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TRS ActiveCare health insurance rates will increase by 4.5 percent for the 2009-10 plan year, beginning Sept. 1, 2009. Though, projected costs increased by 9 percent, a plan surplus will help subsidize some of the additional costs.

A new level of coverage was also adopted, with a higher deductible. The new ActiveCare 1-HD is similar to ActiveCare 1 coverage, but has a deductible of $2,300 compared to $1,150 for ActiveCare 1. The additional option was provided in order to meet federal guidelines.  The deductible for ActiveCare 1 was increased from $1,100 to $1,150 for 2009-2010.

No plan changes were made to ActiveCare 2 or 3.

The current and new rates are as follows. (NOTE: These total premium rates do not include the mandatory contributions from the state and school districts).

 

Current

2009-10

ActiveCare 1

    

  Employee Only

$266.00

$278.00

  Employee + Spouse

$606.00

$633.00

  Employee + Children

$424.00

$443.00

  Employee + Family

$667.00

$697.00

ActiveCare 1-HD

    

  Employee Only

n/a

$245.00

  Employee + Spouse

n/a

$600.00

  Employee + Children

n/a

$382.00

  Employee + Family

n/a

$785.00

ActiveCare 2

    

  Employee Only

$354.00

$370.00

  Employee + Spouse

$806.00

$842.00

  Employee + Children

$564.00

$589.00

  Employee + Family

$886.00

$926.00

ActiveCare 3

    

  Employee Only

$477.00

$498.00

  Employee + Spouse

$1,085.00

$1,134.00

  Employee + Children

$760.00

$794.00

  Employee + Family

$1,193.00

$1,247.00

 

HMO plan changes

The Board also approved changes in the HMO plans that are available in several parts of the state. Legacy Health Solutions will not be participating in ActiveCare in the upcoming year, and Scott & White Health Plan has requested to expand its service area into those parts of West Texas previously served by Legacy. TRS has more detailed information on HMO plan changes and premium rates on its website, but key changes can be summarized as follows:

  • FIRSTCARE premiums will decrease by approximately 10 percent; generally, co-pays and deductibles will also decrease, but a few drug costs will increase slightly.

  • Scott & White premiums will increase approximately 7 percent; a number of plan design revisions will change dollar-amount charges to percentages (for example, the cost of outpatient surgery will change from a $25 co-pay to 20 percent of charges).

  • Mercy Health Plans will have no plan changes, but premiums will increase by about 5 percent.

  • Valley Baptist also has no plan changes, but is increasing premiums by approximately 5 percent.

The TRS Board received an update on the pension fund's financial status. December's asset value of $81 billion represented a slight increase in the fund's market value from November's low of $78.6 billion, which was welcome news, but overall losses since the fund's valuation in August ($105 billion) are still nearly $25 billion. Staff noted that the fund has generally outperformed the investment market, and that TRS's losses might have been several billion dollars worse if the investment strategy had not been changed just prior to the economic downturn.

After last week's Senate hearings in which Senate Finance Committee members blasted the University of Texas Investment Management Company (UTIMCO) for paying bonuses to investment staff after severe investment losses, the TRS Board reconsidered the TRS investment staff's incentive compensation plan.

Both the UTIMCO and TRS bonus plans allowed for staff to earn bonuses in a "down" market as long as the fund was outperforming peers. Bonuses earned by TRS staff to date total around $2.7 million. Unlike UTIMCO, though, TRS had included a deferral provision that delayed bonus payments by one year if the fund experienced losses, so no bonuses have yet been paid.

In light of lawmakers' concerns the Board re-examined the plan and, while unhappy about the perception of going back on commitments made to investment staff who were recruited from all over the country, accepted a compromise plan by Chief Investment Officer Britt Harris. His proposal will further delay bonus payments until the plan experiences positive returns, and Harris completely forfeited his own incentive compensation for the year. The Board will bring back the compensation plan next fall to consider additional refinements.

The Board received an update on the agency's new communications strategy, which has included reaching out to the membership through conference calls and a multi-city tour. Another "Report Card" tour is planned for next fall.

The board is still without fiduciary counsel, after several missteps over the past several months. A new counsel was selected last summer, then withdrew after controversies over rates and potential conflicts of interest; the subsequent counsel was let go after only a few weeks because of an apparent conflict of interest. Rather than choosing from among the firms that had previously applied, the board will conduct another search.

Posted: 03/09/09