Collaborating for Coverage

As executive director of Congregation Emanu-El B’ne Jeshurun, a synagogue in River Hills, Wis., Bruce Ente provided health insurance for the organization’s three employees. But four years ago, those premiums cost the synagogue, which ran on an annual budget of $1.3-million, about $11,000 each month — or, as Mr. Ente puts it, “enough to choke a horse.”

It wasn’t until a couple of years later that Mr. Ente learned of a new and more affordable option: the Wisconsin Jewish Group Benefits Plan, the result of a collaboration struck in 2006 between nearly two dozen Milwaukee-area synagogues and Jewish charities and the insurance carrier Humana. The plan, which has since changed to another provider, United Health, covers approximately 325 fulland part-time employees of organizations that could not easily afford medical insurance for workers if they applied individually.

Mr. Ente, who left the synagogue last year and is now working as a management consultant and serving as the health plan’s president, says Congregation Emanu-El B’ne Jeshurun saw its monthly premium drop to approximately $3,140 the first year — a 71.5 percent decrease — and the benefits were similar to what the organization had before.

Jewish group leaders say the plan is innovative for several reasons: It brought together groups with differing agendas that hadn’t worked together before. It also provided health insurance to part-time employees, such as teachers who may work a few hours at a synagogue and a few hours at a Hebrew school and are otherwise not eligible for benefits.

And the plan’s structure, which provides a model for other groups facing financial pressures, can be extended to provide employees with other benefits, like retirement planning.

Getting Started

Back in 2001, Tobey Libber, then planning director at the Milwaukee Jewish Federation, noticed how badly the budgets of local synagogues and Jewish social-service and educational groups — especially small charities — had been battered by health-insurance costs.

“They were all dealing on their own with health-insurance carriers and without much bargaining power,” he says.

He realized he could do something about the problem when he switched jobs in 2002 and became a program officer at the Helen Bader Foundation, a private foundation in Milwaukee that supports charities that focus on Jewish life and learning, among other causes. There, he pondered the possibility of helping Jewish organizations band together for greater bargaining power.

In 2006, Mr. Libber was able to turn the idea into a reality, with the foundation’s clout and money as well as a team of experts in employee benefits.

But putting the plan together was not without significant challenges, including legal ones.

In 2004, Mr. Libber began the process by gathering leaders of local Jewish organizations. The planning group included, along with a health-insurance broker and a lawyer, Brian Leibl, then chief financial officer of the Milwaukee Jewish Federation, and Lisa Hiller, the Bader foundation’s vice president for administration and a certified employeebenefits specialist.

With the help of a $40,000 grant from the foundation, the group created a proposal for a health plan.

Eventually, the foundation provided five grants, totaling $330,000, to put the plan in place.

Bader was “in a unique position to initiate this project because almost every Jewish group in Milwaukee had at one time received a grant from the foundation,” says Mr. Libber.

To encourage participation, he adds, “we attended a lot of board meetings. We got a lot of people to play in the sandbox who usually didn’t do that with each other.”

He says some charities jumped at the idea of banding together — particularly small groups that were especially hard hit by rising health-care costs. But, he notes, “some of the larger organizations with more employees were negotiating on their own and doing OK.”

In fact, Mr. Libber says participating in the plan actually increased some organizations’ rates for the first year or two. To keep a cap on those groups’ expenses, and thereby entice them to participate, the Bader foundation provided some grant money to help larger groups meet the increased costs they would probably face in the first two years of the collective’s existence.

Navigating Red Tape

But the biggest hurdle to overcome was the year-and-a-half that the group struggled for formal recognition from the Internal Revenue Service.

Harvey A. Kurtz, a lawyer in Milwaukee who specializes in employee-benefits law, was asked by Mr. Libber to find a legal framework for the group. Mr. Kurtz found a 2000 law that states that a group of religious institutions can combine to offer benefits as a single employer and not be subject to state laws that otherwise govern multiple-employer arrangements.

The law is the linchpin of the entire program, Mr. Kurtz says: Without it, insurance companies wouldn’t have regarded the collective as a single employer.

Mr. Kurtz says he went looking for a precedent he could cite and found none outside of Catholic groups, which are all controlled under the hierarchy of the Roman Catholic Church. “The irony was the collective had to register as a ‘church group,’” Mr. Libber says.

But the Jewish organizations were not technically related to one another, Mr. Kurtz notes, since each had its own board of directors.

In the fall of 2004, Mr. Kurtz asked the Internal Revenue Service to declare the Jewish groups a single entity, by filing a standard church-plan application, he says, “but the agent reviewing the application declined it because he just couldn’t see this as a church.”

In mid-2005, the IRS asked the collective to prove that its individual entities were “associated with a Jewish church,” Mr. Kurtz says. “We provided [the IRS agent] with an extensive briefing based on interviews with people in our community, giving an explanation in detail of what the Jewish religion is all about — because it is about education and social justice and worship of God. All three things are considered part of the religion.”

After that, the process seemed to stall. Ultimately, the collective turned to Sen. Herb Kohl, a Democrat who represents Wisconsin, to help break the deadlock. Senator Kohl wrote a letter to the IRS’s commissioner, citing a precedent involving Jewish groups in Detroit, and in April 2006, the Milwaukee plan got its approval.

Switching Providers

Administration of the Wisconsin Jewish Group Benefits Plan was handed to the Milwaukee Jewish Federation, which acts as a back office at no financial cost to the collective’s individual members.

Mr. Libber says the group’s recent switch in insurance companies — from Humana to UnitedHealth — brought a surprising change. The new insurance provider offered the group only a 7-percent increase in its premiums, he says, “which I understand is unheard of.”

Although such a small increase is not quite unheard of, “it’s pretty darn good,” says Christopher J. Bartnik, a senior vice president of Wachovia Insurance Services, in McLean, Va. “Most groups are seeing 12-to-15-percent increases in their annual premiums.”

Spreading the Risk

One reason the Wisconsin collective is able to get cheaper insurance for its members than many of them could get on their own is the characteristics of people in the plan, in addition to their increased number.

Before the benefits group was formed, says Mr. Ente, several organizations’ employees were almost solely middle-aged people with families — in other words, frequent consumers of health care. But, by joining with other charities that employed more young and unmarried workers, those groups were able to spread the risk for the insurer and shrink their premiums.

Members of the collective sign a three-year contract. “That commitment prevented some groups from jumping in or out when their premiums got high and low, and disrupting the cohesion of the group,” Mr. Ente says.

The collective’s first three-year cycle ended in December; no members dropped out, he says, and two new charities joined.

Although members are saving on health-care costs, it can be difficult to gauge exactly how much, says Marc Cohen, executive director of Congregation Shalom, in Milwaukee.

“The challenge is comparing apples to oranges after year one, because you can compare what you were paying to what you paid the first year. But after that there’s no way to compare what your health-care costs could have been to what they are becoming,” he says. However, he notes, “we were seeing health-care increases in the range of 20 to 30 percent annually, before becoming part of this organization. Now we’re seeing anywhere from 7 percent to 19 percent.”

He also appreciates that he now has access to data in the aggregate that wasn’t available before — learning how many people in the collective have cholesterol issues, for example.

“Though we don’t know by name,” Mr. Cohen says, “it does give the group’s members an idea of how healthy they are.”

Other charities that seek to band together to get better deals on health care and other benefits need to “work for the good of the whole instead of just your own organization,” says Mr. Cohen.

As for the future of the Wisconsin plan, Mr. Ente says members have discussed expanding its reach to provide dental or vision coverage and other types of insurance, such as long-term care and disability. Also, he says, the group could pool its purchasing power for other services, such as hiring janitorial services at decreased cost.

But the important thing, Mr. Libber says, is that the plan may entice more workers to work for Jewish charities, in Milwaukee and beyond.

“It’s harder and harder to get people to commit to Jewish communal work, and one of the issues among many is quality of benefits and salary available,” he says. “If the benefits are comparable to other forms of employment or better, than Jewish communal work becomes that much more attractive.”