TRS RE – New Stop Loss Market for Texas School Districts

TRS ActiveCare is effectively, without any desire to do so, on the road to becoming a de facto stop loss carrier………….

The Texas Classroom Teachers Association (TCTA) is concerned about the continued solvency of the TRS ActiveCare health plan for their members.

“Some large districts are reportedly considering entering ActiveCare for the specific purpose of offering it against their local plan through the DOI exemption. The idea is to siphon off their more expensive employees to the higher-benefit ActiveCare, making the local plan healthier by retaining the lower-cost employees.” – TCTA 15 April 2021

TCTA additional concerns include:

The 145 districts that are skimming the healthier employees out of ActiveCare are already costing the plan around $41 million that will have to be made up with higher premiums.

TRS says that if it were to set next year’s premium rates now, the increase due just to rising medical costs would be around 2%. But the increase needed to make up for the costs from the DOI exemptions will add another 3%-4%, and if the number of districts offering competing plans grows, we could be looking at 2% or more beyond that.

TCTA’s hope is there is a chance that legislation could be passed to address the issue.

However, TCTA laments, at this time, there is no legislation that would either shut down or expand the ability of districts to offer competing plans, but an amendment could be added to other bills moving through the process.

The TRS Board of Trustees is waiting until July to set ActiveCare rates for the next school year, in part to see whether any relevant new laws are passed.