- Note: Click here for the June board meeting materials, including links to the meeting webcast and the comprehensive “board book” agenda.
Premium Rates Negatively Impacted by Alternative Plans
TRS Board Approves New ActiveCare Rates
The TRS board at its special meeting (held virtually) approved TRS-ActiveCare premiums and benefits for the new plan year starting Sept. 1.
BCBSTX administered non-HMO plans — which comprise the vast majority of ActiveCare covered employees — will see overall average premium increases of 6.2 percent.
TRS Chief Health Care Officer Katrina Daniel told the board that the 6.2 percent average increase for the four non-HMO plans would have been capped at 3.7 percent — due to normal health care cost increases coupled with the costs for COVID-19 — if it had not been for the “adverse selection” factor of District of Innovation (DOI) ISDs exercising their option to offer an alternative health care plan in addition to ActiveCare to their employees.
The alternative, competing plans currently offered by the more than 140 DOI ISDs are often cheaper, often offer fewer benefits, and often attract the healthiest of school employees, leaving ActiveCare with a greater proportion of more-costly-to-cover employees, staff said.
The adverse selection impact of DOI ISDs offering competing plans added 2.5 percent to average premiums for the upcoming plan year.
The board had delayed, from its April meeting to only three days after the legislative session ended, the setting of ActiveCare rates for the upcoming plan year so that what lawmakers decided about ActiveCare alternative plans could be factored into the rate setting. See TEN, April 26.
SB1444’s Good News
The good news, TRS Executive Director Brian Guthrie said, is that the SB1444-Taylor bill passed by the Legislature addressed the issue of competing plans.
- Note: The governor signed SB1444 (to be effective on 9/1/2021) on June 7.
The bill:
1) shuts the door on additional DOI districts being able to offer alternative plans; 2) allows districts to drop out of ActiveCare if they notify TRS of their intention to do so by Dec. 31 before the next plan year begins on Sept. 1; 3) prohibits, after the upcoming school year, a district from offering both TRS ActiveCare and an alternative plan at the same time, and 4) requires that once a district drops out of ActiveCare, it will have to wait a minimum of five years to rejoin the program.
The decision was made by lawmakers to not force DOI districts currently offering both ActiveCare and alternative plans to choose to offer only one or the other plan for the upcoming school year in recognition that many of these districts have contracts for alternative plans for 2021-22, Guthrie said.
For the non-HMO ActiveCare plans, the 6.2 percent average premium increase was unevenly distributed across the plans, with the Primary+ plan premium rising by 5.5 percent, and the premiums for the remaining three plans (Primary, High Deductible [HD] and ActiveCare 2) each increasing by 8 percent. The only benefit changes were made to the HD plan, to comply with IRS regulations, staff said.
HMO Plans
The board also approved the ActiveCare premiums and benefits for the two companies offering HMO plans in three different areas of the state.
There were no changes in the areas of the state where the plans could operate.
The two HMO plans offered in different parts of the state by BCBSTX will see premium increases (mostly as a result of DOI ISDs offering competing plans in their areas), but will not have benefit changes. The Baylor Scott & White HMO plan will have benefit revisions, but no premium increases (see graphic).
The open enrollment period for all the ActiveCare plans runs from July 12 to Aug. 23.
See also this Texas Classroom Teachers Association posting for easy-to-read summaries of the new ActiveCare rates.