Mosaic Mennonites

Missional - Intercultural - Formational

financial

Clergy Housing Allowance & Inflation: Can You Change it Mid-year?

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With rising inflation, all of us have experienced prices rising on most everything over the past few months, including housing expenses (rent, mortgage rates, utilities, furniture, etc.) Credentialed leaders are afforded a clergy housing allowance through the federal government which allows them to exclude housing expenses from their gross income.  These allowances are set annually by your congregation or governing board.  With the current financial climate, you may be asking, can I change my Housing Allowance to reflect the current increases in my housing costs?   

The answer is yes, with the following rules: 

  1. Changes may be made to a Clergy Housing Allowance for the remainder of 2022.  You cannot change the Housing Allowance for any period already past, but you can change it for the rest of the year. 
  2. The same authority (e.g. Church board) that set the Housing Allowance at the beginning of the year needs to be the same authority that changes it. 
  3. The change needs to be duly recorded in the minutes of that authority’s meeting when the change was approved. 

Some churches establish a maximum amount that their credentialed leaders may utilize as a Housing Allowance for a given year.  If the credentialed person decides to increase the amount of their housing allowance for the remainder of the year (and it is less than the approved maximum amount), the person may change it without further approval. 

For more information regarding a Clergy Housing Allowance, please see this article, “Did you Know?” on the Mosaic website. For further questions, we encourage you to contact an accountant familiar with the IRS’s Clergy Housing Allowance.  

Increase in IRS Mileage Rate

Due to recent gas prices, the IRS recently announced an increase to the business mileage rate, beginning July 1, 2022.  As of July 1, the mileage rate for business travel will be 62.5 cents per mile, up 4 cents from the rate effective at the start of the year.  For more details, please see the IRS website.  

 

A Tradition of Mutual Aid

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by Conrad Martin, Director of Finance

The last week of August, I had the honor of representing Franconia Conference at the 50th anniversary of the Mutual Aid Sharing Plan (MASP).

The Mutual Aid Sharing Plan was established to provide coverage for the medical costs of the international workers for Anabaptist organizations around the world.  While each organization has its own plan, each member organization pools their resources together to share the risks involved in medical-related expenses.

In the 1950s, purchasing any kind of insurance was still frowned upon by many Anabaptist groups, but the concept of mutual aid sharing was at the heart of these groups.  In 1955, Mennonites leaders from across North America came together to establish the Association of Mennonite Aid Societies, which led to more formal collaborations between groups for sharing the risks related to “housing and lands.”  In 1957, Mennonite Indemnity, Inc. (MII) was established to serve Anabaptist communities under the umbrella of Mennonite Central Committee (MCC).

Edgar Stoesz was working for MCC, with responsibilities serving MII, when he noticed a need for the sharing of medical costs for international workers.  He was attending a meeting of the Council of Mennonite Mission Board Secretaries and overheard a conversation between one of the organizations represented at the meeting and an insurance agent.  The prices that were being quoted for medical coverage shocked him and Stoesz remembers wondering why these organizations couldn’t pool their resources and share in the cost of medical claims.  He determined that it would save these organizations a lot of money.  He shared his idea with the group and immediately they asked him to create a plan and report back to them.

The concept Stoesz came up with was simple: member organizations would total up the medical costs for each worker at the end of the year and any costs in excess of $1,000 would be distributed equally over all of the member organizations, based on the number of participants.  So in 1969, MASP was created.

In the early years, there was little overhead, so Stoesz was right—it did save a lot of money.  Initially there were six member organizations, of which Franconia Conference was one, providing medical coverage for the missionaries sent to Mexico and other countries.  Over the years, many other Anabaptist mission boards throughout the United States and Canada joined in MASP.  Also over time, some member organizations birthed their domestic programs into new entities (for instance, Ten Thousand Villages was birthed out of MCC) and so MASP began to invite other domestic Anabaptist organizations into the sharing plan.

In more recent years, the medical insurance world has become more and more complex.  Staff were brought on to focus on these details.  In 2010, the Affordable Care Act created some challenges for MASP and the concept of the end-of-year reconciliation had to be changed.  Actuaries were contracted to develop a system of premiums calculated at the beginning of the year, and so MASP began to function more like an insurance company.  Reinsurance was purchased to handle any extremely high medical costs.  In 2015-16, several large domestic claims were almost too much for the MASP, leaving the MASP board to consider dropping the domestic organizations.  Instead, the decision was made to stick together and weather the storm; MASP came out of that period a stronger organization.

In celebration of its 50th anniversary, MASP commissioned Jewel Showalter to write a book on its history.  A copy is available in the conference office.

Today, Franconia Conference continues to partner with the MASP member organizations for medical coverage for Robert and Bonnie Stevenson, serving in Mexico.