Texas House Scheduled to Vote on HB 3976

ALERT! The Texas House of Representatives has added HB 3976 to its calendar for Wednesday, May 3.

Click here to email your Representative

As members of the Texas Retired Teachers Association (TRTA) know, the TRS-Care retiree health insurance program currently faces a $1 billion budget shortfall. If nothing is done this session to address it, retirees will carry the full burden of the shortfall. This means staggering premium increases, benefit cuts, or a combination of both.
 
Without some action this session, retired school employees could see the dissolution of the plan even as soon as the next year or two! 

Facebook Live Event

TRTA Executive Director Tim Lee and Legislative Coordinator Bill Barnes will be discussing HB 3976 and TRS-Care tonight (May 2) on Facebook Live at 6PM CST. You can watch this live stream via TRTA’s Facebook page

TRS-Care Options

Much progress has been made on improving the stability of the TRS-Care program, but many of the program changes require retirees to pay more out of their pockets.
 
The trend of more costly healthcare is has been experienced by nearly all Americans over the last decade. TRTA certainly is not unaware of this reality; but we have argued that TRS retirees’ income largely is fixed, and their actual buying power is eroded due to inflation and the lack of regular pension increases.
 
Few in the Legislature would disagree with this premise, and many have filed legislation to provide retirees with an increase in their benefits. However, those bills are not likely to pass this session because the TRS pension fund currently cannot sustain benefit increases (per state law, the pension fund must be able to amortize its unfunded liability within 31 years or less in order for such increases to be approved).
 
The options available to deal with this health care funding challenge focus on more money for TRS-Care, as well as retirees paying more for their insurance.
 
The Texas House version of TRS-Care reform is based on a budget strategy that includes $633 million more funding for retiree healthcare. While this eases the pain on retirees, the fact remains that program changes are still necessary for TRS-Care to exist.
 
Those changes will be voted on tomorrow, Wednesday May 3, as HB 3976 moves to the House floor.  
 
The bill is critical to the solvency of TRS-Care, as time in this session is running out to address the shortfall. The 85th Legislative Session is scheduled to end May 29.

It is important that TRTA members understand that we are at a critical time in this process. TRS-Care has never been in such a dire position as it is today, and action is needed to keep the TRS-Care plan sustainable. 
 
To be clear, the Texas House budget includes a one-time infusion of cash from the Rainy Day Fund, as well as an increase in the ongoing state appropriations for TRS-Care.
 
The importance of HB 3976 is that it changes the plan design to implement a single-option healthcare plan for retirees, with a specific option for pre-65 retirees (a High-Deductible plan), and a specific option for retirees over the age of 65 (Medicare Advantage).
 
The Teacher Retirement System of Texas (TRS) provided these options to the Legislature through a study group that met last year. These are the only plan design change options on the table for consideration.
 
In order for TRS-Care to survive and offer some form of benefit to retirees, the Legislature must agree to more funding for TRS-Care and pass a bill that instructs TRS on how to implement plan design modification. The more money provided through the Legislature, the less money retirees will have to pay out of their pockets.
 
TRTA urges the Legislature to adopt a final budget with the highest amount of funding possible for TRS-Care, and to support plan design changes as recommended by TRS.
 
TRTA supports HB 3976 and we ask the Legislature to continue to improve the TRS-Care plan design by providing as much revenue as possible to the ailing retiree healthcare program. 

HB 3976 Plan Design

Projected Pre-65 Retiree Premium Costs (Retiree only):

Year House Premium Plan (HB 3976)  
2018 $200/month  
2019 $250/month  
2020 $310/month  
2021 $370/month  

 
(HB 3976 also provides a zero-cost premium for TRS-Care pre-65 members who retired with a disability annuity. Please note, the zero-cost option would only apply to the disabled retiree, not to the spouse, and the provision would end in FY 2021).
 
Retirees age 65 and over: All retirees age 65 and older will be transitioned to the TRS-Care Medicare Advantage plan. The premiums would be approximately $146 per month.
 
Projected 65 and Over Retiree Premium Costs for Medicare Advantage (Retiree only):

Plan Year 2018-2021: $146/month

You can learn more about HB 3976 by clicking here.   

What You Can Do Now!

We need TRTA members to call and email their legislators today and ask them to support HB 3976. While the changes being proposed in this bill may not be ideal, they offer the best hope for TRS-Care’s survival.
 
Your TRTA Legislative Team will continue to work with legislators to improve the plan, and your voice matters as we work to see this bill through to its final passage.
 
When you talk with your legislator, we advise you to be appreciative and complimentary for the long hours legislators are working as the last month of session is underway.
 
We also suggest that you remain firm on the need for a solution to TRS-Care that includes the highest appropriation possible for TRS-Care. It will take two bills to solve our TRS-Care issues this session: a budget that has the most money possible for TRS-Care, and a bill that provides flexibility to TRS on making changes to the health care plan to ensure it survives.
 
It has taken everybody—our friends in the House, the Senate, at TRS, TRTA, and more—to find ways to keep TRS-Care sustainable.
 
HB 3976 is the best vehicle available for ensuring that TRS-Care is sustained and does not head into a “death spiral.” We are asking for your help today to contact your legislators to keep this process moving forward so that TRS-Care can continue!
 
Please call and email your Representatives NOW!
 
Call your Representative using our toll-free Legislator Hotline: 1.888.674.3788
 
Click here to email your Representative now!

Thank You

Thank you for your membership to TRTA. We are fighting ardently for your benefits every day at the Capitol. If you are not yet a TRTA member, please join here. Be sure to read our comprehensive Frequently Asked Questions about TRS-Care here.

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