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The Texas Public Employees Association is the oldest and largest state employee group. As a non-partisan, non-union association, TPEA is the leading advocate for ALL state employees and retirees before the Texas Legislature.
ERS Interim Studies on Retirement and Health Insurance
ERS was required in the Appropriations Bill to look at both our retirement plan and our health insurance coverage and prepare reports for the next legislature. As part of these interim studies, ERS has held three public forums and it continues to solicit input from state employees and other interested parties.
Separate forums were held to discuss retirement, health insurance, and the state workforce. ERS did an excellent job in inviting subject matter experts on these topics from around the country. TPEA has had numerous staff in attendance and participated in the workforce forum. Full video recordings, as well as accompanying presentation materials are available on the ERS website.
It is very likely that there will be serious efforts during the 2013 legislative session to make fundamental changes to our retirement plan and our health insurance. As Texas has faced ongoing fiscal difficulties there have been increasing efforts to cut or change benefits, often without adequate understanding of the key role benefits play in maintaining an experienced and highly productive workforce. While some other states face serious problems with their retirement plans, Texas has lead the way in making responsible changes to manage ours. Legislators need to differentiate Texas from these other states and recognize that Texas has an efficient workforce with total compensation costs that are lower than the private sector.
Please consider providing your home email address to TPEA so that we can provide additional information on efforts to change our retirement plan or reduce health benefits.
ERS Generates 12.58% Investment Return for FY 2011
Although a few critics continue to call for ending public pensions in Texas, recent results from fiscal year 2011 show that ERS generated a 12.58 percent return on investment for its retirement fund for the fiscal year ending August 31, 2011.
ERS’ funding ratio (assets to liabilities) declined slightly to a solid 82.6 percent. ERS is still recognizing investment losses from the market crash in 2008 and 2009. These losses are recognized over time through a process called actuarial smoothing. While the ERS retirement fund is in good shape, it will need a number of years of above average investment returns to counteract prior investment losses.
The full CAFR is available on the ERS web site, but this summary page shows the highlights for the retirement fund.
Take Action: ERS Coverage Review Period Extends Through Dec. 9
There are two significant changes to the ERS health plan that will take effect on January 1, 2012 that require action by certain employees and retirees by Dec. 9:
Tobacco Users
Plan members will be required to pay a portion of their health insurance premium costs for themselves and other covered family members who use tobacco.
Affected plan participants must take action during the ERS Coverage Review Period that is currently in process and extends through December 9.
More information on tobacco users available here.
Humana Medicare Advantage Plan
Effective January 1, 2012, Medicare eligible retirees and their qualifying family members will be enrolled in the Humana Medicare Advantage Plan, a statewide Preferred Provider Organization (PPO), unless they opt out during the Coverage Review Period which runs through December 9.
Coverage will only change for medical services, since drug benefits will stay under the ERS Group Benefits Program through Caremark. Active employees, including return to work retirees, will not be eligible for the Medicare Advantage Plan.
TPEA received many questions about this change with some retired employees expressing anger at ERS. We wanted to provide you helpful responses to some of the frequently asked questions we fielded in recent weeks.
Q: Why is ERS doing this? Whose idea was it to push retirees into a Medicare Advantage plan?
A: It is important to understand that the legislature directed ERS to either implement a Medicare Advantage plan or to require retirees to pay 30 percent of expenses not covered by Medicare. The 30 percent cost sharing alternative would have been a much more expensive change for retirees. See the Appropriations Act rider that required these changes.
Q: How does the Humana Medicare Advantage Plan compare to my current coverage or other plans?
A: Not only is the Humana Medicare Advantage Plan less costly than the 30 percent cost sharing option, but participants can also achieve significant savings compared with current premium costs for a Medicare eligible spouse or child, or for surviving spouses. For example, eligible participants with retiree and spouse coverage will save $137.74 monthly under the Humana plan. The Plan Comparisons provided on the ERS website also suggest the Medicare Advantage plan is lower cost than current coverage, since there are no annual deductibles and other cost sharing features are less expensive.
Q: Am I going to have to change doctors? Does my health care provider take part in the Humana Plan?
A: One legitimate concern that eligible retirees have expressed is that some medical providers may not participate in the Humana Plan. Humana has set up a specific toll free number to inquire about the participation of medical providers (855-377-0001).
Q: Are retirees being forced into this Humana Plan?
A: No one will be forced to participate in the Medicare Advantage Plan, since you can opt out through December 9. After January 2012 participants can continue to change plans, at least for the remainder of the plan year. Participation in the Humana plan will save the state money because the federal government subsidizes private Medicare Advantage plans. ERS worked hard to create a plan that offers benefits at least as good as our current plan, and at lower cost to participants. Eligible retirees should take the time to understand their choice. ERS has been holding a series of educational forums around the state to provide a better understanding of the choices retirees face, and there is a lot of information on the ERS website.
Texas Public Employees Association is accepting nominations for the 2012 Unsung Hero Awards through December 16. TPEA created the awards to generate a positive and more accurate image of state workers among state decision makers and the general public. State agencies can showcase the success of their employees by identifying and recognizing state employees who represent the ideals of public service. Senior level agency management will be invited to attend the awards ceremony and make the presentation to their employees.
The Unsung Hero Awards Luncheon will be held April 12, 2012 in Austin. Awardees and their guest(s) will be invited to attend this luncheon where they will be honored for their outstanding public service to Texas and its communities. You can access the nomination form here.
Continue to Stay Informed by Signing Up Now
Due to legislative restrictions, TPEA cannot send full advocacy information to state email addresses. In order to continue to stay up to date about the latest developments in legislation affecting state employees and retirees during the 2011 session, go to http://www.tpea.org and sign up with your home email address now, if you haven't already. You can also follow our twitter feed.