Does TRS ActiveCare Non-Compete Agreement Trump Chapter 1501 of The Texas Insurance Code?

If a district requests a Blue Cross small group proposal is Blue Cross required to provide one or does the non-compete agreement preclude them from doing so?

For the first time in 20 years TRS ActiveCare member school districts now have the option to exit the state sponsored government health plan in 2022.

Blue Cross Blue Shield is the plan administrator for TRS ActiveCare.

A source has confirmed there is a non -compete agreement between Blue Cross and TRS prohibiting Blue Cross from soliciting or insuring TRS ActiveCare member districts who exit the program in 2022.

However, there may be an out for districts wishing to continue with Blue Cross coverage outside the TRS ActiveCare program once they exit the government health plan.

Under Texas Insurance Code, Chapter 1501 is a little known provision that allows Texas school districts to elect to be considered Small Group regardless of size. The ramifications are huge.


Sec. 1501.009. SCHOOL DISTRICT ELECTION. (a) An independent school district may elect to participate as a small employer without regard to the number of employees in the district. An independent school district that makes the election is treated as a ….

Under the Small Group provisions any eligible employer group (which includes school districts of any size) who apply for group coverage can not be turned down. Small group carriers are required to insure eligible small groups in Texas requesting coverage. Other provisions work to the advantage of Texas school districts under the Small Group Provisions such as favorable rating applications and cap on renewal rate increases.

If a district requests Blue Cross coverage as a self declared small group will the non-compete agreement preclude Blue Cross from doing so?

We have requested a copy of the non-compete agreement for our review. We are not holding our breath.