This blog post about one of the situations at EPISD was sent to us. If the district sends us a rebuttal we will publish it. This blog wants to encourage informed discussion and decision making.
| AFT President Ross Moore’s Letter to Membership |
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Part 2 TRS-ActiveCare Action
Dear Xavier,
This is Part Two of a two part Eyes on the Board of Managers. Wednesday’s nine and a half hour marathon of meetings began at 1:00 PM with a Curriculum Committee Meeting and had two items of interest and real importance: The presentation of the Facilities Master Plan to the Board of Managers and the Action on TRS-ActiveCare. To do justice to both key topics, I will split this into two Eyes on the Board of Managers. This part will address the presentation of the Action on TRS-ActiveCare.
During the Regular Board of Managers meeting, the issue of the District’s relationship with TRS-ActiveCare and whether it should continue was discussed and debated. A decision was made at 10:00 PM to adopt a course of action that may or may not be successful, and may or may not bring you savings or better coverage.
The discussion began with a background and information presentation by Mr. Randy McGraw. Mr. McGraw has been the District’s Benefits Consultant for nearly a decade. During that period, he was employed by JDW Insurance (Mr. Margo’s company until 2012) and is now employed by HUB International, which purchased JDW Insurance. He detailed the history of health care coverage in the district dating back to 1992. His presentation was professional, thorough, packed full of data and documented several bad decisions made by the District between 2000 and 2010 with regards to ‘fiscal discipline and sound decision making’ that brought about the crisis that led to a proposal to significantly increase the premium and deductible rates under EPISD’s self-insured plan in 2009 and 2010. His presentation was inaccurate on a couple of items regarding the decision to enter TRS-ActiveCare including Dr. Garcia’s “my way or the highway” approach to healthcare coverage and the omission of the fact that not only did my predecessor urge transitioning, so did Ms. de la Rosa’s and the then president of ATPE. But, that was then and this is now.
Mr. McGraw then presented a detailed analysis of the current situation within the District, with our neighboring Districts, with TRS and the healthcare coverage in general. Here are some main points I gleaned from his analysis.
1. TRS is facing a fiscal challenge that will require at least one of six major changes they proposed.
2. Socorro and Ysleta ISDs make a larger contribution to their employee’s health care coverage costs than EPISD.
3. Health care coverage costs are increasing in the private sector.
4. That the push for “Opt Out” legislation in the 2013 Legislature was doomed from the start and was very unlikely to succeed in 2015. Mr. Margo echoed that in a comment. Comment: That has been the El Paso and Texas AFT’s view of that effort all along. Our local and state level efforts are focused on the State increasing its contribution well above the $75 approved by the 2001 Legislature. Texas AFT analysis is that putting our energies into getting an increased state contribution is much more likely to succeed. Supporting “Opt Out” legislation would be a waste of time, effort and money.
5. One thing that Mr. McGraw didn’t say was that returning to self-insured would bring you savings or better coverage. Comment: Given the insurance market today, he would have been on very thin ice if he had.
6. During a discussion between Mr. McGraw and Ms. Arrieta-Candelaria on options and possible courses of action she proposed a really novel and merit worthy idea as an option. She proposed employees individually opting out of TRS-ActiveCare and going into the ACA exchanges or open market, AND the District would provide all employees $400 a month to buy healthcare coverage. Comment: This proposal is novel, has merit, and really should be explored as an option.
After the very informative presentation, comments were allowed. One speaker, Xavier Miranda, asked Mr. Margo to recuse himself based on direct or indirect affiliation with HUB International which stands to benefit from returning to self-insured. After the last speaker, Mr. Margo, in response to Mr. Miranda’s comments, clarified for the record that he “had no involvement with HUB International in two and a half years. None what so ever.” Comment: Mr. Margo’s son Donald Margo III became HUB International’s Area President for El Paso in June 2014.
When I spoke, I asked very fundamental and pragmatic questions and received no answers. I said:
“I am a practicing pragmatist. I am speaking on the TRS-ActiveCare withdrawal option. I am speaking neither in support of nor in opposition to withdrawing. I am not married to TRS nor am I married to self-insured. I am married to the best possible care at the best possible price for my members. Rather, I am going to ask 10 fundamental questions that need to be answered and I hope you discuss thoroughly during closed session.
“First, most importantly, and again, Mr. Margo can you guarantee publicly and unequivocally that by withdrawing from TRS-ActiveCare my membership will gain better coverage and substantial savings on their burdensome healthcare coverage costs? Comment: Mr. Margo did not respond. Though the Times reported yesterday that he did, that was corrected on page A-1 of today’s paper. No one has been willing to make that guarantee, regardless of their position, organization or sponsorship of such a move.
“Second, do you believe TRS will accept the precedence of a large district withdrawing without a legal fight? If so, why?
“Third, do you believe that this will be a short or long run legal battle with the TRS as it enforces TAC, Ch. 41, Subch. C, Rule 41.30(a)(4) which governs withdrawal and allows withdrawal and allows it under some circumstances, with TRS Board approval?
“Fourth, who will be representing the District and what are the median and worst case estimates of the legal costs to the District?
“Fifth, will the transition to self-insured begin before or after any litigation is resolved?
“Sixth, will my members remain covered under TRS-Active in the interim? If not, what is the plan for long-term medical issues or treatment during the transition?
“Seventh, what is the District’s ‘Plan B’ to reduce the burden of this “benefit” on employees if it loses in the courts OR if withdrawing wins in the courts, but does not provide the results some expect?
“Eighth, in the interim, while litigation and transition struggles play themselves out, will you show that you do wish to reduce the burden on your employees and temporarily increase the District’s contribution help with their premiums? Comment: Not only does the State Legislature need to increase the State’s contribution, so too does our District.
“Ninth, what are the projected overhead costs associated with having a Third Party Administrator manage this for the District?
“Tenth, as HUB International already has the contract to provide Services to HR is it a safe assumption that their role and fees with the District will increase if withdrawal occurs? If so, isn’t that kind of problematic on several levels? Comment: Mr. Margo’s son, Donald Margo III became HUB International’s Area President for El Paso in June 2014. Mr. Margo’s C.W. Wakefield Plaza Management is located in Suite 800 at 201 E. Main Street. That is the same suite HUB International occupies. Mr. McGraw, the District’s able consultant is also located within that that suite. I would like to believe that they keep all these functions compartmentalized, and they probably do. But, for the sake of appearances alone, maybe Mr. Miranda was right.
“This is not a small step being urged. I have heard a lot of rhetoric and finger pointing on the topic of returning to self-insured status, but no data or details. It may be a good option or it may be a bad one. Don’t know. However, my membership and I prefer to deal with data and details in the here and now before deciding whether to support this unprecedented move.
“To close, Mr. Margo will you guarantee publicly and unequivocally that by withdrawing from TRS-ActiveCare my membership will gain substantial savings on their burdensome healthcare coverage costs?” Comment: Again, no answer.
Mr. Margo, after that, asked me as I returned to my seat, “Why didn’t you ask those questions in 2009?” My response, “Because just like you weren’t sitting up there, then, I wasn’t standing here, then.”
After over two hours in closed session, the Managers returned to announce their decision. The option to unilaterally secede from TRS-ActiveCare was rejected. This would have led to a long, costly and ultimately futile legal battle with the potential for great disruption to services. The option to lobby for “opt-out” legislation was closed as pointless by all concerned, including Mr. Margo. Both decision are for the best.
The Board of Managers voted to “research and petition TRS to withdraw”. They are going to use the key legal provision governing this issue is found in TRS rules, which state, at 34 TAC Part 3, Ch. 41, Subch. C, Rule 41.30(a)(4): “(4) Discontinuance of participation. Entities that participate in TRS-ActiveCare may not discontinue participation unless authorized by Chapter 1579, Insurance Code, and by appropriate rule or resolution adopted by the TRS Board of Trustees.”
So, what is the Federation going to do as this process plays out?
First, continue to push for the best possible coverage at the best possible price regardless of source for you, the membership. That, above all else, has been and remains my Number One priority.
Second, support and ask you to actively support the Texas AFT Legislative Agenda’s push for a greater State contribution to your premiums. This goal is shared by every responsible state education organization. This includes providing our Legislators with the great supporting material you have provided in the Federation Healthcare Coverage Survey to help them argue the case in the Legislature.
Third, argue before the Board and Administration for a greater EPISD contribution to your premiums regardless of whether we are self-insured or under TRS. I ask you to actively support this push for a greater EPISD contribution to your premiums.
Fourth, keep you informed about the progress of the withdrawal petition and other local and state developments.
In Solidarity
Ross
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