The Teacher Retirement System of Texas (TRS) Board voted last week to award contracts to Blue Cross and Blue Shield of Texas (BCBSTX) and United HealthCare to administer health-care plans for active and retired public school employees. This decision is one of the largest health-care procurements in TRS history. In moving away from Aetna and Humana as the plan administrators, TRS will save $754 Million over the next three to five years for the health benefits programs that cover 705,000 Texas public school employees and retirees. TRS officials said it will be able to use the savings from the contracts to help keep premiums stable and that participants should not see a change in premiums or benefits for the next year.
BCBSTX will take over administration of both TRS-ActiveCare, for active employees, and TRS-Care Standard, for retirees under 65. United HealthCare will be the new administrator for TRS-Care Medicare Advantage for retirees who qualify for Medicare. These changes will take effect September 1, 2020 for active members and January 1, 2021 for retirees.
The Board went into closed session during the February 21 board meeting to discuss details for the contracts, and little has been said about any changes to the plans themselves. What was made public is the breakdown of projected savings that led to the decision to switch administrators. BCBSTX will save TRS-ActiveCare $300 million and TRS-Care Standard $140 million over three years. United HealthCare will save TRS-Care Medicare Advantage $314 million over five years. Since both programs have had funding challenges in recent years, TRS hopes that these savings will improve the long-term sustainability of the programs. It is important to note that the 86th Texas Legislature appropriated $231 million to keep TRS-Care premiums constant through 2021.
TRS also has been reassuring participants that BCBSTX and United HealthCare have broad networks that will expand provider options for the majority of members participating in either program. According to a TRS press release, 99% of the providers used most frequently by TRS-Care participants can be found in United HealthCare’s network. TRS hopes this will keep disruption in care to a minimum for its members. TRS plans to launch a communications campaign to inform members about the contract changes and to answer questions. Letters and benefit information will be sent to active and retired members in April along with electronic notifications. TRS will also be visiting districts over the summer to train benefit managers and district leaders. In addition to these steps, they are looking at in-person district meetings during the summer and fall enrollment periods that TRS-ActiveCare members are encouraged to attend. Information sessions for retirees will be held across the state in the fall.
For more information about your specific plan, please visit the TRS website.