In the early part of the winter, Teacher Retirement System (TRS) held regional meetings to discuss important basics of the TRS-ActiveCare program costs.
Strength in numbers
It should be no surprise that healthcare costs have risen and continue to do so. Employers are able to provide more affordable healthcare options than individuals can purchase themselves because a larger pool of enrollees creates more leverage to negotiate lowers costs from insurance companies. Typically, the more participants that are part of the plan, the lower the overall cost. Currently, school district participant numbers allow TRS to negotiate lower premiums than many individual districts would be able to obtain, particularly smaller, rural districts.
TRS negotiates premium costs but doesn’t determine the final cost to employees. Employee costs may vary from district to district and are based on each district’s contribution. At a minimum, the negotiated premium cost is offset for employees by at least $225, the amount the state and districts are required by statute to contribute towards premiums. The remaining premium is either paid by the employee or by an additional individual district contribution, reducing employee costs further. According to TRS, around 6,000 employees saw their employee cost eliminated in the 2019–2020 plan year due to additional contributions made by school districts.
When districts contribute more than the minimum required towards employee premiums, this is an important element to the total employee compensation package. It is not uncommon for district staff to report increases to their insurance premiums each year only being marginally covered by the general pay increase received. Budgeting additional contributions to healthcare premiums will assist districts in ensuring that employees can put their pay increases in their pockets and not use them to offset increasing healthcare costs.
Other items to note
TRS also shared:
- Since 2013, per member charges have increased 20.78% for self-insured plans in Texas, but only 8.67% for TRS members.
- The average district contribution in the 2019–2020 plan year was $324 for employee only coverage.
- According to 2018 data, on average, large employers in the U.S. contribute more to employee premiums than TRS-ActiveCare districts.
Additional information about TRS-ActiveCare can be found directly on the TRS website.
Patti Ellis is an associate consultant at TASB HR Services. Send Patti an email at email@example.com.
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