News from the 87th Texas Legislature

September 13, 2021

Lawmakers move to support retirement fund, health care benefits

Texas capitol dome

During the regular session of the 87th Texas Legislature last spring, legislators passed a new state law to bolster the ERS Retirement Trust Fund and other bills that will positively affect participants in ERS insurance programs. Read a summary of key developments below and see additional details in the handout “87th Texas Legislature Sets Retirement Plan on Path to Solvency.”

Retirement benefits and funding

Senate Bill 321 commits to additional annual payments to the Trust Fund above the state’s regular percentage-of-payroll contributions, with a goal to pay down the Fund’s current $14.7 billion unfunded liability by 2054.

The law also calls for ERS to create a cash balance retirement benefit for new employees who start on or after September 1, 2022. Retirement eligibility and benefits for current employees and retirees will not change, but the change in benefits for future employees and the state’s commitment to pay off the Fund’s debt will ensure current and future retirees get the lifelong annuities they earned over their careers.

Health insurance

The Legislature maintained current funding for health insurance coverage for eligible participants in the Texas Employees Group Benefits Program (GBP). Because of this appropriation, as well as ongoing cost-saving measures, ERS hopes to avoid increasing premium rates or decreasing benefits in any of the GBP health plans for Fiscal Years 2023 and 2024.

Other laws related to insurance coverage will impact non-Medicare GBP plans. New requirements effective September 1, 2022, require HealthSelect of Texas® and Consumer Directed HealthSelectSM plans to cover in-network diagnostic imaging to detect breast cancer (including mammograms, ultrasound and MRI) at the same level as preventive screening. A second new law will limit formulary insulin costs for plan participants to no more than $25 per prescription for a 30-day supply. These laws do not apply to the HealthSelectSM Medicare Advantage Plan preferred provider organization (MA PPO) or the HealthSelectSM Medicare Rx plan.

ERS governance

Retirees from state agencies will be eligible to serve as one of the three elected members to ERS’ Board of Trustees. Previously only active state agency employees were eligible to run for a Board seat. See ERS Trustees to learn how trustees are elected or appointed.