WELS Benefit Plans

A summary of the WELS Benefit Plans

The WELS Benefit Plans were formed by WELS to ensure that workers and their families have access to quality health and retirement benefits regardless of where the Lord calls them to serve.

The WELS Benefit Plans Office offers two main benefit plans, the WELS VEBA Group Health Care Plan (WELS VEBA) and the WELS Retirement Program. We want to help you, as a sponsoring organization representative, to understand these plans and how they work.

WELS VEBA – Protecting your workers’ health

It is important to take care of your workers by providing comprehensive benefits while also selecting coverage that is affordable and preserves assets for your organization’s ministry. As the cost of health care continues to rise and the health care industry becomes more complex, deciding on the best health benefit program for your workers is an increasingly difficult challenge.

What is WELS VEBA?

WELS VEBA is our church body’s health plan – offering your workers four medical plan options and a range of additional health benefits. Through WELS VEBA, the health care costs for WELS and ELS workers and their families are shared by the sponsoring organizations and plan members.

Active workers who enroll in WELS VEBA Medical Benefits automatically receive:

Coverage available in addition to WELS VEBA Medical Benefits:

How do the WELS VEBA Medical Benefits work?

  • The worker and/or sponsoring organization pays a monthly premium.
  • The worker pays for his or her health care until the deductible is met.*
  • The WELS VEBA plan shares the cost of covered items and services with the worker (coinsurance).
  • If a worker has high medical costs, he or she won’t pay more than the medical out-of-pocket maximum for covered services obtained at In-Network providers.

* Note that WELS VEBA provides 100% coverage, without regard to the deductible, for a wide range of preventive care services obtained at In-Network providers.

Advantages of WELS VEBA

The WELS VEBA health plan is specifically designed for workers of WELS and ELS sponsoring organizations and their families, to be comprehensive, cost-effective and consistent with God’s Word.

Consistent benefits

High-quality health care wherever a worker is called to serve.

Consistent value

Costs are shared across the synod, allowing competitive and stable premiums.

Consistent with God’s Word

WELS VEBA is specifically designed to remain consistent with both God’s Word and the law.

To discover more information on the important advantages of WELS VEBA, watch the benefits of WELS VEBA video.

Which plan is right for my workers?

All four WELS VEBA plan options cover the same medical services and prescription drugs. The primary differences between the plan options are the amounts that members are liable to pay for medical care and the premium costs. Plan options with higher coverage levels and therefore lower out-of-pocket costs for members require a higher premium, and vice versa.

A brief comparison of the four WELS VEBA plan options is provided below:

Plan 1

  • Highest coverage level for members
  • Lowest maximum out-of-pocket liability
  • Highest premium cost to sponsoring organization
  • Deductible: $500/$1,000 (individual/family)
  • Medical out-of-pocket maximum: $1,500/$3,000 (individual/family)

Generally best for: members who expect to have high claims expenses, couples with children, individuals managing chronic conditions and families with low income.

Plan 2

  • Second-highest coverage level for members
  • Higher out-of-pocket liabilities than Plan 1 (still reasonable for many families)
  • Premiums for Plan 2 are 10% less than Plan 1
  • Deductible: $1,000/$2,000 (individual/family)
  • Medical out-of-pocket maximum: $3,000/$6,000 (individual/family)

Generally best for: members who want “traditional” coverage, who may be healthier than Plan 1 members or can afford a higher out-of-pocket expense.

Plan 3

  • Only Plan qualified for use with Health Savings Accounts (HSAs)
  • Higher out-of-pocket liabilities compared to Plans 1 and 2
  • Members pay full cost of prescription drugs until deductible is met
  • Premiums for Plan 3 are approximately 21% less than Plan 2
  • Deductible: $2,700/$5,400 (individual/family)
  • Total out-of-pocket maximum: $5,100/$10,200 (individual/family)

Generally best for: members who want to utilize HSAs.

Plan 4

  • Lowest coverage level for members
  • Highest maximum out-of-pocket liability
  • Lowest premium cost to sponsoring organization
  • Premiums for Plan 4 are approximately 23% less than Plan 2
  • Deductible: $3,500/$7,000 (individual/family)
  • Medical out-of-pocket maximum: $6,000/$12,000 (individual/family)

Generally best for: sponsoring organizations looking to provide comprehensive coverage through WELS at a low cost (potentially paired with an HRA plan) and members who are healthy and expect few medical needs.

HRAs vs. HSAs

Health Reimbursement Arrangement

A Health Reimbursement Arrangement (HRA) plan is a “promise to pay” employer-funded benefits to workers as tax-free reimbursement for eligible medical expenses.

Health Savings Account

A Health Savings Account (HSA) is a tax-favored savings account available to members who are enrolled in the WELS VEBA Plan 3 High Deductible Health Plan to pay for eligible medical expenses tax-free.

The HSA offers a triple tax advantage:

  • Contributions can come out of a worker’s pay check tax-free and unused amounts rollover each year.
  • HSA assets can earn investment income tax-free.
  • Workers can make tax-free withdrawals to pay for eligible medical expenses.

HRAs vs HSAs

Please note that the Benefit Plans Office does not provide the services to administer HRA plans for sponsoring organizations or HSAs for workers. Organizations and workers are responsible to find their own administration firm. Please contact the Benefit Plans Office if you have additional questions regarding HRAs or HSAs.

Health Reimbursement Arrangement

  • Property of the organization.
  • Organization designates a specified amount of tax-free dollars to reimburse workers for eligible medical expenses each year.
  • Contribution limits set by the sponsoring organization.
  • Balance does not roll over each year and generally remains organization’s property.
  • Funds are only paid when claims are incurred.
  • Can be used with WELS VEBA Plan 4 to pay for qualified medical expenses.

Health Savings Accounts

  • Property of the worker even if worker accepts a new call/position or retires.
  • Contributions made by worker and/or the sponsoring organization.
  • The maximum contribution in 2019 is $3,500/$7,000 (individual/family) for most workers.
  • Balance rolls over each year.
  • Can be used with WELS VEBA Plan 3 – High Deductible Health Plan to pay for qualified medical expenses and retirement savings.
  • Important: Members must pay full cost of prescription drugs until WELS VEBA Plan 3 deductible is met.

Reducing health care costs

If your organization is seeking to be good stewards of its resources and potentially reduce health coverage costs in 2020, you may want to consider the following options:

  • Support a WELS VEBA Plan option with a higher deductible.
  • Ask workers to pay a higher percentage of the WELS VEBA premium.
  • Support a WELS VEBA Plan option with a higher deductible, and allow workers to “buy-up” to a lower deductible plan by paying the difference in WELS VEBA premiums.
  • Adopt Plan 3 and provide funding for worker Health Savings Accounts.
  • Adopt Plan 4 and offer reimbursements through a Health Reimbursement Arrangement plan.

WELS VEBA eligibility

To be eligible for WELS VEBA, a worker must:

  • Be an active worker in an eligible sponsoring organization; and
  • Be hired or called, and compensated, to work at least 20 hours per week for five or more months per year.

More details on eligibility rules and opportunities to enroll can be found on the WELS Benefit Plans Eligibility and Enrollment page.

Membership rights and responsibilities

Each worker has the freedom, and therefore the responsibility, to enroll in the WELS VEBA benefits that they desire, subject to the applicable WELS VEBA eligibility rules. While a sponsoring organization is not able to enroll, terminate, or make any changes to a worker’s WELS VEBA coverage, each sponsoring organization is free to determine the amount that it contributes toward the cost of each worker’s WELS VEBA coverage.

We encourage you to carefully consider the financial support for WELS VEBA coverage that your organization will provide to its workers, being mindful of the costs that both your organization and its workers can afford to pay. It’s important to clearly communicate the financial support for WELS VEBA coverage that your organization will provide each year so that workers can make informed decisions when enrolling for WELS VEBA coverage.

You can think of it as insurance, but because we’re all members of a group policy and we’re all WELS congregations and WELS members who are buying this policy, I look at it as a way of brothers and sisters helping each other. I look at it not so much as an insurance policy, as much as it is a way for us to show our concern and compassion and support for each other. – Rev. Charles Heup, Good Shepherd, Plymouth, Wisconsin.

WELS Retirement Program – Protecting your workers’ futures

Although retirement may seem a long way off for many of your organization’s workers, it is never too early for them to start saving for the future. Through the WELS Retirement Program, WELS provides retirement income and retirement savings vehicles for those working in WELS’ ministry.

The WELS Retirement Program is comprised of two plans; the WELS Pension Plan and the WELS Shepherd Plan.

Please note that workers at ELS sponsoring organizations are not eligible to participate in the WELS Retirement Program.

The WELS Pension Plan

The WELS Pension Plan is a defined benefit plan that provides a monthly annuity for life to retired called workers with options for surviving spouse benefits. All contributions are paid by sponsoring organizations and are placed into one group trust.

Workers who have been issued a formal call by WELS to serve at least half-time at a WELS sponsoring organization will automatically participate in the WELS Pension Plan and do not need to complete an enrollment form to begin participating.

The WELS Shepherd Plan

The WELS Shepherd Plan is a defined contribution plan that allows WELS called and lay workers to save and invest during their working years to provide an account balance that can be accessed in retirement. Contributions can be made by workers and/or sponsoring organizations and are placed into the worker’s individual account.

If your sponsoring organization has adopted the WELS Shepherd Plan, workers who are expected to work at least 20 hours per week are eligible to participate. Please inform such workers of their eligibility, any financial support offered by your organization and enrollment instructions.

Retirement Plan comparison

The table below compares the differences between the main features of the two plans:

WELS Pension Plan

WELS Shepherd Plan

Participation

Automatic for called workers.

Optional for eligible called and lay workers.

Enrollment

Automatic upon acceptance of an eligible call.

Must enroll to participate, and be called or hired by a sponsoring organization that has adopted the WELS Shepherd Plan.

Benefits

Provides a monthly annuity for life with options for surviving spouse benefits.

Benefits determined by a formula that includes the worker’s actual years of creditable service.

Allows a worker to save and invest during their working years to provide an account balance they can access during retirement.

Benefits determined by the amount of contributions made to a worker’s account and the worker’s actual investment returns.

Contributions

All contributions paid by sponsoring organizations.

All contributions are placed into one group trust.

Contributions can be made by workers and/or sponsoring organizations.

Contributions are placed into a worker’s individual account.

Investments

Investment decisions made by the WELS Retirement Program Commission.

Investment decisions made by workers (within parameters set by the Commission).

Taxation

Benefits for retired Ministers of the Gospel may be eligible for housing allowance that is not subject to income tax.

Contributions are made tax-free and benefits are taxed when paid (unless eligible for housing allowance that is not subject to income tax).

Benefits for retired Ministers of the Gospel may be eligible for housing allowance that is not subject to income tax.

Contributions can be made pre-tax or after-tax.

Risk Retention

Investment, inflation, and longevity risks retained by WELS.

Investment, inflation, and longevity risks retained by workers.

Further support

For more information on the WELS Benefit Plans, visit the Contact Us page.