The Reasons Why Most Texas Public Schools Will Stay With TRS ActiveCare

Back in 2001, right as the Texas legislature passed TRS ActiveCare, I visited with a Superintendent of a district we had insured with Mutual of Omaha.

I wanted to know if his district was going to join the new government health plan or continue coverage in the commercial market.

“Dr. Rodriguez, what is your district going to do, join TRS ActiveCare or stay with Mutual of Omaha” I asked.

“Are you kidding Bill? We are going with TRS ActiveCare! We won’t have to screw with insurance anymore! We won’t have to deal with insurance agents either! Nor will I have to put up with an insurance committee and pesky board members. And when employees come to me to complain about their coverage all I have to tell them is call Austin.” replied the overly relieved Superintendent.

Now that SB 1444 has passed and Texas school districts are free, for the first time in 20 years, to exit TRS ActiveCare, has this mindset changed?

Superintendents, particularly those without proven tenure, are not about to stick their necks on the line by recommending a move away from TRS ActiveCare. It’s more work for them and their staff and no matter what they do towards moving to something “better” the journey is fraught with all kinds political dangers.

To shield against political backlash, some superintendents will place the decision burden on district employees. “Let the employees vote which way the district should go” will be the message.

That’s exactly what almost all the 145 districts currently offering a competitive TRS ActiveCare alternative plan did. Two major providers of voluntary benefits each with hundreds of existing school district clients simply went to each district and offered another voluntary benefit.

“We have a new benefit we would like to offer, it’s health insurance. Can we offer the program as an option along side all our other voluntary benefits?” was the message.

To which the district’s response was “Yes, of course, it is up to employees which plan they want, so go ahead and offer it. We don’t even have to go to bid since you are our existing vendor of voluntary products.”

Selling health insurance has never been easier. No political risk to speak of, no bidding required, trusted voluntary benefits provider of many years, little or no work on the part of staff, and completely voluntary.

SB 1444 changes all of this. Effective September 2022 districts will no longer be allowed to offer competing health plans alongside TRS ActiveCare. Districts will have the option to stay with TRS ActiveCare as their sole health care provider or seek coverage in the open market.

Most districts won’t leave TRS ActiveCare for the following reasons:

  • A recommendation to exit puts political capital at risk
  • Stepping in the unknown without the ability to compare benefits and costs is not good business
  • The business of running and managing a health plan is not what districts do now so why change?
  • The perception that being in a large pool is better than being on their own

A few districts will leave TRS ActiveCare but no where near the number we see today who offer alternative coverage.

The politics of change is most powerful in the public sector leading to decisions that often work against the best interests of those affected.