The recently passed Patient Protection and Portability Act, or the new federal health care initiative, is providing some reimbursement to the TRS-Care program. Approximately $47 million has been paid to the Teacher Retirement System of Texas (TRS) as the plan sponsor for the TRS-Care program.
When the federal health insurance plan was passed, a special fund was created to help cover claims costs for health care providers and plan sponsors of retiree health insurance programs. The fund, also known as the Early Retiree Reinsurance Program (http://www.errp.gov/index.shtml), was allocated $5 billion. Retiree plan sponsors were able to make an application to receive some portion of these funds.
The Teacher Retirement System of Texas (TRS) worked diligently to make the necessary application to receive a portion of this federal award. Again, the TRS-Care program was awarded $47 million to help reduce overall health care costs.
In addition, TRS can continue to submit claims to qualify for more federal funding. The proceeds are being used to reduce health insurance costs for TRS-Care. While these federal dollars have not resulted in a reduction in TRS-Care premiums, deductibles, co-pays, or other general out-of-pocket costs, the reduced expense to the TRS-Care plan may help control future costs for plan participants. There is no guarantee that TRS will receive any additional funds, and many health plan sponsors across the country are trying to receive a portion of the $5 billion. Once the fund is exhausted, it will not be replenished.
TRS-Care plan participants have received, or will receive, a letter explaining TRS participation in the Early Retiree Reinsurance Program. The letter is a federally required announcement that reads in a somewhat confusing manner.
The bottom line for TRTA members and TRS-Care participants is that there is no change being made to your TRS-Care health insurance program. You do not need to take any action upon receipt of the letter; it is merely informing health plan participants about TRS participation in this process and that TRS has been awarded funding used to defray the overall costs of the TRS-Care health insurance program.
I hope this update clarifies the confusion with the letter. The fact is that any additional money we may receive to help reduce health insurance costs is a welcome benefit. As we will discuss in upcoming issues of the Inside Line, the Texas budget scenario is putting pressure on all TRTA legislative initiatives, including state funding for TRS-Care.
As always, your membership in TRTA is greatly appreciated. We know you are ready for a very eventful and challenging legislative session, and together we will work to improve the livelihood of all Texas public education retirees!
