Blog

02 Jun
0

TRS Board Meets, Enacts TRS-Care Changes From HB 3976

The Teacher Retirement System of Texas (TRS) Board of Trustees held meetings on June 1 and 2. The TRS Board of Trustees finalized changes to TRS-Care’s benefit structure during the meetings as recommended by the Texas Legislature.

TRS-Care, the health insurance program provided by Texas to more than 256,000 retired teachers, underwent significant funding and structural changes during the 85th Legislative Session.

TRS presented this slideshow presentation during its adoption of the TRS-Care changes.

The Board of Trustees adopted the following changes, which will begin Jan. 1, 2018:

Pre-65 Retirees

Pre-65 retirees will be in a high-deductible health care plan. The deductible to reach for an individual using an in-network provider is $3,000. The plan has a $7,150 Maximum Out-of-Pocket cost (MOOP). More information about the deductible for spouses and families is listed here.

Once the deductible is reached for in-network coverage, the insurance will cover 80 percent of the retiree’s expenses.

The premium for pre-65 individual retirees is $200 per month. For a retiree with a spouse, the premiums are $739 per month. For a retiree with a child, the premiums are $433 per month. For a retiree with a family, the premiums are $1,074 per month.

Over-65 Retirees

If you are age 65 or older and you decide to leave TRS-Care, you will not be able to rejoin. Carefully consider and research your health care options before making any decisions about your health care plan.

Retirees who are age 65 and older will be participating in the Medicare Advantage plan. (The TRS-Care tiers 1, 2 and 3 will no longer exist.) The deductible for Medicare Advantage retirees will be $500. The plan has a $3,500 Maximum Out-of Pocket cost.

Once the deductible is reached, the insurance will cover 95 percent of the retiree’s expenses.

There are other benefits to this plan, which are outlined on this slide.

The premiums for individual retirees age 65 and older are $146 per month. For a retiree with a spouse, the premiums are $590 per month. For a retiree with a child, the premiums are $504 per month. For a retiree with a family, the premiums are $1,106 per month.

Pharmacy Benefit Provider Change

The TRS Board of Trustees voted to change from Express Scripts as the provider of pharmacy benefits to TRS-Care programs. The new pharmacy benefit provider is CVS Caremark. This change will be effective Sept. 1, 2017 (unlike the health care plans, which begin Jan. 1, 2018).

Providers Who Do Not Accept Medicare Advantage

Many retirees have expressed concern that some doctors do not accept Medicare Advantage. TRS says that Humana, the Medicare Advantage provider, will pay doctors even if they are not in-network. If your doctor’s office says they do not accept Medicare Advantage, you have two options: 1) bring this document to the doctor’s office, which explains that they will receive payment. 2) have TRS or Humana contact the doctor’s office to explain that they will receive payment.

General Maintenance Drug Coverage

The Texas Legislature allocated $20 million for pre-65 retirees to have coverage on general maintenance drugs. TRS has not yet outlined which drugs will be included in this coverage. TRS must first work with the Internal Revenue Service (IRS) to develop this list.

Why the Changes Occurred

Fueled by a $1 billion budget shortfall, the Texas Legislature passed HB 3976. HB 3976 made sweeping changes to TRS-Care. Among those changes are the elimination of the coverage tiers called TRS-Care 1, 2 and 3. Instead, pre-65 retirees will be offered a high-deductible health care plan, and retirees age 65 and over will be combined into the Medicare Advantage program. You can learn the full details about the changes from HB 3976 here.

While HB 3976 has not yet been signed into law, (Gov. Greg Abbot has until June 18 to sign this bill) it is very unlikely the bill will be vetoed.

On June 2, Tim Lee, the Executive Director of the Texas Retired Teachers Association (TRTA), provided public comment to the TRS Board. He described a litany of issues presented to TRTA about the pending TRS-Care changes through both individual conversations and social media interactions. In particular, Lee raised points made by retirees via TRTA’s Facebook Live events. You can watch TRTA’s past Facebook Live broadcasts here.

Lee voiced that retirees desired to have Humana increase its hours of operation to answer retiree questions during nights and weekends. TRS Executive Director Brian Guthrie said that this request would “not be a problem.”

Additionally, Lee discussed the need for TRS to provide additional information about the planned regional meetings where the organization will discuss the TRS-Care changes with retirees. Lee raised the point that “not every (retiree) is going to know what’s going on (with these changes).”

TRS is planning approximately 80 meetings across the state with Humana. TRTA will alert its members when these meetings will occur.

The Board of Trustees President, David Kelly, agreed with Lee’s sentiment that while they had hoped the Legislature would provide more funding for TRS-Care, the funding that was provided was the highest amount that the Legislature could agree on.

Senate Bill 1, the Texas funding bill, allocated $484 million for TRS-Care.

Trustee Dr. Greg Gibson expressed his dismay at the impending TRS-Care changes. Gibson, who works as the superintendent of Schertz-Cibolo-University City ISD, said that the changes to TRS-Care would make it harder to recruit and retain talented teachers.

“They worry about their health care and their retirement,” Gibson said. “We’re coming up with the best bad idea that we can.”

Kelly agreed that he too had hoped for a better resolution from the legislative session, and he expressed his concern that approving these changes would create future problems for retirees.

“There are some aspects of this role that stink,” Kelly said. “This is something that I do not look forward to doing.”

TRTA agrees with Chairman Kelly’s comments that while the situation is not the best that many had hoped for, it was the best deal that could be reached. Until the federal government implements cost controls, it will be difficult to fix the chronic underfunding of TRS-Care.

TRTA believes that the federal government must take action on cost control and that the state must have a more realistic view on funding TRS-Care. While TRS is making the necessary changes as set forth by the Legislature, TRTA knows your health care is a vital part of your retirement security. The changes made this session saved TRS-Care from imminent collapse, but TRTA’s work is not done. Our goal is to be your voice in policy discussions about health care cost containment.

Please support us in these efforts. We cannot accomplish these goals without your membership.

Thank You

Thank you for your membership to TRTA. Now is the time to spread the word about the impending TRS-Care changes with your fellow educators, both active and retired. Many retirees, particularly ones who are not members of TRTA, will be caught completely unaware by these changes.

These retirees should be informed that these changes are going to begin on Jan. 1, 2018, and if they want to see a better outcome for their health care in the future, they need to get involved with TRTA and plan on voting in the 2018 elections.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

Read More
30 May
0

85th Legislative Session Comes to an End, Budget Passes

The 85th regular session of the Texas Legislature came to an end on Monday, May 29, 2017. Though Governor Greg Abbott has yet to decide whether or not to call a special session to cover any remaining issues, the state budget (Senate Bill 1) has passed and the fate of the TRS-Care retiree health insurance program has been decided, for now.

As members of the Texas Retired Teachers Association (TRTA) have been reading throughout the past five months, sweeping structural changes to TRS-Care are about to begin. As of January 2018, the plan as we know it today will change.

While this situation may not be all that everyone would want, it would have been much worse if TRTA and thousands of retirees had not been so active and vocal this session. Without a doubt, your efforts made a difference and prevented premiums from skyrocketing to $1,500 per month. Many state programs received no new general revenue or had budget cuts. Retirees received new money in general revenue as well as additional supplemental general revenue.

While we have reported on projected changes to the plan, some final decisions still have to be made by the Teacher Retirement System of Texas (TRS) Board of Trustees. The TRS Board begins meeting later this week to review the budget that has been approved by the Legislature, which calls for approximately $484 million from the state and school districts to help cover the $1 billion TRS-Care program shortfall.

Public education retirees, as well as their spouses and dependents, will have to pick up the other $516 million of the shortfall through higher premiums, out-of-pocket costs, and benefit reductions. Some of the biggest changes expected as a result of this session’s TRS-Care reform legislation include huge cost increases for spouses and dependents using the plan.

These changes will go into effect in January 2018. For 2017, TRS will run a long plan year, meaning deductibles will not re-set in September for current participants. Deductibles will re-set when the new plans go into effect in January.

TRTA currently is working on finding options that spouses and dependents may be able to use in place of TRS-Care.

Legislators make decisions on program funding by considering numerous variables. Most legislators see TRS-Care as an ongoing appropriation and chose not to use the Rainy Day fund to help TRS-Care. TRTA supported the use of the Rainy Day fund to help offset the impact of changes on retirees. TRTA also pressed the need for increased appropriations that can be counted upon every session. The increased state and school district contributions to TRS-Care do provide an ongoing rise in revenue.

Members, we have received hundreds of emails, some with very specific personal scenarios, and we hope to answer them in a timely fashion. In the meantime, TRTA has compiled these questions and sent them to TRS to receive clarification and correct information. Please continue to bear with us as we work with TRS to get answers to you. TRTA will also provide a comprehensive update about the changes to TRS-Care in the second quarter issue of our quarterly news bulletin The VOICE, which should be in your mailboxes by late June to early July.

We hope to provide as much information as possible for you as you weigh your health care options going forward. Please know that there is still time to assess what options are available to you, as the changes to TRS-Care will not occur until January. We urge caution to anyone considering leaving the plan and encourage you to wait until all information has been finalized this summer before making any decisions that could impact your ability to utilize TRS-Care programs in the future.

Many members have emailed us regarding a cost-of-living increase for retirees this session to help offset increasing health care costs. Unfortunately, legislation was not passed this session to give retirees a much-needed raise. TRTA was successful in preventing SB 1750 and 1751 from moving forward in the legislative process, two bills that proposed changing the TRS defined benefit plan to a defined contribution plan for future retirees. TRTA opposes any legislation that would harm the retirement security of Texas public educators.

Despite the changes coming to TRS-Care in 2018, retirees should know that they are a group the Legislature wants to help. That is the power of TRTA: the Legislature values retired teachers. However, the Legislature is made up of many people whose views do not always align with that of TRTA. While we received more money, TRTA stated in public testimony that we need three times more than what we got to keep TRS-Care as it is today. We didn’t get that, but we did get more than most other programs funded in the budget.

This is small conciliation to a retiree on a fixed income who has not had a raise in over a decade and is looking at major changes to their healthcare plan, and we do not disagree. It is, though, something to build on as we use our collective strength to prepare for the next session and endeavor to restore TRS-Care to the benefit level we believe is needed to ensure all public education retirees that their healthcare is secure and appropriately funded.

What’s Next?

Legislative session may be over, but the work to protect the benefits of current and future education retirees in Texas is just beginning. TRTA can continue to work with TRS on final plan design changes, but the most important change we can make together as a unified body of active and retired educators is to understand and never underestimate our power.

Now is the time to reach out to other retirees and communicate with them about the changes that are coming. There are many retirees who will be caught unaware by these changes. This is a great opportunity to get them involved with the largest retired teacher organization in the nation: TRTA!

TRTA Executive Director Tim Lee sent a tweet during the final hours of session this weekend: “Retired and active teachers–most powerful voting block in all of Texas. We need to make sure they know the power they have. @TRTA #txlege

This tweet has been shared multiple times! Elections are coming up in Texas and the people who make the decisions about your benefits and their funding will be asking for your vote. Remain active and involved, and never give up your voice at the voting booth!

Thank You

Thank you for your membership to TRTA. Together, we have fought every day of the legislative session to improve benefits for educators. The fight is not over! Now more than ever, we must unite in our efforts, grow our organization, and prove our power through our votes.

If you are not yet a TRTA member, please join here. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care here.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

Read More
25 May
0

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.

Be sure to like us on Facebookfollow us on Twitter and subscribe to our YouTube channel.

Read More