time table for each phase is not yet decided. However, by the end of the process, apportionments would be lowered some 46 percent, and the local churches would face an increased cost of $16,000 per clergy. (Of course, the increase would really be more assuming a continuing increase in the cost of insurance.) 
 
Here is a proposal that actually lowers apportionments without the conference having to cut spending. However, before we jump on this solution, we should seriously consider the consequences.
 
First, this proposal would devastate many medium and small membership churches. For example, there is a very vital small United Methodist Church in Winston County with a full time pastor. They are in ministry to the needy in our community. They give to missions. They have a great children’s program. They minister to the elderly. Their pastor gives leadership to the district. They faithfully pay their apportionments, which are about $17,000 per year. Their apportionments are determined by the very same formula that determines the apportionments of the biggest churches. Direct billing would result in approximately an $8,100 increase in costs to this vital small church. (That is about a $16,000 in direct billing plus $9,180 in other apportionments.) This would be an impossible burden for this vital small congregation to bear. Every charge with a full-time pastor whose apportionments are less than $35,000 per year is going to be hurt by this. 
 
At the same time, one of our largest churches would get a reduction in costs of about $300,000. We would really be shifting apportionments from the big churches to little churches. While this might allow some big churches to do more ministry, the ministry in many more small- and medium-size churches would be crippled. Personally, I do not believe that all effective ministry takes place in big churches.
 
Many small- to medium-size churches which now have full time pastors would be forced to switch to part-time pastors. This would put them, and our conference, on the road to rapid decline. 
 
Second, the proposal would weaken our connectional system. It has been a part of our connection that the stronger churches help the smaller ones have effective ministry. Personally, I believe that no money which my church sends to Jackson is better spent than the dollars that help some smaller churches have a full time pastor.
 
If the local church pays all of salary, all of the insurance and all of pension of the pastor, then the local church and the pastor will grow to see the relationship as employer- employee. Loyalty to the connection will inevitably be weakened.
 
Many small churches already feel the conference does not care about them. Direct billing will pour gasoline on this smoldering fire of resentment. Direct billing of pensions and insurance will deeply divide the Mississippi Conference.           
 
Third, the proposal would endanger our hospital insurance program. In the former North Mississippi Conference, health insurance was direct billed until the mid 1970s. There came a crisis point because anyone under 50 years of age could (and still can) get insurance cheaper from private companies. Young and healthy people were getting out, and the conference hospital insurance was crashing. It was clear that an insurance program which included all the pastors was needed to save the program. The only way to make that happen was to apportion the pastor’s hospital premiums. This saved our insurance program.
 
What will keep the same the same thing from happening again? 
 
Fourth, the proposal simply will not work. The small- and medium-size churches will simply not be able to pay apportionments if they are given a $16,000 plus increase in cost for their pastor’s insurance and pensions. Many will pay their pastors insurance and pensions and not pay apportionments. The result will be less money for apportioned ministries, not more.
 
The fact is that direct billing does not reduce costs one penny. Insurance and pensions will still cost the same amount. It will only shift those costs to the smaller- and mid-size churches. Direct billing is simply a way to avoid making the real structural changes that are required to reduce costs.
 
For these reasons, I urge everyone to reject the direct billing of insurance and pensions.
 
Childs is pastor at Louisville First United Methodist Church and served as a delegate to the 2008 General Conference.