Chisum Amendment Creates Defined Contribution Plan…This Time for your Health Insurance!

Click Here to Send an Email Asking your Texas Representative to Vote “NO!” on this Amendment–Read Complete Update Below

The Texas House reportedly will consider another “fiscal matters” bill tomorrow. The bill, SB 1811, already has hundreds of amendments that will be considered along with it. An amendment filed by Representative Warren Chisum creates a Health Reimbursement Arrangement or HRA. These plans are tantamount to a defined contribution health care plan for TRS-Care participants who now use Medicare.

What this means for you as a TRS-Care participant is the TRS Board may be forced to create a health reimbursement account that you will use to buy a Medicare supplement (or similar plan). The funds available to you through the HRA plan would then be used to pay premiums. Many times, however, the funds available through an HRA are not enough to cover the costs of such plans. These plans also offer considerably lower benefits to retirees than the current TRS-Care plan.

The amendment provides for the hiring of a third-party administrator to manage the HRA accounts. Privatized, third-party administrators do not work for free, and TRTA is concerned this would create an undue financial burden on TRS retirees through higher administrative costs.

TRTA does NOT support this amendment for many reasons, including:

·         The introduction of HRA accounts shifts higher health costs onto retirees;

·         Medicare supplements and similar plans generally offer much lower benefits than the current TRS-Care plan;

·         Unlike the current TRS-Care program, most Medicare supplements and similar plans do not include prescription drug coverage;

·         Under this amendment, a Medicare-eligible retiree may have to leave their current plan with TRS-Care to buy a Medicare supplement plan and a prescription drug plan;

·         This is being done through a much less efficient system;

·         TRS-Care participants currently pay premiums for their health care plan;

·         TRS-Care provides a strong benefit plan with prescription drug coverage that is coordinated with Medicare, and offers a low cost option for the participant and the plan sponsor;

·         TRS-Care is managed by the Teacher Retirement System of Texas in a very cost-efficient manner; and

·         TRS-Care covers more than 200,000 TRS retirees and dependents.

TRTA does NOT support the Chisum amendment as it will increase costs for retirees and lower their benefit coverage, and it is less efficient and far more confusing than what is currently available through TRS.

The Chisum amendment is a fundamental change in how the state would provide a health insurance option for current and future TRS-Care participants. A change of this magnitude MUST be addressed in a public hearing where the issue can be debated and the public

TRTA members need to alert their Texas Representative and tell them to vote “NO!” on the Chisum amendment creating HRA accounts for TRS retirees!

Thank you for your hard work on behalf of TRTA!

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