On Thursday, Sept. 12, 2013 – the first day of a two-day TRS Board meeting – Teacher Retirement System Executive Director Brian Guthrie updated trustees on the status of TRS-ActiveCare, the health insurance program for school employees.

In recent years the fund has operated on a tight budget, and TRS has dipped into the health insurance program's reserves to limit the premium increases necessary due to rising health and pharmacy costs.

Recently, TRS has been unable to make timely payments to the plan administrator, Blue Cross Blue Shield, though TRS staff had, with admirable foresight, negotiated an arrangement to avoid paying a late payment penalty.

Although this is concerning, and Guthrie referred to the possibility of a mid-year premium increase, TRS staff are optimistic that changes in the schedule under which districts and other employers make premium payments to TRS will alleviate the cash flow problem and a mid-year increase will not be considered.

Still, the fund continues to be plagued by problems of "adverse selection." Enrollees have continued migrating to ActiveCare 1-HD, the lowest cost plan; but this year, for the first time, significant numbers of employees are choosing to waive coverage altogether. Because those who opt out tend to be younger and healthier, the remaining participants will be heavier users of the insurance and will continue to drive up costs.

We anticipate that the 2015 legislative session will include a strong focus on health insurance, specifically including both the TRS-Care and ActiveCare plans. An interim study of the plans by one or more legislative committees is likely, and the three-day TRS "retreat" (a special meeting of the Board at which many topics are examined in depth) in February 2014 will include a major discussion of the insurance programs.