Closer Look at Health Insurance

ERS Board Adopts Premium Rates; Legislature Provides Direction on Savings Measures

Posted on 6/2/17; updated 6/6/17 with updated Plan Year 2018 premium rates)

At its May 2017 meeting, the ERS Board of Trustees set Plan Year 2018 premium rates for active employee and non-Medicare-eligible retiree insurance plans, including HealthSelect of Texas, Consumer Directed HealthSelect and the three HMO plans. The ERS board also decided to retain health benefits—e.g., copays, coinsurance, etc.—at current levels.

These actions were contingent on lawmakers’ continuing the State’s health insurance contribution rates, and those were adopted in the budget finally passed May 27. The State will continue to cover 100 percent of the employee/retiree-only premium and 50 percent of spousal/dependent premiums.

TPEA is pleased the Legislature made such a substantial commitment to the ERS health plan during a session when available revenue was so limited. Total funding by the State for the health care of general state employees, retirees and their dependents came to $4 billion over the 2018-2019 biennium, an increase of about 1.6 percent from the 2016-2017 biennium. ERS will draw on its insurance contingency reserve fund to supplement the State and member contributions toward the cost of the health plan, as well as adopt some targeted cost-savings measures as directed by the Legislature.

Small Premium Increases for HealthSelect Plans

The rates adopted at the May board meeting were best estimates pending the final appropriations bill. Those on the HealthSelect of Texas and Consumer Directed HealthSelect plans will see an increase of no more than 1 percent for spousal and dependent coverage. 

HMO participants will see no change from Plan Year 2017 in premiums for spousal/dependent coverage. (Download a Plan Year 2018 rate sheet here.)

Premiums for Medicare-eligible retiree coverage will be set later this year, with an effective date of Jan. 1, 2018.

Savings Measures to Expect

In SB 1, the budget bill, the Legislature directed ERS to implement specific cost-savings measures. Most notably for plan participants, ERS will take steps to discourage health plan participants from using non-network freestanding emergency rooms. Look for communications from ERS this summer about distinguishing freestanding ERs from hospital ERs or urgent care facilities and the additional costs associated with freestanding ERs.

In addition, ERS will realize savings by reducing contracted provider rates with state-funded health institutions.

Summer Enrollment for active and non-Medicare-eligible retirees will run from June 26 to July 28. ERS will mail all eligible members a personal benefits enrollment packet. Look for this in your mail.

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