02 Jun 2012

TRS Retiree Advisory Committee Meeting Provides Background on How Changes May Improve Both Benefits and TRS-Care Funding

The TRS Retiree Advisory Committee (a group of active and retired TRS members that advises TRS on benefits issues and presents concerns) met to discuss changes and potential options for modifying the TRS-Care health insurance program.

Bill Hickman, a TRS consultant from Gabriel, Roeder, Smith & Company, reported that projections show the TRS-Care program will be solvent through FY 2014. As you know, concerns were raised during the last legislative session about the sustainability of the program, which received less funding from the state for the current biennium than in previous years.

Though the date at which TRS-Care was expected to run out of funds has improved, TRS has been tasked with finding options that will extend the program for a longer period of time. At today’s meeting, the news about maintaining revenues and managing costs was good; but if the plan begins to lose money, “it loses it fast,” potentially creating major funding problems very quickly for the TRS-Care program.

Maintaining the plan through FY 2014 is great news; however, this issue will dominate legislative discussions next session. FY 2015 and beyond may be negative growth years, meaning the plan is likely to run out of money quickly after next session if nothing is done to improve the situation.

TRTA members were instrumental in working with the Texas Legislature last session to protect retiree premiums. At the time, the Legislature indicated its intent that health care premiums for retirees not be raised by the TRS Board of Trustees during this biennium.

Positive changes for TRS-Care include a new pharmaceutical benefits manager (PBM). TRS-Care participants will be transitioned from Caremark to Medco, effective September 1, 2012. The TRS Board of Trustees selected Medco because of a significant cost savings to the program. An important note about Medco: Medco is now owned by Express Scripts International (ESI). Materials about your pharmacy benefit change will mention transitioning from Caremark to MedcoESI. Eventually, the Medco name will be dropped altogether, and will be referred to only as Express Scripts or ESI.

New Health Care Rules Could Save BIG Dollars

The TRS Board of Trustees has discussed and will continue to talk about TRS-Care plan savings that are made available through the Affordable Care Act. One of those changes is a program that we have already reported on called the Employer Group Waiver Program (EGWP, pronounced “Egg Whip”).

This option allows anyone who is Medicare A or B eligible and who has been on TRS-Care 2 or 3 to receive better prescription drug benefits than currently provided by TRS-Care. In addition, it saves TRS-Care hundreds of millions of dollars.

Betsey Jones, Director of Health Care Policy for TRS, explained to the committee that this plan would provide a better benefit for retirees. Examples of these improved benefits include:

·         No penalty for using brand name drugs over generics;

·         Low income premium assistance; and

·         Reduced premiums for participants who experience catastrophic levels of coverage. 

The rules governing these changes will allow a person to opt out of the program; however, the more people that opt out, the less beneficial this is for the TRS-Care program financially. TRS knows that this program could potentially save the plan hundreds of millions of dollars and provide a better benefit to retirees. TRS also knows that many people have a low propensity for change, so they may develop additional incentives for staying in the program.

It is also good news that Medco will be the TRS-Care Medicare Part D provider. If approved, this change would become effective next January.

Another change that will be discussed in more detail next week is a Medicare Advantage plan. This plan would take the place of traditional Medicare Part A and B plans. The Medicare Advantage plan would be available to TRS-Care participants that qualify for both Medicare A and B. Like the prescription drug benefit change already discussed, this Medicare Advantage plan would provide the same or better coverage and would save TRS-Care enough money that the TRS Board may consider additional incentives for retirees.

There are many TRS-Care participants who are over age 65, but may not qualify for both parts of Medicare (these individuals may not have changed jobs in their school district after 1986, or both spouses are educators they did not pay the Medicare tax after 1986). These people would not qualify for the Medicare Advantage plan that is being considered by TRS. TRTA is working to get an answer to the question about their continued health care coverage and cost. Since these issues are still new and developing, we have been told that these people will stay on their current plan at the same rate, but they would not be eligible to receive some of the additional benefits that are part of the Medicare Advantage plans. We are still researching this answer, but it will be a major factor in our discussions with the TRS Board of Trustees.

Several Medicare Advantage vendors are being considered, but TRS reports that all vendors provide additional services above and beyond Medicare A and B. Upon selection of a vendor, this plan would become effective in January 2013.

The board will consider this issue at next week’s meeting on June 7 and 8 (link to meeting agenda: If you would like to watch this meeting live online, click on the following link (June 7: and June 8:

TRS is still studying changes to non-Medicare eligible TRS-Care participants (people who are not yet age-eligible for Medicare coverage). Younger retirees not participating in Medicare due to age factor at a higher cost than Medicare eligible participants. This is because Medicare becomes the primary insurance for the retiree, with TRS-Care being secondary.

TRS staff said today that every consideration, from changing the eligibility age to pre-funding the plan, is being studied. At this time, no options have been selected. Study results are due to the Texas Legislature in September. Betsey Jones of TRS pointed out that there are only three methods of improving the program: 1. Adjusting eligibility and benefits; 2. Raising retiree premiums; and 3. Increased funding from other sources (includes the state, active personnel, etc.).

As you know, TRTA is against raising retiree premiums or accepting benefit changes that simply cost-shift the burden onto retirees. We will continue to push for additional funding from the state as a means to help sustain the TRS-Care program.

Although many of the changes that were discussed today are positive, one major challenge is communicating these changes to the retiree population. It is important that our members understand what is taking place.  We at TRTA will answer your questions about changes to the TRS-Care health insurance program to the best of our ability. As the summer progresses and TRS continues its legislative study, we will provide more detailed information to you through The Inside Line and The VOICE.

It is also important to note that these changes will be discussed and voted on by the TRS Board of Trustees. This provides TRTA more time to ask questions, study the options, and learn more about how changes may protect your health care benefit or provide cost savings to you.

Also, these changes are dependent upon the results of the Supreme Court case over the Affordable Care Act (ACA). These options may only be beneficial if the ACA remains intact. That case is expected to be resolved this month (June 2012).

The TRS staff and Board and TRTA are all working to keep your TRS-Care program viable in a way that provides a health care benefit that is as good or better at the same or lower cost to you. These are significant challenges, but there is good progress being made. June is an important month to participate in this process.

This is a confusing topic with questions that must be asked and issues that need to be resolved. While we are not ready to say that these plans should be accepted, we do think the work being done is very promising. Many things can still happen that would change the current considerations, so please do not think this issue is solved or that these proposals are ready to be implemented. We still have a long way to go! Next week’s TRS Board of Trustees meeting is vital to knowing in what direction we are heading.

You are our number one priority. TRTA takes its role as your voice and advocate very seriously. We want to know that our members and all TRS retirees and TRS-Care participants will be better off if these plans are implemented. Please feel free to email us your questions, concerns, and suggestions.

Thank You

We appreciate your membership in TRTA. If you are not a member and would like more information about joining, please contact our office at 1.800.880.1650. Thank you for all you do to support TRTA!

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01 Jun 2012

Primaries are Over, but the Need to Educate is More Important than Ever!

Now that the Texas primaries are behind us, many people think it is time for a summer break and that we can resume political conversations in the fall. However, TRTA members know the value of utilizing the months before the general election to educate candidates about our issues!

The lobby to eliminate defined benefit pension plans is growing every day. The war may seem to be occurring only in states where legislatures have inadequately funded their pension plans; but there are numerous groups here in Texas that want to see your TRS plan changed.

Some of those groups, such as the Texas Public Policy Foundation and the Laura and John Arnold Foundation, are working daily to influence legislators to transition TRS from a defined benefit plan to a defined contribution plan. TRTA is opposed to any change to the TRS defined benefit plan design. We will oppose any effort to eliminate these important benefits for future educators.

Remember, even though some may believe that these changes will only impact “future” retirees, a so-called “transition” would impact every TRS member, active or retired. While decision-makers may believe current retiree benefits are not the target, any change to TRS that reduces funding levels puts the fiscal stability of the TRS plan in jeopardy.

Preservation of the TRS defined benefit plan is not TRTA’s only issue. We MUST do all in our power to protect the TRS-Care health insurance program. Funding for TRS-Care was reduced last session.

The good news is that premium levels will not increase during the current biennium. This marked the 4th session in a row that TRTA was able to keep premiums from increasing! TRTA has worked with the Legislature to ensure premium costs stayed the same as a means of helping retirees who have not had a pension increase since 2001.

Now, TRS-Care is running out of reserve dollars to maintain benefits and premium costs. The Legislature was informed last session that the “temporary” cuts to TRS-Care would cause immediate funding challenges. TRS officials are working on many proposals to preserve benefits for TRS-Care participants.

Today, TRTA will attend a meeting of the TRS-Care Advisory Council. This group is chaired by long-time TRTA member and friend, Sue Passmore. TRTA will review these proposals and send you an update after the meeting.

The TRS Board of Trustees will meet next week to review proposals discussed at today’s hearing. We will address the TRS Board about these proposals. TRTA will not support any premium increases or benefit reductions for TRS-Care participants. We are ready to work with TRS on any plan that can reduce costs and maintain this vital health insurance benefit. The TRS Board, however, can only do so much. The Texas Legislature must be ready to fund this health care program appropriately.

TRTA’s Message to Candidates for Office

This summer, we know you will be engaged with your legislators and those seeking election in the fall. As you meet with your leaders, please share these TRTA Legislative Priorities.

  1. Preserve the TRS-Care health insurance program without increasing premiums or making drastic benefit reductions for plan participants. Provide any supplemental budget appropriations that are needed to keep this program funded and intact.
  2. Defend the TRS Defined Benefit Pension Plan—Attacks levied against public pension plans are growing to a fever pitch, but no other plan design can provide the same level of benefit at a lower cost to the participant or the taxpayer.
  3. Pension Increase—TRS retirees have had no permanent increase in their pension benefits since 2001! Over the past 12 years, the costs of goods and services have increased dramatically. The price of gasoline alone has risen 247%! Retirees need an increase in their benefits or should receive some form of supplemental payment.
  4. Pension Funding—TRS is a well-funded, well-managed pension trust fund. The state’s contribution level was cut last session. The Texas Legislature must restore and increase funding to keep this plan strong.
  5. Allow direct election of TRS Trustees—TRTA is calling on the Legislature and Governor to pass legislation that allows for member trustees on the TRS Board to be elected directly by their constituent representatives. While there are elections for these positions today, the Governor still has final choice of the top three vote-getters in a member election. Why should the Governor have final appointment of members to the TRS Board who are duly elected by their member representatives?

These are the top five legislative priorities identified by TRTA members. TRTA works on MANY other issues during the legislative session. TRTA is an expert on pension policy and our members are very involved in the legislative and political process. While TRTA does not endorse candidates, our members VOTE in high percentages in all elections. We watch, listen, talk, educate and vote!

If you want to know more about the issues listed above, or want to help protect and improve benefits for public education retirees, please contact TRTA at 1.800.880.1650.

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28 May 2012

Memorial Day Thanks, and a Call to Action–Vote!

On behalf of the TRTA Board of Directors and the TRTA staff, I want to wish all of you a happy Memorial Day. We want to thank all of you who have not only served in our public classrooms, but to say a special “Thank You” to those who have also served in our armed forces. As the son of a retired US Army veteran, I know first-hand the time commitment and personal sacrifice our soldiers make in the name of protecting our freedoms.

Since 1997, the country has observed a National Moment of Remembrance at 3:00 PM (your local time). This one minute of silence is to reflect on all those who have served in our nation’s military and for those who made the ultimate sacrifice. It is also an important educational opportunity to tell younger generations about those who have served in our military.

Go Vote

Tomorrow is Primary Day. Many of you may have already participated in early voting, and we appreciate your participation in the political process. For those who have not yet voted, here are some important things to remember before going to the polls.

·         Many of tomorrow’s primary elections will be decided by the thinnest of margins. Your vote WILL make a difference.

·         You may think that your preferred candidate is “going to win without my vote.” That may not be the case! Everyone needs to think about their preferred candidate and then go and vote. Many groups have organized and spent hundreds of thousands of dollars to influence these elections…your participation is critical.

·         Primary turn out has traditionally been relatively low. This cycle may be an exception. Considering retirees are generally the higher percentage of voters, and that TRTA members are even more aware of the issues and candidates important to them, your power in the polls cannot be overstated.

·         Many candidates have contacted TRTA about their support for the Defined Benefit plan and the TRS-Care health insurance program. When you go and vote, make sure your preferred candidate knows you supported their effort and that look forward to working with them on the TRTA legislative agenda.


Have a great Memorial Day! Your support and membership helps TRTA protect and improve benefits for over 300,000 TRS retirees. Thank You for all you are doing to keep TRTA strong!!

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