Category Archives: healthcare

12 Days of Voting: Healthcare

Early voting is underway NOW for the November 6 elections, so we’re taking a look at some of the reasons why it’s so important that educators vote TODAY! In this post, we’re taking a closer look at healthcare.


Believe it or not, Texas spends less than any other state on employee benefits, funding them only at about $967 per pupil, which includes the cost of health insurance. In fact, Texas spends less than our neighboring states Oklahoma and New Mexico, which are both under the national average as well but are spending $1,505 and $1,905 per pupil respectively, despite having significantly less wealth per capita than Texas (U.S. Census Bureau, Public Education Finances: 2014, G14-ASPEF, released May 2016).

The ever-increasing amount of money being taken out of educators’ paychecks for healthcare is primarily due to the fact that state funding and state-mandated district funding for health insurance, including the TRS-ActiveCare plan used by many districts for their employees, has remained unchanged since the program began some 17 years ago.

When the Legislature first decided to subsidize teacher health insurance premiums back in 2001, the $225 contribution for each employee (made up of $75 from the state and $150 from the school district) was in line with what private employers were paying toward healthcare for their employees. Since that time, health insurance inflation generally has been between eight and ten percent per year, and educator premiums have increased more than 250 percent. Also during that time frame, many private employers have increased what they pay toward employee health insurance premiums, but Texas’s funding of the healthcare program for public school employees has fallen way behind.

Legislative inaction has now led to an insurance program for school district employees that is more burdensome than beneficial, and for many educators, it amounts to a pay cut year after year. Back In Nov. 2014, the Teacher Retirement System (TRS) released its TRS-Care Sustainability and TRS-ActiveCare Affordability Study that was commissioned by the 83rd legislature. It outlined numerous options for lawmakers to consider in dealing with the looming healthcare crisis for educators. Despite those recommendations, the legislature has largely ignored exploding healthcare costs for active employees.

One reason the legislature has neglected to address active school employees’ healthcare costs, including during the most recent 2017 legislative sessions, is the sad fact that the state’s health insurance program for retired educators, TRS-Care, is in even worse shape. After years of inadequately funding retirees’ health insurance, the legislature has now faced back-to-back sessions in which the program was at risk of running out of money and collapsing in on itself —a prospect that would leave hundreds of thousands of retired educators with no health insurance, dramatically limiting their access to healthcare when they most need it.

Back in 2015, the 84th Texas legislature opted not to address the funding formulas that determine how our state pays for TRS-Care. Instead, they made a $700 million supplemental appropriation to keep TRS-Care afloat for one more budget cycle.

By the time the 85th legislature arrived in Austin in January 2017, the TRS-Care shortfall had ballooned to $1.2 billion. Again, lawmakers were unwilling to address the underlying funding formulas, and they similarly declined to make even a one-time appropriation to cover the full cost. Instead, the Senate under the guidance of Lt. Gov. Dan Patrick and Sen. Joan Huffman, who chaired the Senate Committee on State Affairs that oversees TRS, pushed forward a plan that cut the cost of TRS-Care to the state by shifting more costs to retirees.

It’s worth noting that retired educators have not seen a cost of living adjustment to increase their pensions for over a decade, during which time they’ve also had to endure dramatic reductions in their healthcare benefits as a result of restructuring of the health insurance plan to save costs. That combination of dwindling purchasing power due to the effects of inflation on stagnant pension payments and crushing new healthcare costs caused such an outcry from retired educators that by the time legislators came back to Austin in the summer of 2017 for a special session, they felt compelled to put a modest amount of one-time extra dollars into the system to temporarily soften the blow of the impending changes to TRS-Care. However, those additional one-time funds were only a short-term band-aid on a much larger problem that remains.

Even with the draconian measures taken by the 85th legislature, resulting in significant rate hikes for many plan participants, TRS-Care is projected still to have a funding shortfall that will have to be addressed by the 86th legislature. In other words, lawmakers must act in 2019 if TRS-Care is to continue to exist for retired educators

Finding real solutions to the crisis of access to affordable healthcare for the state’s active and retired educators is a complex and expensive task. It cannot and will not be achieved by legislators whose singular priority is creating the appearance of cutting state spending without solving the problems faced by our state’s more than one million active and retired school employees. The elections that will determine who occupies those critical legislative seats and will have the power to decide the future of healthcare funding for educators are happening right now. Active and retired public school employees who have dedicated their lives to serving and educating our 5.4 million young Texans have the power to shape the outcome of this battle simply by voting on Nov. 6.


Go to the CANDIDATES section of our Teach the Vote website to find out where officeholders and candidates in your area stand on this and other public education issues.

Remind your colleagues also about the importance of voting and making informed choices at the polls. While it is illegal to use school district resources (like your work e-mail) to communicate information that supports or opposes specific candidates or ballot measures, there is NO prohibition on sharing nonpartisan resources and general “get out of the vote” reminders about the election.

Early voting in the 2018 general election runs Monday, October 22, through Friday, November 2. Election Day is November 6, but there’s no reason to wait. Get out there and use your educator voice by casting your vote TODAY!

Teach the Vote’s Week in Review: Sept. 21, 2018

Here’s your weekly wrap-up of education news from the ATPE Governmental Relations team:


The Board of Trustees of the Teacher Retirement System (TRS) met this week to discuss such topics as premiums for the state’s healthcare plan for retired educators. After receiving a more favorable update on the estimated shortfall for TRS-Care and hearing lawmakers indicate that the legislature will provide needed funding, the board intends to try to keep premiums and benefits stable. Read more about the board’s discussions this week in this blog post by ATPE Lobbyist Monty Exter.

 


Senator-elect Pete Flores (R-San Antonio)

Voters in Senate District 19 turned out for a special election runoff on Tuesday to decide who will represent them in the Texas Senate until the 2020 elections. Gathering 53% of the vote, Republican Pete Flores was the race’s clear winner and will be filling the seat left vacant by former Sen. Carlos Uresti who resigned this year.

Flores’s win flips the seat long held by Democrats into the Republican column heading into the 2019 legislative session. The change makes it that much easier for the upper chamber’s Republican super-majority to pass Lt. Gov. Dan Patrick’s agenda, especially with another Democratic vacancy generated by the anticipated race to replace Senate District 6’s Sen. Sylvia Garcia, who is running for Congress. Garcia’s seat would not be filled until a special election occurs well after next year’s legislative session begins.

ATPE Lobbyist Mark Wiggins breaks down how this impacts the upcoming legislative session and what it means for contests in the November election in this blog post.

 


Are you already registered to vote? If so, don’t stop there…  take the next step!

Tuesday, September 25 is National Voter Registration Day, and thousands of volunteers across the U.S. will be mobilized to help others register to vote and get informed about elections. Perhaps if you’re already to vote you can go the extra mile by asking friends and family if they’ve registered and reminding them of these important dates:

  • The deadline to register to vote in November is Oct. 9, 2018.
  • Early voting runs Oct. 22-Nov. 2, 2018.
  • Election Day is Nov. 6, 2018. 

You can also encourage your friends and family to check out the Candidates section of TeachtheVote.org for more information on the candidates vying for seats in the Texas House, Texas Senate, State Board of Education, Governor, or Lieutenant Governor.

The first Friday of early voting, Oct. 26, is Student Voting Day in Texas. Encourage the students you know to get registered and participate in the upcoming election. Voting is more than just a civic duty; it’s how we work together to create positive change in our communities and its important that we get everyone involved.

 


No action is good action: TRS committee takes no action on TRS-Care premiums

The Teacher Retirement System (TRS) Board of Trustees is meeting today and tomorrow. This morning, TRS Chief Healthcare Officer Katrina Daniel updated the board’s Benefits Committee on the most recent fund balance shortfall for TRS-Care. Today’s update noted that as a result of several positive factors, that shortfall has fallen to approximately $240 million for fiscal year  2021, the second year of the upcoming biennium.

TRS-Care had already moved in a substantially positive direction by the time the agency laid out its legislative appropriations request (LAR) last week. The LAR had incorporated the shortfall, which was estimated to be $410 million as of June 30, 2018.

Since June, TRS has made significant progress in contract negotiations with Humana, the current third-party administrator of TRS-Care Medicare Advantage. The new contract will result in considerable additional savings to TRS-Care that brings the shortfall down to the approximately $240 million mark discussed today.

Based on the June 30 numbers, which have only improved, both House and Senate leaders have requested that the TRS board not raise premiums for retirees, but instead rely on their assurances that the legislature will fully fund the shortfall during the upcoming legislative session. Based on those assurances, TRS Executive Director Brian Guthrie recommended that the board take no action on increasing rates for TRS-Care.

in addition to leaving premiums the same for the upcoming year, the benefits side of TRS-Care will also remain the same for the upcoming plan year.

The TRS board documents related to this discussion can be found here, or you can watch an archived video of the discussion. The healthcare discussion starts at the beginning of the video.

ATPE testifies on educator healthcare

The House Appropriations Subcommittee on Article III, which oversees the public education budget, met Wednesday at the Texas Capitol to discuss interim charges related to TRS-Care. Chairman Trent Ashby (R-Lufkin) began by noting the roughly $1 billion shortfall facing the system heading into the 2017 legislative session, which lawmakers only partially filled. Without those funds, the system would have been insolvent. The program faces another shortfall heading into the 2019 session, which begins in January.

ATPE Lobbyist Monty Exter testifies before House Appropriations Article III Subcommittee September 5, 2018.

Teacher Retirement System (TRS) of Texas Executive Director Brian Guthrie estimated that the fiscal year ending in 2021 will face a roughly $410 million shortfall, which is down from previous projections. Guthrie explained that TRS-Care is funded as a percentage of payroll, which is not growing at the same rate as health care costs. This is the fundamental reason why TRS-Care has begun to face repeated shortfalls. Retirees have born additional costs as a result of the underfunding, and roughly 30,000 have chosen to leave the program because they can no longer afford to participate.

Guthrie suggested that the best case scenario for TRS-Care would be for the legislature to appropriate an amount more than is needed to simply keep the fund solvent, the excess of which could become the corpus of an investment fund that would be able to provide long-term funding stability, similar to the TRS pension trust fund.

ATPE Lobbyist Monty Exter credited the House and Chairman Ashby in particular for preventing the collapse of TRS-Care last session. Exter suggested allocating additional dollars to the base funding formulas for TRS-Care, as opposed to providing supplemental funding each biennium. Exter shared a story from a retiree whose incontinence medication shot up to $500 after the most recent TRS-Care changes. To that end, Exter suggested expanding the list of free and near-free medications, particularly in maintenance drug categories. In addition, allowing retirees access to café plans or health savings accounts (HSA) would allow retirees to allocate tax-deferred dollars on the front to help with budgeting towards their annual deductible. Finally, Exter noted that preventing retirees from leaving TRS-Care or banning them from returning after testing other private plans violates free market principles and harms consumers.

Beyond TRS-Care, Exter warned of problems associated with TRS-ActiveCare and the pain experienced by active educators who are seeing health care costs rise more quickly than their paychecks. The 86th Texas Legislature will also be faced with issues relating to the TRS pension fund. Both will vie with TRS-Care for attention and resources.

Chairman Ashby indicated that the changes to TRS-Care have generated enormous attention, and voiced optimism that this will lead to positive outcomes for both active and retired educators’ health care next session.

Summer Activism: How can I continue to fight for our classrooms?

Congratulations, you made it to summer!

The students are gone, but every teacher knows the work never really stops, even when the temperatures soar. As it turns out, this summer is already shaping up to be a pretty active one when it comes to shaping public education policies that could make a big impact on classrooms next fall.

In fact, keeping on top of what’s happening this summer is critical to ensuring lawmakers start off on the right foot when they return to Austin in January to start making laws that affect your students, classrooms and profession. To that end, many ATPE members have asked what educators can do to stay on top of these important conversations this summer.

The good news is there’s plenty to do, and much of it can be done with minimal disruption to your summer schedule! Here’s a list of ways to keep engaged:

Be Social

Keeping up on your social media feeds is the best way to stay up to date on what conversations are going down where. Your ATPE governmental relations staff is busy going to important meetings where the future of public education is being discussed, and we’re posting what’s being talked about on Twitter. Good handles to follow are @OfficialATPE, @TeachTheVote, @ATPE_JenniferC, @ATPE_MontyE, @ATPE_KateK and yours truly, @MarkWigginsTX. Also check for updates on ATPE’s Facebook page. The more follows, likes and shares we get, the more clout we’ll have when we start mobilizing members during the legislative session.

Speak Up

There are dozens of meetings scheduled this summer where members of the public are allowed to testify about public education issues, letting lawmakers know where they stand. Next month, a special Senate committee is meeting to talk about school safety, and the House Public Education Committee is holding hearings on school safety and mental health next week. The Texas Commission on Public School Finance is scheduled to meet July 10 to discuss ways to fix the school finance system. The State Board of Education (SBOE) just wrapped up their June meeting, but they’ll be back in September. If you want to know more about how to testify, just call or e-mail your ATPE governmental relations department; but you don’t have to travel to Austin to be heard. Reaching out to the people elected to represent you via letters, email, and phone calls can be just as effective. You can often them just down the street at their local district offices during this time year as well, if you want to talk to them face to face without ever leaving home.

Volunteer

The most important way to make sure we secure adequate funding, resources and respect for the teaching profession is by electing pro-public education candidates to office. You can find out who supports public education by checking out our Candidates page. The November 6 election is the biggest and last opportunity between now and the next legislative session to do that. Even though July and August are typically slow months for political campaigns, those campaigns are always looking for people to block walk, make phone calls and put up signs. Volunteering during the dog days is also a great way to get to know candidates and staff on a personal level, since they’re usually very grateful for the help!

Donate

Unfortunately, money still matters in the world of politics. Campaigns rely on it and so do political action committees (PACs). People are grateful for donations any time, and summer is no exception. For most educators, pooling your money with other donors through a PAC offers you an opportunity to get the best bang for the buck. For example, during the primaries, 72 percent of the candidates who received a donation form the ATPE-PAC went on to win their election. In the primary runoffs that number jumped to 80 percent.

Preach the Word

Summer is a time for barbecues, grilling out and social gatherings. We’ve all been general brought up to avoid talking politics, but the future of our schools is something that should rise above partisanship. Are your friends also stressed about paying too much in property taxes? Do they know that fixing the school finance system by ensuring the state pays its fair share of the burden would go a long way in fixing that? What about testing — are other parents just as fed up with the overemphasis on STAAR? Let them know the hard work you and ATPE are doing to advocate for solutions to these problems and let them know about Teach the Vote! We created the site for everyone who cares about the future of public education because we need everyone’s help to make sure we get  the right people in office to fix these and many other issues, such as teacher health care and compensation.

We’re gearing up for a scorcher, but educators can’t afford to spend too much time in the shade. Every little bit helps us to avoid getting burned next session!

School finance group looks at costs of undereducation

The Texas Committee on Public School Finance working group on outcomes met Tuesday morning to take invited testimony on a number of subjects. The agenda for Tuesday’s meeting at the Texas Capitol included intersections of education, healthcare access, child and family well-being, and economic outcomes in Texas; strategic talent management and building systems to attract, retain, and develop highly qualified talent into Texas public schools; and teacher quality / certification.

School finance commission working group on outcomes meets May 29, 2018.

Anne Dunkelberg with the Center for Public Policy Priorities was the first to testify regarding the consequences of an undereducated workforce, including effects on poverty, uninsured and incarceration rates. Texas leads the nation in both the rate and number of uninsured. Meanwhile, as healthcare premiums continue to rise, employees are paying a larger share each year from their own paychecks. Texas is also among the states with the highest poverty rates.

Texas’s high rate of uninsured translates to a heavier uncompensated care burden on local hospitals, which often try and recoup that cost through local property taxes. Underscoring the link between educational attainment and better pay, Dunkelberg warned that Texas must invest in education “to minimize massive public expenditures on undesirable outcomes.”

Dunkelberg concluded by acknowledging that, like businesses, the Texas Legislature is often under pressure to reduce costs now rather than down the line. Yet if the state is to ever see long-term savings, it must invest on the front end with education.

Next, Martin Winchester with the Texas Education Agency (TEA) testified with regard to teacher recruiting and retention.

“We do not believe by any means it is all about the pay,” said Winchester. Rather, Winchester suggested working conditions, such as adequate classroom support and opportunities to grow and advance in the profession, are the top factors.

Working group leader Todd Williams pondered why starting teachers in Texas are paid the same salary, regardless of whether they received 1,500 hours of classroom training or 15 hours. Winchester indicated that TEA Commissioner Mike Morath would support allowing educators from more rigorous certification programs to “skip a level” on the pay scale, and noted that first-year teachers from alternative certification programs quit at a much higher rate due to a lack of preparation.

While lauding the ideas discussed by TEA, state Rep. Diego Bernal (D-San Antonio), who serves as vice-chair of the House Public Education Committee, chided the agency for proposing policies at certain points while avoiding policy discussions at other points.

Kate Rogers with the Holdsworth Center was the last to testify, and spoke about strategic talent management. Rogers stressed the importance of coaching for both teachers and administrators, and emphasized that teachers need more non-instructional time in order to develop better lesson plans and participate in development activities such as coaching and mentoring. According to Rogers, teachers in the U.S. spend more of their time on direct classroom instruction than teachers in any other developed nation, which leaves them without enough time to do other critical activities needed to improve over time.

Williams concluded the meeting by laying out the next few steps for the working group, and proposed July or August as the target window for a preliminary report. No further meetings are currently scheduled.

House committee discusses teacher pensions, health care

The House Committee on Pensions met Thursday morning in Dallas to discuss items listed under the committee’s interim charges, including the Teacher Retirement System (TRS) of Texas.

The committee met in the chambers of the Dallas City Council, which oversees pensions for the city’s police and firefighters that have come under scrutiny as of late. Dallas Mayor Mike Rawlings was the first witness to testify, thanking the committee for legislation dealing with issues pertaining to Dallas police and firefighter pensions and updating members on changes the city has put in place since the legislation’s passage.

House Pensions Committee meeting May 10, 2018 in Dallas.

Executive Director Brian Guthrie testified for TRS, laying out the basics of the $152 billion trust fund that serves 1.5 million active and retired members. The fund earned a return of 12.6 percent for fiscal year (FY) 2017, under an assumed rate of return of 8 percent. The fund carries $35.5 billion of unfunded liability and is 80.5 percent funded with an amortization period of 32.2 years, which Guthrie noted will change if the assumed rate of return is lowered. TRS manages two major healthcare programs: TRS-ActiveCare for active teachers and TRS-Care for retirees. Guthrie testified that TRS undertook a study in 2013 looking at the fund’s defined benefit structure, and will be producing an updated study this fall.

Turning to health care, Guthrie described TRS-Care as a “pay as you go plan.” The state’s contribution to the plan is 1.25 percent of active employee payroll, while school districts contribute .75 of active employee payroll and active employees contribute .65 percent of their paycheck. Retirees contribute to the plan through premiums. The plan faced a $1 billion projected budget shortfall heading into the last legislative session, and lawmakers of the 85th Texas Legislature put $700 million into the system in order to keep the fund from folding. While the infusion was able to prevent retirees from losing their health care, it wasn’t enough to avoid increases in costs and reductions in benefits.

Even with the changes, which included increasing premiums, the fund faces a $400-600 shortfall heading into the next biennium and ongoing shortfalls moving forward. Guthrie attributed the increase to legislation accompanying the added funding that directed the agency to ease cost increases. Guthrie indicated the primary problem is with the fundamental design of the funding formula, noting that healthcare costs are increasing far more quickly than revenue received from active employee payroll, which is the basis for the funding formula.

The largest cost increases are associated with plans that include coverage for dependents, and TRS initially offered retirees the option of permanently leaving TRS-Care for an insurance plan on the private market. Chairman Dan Flynn (R-Canton), members of the committee and legislators representing the Dallas/Fort Worth Metroplex pressed Guthrie to find a way to protect benefits, in particular prescription drug costs. Guthrie testified that the agency is studying all possible avenues, but the fund design presents the largest challenge.

Finally, Guthrie explained TRS-ActiveCare as a group insurance program for small to midsize school districts that would be otherwise unable to provide their own insurance programs. The state provides $75 per member, per month through the school finance formulas, districts contribute a minimum of $150 per month, and individual members are responsible for the remainder. Minimum state and district contribution levels have not changed since the plan’s inception in 2002, and employees’ share of the premiums has increased to 60 percent from 30 percent over the last 14 years. Because of rising healthcare costs, TRS board members voted at their most recent meeting to raise premiums for individual members between five and nine percent, or seven percent on average.

Because TRS-ActiveCare is funded through the school finance formulas, Guthrie suggested that any changes to TRS-ActiveCare would best be addressed as part of lawmakers’ broader efforts to reform the school finance system.

House Public Education Committee Chairman Dan Huberty (R-Houston) sharply questioned Guthrie over the board’s anticipated July vote to lower the fund’s assumed rate of return to 7.5 percent from 8.0 percent, despite returning 12.6 percent for FY 2017. This would cost an additional $1.2 billion on top of the $400-600 extra needed for TRS-Care, for a total ask of $1.6 billion on top of the $3 billion in base funding already designated for TRS. Guthrie testified that the agency’s fiduciary responsibility requires staff to provide an accurate estimate of what the fund is anticipated to produce.

A representative from Arlington ISD asked the board to consider allowing school districts with more than 1,000 employees to opt out of TRS-ActiveCare and provide their own insurance programs, pointing out that family healthcare costs under the TRS-ActiveCare high-deductible plan could account for more than a third of a first-year teacher’s annual salary. Chairman Huberty noted that such an arrangement could adversely impact TRS funding by reducing the broader pool of active TRS members.

Texas Retired Teachers Association (TRTA) Executive Director Tim Lee thanked the Texas Legislature for making the minimum changes necessary to keep TRS-Care from failing entirely. Lee suggested that 14 years may have been too long to go without increasing premiums, and pointed to the Employee Retirement System (ERS) as an appropriate benchmark for TRS. Going forward, Lee testified the only long-term solution is pre-funding the program, which would be even more costly than migrating TRS members to ERS. Lee indicated that retirees will be unable to countenance further cost increases, and noted that 36,400 people have decided to leave TRS-Care for the individual market.

Staff from the Pension Review Board (PRB) testified regarding the agency’s efforts to improve defined benefit programs. The board has ordered staff to develop an online dashboard of Texas public pension data, to study potential legislative recommendations regarding how systems whose funding is set by legislative statute can respond to changes in market systems, to study how systems of scale could be utilized to improve groups of smaller plans, and to conduct intensive actuarial reviews of systems with risk that threaten their long-term stability. PRB staff noted that ERS has already lowered its estimated rate of return to 7.5 percent from 8 percent, which TRS is currently contemplating.

The committee then opened the table to public testimony, and dozens of retired teachers voiced their concerns regarding healthcare and the defined benefit structure of the TRS pension program. Many shared heartbreaking stories of seeing fixed incomes virtually consumed by skyrocketing premiums even before paying the increased costs for services and medication. Retirees also expressed concerns regarding changes to the assumed rate of return.

 

Why March 6 Matters: Healthcare

Early voting is underway NOW for the March 6 Texas primary elections, so we’re taking a look at some of the reasons why it’s so important that educators vote in this election! Today, we’re taking a closer look at healthcare for active and retired educators.


In our first post of this series we examined teacher pay, which lags behind the national average. While paychecks are a major concern, Texas also spends less than any other state on employee benefits, funding them only at about $967 per pupil, which includes the cost of health insurance. In fact, Texas spends less than our neighboring states Oklahoma and New Mexico, which are both under the national average as well but are spending $1,505 and $1,905 per pupil respectively, despite having significantly less wealth per capita than Texas (U.S. Census Bureau, Public Education Finances: 2014, G14-ASPEF, released May 2016).

The ever-increasing amount of money being taken out of educators’ paychecks for healthcare is primarily due to the fact that state funding and state-mandated district funding for health insurance, including the TRS-ActiveCare plan used by many districts for their employees, has remained unchanged since the program first began some 17 years ago.

When the Legislature first decided to subsidize teacher health insurance premiums back in 2001, the $225 contribution for each employee (made up of $75 from the state and $150 from the school district) was in line with what private employers were paying toward healthcare for their employees. Since that time, health insurance inflation generally has been between eight and ten percent per year, and educator premiums have increased more than 250 percent. Also during that time frame, many private employers have increased what they pay toward employee health insurance premiums, but Texas’s funding of the healthcare program for public school employees has fallen way behind.

Legislative inaction has now led to an insurance program for school district employees that is more burdensome than beneficial, and for many educators, it amounts to a pay cut year after year. Back In November 2014, the Teacher Retirement System (TRS) released its TRS-Care Sustainability and TRS-ActiveCare Affordability Study that was commissioned by the 83rd legislature. It outlined numerous options for lawmakers to consider in dealing with the looming healthcare crisis for educators. Despite those recommendations, the legislature has failed to address exploding healthcare costs for active employees.

One reason the legislature has neglected to address healthcare costs for active employees, including during the most recent 2017 legislative sessions, is the sad fact that the state’s health insurance program for retired educators, TRS-Care, is in even worse shape. After years of inadequately funding retirees’ health insurance, the legislature has now faced back-to-back sessions in which the program was at risk of running out of money and collapsing in on itself —a prospect that would leave hundreds of thousands of retired educators with no health insurance, dramatically limiting their access to healthcare when they most need it.

Back in 2015, the 84th Texas legislature opted not to address the funding formulas that determine how our state pays for TRS-Care. Instead, they made a $700 million supplemental appropriation to keep TRS-Care afloat for one more budget cycle.

By the time the 85th legislature arrived in Austin in January 2017, the TRS-Care shortfall had ballooned to $1.2 billion. Again, lawmakers were unwilling to address the underlying funding formulas, and they similarly declined to make even a one-time appropriation to cover the full cost. Instead, the Senate under the guidance of Lt. Gov. Dan Patrick and Sen. Joan Huffman, who chaired the Senate Committee on State Affairs that oversees TRS, pushed forward a plan that cut the cost of TRS-Care to the state by shifting more costs to retirees.

It’s worth nothing that retired educators have not seen a cost of living adjustment to increase their pensions for over a decade, during which time they’ve also had to endure dramatic reductions in their healthcare benefits as a result of restructuring of the health insurance plan. That combination of dwindling purchasing power due to the effects of inflation on stagnant pension payments and crushing new healthcare costs caused such an outcry from retired educators that by the time legislators came back to Austin in the summer of 2017 for a special session, they felt compelled to put a modest amount of one-time extra dollars into the system to temporarily soften the blow of the impending changes to TRS-Care. However, those additional one-time funds were only a short-term band-aid on a much larger problem that remains.

Even with the draconian measures taken by the 85th legislature, resulting in significant rate hikes for many plan participants, TRS-Care is projected still to have a funding shortfall that will have to be addressed by the 86th legislature. In other words, lawmakers must act in 2019 if TRS-Care is to continue to exist for retired educators

Finding real solutions to the crisis of access to affordable healthcare for the state’s active and retired educators is a complex and expensive task. It cannot and will not be achieved by legislators whose singular priority is creating the appearance of cutting state spending without solving the problems faced by our state’s more than 1 million active and retired school employees. The elections that will determine who occupies those critical legislative seats and will have the power to decide the future of healthcare funding for educators are happening right now. Active and retired public school employees who have dedicated their lives to serving and educating our 5.4 million young Texans have the power to shape the outcome of this battle simply by voting in the 2018 primaries.


Go to the CANDIDATES section of our Teach the Vote website to find out where officeholders and candidates in your area stand on school finance and other public education issues. Because voting districts in Texas are politically gerrymandered, most elections are decided in the party primary instead of the November general election. That’s why it is so important to vote in the primary election. Registered voters can cast their ballot in either the Republican or Democratic primary, regardless of how you voted last time.

Remind your colleagues also about the importance of voting in the primary and making informed choices at the polls. Keep in mind that it is illegal to use school district resources to communicate information that supports or opposes specific candidates or ballot measures, but there is no prohibition on sharing nonpartisan resources and general “get out of the vote” reminders about the election.

Early voting in the 2018 primaries runs Tuesday, Feb. 20, through Friday, March 2. Election day is March 6, but there’s no reason to wait. Get out there and use your educator voice by casting your vote TODAY!

TRS board discusses future shortfalls as critical primary election looms

I was listening to a retired educator testify before the TRS board at their annual board retreat this morning. She expressed that retirees are scared about increasing healthcare premiums and upcoming changes that will greatly impact the actuarial picture of the pension fund. She also asked for TRS to advocate on behalf of retirees in dealing with the legislature. It was moving testimony. However, I wish she and all educators, active and retired, would shift their mentality from scared to angry and look not to TRS to take care of them next session, but instead look to themselves to be their own best advocates, at the polls where these decisions are really made.

The reality is TRS is an administrative agency, and while the TRS staff does a phenomenal job, their job is to implement the legislature’s will, NOT to lobby the legislature on behalf of TRS members. In fact, all state agency staff, TRS staff included, are prohibited by state law from engaging in lobbying efforts.

TRS has hard days ahead. If the defined benefit pension system or TRS-provided retiree healthcare are going to continue to exist, active teachers and retired teachers alike will have to use their voices not only at the capitol but also at the polls.

What are the factors that underpin this bleak reality?

First, TRS is set to drop its assumed rate of return from 8 percent to 7.25 percent. This one action, at least on paper, will make the fund go from healthy to anything but. There is already extreme pressure from Wall Street money managers and the politicians willing to work on their behalf to convert TRS to a 401(k) style system off of which they could make huge profits. Without other changes offsetting the drop to 7.25, this pressure will likely increase exponentially as the pension fund will look considerably more vulnerable going forward.

Second, despite the draconian changes to TRS-Care coming out of the last legislature, the retiree health insurance system, as it stands today, still is not financial sustainable. And the issues with retiree health care don’t even take into account the significant health insurance burden on active teachers, which is forcing many of them out of the education profession.

Sometimes there are smart policy initiatives that can solve statewide challenges with little or only indirect additional costs. The challenges facing TRS are NOT those kinds of challenges. The truth is that the state has for years gotten by knowingly underfunding both the pension trust fund and the retiree healthcare trust fund. On the pension side, in fact, the state’s share of an educator’s pension (at 6.8 percent) is less than half the teacher retirement system contribution rate set by the next lowest state not paying into Social Security.

Texas has now reached a point where getting by on barebones funding can no longer happen – not  if we want to continue providing teachers with a pension or retiree health insurance. What has changed?

As stated above, in response to long term market trends and despite best-in-class fund management by TRS staff, the agency is expected to reduce the assumed rate of return on the fund to 7.25 percent, down from 8 percent. This change will increase the pension’s unfunded liability by $10 billion and raise its funding period from just over 30 years to a whopping 86 years. (Anything under a 30-year funding period is considered actuarially sound, and for TRS the 30-year period has been linked to providing cost of living increases (COLAs) for retirees.) At 8 percent there was an expectation that the fund would be in a position to offer a COLA within the next few years, at 7.25 percent the fund would not be considered healthy enough to offer retirees a COLA for at least the next 56 years.
In order to offset the adjustment to the assumed rate of return, the TRS pension fund’s contribution rate will need to be increased enough to generate an additional $1.4 to 1.6 billion per biennium.

TRS must be honest and stay above political bias or pressure in setting its estimated rate of return. In truth, a lower assumed rate of return, as long as it is coupled with a proper contribution rate, will produce a healthier pension system in the long run. However, because it is up to the legislature and not TRS to adjust the contribution rate, it is vital that the agency be diligent and expedient in communicating to its members the realities and potential consequences of a decision to adjust the fund’s assumed rate of return.

In addition to needing $1.5 billion or more in new pension contributions, TRS will also need substantial additional dollars just to sustain TRS-Care at the new 2018 levels. In all, TRS estimates that it will be asking the legislature to appropriate between 2 and 2.5 billion additional dollars next biennium. Lobbyists for each of the four statewide educators groups (including ATPE), the retired educators group, and a group representing school districts, when given the opportunity to comment, expressed their belief that such an ask would be a complete non-starter with the current group of legislators, particularly the Governor, Lt Governor, and the majority of Texas Senate.

Without substantial additional funds; TRS-Care will quickly go bankrupt and cease to exist. Active teachers’ health insurance costs will continue to rise unchecked pushing more and more good teachers out of the profession, and the TRS pension fund will be on a certain path toward being abolished. That is the very likely future, unless retired and active educators alike decide to make their voices heard at the polls this election year. Early voting starts Tuesday, Feb 20, and runs through Friday, March 2. Election day is Tuesday, March 6. With over one million active and retired education professionals in the state of Texas, the question is not whether you can save your retirement, fix your health insurance, and improve public education policy for 5.4 million students in this state. No, the only question is – will you?

Important update on TRS retiree healthcare

ATPE has just received the following announcement from the Teacher Retirement System of Texas (TRS) regarding participants, members, or their dependents who originally terminated coverage with TRS-Care between July 1, 2017- January 1, 2018, but want to return.

For more information please visit the TRS Website of contact TRS at 1-888-237-6762.

From TRS:
2018 TRS-Care Plan Changes Grace Period

The Teacher Retirement System of Texas (TRS) has received a number of requests from TRS-Care participants who terminated health plan coverage but want to return to TRS-Care.

Under TRS plan rules, retirees and dependents who terminate coverage cannot return to TRS-Care unless they experience a rare special enrollment event. However, TRS understands that there may be some individuals who did not wish to leave TRS-Care, or who now wish to reverse their decision and re-enroll.

Therefore, TRS is offering a one-time grace period until February 28, 2018 to allow former TRS-Care participants to re-enroll in TRS-Care if they terminated coverage or dropped a dependent due to the 2018 plan changes.

Who can re-enroll in TRS-Care during the grace period:

To be eligible for this grace period, participants must have a TRS-Care termination date of July 1, 2017 through January 1, 2018.

This is not an opportunity to add new dependents. You can only reinstate dependents that were previously covered under TRS-Care and were terminated from TRS-Care coverage between July 1, 2017 and January 1, 2018.

Steps to take to re-enroll:

To re-enroll with TRS-Care, please submit a signed application for TRS-Care. Your application must be post-marked no later than February 28, 2018. Your coverage will be effective the first day of the month following the time we receive your application.

Please note that if you submit your application near the end of the month, there may be a delay until TRS can make your coverage retroactively effective. Please submit your application as soon as possible.

If you wish to re-enroll in TRS-Care, please complete the application that applies to you based on your Medicare status, and sign and return the application to TRS postmarked no later than February 28, 2018.

There are two versions of the application—one for participants with Medicare and one for retirees without Medicare.

Please refer to the following link on the TRS website for more information.