New Update on Conference Committee and Health Insurance Funding 3-31-20

Greetings KRTA Members:

I hope all of you and your loved ones are staying safe during these unprecedented times.

The Budget Conference committee is scheduled to meet later this afternoon to finalize the budget. As you know, the Senate Budget including no funding to the TRS Health Insurance Fund over the next two years despite unanimously passing the 2010 Shared Responsibility Agreement. Here is some additional information on the dangers of the General Assembly not funding the TRS Health Insurance Fund

• The TRS Health Insurance Fund is building up a pre-funded insurance benefit with a growing reserve of dollars. Active teachers and school districts are the reason for this because they pay a percentage out of every paycheck – not the state’s 0.75% contribution.
• When the state doesn’t pay its portion of the Kentucky Employees Health Plan (KEHP) premium for under-65 retired teachers, it’s taking money from active teachers and school districts to pay the state’s share.
• Without payment of the state’s portion of Shared Responsibility, the TRS Health Insurance Fund would become insolvent in less than 20 years. We would lose 10-years of progress and revert from a pre-funded benefit to a pay-as-you-go benefit which would cost taxpayers millions of more dollars.
• This loss of funding is especially critical during the current market decline. Instead of taking advantage of investment opportunities during this time, TRS would be forced to liquidate assets during a down market to pay for the state’s portion of benefits.
• This practice of “kicking the can down the road“ where legislators use Medical Insurance Fund dollars to pay for short-term budget fixes is exactly what got our pensions in trouble in the past. Applying this practice to the TRS Health Insurance Fund will lead to retired teachers potentially paying significantly more or losing their health insurance completely.

We need your support during these troubling times. We need you to call your elected officials and demand that the General Assembly fully fund the state’s obligation to the TRS Medical Insurance Fund.

Please contact your legislator
by calling 1-800-372-7181
or via email by clicking here

Thanks for everything you do and remain safe during these tough times.

Tim Abrams
Executive Director
KRTA