TCCTA Blog

New Laws and Rules Affect TRS Members

September 1 of odd-numbered years is the date when most laws passed during the previous Regular Session of the Texas Legislature take effect. Lawmakers did not make any striking changes regarding TRS retirement eligibility in 2015, but did enact a few categorical adjustments that may affect some members of TRS—if not right away, then maybe later.

As reported here before, the TRS fund is basically in good shape, thanks to changes enacted in 2013, and a healthy return on managed investments. A long term positive trend line is necessary, under the law, to permit prospective benefits enhancements.

If you are a TRS member and have not seen the July issue of TRS News, please have a look. Here it is, in pdf format.

As you read it, keep in mind that community college educators and retirees do not receive health benefits from TRS, but from ERS. Therefore, references to health care in the newsletter do not apply to members at two-year institutions.

Also in the publication, please note several rule changes made recently by the TRS Board of Trustees. Contact the agency with any questions regarding your particular situation.

Effort to Repeal WEP in Congress Continues

If you plan to retire from an institution that does not participate in the Social Security system, but are entitled to Social Security due to other employment, the Windfall Elimination Provision can significantly reduce the amount of your pension.

Here is background information on WEP.

The latest effort to repeal WEP is HR 711, known as the Equal Treatment of Public Servants Act of 2015, introduced by U.S. Rep. Kevin Brady (R-The Woodlands).

The bill would, according to a previous analysis by the Texas Retired Teachers Association (TRTA):

• Permanently repeal the current Windfall Elimination Provision and replace it with a new and fair formula that treats public servants like the rest of American workers.
• Guarantee public servants receive the benefits they earned while they paid into Social Security.
• Reduce the WEP by up to a third for current retirees, and up to half for future retirees – increasing lifetime Social Security benefits by between $20,000 and $32,400 (as estimated by the Social Security actuary).
• Not impact the Social Security trust fund.
• What does this mean for retired educators in Texas? If H.R. 711 passes, your Social Security amount will no longer be figured by the arbitrary WEP formula established in 1983, but will be based on your real-life Social Security contributions and work history—just like everyone else.

Here is the latest information from TRTA on the repeal effort.

The measure has been referred to the House Ways and Means Committee, on which Rep. Brady serves.

Based on past experience, success will be difficult, given the budget deficit, plus the fact that WEP applies only in 15 "non-mandatory" states, in which school and college districts opted (in most cases many years ago) not to participate in Social Security. In other words, officials from 35 states may not see it as a priority.

HR 711 does not address the Government Pension Offset, which affects spousal benefits.

Here is a link to find out "Who Represents Me?"

 

TRS Defended

The news has been mostly good lately for the Texas Teacher Retirement System. Thanks to a law passed in 2013, the pension fund has grown significantly, allowing optimistic projections for the long term. However, critics continue to argue that such "defined benefits" plans should be replaced by "defined contribution" plans (such as ORP).

Tim Lee, executive director of the Texas Retired Teachers Association, recently published a rebuttal to one critic of public pensions, James Quintero of the Texas Public Policy Foundation. Mr Lee's article appeared in the Fort Worth Star-Telegram. Here is the link, which also includes the piece by Mr. Quintero.

The article by Mr. Lee is a keeper, particularly for TRS members as they visit with lawmakers who are "at home" in their districts during the interim before the next Regular Session.

Most Capitol observers believe TRS will remain in its present form, partly because one out of every 20 Texans is a participant in TRS—the "primary source of retirement security for teachers, principals, superintendents, school bus drivers, school administrative personnel and cafeteria workers. It has been so since 1937," as Mr. Lee puts it. This proportion includes current retirees, who are a potent political force in Austin.

It is important to keep in mind that many community colleges do not participate in the Social Security system. Hence TRS may be the only source of retirement income for these individuals.

ERS Extends Benefits to Same-Sex Spouses

As of July 1, public employers, including Texas agencies, universities, and two-year colleges will allow current and retired gay and lesbian employees to enroll their same-sex spouses in the same benefit programs and services available to opposite-sex couples.

Health benefits for community colleges are administered by the Employees Retirement System of Texas. Here is the official announcement from ERS. Please read it carefully.

ERS is notifying all third-party administrators of GBP programs (such as UnitedHealthcare for HealthSelect of Texas, or Humana for HealthSelect Medicare Advantage, about these dependent eligibility changes. "We will require that they accept these enrollments, issue ID cards for them and make other administrative changes," according to the announcement. 

The agency says it's unclear at this point how many individuals will receive health coverage due to the change, following the U.S. Supreme Court’s ruling on June 26.

For questions, please call ERS at (877) 275-4377, or contact your benefits coordinator for individual guidance.

ERS Summer Enrollment News

ERS Benefits Summer Enrollment starts June 29 and ends July 31. You’ll receive your Summer Enrollment packet later this month or in July, depending on your enrollment phase. It will include the dates of your enrollment phase—the time frame when you’ll be able to make benefits changes, about two weeks—and your benefit options based on where you live or work, employment status and dependents.

Here is the official announcement. Here is additional information, including the 2016 Plan Year Rates (click on the right).

Please note: If you want to add a dependent to health coverage, be prepared to provide documentation to Aon Hewitt verifying he or she is eligible for coverage. Keep in mind, these documents must be dated before you enroll him or her to your coverage. If you don’t provide documentation by the requested deadline, your dependent could be dropped from coverage, according to the official statement.

Benefits Update from ERS

The Employees Retirement System of Texas, which provides community and technical college educators their health benefits, has posted a couple of updates that may be of interest.

One post concerns the new State of Texas Dental Choice Plan, which now pays 40% (up from 0%) of covered expenses after you meet the $1,500 maximum. Here's the official announcement from ERS for more information.

The other message concerns dependent coverage for health care. If you add a dependent to health coverage who was not previously verified as your eligible dependent, you will be required to prove that he or she is eligible for coverage. Here's a link with the details.

UnitedHealth Group Draws Crtitics

Two years after its main subsidiary took over the health care contract affecting nearly a half million Texans—including community and technical college educators—UnitedHealth Group is under new scrutiny from lawmakers.

It's covered in an article in the Dallas Morning News by Robert T. Garrett.

In 2012 United beat out Blue Cross Blue Shield of Texas as third party administrator for 445,000 active and retired state workers and their dependents.

The switch was controversial because the "company hired super-lobbyists connected to Gov. Rick Perry, such as former Perry chief of staff Mike Toomey and former Perry campaign manager Luis Saenz, when it snagged the four-year, $204 million Employees Retirement System deal in 2012," according to the article.

Last week, the issue received the attention of the House State Affairs Committee, chaired by Byron Cook (R-Corsicana). At a hearing, panelists expressed concern that health participants are paying more than they should, especially in rural areas. Also discussed was a reported shortage of primary care physicians, compared to the previous PCP list under Blue Cross. It's a complaint heard frequently.

From the article:

Cook, a member of Speaker Joe Straus’ inner circle, said the system immediately should hire an outside auditor to check into disturbing signs he’s seeing that “balance billing” after hospital visits is growing and plan participants are shelling out increasing sums for out of network care.

Tom Quirk, United’s chief operating officer for Texas and Oklahoma, shot back, “Claims administrators don’t balance-bill. Physicians or care providers balance-bill.”

He and retirement system executive director Ann S. Bishop, a former Perry chief of staff, said United is hitting a goal of holding this year’s plan costs to 7.5 percent growth over last year. They also said United works hard when state employees complain to patch holes in its provider network, especially with the hospital-based doctors who resist signing contracts with insurers and are responsible for much of the balance billing.

Cook and a couple of his committee’s members, though, said they weren’t totally satisfied by the assertions of smooth sailing.

“I didn’t care which group has it,” Cook said of the contract. “I still don’t. But I care a lot that it be run for the benefit of the state and the participants. … I’m very happy if it all proves up. But we need to make sure the state does a good job at monitoring big contracts.”

Prescription Meds Update from ERS

Starting September 1, Texas Employees Group Benefits Program (GBP) participants will pay about 30% less for Tier 1 prescription drugs, which include most generic drugs. The copay for Tier 1 drugs will be $10 for a 30-day supply, down from $15. The cost for a 31- to 90-day supply will be $30, down from $45. The new copay will apply to participants in HealthSelectSM of Texas, Community First Health Plans, and Scott & White Health Plan.

ERS is making the change to encourage members to use generic drugs, which generally are no different than their brand-name counterparts. Generics not only help members save money, but also help reduce overall costs for the GBP health plans. Lowering costs in the health plans helps preserve benefits for active employees, retirees, and dependents. We hope you’ll take advantage of this savings opportunity in the new plan year.

When you buy your prescriptions on or after September 1, 2014, don’t forget that prescription drug deductibles for you and each of your dependents start over on September 1. You pay a $50 deductible per person each plan year before the plan begins to cover drug costs. This applies to participants in HealthSelectSM of Texas, Scott & White Health Plan, and Community First Health Plans.

The above information is taken from an official press release from ERS.

TRS Posts Updates

Members of the Teacher Retirement System of Texas may want to consult the recently published newsletter, TRS News. Included in this issue is a summary of important deadlines regarding items such as unreported service credit. It's on page three of the newsletter. An online version is available here.

During the 2013 Regular Session of the Texas Legislature, several significant changes were made regarding eligibility for early retirement, affecting TRS members who have been hired recently. (ORP participants were not affected by these changes.) Consult page four of the newsletter, which should arrive in the mail soon if it hasn't already.

TRS members contemplating retirement after the 2014-15 school year may want to take advantage of one-on-one counseling appointments planned across Texas. Here is the link for the schedule. 

Here is the Group Benefit presentation schedule, which will take place Sept. 15, 2014 through May 21, 2015. You may register for a group presentation beginning August 15, 2014.

There is lot of new information for TRS members on the agency's Web site.

Annual Enrollment Events Scheduled

During the annual enrollment period, participants in the Group Benefits Program of the Employees Retirement System can view webinars and attend meetings at various locations around the state. Annual enrollment is the time when you can make changes in your health and dental plans for the coming year. Changes will take effect on Sept. 1.

As reported earlier, a new option is available for dental coverage, and ERS is also offers discount programs that have been unavailable previously.

If you don't wish to make any changes, you don't need to do anything. A flyer should have arrived in the mail explaining the various options, but it's all on the ERS Web site.

Here is the schedule of events. You can access various links on this site for more information.