TRS Board suggests need for parity with state employees

 

Premium rates

On Friday, June 6, the TRS Board of Trustees approved premiums for TRS-ActiveCare, the school employee health insurance program, for the 2014-15 school year. TCTA testified, asking the Board to help us educate legislators about the need for increased state funding to help with the rising costs of insurance premiums.

Click here to see the information provided by TRS regarding the changes in benefits and premium rates described below.

Premiums for ActiveCare 1-HD, the “catastrophic” plan, will remain the same for employee-only coverage ($349) and for employee/child coverage ($572). The rate for employee/spouse coverage will increase by 7 percent to $850, and for family coverage by 8 percent to $1,145.

For ActiveCare 2, the employee-only rate will increase by 5 percent to $555. Employee/spouse coverage will increase by 7 percent to $1,287, employee/child by 4 percent to $875, and there will be no change in the family premium ($1,323).

A new level of coverage called “Select” will be implemented; it was described as “similar to an HMO” and falls between 1-HD and 2 in terms of coverage. It is considered by staff to be the preferred level of coverage to which employees will be steered. It is an “Exclusive Provider Organization” (EPO) plan; there is no coverage for out-of-network providers except for emergencies. The Select rates are as follow: $450 for employee-only, $1,044 for employee/spouse, $709 for employee/child, and $1,238 for family.

Under the Select coverage, in four urban areas the network will be limited to specific Accountable Care Organizations: In Houston, enrollees will use the Hermann ACO; in Dallas, the Baylor ACO; in Austin, the Seton ACO, and in San Antonio, the Baptist ACO. Outside of those areas, enrollees will have access to a statewide EPO network.

The Board voted to eliminate ActiveCare 3, as the costs for that coverage level have risen so high that the required premium increase would make the plan completely unaffordable for most employees. Members currently enrolled in ActiveCare 3 will be moved to ActiveCare 2.

The Board also approved a number of benefit changes, including small increases in the deductibles for 1-HD, and a restating of the out-of-pocket maximums to conform to the Affordable Care Act.

A new benefit available at all levels will be “Teladoc,” a program designed to prevent unnecessary doctor and emergency room visits. Available 24/7, Teladoc provides access to a doctor by phone or online consultation. It will be provided for $40 per consultation for ActiveCare 1-HD enrollees, and will be free to those enrolled in ActiveCare 2 or Select.

Comparison to state employees

TRS staff noted that ActiveCare is essentially in line with health care plans in the private sector in terms of benefits and actual premium rates, but not with regard to what employees pay toward premiums. In the private sector, employers tend to increase their contribution as the rates rise.

Unlike the program for Texas state employees, for which the state continues to increase contributions toward employee premiums to maintain its share as premiums increase (the state covers employee-only coverage completely, and contributes 50 percent toward family coverage), the state has not increased its $75 monthly contribution for school employees since ActiveCare was created more than a decade ago. Some school districts have increased their local contribution (the minimum required contribution is $150 per month) but many are finding it hard to keep up with the increases due to cuts in state education funding, so the burden increasingly falls on employees.

In comments prior to the discussion about the premium increase, several Board members, led by private investor Joe Colonnetta and including the employee representatives on the Board, strongly advocated for parity with the state employee system, though staff cautioned them about current laws that prohibit TRS from lobbying.

HMO approval

In other news, the Board re-approved the existing three HMOs that serve portions of the state. The Board had considered, but rejected, some additional HMOs, including one with statewide coverage and one that would have provided services to Houston-area school districts. New premium rates and changes to benefits can be viewed here.

Enrollment period

The enrollment period for ActiveCare for the 2014-15 school year will begin July 21 and run through August 31.

TRS-Care (retiree health insurance)

Due to an ongoing directive from the Legislature, there will be no increase in the premiums for retirees under TRS-Care. This will be the last year that TRS-Care can remain solvent without action from the Legislature. If no action is taken, TRS-Care will run out of money during the 2015-16 school year.

There were some minor benefit changes to TRS-Care levels 2 and 3, including changes in out-of-pocket maximum levels to conform to the Affordable Care Act.