Wednesday, April 29, 2015

Governor Rauner wants to cut the state funding to the Teachers' Retirement Insurance Program


We need your help!

Recently formed "legislative working groups" began meeting in Springfield this week, and what we have learned so far is that the Rauner administration has already put forth proposals to fill the $6 billion hole in the 2016 state budget.

Of the many reforms he has put forth, his administration has stated they want to cut the state funding to TRIP.

State funding into TRIP is vital to us. Without the state's $95 million assistance to the program, insurance premiums will rise drastically.

Please contact your state representatives and senators by clicking the link below and let them know how cuts to TRIP funding will affect you.

Take Action on TRIP funding


Healthcare for Retired Teachers from IRTA:

Many retired teachers in Illinois prepaid through active employee contributions to be able to receive a partial subsidy of their healthcare in retirement.  This healthcare is provided through the Teachers Retirement Insurance Program (TRIP), and unlike retiree health insurance for state employees, the vast majority of the cost is paid for by retirees, active teachers and school districts.

·       Retired teachers receive a subsidy between 50% and 75% of their premiums.

·       As active teachers, they and their local employers prepaid much of the cost of healthcare.

·       Many teachers were kept out of Medicare by the State, and now many teachers rely on TRIP as their only healthcare option.

·       TRIP costs the state about $90 million per year, which is much less than healthcare for other public employees for the state and universities.

·       Many older teachers were not allowed to participate in Medicare by the State of Illinois.


The Teachers’ Retirement Insurance Program (TRIP) Issue from the IEA: 

Since the creation of this health insurance program for retired teachers, the program has consistently had to deal with funding issues. Adjustments to the funding of the program have been made through the years to ensure the plans solvency. The most recent agreement was struck in 2004 and structured the funding of TRIP as we know it today. However, the four revenue streams are not keeping up with the actual costs of the health insurance plan and the day is nearing when an adjustment will need to be made to maintain the solvency of the plan.



How TRIP Is Funded:


Active members pay 1.02% of their salary; the state matches the active teacher contributions ($95 million for FY15); school districts contribute 0.76% of their payroll, and retirees pay their health insurance premiums. The law allows for these funding streams to increase by an equal percentage but not more than 5% above the previous year. TRIP continues to operate with a deficit and will be in the red at the end of the current fiscal year by over $100 million. TRIP is a $500 million program.

What to Expect in the Next Few Months:

In recent years, some legislative leaders have consistently tried to make the point that the state should not be providing health insurance for retired educators, and we have seen proposals this year that would eliminate the state’s contribution to the program. We have been successful in defeating similar proposals in the past. However, to maintain the program in to the future, TRIP will require some modifications and we must fight to ensure the continuation of the state’s contribution of $95 million.

What You Can Do:

With the known fiscal issues that the program faces, encourage your lawmakers to prioritize funding for this program to ensure that it carries into the future and keeps the promise of a secure retirement for our retired members and for those moving closer to retirement. There are 74,000 retired teachers that depend on this insurance program, and a majority of them do not receive Social Security.
 

Commentary by Will Lovett, IEA:


“Our larger fear during the current legislative session is the fiscal health of the TRIP program. The Governor has proposed eliminating the state contribution to TRIP entirely.  We have had conversations about this concern dating back to 2011.   As you are aware, TRIP is funded by premiums paid by retirees, contributions by school districts, contributions by active members, and the state in turn matches the active teacher contribution.  The Governor’s proposed budget would eliminate between $95-$100 million in state funding for TRIP.  The program is roughly a $500 million program.  We wish that we could talk about a benefit enhancement or premium reduction for participants but protecting the program as it currently exists is our main priority in this current budgetary environment.  Especially when we stand to lose $100 million in funding for the program.  


“We are looking at ways to incorporate the TRIP funding issue into our overall IEA legislative messaging during the next few weeks.  Budgetary conversations are ongoing between the Governor’s office and the four legislative caucuses and there currently has not been legislative language introduced to remove the state contribution to TRIP to date.  We are trying to secure funding for the program at every step of the way.  On the website you will find the attached fact sheet about TRIP.  It has been updated and will help our members talk about this issue with legislators.  We will engage our retired members soon around this especially if it is something that starts to gain traction within the General Assembly. 


The cost of premiums for non-Medicare eligible members: 

“...The subsidy that they receive is similar in terms of percentages as those that are Medicare eligible.  Members get a 75% premium subsidy if they participate in an HMO or if one is unavailable to them where they live.  This same premium subsidy applies equally to those that are or are not able to participate in Medicare.  If members can access an HMO but chose not to do so, their premium is subsidized by only 50%.  Members often choose to pay the higher premium but they do it knowing what they are going to pay.  We need to remember that members that are not eligible to participate in Medicare did not contribute the 1.45% of salary to help fund a Medicare benefit.”


No comments:

Post a Comment

Note: Only a member of this blog may post a comment.