TRS-Care Premiums Could Triple if No Action by Legislature

Yesterday, the Texas Retired Teachers Association (TRTA) Board of Directors and staff attended the Teacher Retirement System of Texas (TRS) board retreat in Corpus Christi. The retreat, a three-day board meeting, began with a hearty discussion about TRS-Care and TRS Active-Care, the health insurance plans for TRS retired and active school employees.

Many TRTA members were in attendance and represented such local units as Aransas County RTA, Corpus Christi Area RTA, Falfurrias-Fremont RTA, Kingsville Tri-County RTA, and San Patricio County RTA. Well over 50 TRTA members filled the meeting rooms to overflow capacity and made TRTA’s presence known with their participation. Leroy DeHaven, TRTA District 2 President and a resident of Corpus Christi, shared comments and welcomed the trustees to the city.

TRS Executive Director Brian Guthrie discussed the importance of delving into the issue of health care and reminded guests that it is the goal of the TRS board members and staff to do whatever they can to provide good, accurate information to them as well as to the Texas Legislature.

It was also pointed out that as a matter of Texas statute, TRS cannot lobby. Considering the impending TRS-Care crisis, TRTA members must know that the burden of protecting this benefit falls to us as a professional advocacy organization. We need ALL public education retirees and interested stakeholders to join TRTA and be ready to fight for the TRS-Care program!

The TRS-Care Crisis is Here

TRTA has worked to protect retiree income by partnering with the Legislature to maintain TRS-Care premiums. This was especially important over the last decade, as TRS was unable to provide cost-of-living increases since 2001. While many TRS long-term retirees received a modest increase in their retirement benefits in 2013, not everyone received the raise. Many retirees are still in need, and the raise that was given is simply not enough to cover the increased costs of TRS-Care premiums that may occur as early as September 1, 2015.

How much could those TRS-Care premiums increase? TRS reported yesterday that if the Legislature is unable to correct the funding deficiencies inherent in the TRS-Care program and instead relies on retirees to make up the $1 billion shortfall, premiums could triple over the next two-year period!

That premium hike would force many TRS-Care participants out of the program as it would far exceed their ability cover the costs and still live comfortably.

Please understand that TRS has indicated that TRS-Care premium increases are NOT needed for the current biennium (2014-15). TRTA will have the next legislative session to be active (beginning in 2015) and help resolve this crisis. Yesterday’s discussion was about what MAY happen in a worst case scenario.

Resolving the Crisis, TRS-Care Town Hall Meeting Invites Feedback

TRS Executive Director Brian Guthrie stated that the resolution to this shortfall is dependent upon the Texas Legislature and legislative action, and that TRS has exhausted its available options for saving the plan money at this time.

TRS is updating its sustainability study on the program and the results are due in June. This will include recommendations from TRS staff such as whether or not premium increases or benefit reductions may be necessary in the future.

As was stated above, TRS answered a TRTA question about what the premiums for retirees may be should the Legislature decide to place the entire burden of the shortfall on retirees, and the result would be devastating. For retirees paying about $350 per month, the premium would rise to about $585 per month and continue to rise.

TRTA believes the Legislature must increase revenues to the program that do not rely upon increases in retiree premiums. TRS retirees do not receive regular pension increases, and the increase provided in 2013 did not apply to ALL retirees. As the cost of living rises and as health care costs increase, retirees are not able to cover the burden of these rising health care costs through increased premiums.

During the Town Hall meeting, TRTA Executive Director Tim Lee emphasized that a health care program is a necessity, as are affordable premiums for both retired and active members. Although TRTA members understand the concept of “shared pain,” solutions must be realistic, as retirees and active employees can only afford so much. He also suggested that TRTA and the active educator groups and perhaps even legislators or their staff members come together during the interim to discuss potential solutions well before legislative session begins in 2015.

TRTA is willing to work with all stakeholders to find viable solutions that provide reasonable, affordable health care for retirees and active school personnel. The crisis is here now and is not going away, and in fact, could only become worse even IF the $1 billion shortfall is paid for in full. Long-term solutions and sustainability are KEY and should be the focus of discussions about TRS-Care. All solutions must be put on the table and vetted.

As was reported by a healthcare actuary during the meeting, the best solution to TRS-Care long-term sustainability is pre-funding the program. Pre-funding a program that has an immediate $1 billion shortfall is nearly impossible; BUT it could be possible if the Legislature made TRS-Care pre-funding a priority at a time when state revenues have been robust and the economic stabilization (rainy day) fund has a sizable reserve. Using a portion of those dollars to pre-fund TRS-Care may be a long shot, but putting it on the table for discussion could help legislators see the long-term benefit of pre-funding a vital program and maintaining it many years in the future.

ALERT—The TRS-Care Crisis is Real and Now is the Time to Respond

As you review this Inside Line message, please think on these next steps and how you can help TRTA protect TRS-Care:

  1. Continue to support TRTA through your membership and help us get the message out to ALL public education retirees that we need their membership too;
  2. Sign up for the TRTA Inside Line and encourage others to sign up for this email news service;
  3. Be ready to VOTE in the upcoming primary election—ask those running for office if they support TRS retirees and the preservation of TRS-Care and the TRS pension fund;
  4. Remember that early primary voting begins on February 18, and be sure to VOTE and ask your friends and family to be involved—your vote in the primary may be the deciding factor in who represents you next session when these issues are discussed;
  5. Understand that the TRS-Care issue is a CRISIS and we must prepare to do all that is necessary to protect the program.

Thank You

Thank you for being a member of TRTA. We need you. TRTA is the leader in retirement benefit protection and improvements. The TRS-Care crisis is no longer distant. It is here now and we need to gather our strength and be ready for the fight. Please, if you value the TRS-Care program as part of your current retirement benefits or if you hope to retire and participate in this health care plan in the future, help us protect the plan by joining TRTA and engaging with us in our association efforts.

We hope you were able to participate in the TRS-Care Town Hall events. TRTA appreciates the efforts made by TRS to offer a variety of ways to ask the questions that are on our minds about health care. We also appreciate the foresight of TRS in updating the TRS-Care sustainability study. It will be a vital tool as TRTA and our friends in the active education and administration communities begin lobbying the Legislature in January.

TRS continues its board meeting in Corpus Christi today and tomorrow, but will move on to other topics. You can still watch today’s broadcast online using the following link: http://trs.mediasite.com/mediasite/Play/e34368f7941146119f0bec75a7163ca81d.

If you are not a member and want to learn more about joining, please contact our Membership Department at 1.800.880.1650.