Another Broken Promise? TRS Medical Insurance Statutory Funding in Jeopardy

Call 1-800-372-7181 or visit www.teachfrankfort.org and send an email to your elected officials asking them to:

 

Restore full STATUTORY funding to the TRS Medical Insurance Fund as promised by the 2010 Shared Responsibility Law. 

Once again, Frankfort Politicians are trying to break their promise to Kentucky’s Retired Teachers. HB192 – the House Budget Bill – presently being discussed in Conference Committee does not contain the “statutory” funding levels for the TRS Medical Insurance Fund as stipulated by HB504 – the 2010 Shared Responsibility Law – passed in 2010.  To understand our concern in more detail click here.

To restore the “statutory” funding as required by the Shared Responsibility Law the following needs to happen with HB192 – the Budget Bill:

1. Add $52,434,100 to the $715,293,700 to the General Fund appropriation and Total the line at the top of the TRS section (see below).
2. Add a reference to the $52,434,100 for FY22 to subsection 3.
3. Completely delete the last paragraph of subsection 3.

Here is why this is important:

• TRS has an experience study coming out in June of 2021 which could lower the assumed rate of return on the Medical Insurance Fund, lowering the funding level.
• The strong growth of the TRS Medical Insurance Fund over the last year is due to many factors some factors out of our hands including 1) a strong market; 2) Medicare Advantage is still going strong despite being projected to go away in 2012; and 3) many subsidies and rebates from the Federal Government are likely to go away in the coming years.
• Most of the growth the fund has seen is because of the contributions made by active teachers, school districts, and retired teachers.  Most of the state’s contributions are merely a pass-through to the Kentucky Employee Health plan for under 65 retirees and does not add to the fund.
• While this will not immediately cause problems for retiree health insurance, it could put the long-term health of the fund in jeopardy.  Essentially, this is the same mistake Frankfort Politicians made when they shorted our pension system during the 2000s.
• This will further erode the trust that teachers have in the General Assembly.
• Let’s get to 100 percent funding before we stop the state’s contribution.
• How can one say the Medical Insurance Fund is doing well at 61 percent so we can slow down on funding while it is at 61% funded, yet claim the pension fund, which is at 58 percent funding in crisis.

We are not asking for new benefits.  We are not asking for any favors.  We are simply asking that the General Assembly live up to the provisions in HB540 – the 2010 Shared Responsibility Law – that was passed overwhelmingly by the General Assembly.  We are asking Kentucky Lawmakers to stop balancing the budget on the backs of Kentucky’s Retired Teachers.