Senate Passes SB 19, House Appropriations Discusses TRS Bills

Published date: 7/26/2017

  • TRTA Executive Director Tim Lee appeared on Capital Tonight on the Austin Spectrum News channel on Monday evening, July 24. Watch the video here (Lee appears about 10 minutes into the video)
  • Full Senate passes Senate Bill 19, sends bill to the House
  • House Appropriations discusses various TRS Bills

Senate Votes on SB 19, Sends Bill to the House

Last night (July 25), the full Senate voted on Senate Bill 19, the bill filed for the first called special session of the 85th Legislature by Senator Jane Nelson (R – Flower Mound) and co-authored by Senator Joan Huffman (R – Houston).

SB 19 lays out the Texas Senate’s plan for providing additional revenue to the TRS-Care retiree health insurance program. The Senate’s plan to address TRS-Care funding includes as much as $212 million in additional funding. Read TRTA’s comprehensive overview of SB 19 by clicking here.

Senators Kirk Watson (D – Austin) and Sylvia Garcia (D – Houston) both offered amendments to the bill that were defeated. Watson’s amendment called for an increase in the state contribution to TRS-Care, which sits at 1.25 percent of active teacher payroll as of the passing of HB 3976 during the 85th Regular Legislative Session. Garcia’s amendment proposed using state border security money that was freed up by federal funding to pay for the bill’s provisions.

The bill passed out of the Senate with a vote of 28 to 3. Senators Sylvia Garcia, José Rodríguez (D - El Paso) and Van Taylor (R – Plano) voted against the bill. Last night’s Senate vote means the bill now goes to the House of Representatives for consideration.

House Appropriations Begins Discussions on TRS Bills

The House Appropriations Committee met Tuesday, July 25 to discuss several bills impacting retirement benefits through the Teacher Retirement System of Texas (TRS) as the first called special session of the 85th Legislature continues. To view the archived meeting online, TRTA recommends forwarding the video to 4 hours and 56 minutes.

The following TRS bills were discussed:

HB 20       Author: Ashby | Darby | VanDeaver | Zerwas | Howard

Relating to an appropriation of money from the economic stabilization fund to decrease health insurance premiums and deductibles for certain health benefit plans administered by the Teacher Retirement System of Texas.

HB 76       Author: Darby | Guillen | Oliveira

Relating to a supplemental appropriation for Teacher Retirement System of Texas retiree health.

HB 80       Author: Darby | Guillen | Oliveira

Relating to a cost-of-living adjustment applicable to certain benefits paid by the Teacher Retirement System of Texas.

HB 151    Author: Gooden | Guillen | Thompson, Senfronia | Darby | Cook

Relating to the administration of certain group benefits by the Teacher Retirement System of Texas; making an appropriation.

Representative Drew Darby (R – San Angelo) laid out HB 80, a bill that would provide a one-time cost-of-living increase (COLA) to annuitants who retired after August 31, 2004 and on or before August 31, 2015. The COLA would benefit retirees who did not receive the raise provided to more than 200,000 annuitants in 2013.

TRTA Executive Director Tim Lee testified in support of the bill. TRS Executive Director Brian Guthrie said that paying for the COLA itself would cost $1.36 billion, plus there would be an additional cost of $1.9 billion to make the pension fund actuarially sound so that the COLA could be made. Both Lee and Guthrie agreed that such an increase would be helpful to retirees experiencing increases in their health care costs.

“I throw this bill out to point out the difficulty that our retired teachers are having in not having a COLA increase in a number of years,” Darby said in a closing statement. “These are issues that we need to keep before us and try to find solutions for.”

Darby also laid out HB 76, which would provide a supplemental appropriation to TRS-Care and would help retirees struggling with health care costs.

Representative Lance Gooden (R - Terrell) laid out HB 151, which would provide a one-time distribution of $1 billion from the Economic Stabilization Fund (ESF) (also known as the Rainy Day Fund) for TRS-Care, stating “it’s bold.” The bill would instruct TRS to use $250 million per year to help with out-of-pocket costs for plan participants through the year 2021.

“I think there’s a will in the House to do more than what we have done in the past,” Gooden said.

Chairman Trent Ashby (R – Lufkin), who was the author of HB 3976 during the regular session, laid out HB 20 before the committee. “It became apparent to me…that more needs to be done if possible,” he said, after hearing concerns from many of his retiree constituents about the rising cost of health care.

HB 20 would appropriate $212.7 million from the ESF to bring down premiums, deductibles and out-of-pocket expenses for participants in TRS-Care. A description of the proposed changes introduced in HB 20 can be found below, along with the proposed changes offered through the Senate plan in SB 19.

“The Legislature needs to take further steps next session to attain greater, more permanent solvency,” said Ashby, adding that the Legislature should “erase the burden on retired teachers as much as we can.”

Representative Donna Howard (D – Austin) said in reference to using the ESF, “My understanding is that…we have a higher than projected revenue coming in from natural gas, and if that continues then we could have enough funding there in excess of what had been projected.” She asked if this surplus could go towards funding the changes proposed in HB 20. She said the money needs to be used for the people of the state of Texas and hopes more colleagues can agree with using ESF dollars.

Representative Gooden said that retirees do not have the option of deferring their water payment or other utility bills until the next year. “They have to dip into their savings,” he added.

“You either stop spending or you dip into your own savings,” he said, suggesting that the state should spend some of its “mattress money” from the ESF.

Appropriations Chairman John Zerwas (R – Richmond) agreed, saying that teachers should not be ignored and the Legislature should address “the most important things facing us right now.”

A representative from the Comptroller’s office provided projections for the ESF, saying Texas would end this fiscal year with a balance of $10.25 billion in the fund, and that it would increase to $10.39 by end of FY 18 and to $11.34 billion by end of FY 19.

TRTA Executive Director Tim Lee testified on all of the proposed bills, thanking the Governor, as well as House and Senate leaders for ensuring that TRS-Care was added to the call.

Lee stated that TRS-Care was close to falling apart completely before changes were made during the regular session through HB 3976, but that “many retirees became aware of this only after the legislation passed.”

“If I were a public employee, I would very much be concerned about the cost of health care,” Lee said, adding that the funding mechanism for TRS-Care is broken. “We cannot pay for TRS-Care with a percentage of payroll that has gone up by .25 percent in the last 15 years,” Lee continued.

“It’s really come down to a discussion about what is the potential method of finance. I support whatever we can all agree to,” said Lee. “The one method I know that isn’t working…is that retirees pay.”

Lee encouraged the House members to work to find agreement with the Senate, saying that retirees’ biggest fear is that nothing will happen during the special session to help them with ballooning health care costs. Chairman Zerwas assured Lee that the House would work with their Senate colleagues.

All bills were left pending in committee. TRTA will keep members informed about the progress of the bills as special session continues.

As our members know, multiple bills have been filed during this special session to help retirees. As our members also know, it is vital that agreement between the Senate and the House be found in order for this additional help to be received.

TRTA encourages its members to follow their legislators’ Facebook pages and communicate with them often during special session. A lot of positive work is being done to help retired teachers right now, and it is vital that we keep the lines of communications open with our Senators and Representatives.

Please ask your legislators to work with their colleagues to add as much additional funding to TRS-Care as possible! Not on Facebook? Use our toll-free Legislator Hotline to call your legislators today: 1.888.674.3788!

Comparison of SB 19 and HB 20

Senate Bill 19

Reduce deductible for Non-Medicare Retirees:

To reduce the deductible for the 2018-2019 plan years, it would require approximately an additional $115 million for the biennium.

Non-Medicare Retiree/Family Deductibles From $3,000/$6,000 to $1,500/$3,000

Reduce premiums for retirees with adult disabled children:

TRS-Care has approximately 570 adult incapacitated children of TRS retirees. If the legislature were to reduce the premiums by $200 per month in the 2018-2019 plan years, it would require approximately an additional $2.736 million for the biennium.

Non-Medicare Retiree & Child(ren) from $433 to $233

Non-Medicare Retiree & Family from $1,074 to $874

Medicare Retiree & Child(ren) from $504 to $304

Medicare Retiree & Family from $1,106 to $906

Reduce maximum out-of-pocket for retirees with adult disabled children:

To reduce the maximum out-of-pocket for retirees with adult disabled children, it would require approximately an additional $10 million for the biennium.

Non-Medicare Retiree/Family Maximum Out-of-Pocket

From $6,550/$13,300 to $3,000/$6,000

Reduce premiums for Medicare Retiree:

To reduce premiums by $25 for all Medicare retirees in the 2018-2019 plan years, it would require approximately an additional $84 million for the biennium.

Medicare Retiree from $146 to $121

Medicare Retiree & Spouse from $590 to $565

Medicare Retiree & Child(ren) from $504 to $479

Medicare Retiree & Family from $1,106 to $1,081

Total Additional funding for FY 2018-19:

$212 million, paid from MCO deferrals

House Bill 20

Reduce deductible for Non-Medicare Retirees:

To reduce the deductible for the 2018-2019 plan years, it would require approximately an additional $115 million for the biennium.

Non-Medicare Retiree/Family Deductibles

From $3,000/$6,000 to $1,500/$3,000

Reduce premiums for retirees with adult disabled children:

TRS-Care has approximately 570 adult incapacitated children of TRS retirees. If the legislature were to reduce the premiums by $200 per month in the 2018-2019 plan years, it would require approximately an additional $2.736 million for the biennium.

Non-Medicare Retiree & Child(ren) from $433 to $208*

Non-Medicare Retiree & Family from $1,074 to $749*

Medicare Retiree & Child(ren) from $504 to $279*

Medicare Retiree & Family from $1,106 to $781*

Reduce maximum out-of-pocket for Non-Medicare Retirees:

To increase funding to reduce the maximum out-of-pocket for non-Medicare retirees in the 2018-2019 plan years, it would require approximately an additional $18.7 million for the biennium.

Non-Medicare Retiree/Family Maximum Out-of-Pocket From $6,650/$13,300 to $5,650/$11,300

Reduce premiums for Spouses:

If the legislature were to reduce premiums by $100 for spouses in both plans in the 2018-2019 plan years, it would require approximately an additional $71 million for the biennium.

Non-Medicare Retiree & Spouse from $739 to $639

Non-Medicare Retiree & Family from $1,074 to $974*

Medicare Retiree & Spouse from $590 to $490

Medicare Retiree & Family from $1,106 to $1,006*

Reduce premiums for covered children:

If the legislature were to reduce premiums by $25 for all children covered in both plans in the 2018-2019 plan years, it would require approximately an additional $5.3 million for the biennium. This would result in a combination of spousal and child reduction of $125 in the Retiree & Family tier.*

Non-Medicare Retiree & Child(ren) from $433 to $408

Non-Medicare Retiree & Family from $1,074 to $949*

Medicare Retiree & Child(ren) from $504 to $479

Medicare Retiree & Family from $1,106 to $981*

*Reductions are cumulative

Total Additional State/District Contribution for FY 2018-19:

$212.7 million, paid from the Economic Stabilization Fund (ESF).

Thank You

Thank you for your membership to TRTA! TRTA has more than 82,000 members, but there are more than 350,000 TRS retirees. That means hundreds of thousands of TRS retirees are not involved in the largest retiree organization advocating for their TRS benefits.

To improve funding for TRS-Care, we need as many retirees as possible to join TRTA and stand with us!
 
It is vital that you join TRTA today! If you already are a member, please ask your fellow retirees to join. Many retirees are still unaware of the impending TRS-Care changes! Let’s all work together to improve retirement benefits for current and future retirees.
 
Be sure to connect with us via FacebookTwitter and YouTube.

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