TRS ActiveCare’s Hostage Taking Strategy Under Siege

“Next year these districts will have access to their own claim data with which they can directly competitively bid out their TRS ActiveCare alternative plans. That will be a game changer.”

By Bill Rusteberg

Most Texas school districts participating in TRS ActiveCare (over 90% of all districts participate) who seek competitive commercial alternatives are unable to obtain their own claim experience.

TRS ActiveCare officials know exactly what they are doing. Holding member districts hostage by refusing to release their own claim data, officials know it will be hard, if not impossible in some cases, for districts to receive competitive TRS ActiveCare alternatives in the open market.

This hobbles their efforts in their search for competitive alternatives. Insurance companies will not assume risk without knowing what it is. After all they are not in the business to lose money.

Unless insurance companies can experience rate a risk, they will usually decline to make an offer. Or if they do, their offer will be on the conservative side which can make them not as competitive as they should be.

There is also the danger an underwriter may be way off in his risk evaluation. If that happens, a low rate the first year may end up much higher on renewal. How to you explain that to your  local school Board of Trustees Mr. Superintendent?

This may change. A Bill has been introduced in the Texas legislature requiring TRS ActiveCare to provide all school districts their own proprietary claims experience who request it. If passed, and there is no reason why it won’t, it will take effect September 2021.

This will be a game changer for the 2022-2023 hunting season for anxious TRS ActiveCare competitors.

Even if this Bill doesn’t pass, there will be opportunities next year for experience rating of those districts who have already implemented  TRS ActiveCare alternative plans because they will have accrued access to their own claim experience.

According to TRS officials, there are currently 145 districts who have challenged TRS ActiveCare by offering alternative commercial plans. I expect that number to increase significantly by September 2021 to as many as 250-300 districts across the state.

That means as many as 300 Texas school districts, for the first time ever, will have access to their own claim experience. They will be able to experience rate their risk, also for the first time, and achieve optimum results through a competitive process in the open market.

On a side note, many of these districts have entered into Agent of Record Agreements. These districts will necessarily need to consider terminating these agreements since remaining under them limits their ability to access the entire marketplace. The Texas Attorney General has advised against using an Agent of Record towards the purchase in insurance. See Can Texas Local Governments Employ Broker or Agent of Record?

To our knowledge these districts have forgone competitive proposal processes directly and instead have relied upon access to Interlocal Purchasing Agreements. This is a common practice among political subdivisions in this state. There are numerous Interlocal Purchasing Agreements a district may access, some offer more competitive products / services than others.

Underwriting these districts without the benefit of experience rating may not have resulted in rates and benefits as competitive as they could be otherwise. And accessing less competitive Interlocal Agreements can compound the effect.

Therein lies the opportunity for improvement. Next year these districts will have access to their own claim data to which they can directly competitively bid out their TRS ActiveCare alternative plans. And Interlocal Purchasing Agreements will be better prepared to evaluate their product / services offerings for their members.

This will be a game changer.


One of the least enlightened groups of people that I have ever encountered.  They get their advice from a so-called Consulting Group located in PA, who is so wedded to the old carrier ASO model that it is insane.  What they ultimately have never recognized is the entire program is flawed.  They bet everything on the idea that once groups joined they were stuck for good.  While that seems like a great thing for them it was  the worst thing that could happen.

Why would a District take any action whatsoever to manage risk in their population when it provided no benefit to do so.   The Districts could not control network, plan design, budgeted rates or required contributions. I can’t tell you how many times I received calls to rush enrollment on a very sick new employee because the new employee was beginning expensive medical treatment in a couple of days.   Groups that manage risk take every step possible to avoid those situations…Districts in TRS welcomed them.

When you couple complete lack of risk management with outdated provider contracting and ancient approaches to care management and pharmacy management it is a recipe for disaster.

It isn’t like Texas needs any more dumb, political-based decisions.  I can only hope that some of the very nice people who got stuck in the TRS cage run away as fast as they can. is a specialty company in the benefits market that, while not an insurance company, works directly with health entities, medical providers, and businesses to identify and develop cost effective benefits packages, emphasizing transparency and fairness in direct reimbursement compensation methods.