HB 3976 On Its Way to the Governor, TRTA Answers Member Questions

Announcement: HB 3976 received a final vote in the Texas House on Wednesday, May 24. The bill as passed includes the amendments made in the Texas Senate, such as $20 million in prescription coverage for the under 65 age group. HB 3976 is now on its way to the Governor for his signature.

If signed into law, the TRS-Care's changes will go into effect on Jan. 1, 2018.

On the evening of Tuesday May 23, the Texas Retired Teachers Association (TRTA) hosted a Facebook Live event to provide members with a status update on HB 3976 and answer some questions posed about the changes expected for the TRS-Care retiree health insurance program.

TRTA Executive Director Tim Lee, Legislative Coordinator Bill Barnes, and Pensions Consultant Ronnie Jung participated in the event. You can view the entire video, which is approximately one hour long, in its entirety by clicking here.

Members, we hear your questions and concerns and are doing our best to answer them. If you do not see your question posed here, please send an email to info@trta.org. Below, TRTA will cover some of the most common questions we received this week.

Please read this special proviso to the comments listed below: TRTA is providing information based on testimony from various hearings, as well as meetings and discussions we have had with legislators during the session. At this time, we believe these answers are accurate; however, the Teacher Retirement System of Texas (TRS) Board of Trustees will meet in the coming weeks and months.

The Legislature has vested final rulemaking and administrative authority with the TRS Board to develop and implement plan design changes and benefit levels. TRTA believes the TRS Board will make every effort to enact plans based on the Legislature’s intent. Until the TRS Board sets the final plan design, the information below is subject to change. TRTA will report updates on any changes when the TRS Board takes action.

What will happen in September 2017 with our health care plan?

Normally, the TRS-Care insurance programs run on a plan year that begins in September. This year, TRS-Care programs will run a long plan year that lasts until December 31, 2017. Your health care plan will remain in place until that time, and your current deductibles will not reset in September. Deductibles will not reset until the new plans go into effect in January 2018.

When will the new plans go into effect?

The new plans for both groups (those who are under age 65 and those who are 65 and older) will go into effect in January 2018. All current plans being utilized by participants now remain in effect until the end of 2017.

What are the projected deductible and premium costs for the proposed programs?

Under Age 65 (high-deductible health care plan)

The Texas Legislature is proposing a $3,000 deductible for pre-65 retiree individual coverage. The deductible includes all medical and most prescription drug costs. Once the deductible is reached, the plan will cover 80 percent of prescription drug costs. The plan has a $7,150 Maximum-Out-Of-Pocket (MOOP) cost for individuals. Once the MOOP is reached, all prescription drug costs will be covered. $20 million has been proposed to help cover generic maintenance drugs before the deductible is met. The list of approved drugs for this has not yet been compiled.

Projected Pre-65 Retiree Premium Costs:

Plan Year

Retiree only

Retiree and Spouse

2018

$200/month

$739/month

2019

$250/month

$799/month

2020

$310/month

$859/month

2021

$370/month

$924/month

Pre-65 Disability Retirees: The bill also provides a zero-cost premium for TRS-Care pre-65 members who retired with a disability annuity. Please note, the zero-cost option would only apply to the disabled retiree, not to the spouse, and the provision will end in FY 2021.
 
Age 65 and Older (Medicare Advantage plan)

All retirees 65 and older will be transitioned to Medicare Advantage. The premiums would be approximately $146 per month. The project premium for spouses is $444 per month. The projected deductible is $500 per year per participant.
 
Projected 65 and Over Retiree Premium Costs for Medicare Advantage (Retiree only):

Plan Year

Retiree only

Retiree and Spouse

2018-2021

$146/month

$590/month

When will we know the final deductible and premium costs?

The Teacher Retirement System of Texas (TRS) Board of Trustees will meet over the summer to determine the final deductible and premium amounts. It is unlikely that TRS would alter the amounts by much, and will follow legislative intent closely. As soon as those final numbers are made available to us, TRTA will report them through the Inside Line. TRS will also provide hard copies of the new plan designs to all participants in a timely fashion.

What’s included in the prescription coverage proposed for the under 65 age group?

At this time, we do not know what specific drugs will be covered by the plan, but we have been told that standard maintenance drugs will be included. As TRS finalizes the plan design over the summer, the list of drugs that are covered will be compiled. TRTA will report this list as soon as it becomes available. TRS will make their determinations based on the funding provided to them by the Legislature ($20 million) for this coverage.

Will preventive care (such as mammograms and colonoscopies) be covered by the new high-deductible plan?

The TRS Board of Trustees will determine the final plan design this summer. At this time, we do not know if preventive care will be covered. TRTA will report this information as soon as it becomes available.

What company will be the provider for the high-deductible plan for the under age 65 participants?

TRTA has been told that Aetna will be the provider for the high-deductible plan.

What happens to the TRS-Care plans in two years when the Legislature returns?

The plan that is moving forward in the Legislature (HB 3976), along with the $480 million in funding approved for the plan, will fund TRS-Care for the coming biennium. The TRS-Care funding issue will need to be revisited when the Legislature returns in 2019. Because TRS-Care is experiencing major structural changes, it is hard to predict how the plan will be affected. However, the plan continues to be chronically underfunded, and the likelihood that TRS-Care may be facing another shortfall in two years is high.

Will we be getting a raise in our monthly pensions to cover the rising cost of our health care?

Unfortunately, the answer to this question is “no.” No increases in pension benefits were approved by the Texas Legislature this session. This is due to the fact that the pension fund, though financially healthy, does not meet the state requirement to be considered actuarially sound (able to pay off all of its liabilities within 31 years or less). This requirement must be met in order for the Legislature to approve cost-of-living increases.

Should I leave the TRS-Care plan now? What if I am under age 65 and want to return?

TRTA encourages all TRS-Care participants to make measured and informed decisions when choosing their health care options. A decision to leave TRS-Care now could impact your ability to return to the plan in the future. HB 3976 includes a provision to allow participants under the age of 65 who leave the plan to return at age 65 (within a window of time) and join the Medicare Advantage plan. However, if you are under age 65 and try to return before becoming 65, you will not be able to rejoin. Likewise, those who are age 65 and older who leave the plan will not be able to return.

We encourage our members to wait until TRS releases all final plan design changes this summer before making any decisions.

Please remember that your current plan remains in place until December 31, and the new plans will not go into effect until January 2018. This provides participants with more time to assess their health care options.

Thank You

Thank you for your membership to TRTA. We are fighting ardently for your benefits every day at the Capitol. If you are not yet a TRTA member, please join here. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care here.

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