Preserving the No. 1 benefit

Fully funding health insurance and compromising on HSAs

According to TPEA’s 2015 Legislative Survey, health insurance—followed closely by the retirement plan and job stability/security—is the No. 1 attraction to state employment. (TPEA’s survey received more than 17,000 responses, making it a statistically valid representation of the entire state workforce.) Recognizing the value state employees place on health insurance, the House and Senate both proposed budgets that fully funded the state’s contributions to employee/retiree and dependent health insurance premiums (100 percent and 50 percent, respectively). The funding also included $190 million to cover the premium rate increases later adopted by ERS.

Our work to protect the health insurance benefit was far from over, though. An idea that could have increased the costs of the traditional health care plan—a high-deductible health plan/Health Savings Account (HDHP/HSA) option—resurfaced in the form of HB 966 by Rep. Myra Crownover (R–Denton), who chairs the House Committee on Public Health.

Chair Crownover has filed this bill for the past decade, and in past sessions, TPEA had been able to work with likeminded lawmakers to prevent this bill from becoming law. Our main concern has always been that an HDHP/HSA option could potentially increase the costs of the traditional health care plan by drawing away younger, healthier participants.

Although no state employee or retiree organization has ever supported offering a HDHP/HSA option, the idea has great traction in the insurance industry as well as with think tanks such as the conservative Texas Public Policy Foundation. (In fact, these were the only organizations testifying for the bill during a March 16 House Pensions committee hearing.) As the bill gained widespread support in this more conservative Legislature, it became clear that TPEA’s strategy needed to be amending the bill so that it was less detrimental to the traditional plan.

The bill came up for preliminary approval in the House May 4 and passed to third reading on a 95-46 vote. We thank the many TPEA members who responded to our email and text action alert by contacting their House representatives and asking them to oppose this bill.

During the debate, Rep. Sylvester Turner (D–Houston) and other Democratic representatives asked some critical questions regarding the actuarial effect of offering a HDHP/HSA plan. The next day on third reading, Rep. Eddie Rodriguez (D–Austin) amended the bill to require ERS to conduct a study on the implementation of the HDHP/HSA plan and present it to the governor, speaker, lieutenant governor and the Legislature by 2020. A subsequent amendment by Rep. Ron Reynolds (D–Missouri City) placing the HDHP/HSA plan under sunset review was tabled, and HB 966 passed on third reading 93-50.

The Senate State Affairs Committee reported the bill favorably to the full Senate May 22, with Sen. Kelly Hancock (R–North Richland Hills) noting during the hearing that he planned to amend the bill on the floor with a TPEA-provided amendment. The amendment added language to the statute itself stating that ERS could not split the self-funded risk pool for the HDHP/HSA and traditional health plans, thus addressing TPEA’s foremost concern, that the HDHP/HSA option could ultimately increase costs of the traditional health plan. The bill finally passed the Senate as amended 20-11 on May 25.

On May 27, Chair Crownover moved for the House to concur with the Senate’s amended version, and HB 966 headed to the governor’s desk on a 138-0 vote.

TPEA thanks Sen. Hancock for working with us to alleviate the potential detrimental impact of HB 966 to state employees and Chair Crownover for accepting our amendment.