Monday, April 17, 2017

Governor Rauner's latest proposed budget zeros out funding for the Teachers' Retirement Insurance Program (from Ed Wollet, IRTA)

Teachers' Retirement Insurance Program (TRIP) is composed of two insurance programs: Standard TRIP and TRAIL.  Standard TRIP is the health insurance for those retirees under 65 years old and those retirees who are not Medicare eligible.

The February breakdown from Central Management Systems (CMS) of funding sources for TRIP are as follows:

Active Teachers 24.5%
Retirees 31.6%
School Districts 18.4%
State of Illinois 22.9%
Medicare 0.4%
Other 2.2%

IF the governor's budget were to be adopted with the TRIP line zeroed out, then retiree-participants would have to bear the increased cost or drop out of TRIP and go to the public marketplace for insurance coverage.

The General Assembly began their two-week spring recess this week.  This would be a good time for you to visit in-district with your state senator and representative to explain to them what your health insurance means to you…

A couple of questions arose from the original email that may be of common interest:

Is it true that any increase in the premium can be no greater than 5% in a year?

Yes.  Current statute limits annual premium increases to 5% for TRIP participants.  The state currently pays about $111M for their share of TRIP.  This is funded through a continuing resolution because there is no state budget.  Insurance premium costs to the state rose about 8% last year.  That means the state has to cover more of the premium cost.  There is talk around the capitol to increase the 5% participant cap to have participants absorb more (or all) of the insurance premium increases.  Currently, no senate or house bills have been introduced to increase the cap.

Does the Governor’s recommendation include defunding of both standard TRIP and Trail or just standard TRIP?

Yes.  The budget line item that is zeroed out is found on page 101 of the governor's latest budget proposal.  If adopted by the General Assembly, there would be no funding for either standard TRIP (non-Medicare eligible) and TRAIL (Medicare eligible).  

The link to the proposed state budget is FY2018OperatingBudgetBook.pdf  Near the top of page 101 is "Teachers' Retirement System."  Under that title is "Retiree Healthcare Contributions" and "General Funds."  The governor's proposed state appropriation for FY2018 is on the far right hand side and shows zero appropriation for TRS retiree health insurance.

—Ed Wollet, IRTA Legislative Committee

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