TEXAS PUBLIC EMPLOYEEa newsletter of the Texas Public Employees Association • May 2016 • Volume 71, Number 1

An interview with ERS Executive Director Porter Wilson“It’s a great job—I get to work on behalf of state employees and retirees”Employees Retirement System Executive Director Porter Wilson is fast approaching his one-year anniversary at the helm of the agency, which serves more than 225,000 active and retired state employees through its retirement program, as well as more than 500,000 state and higher education employees and retirees through the Texas Employees Group Benefits Program.

TPEA is well-acquainted with Wilson: From 1996 to 2014, he served as chief of staff for Sen. Robert Duncan. Duncan served as chairman of the Senate State Affairs Committee, which oversees issues related to ERS-provided benefits; also, as a mem-ber of Senate Finance, Duncan was a key player in development of the state budget. In 2014, TPEA presented Wilson with its Public Service Award for his work on active and retired state employee issues during the 83rd legislative session.

TPEA recently visited with Wilson regarding his path to ERS, his forecast for the upcom-ing legislative session and more.

TPEA: Throughout your career, you’ve developed an expertise in state employee compensation issues. How did you develop that interest?

Wilson: I’ve been a state employee for almost 24 years. I started as a State Capitol tour guide when I was an undergrad at the University of Texas, and then my first “adult job” was working for State Rep. and then State Sen. Robert Duncan. Once Sen. Dun-can became the chair of the Senate State Affairs Committee—which has jurisdiction over pension systems in general—I had a great opportunity to work directly on com-pensation issues related to state employees. I got to know the pension system, the health

insurance and the other benefit programs, and how important they were as a piece of total compensation.

TPEA: How did you come to apply for the ERS executive director position?

Wilson: Sen. Duncan retired after the 2013 session and asked me to work for him at Texas Tech, helping build out his vision for a governmental affairs team here in Austin. Ann Bishop [Wilson’s predecessor] announced her retirement around that time. Because of the time I’d spent over the years working with ERS, I was asked to provide input to the search firm assisting the ERS board in finding the next executive director. When I started describing the characteristics I thought would make a quality candidate, it occurred to me I was describing my own re-sume. Working for Texas Tech and for higher ed was something I was passionate about, but the opportunities presented at ERS were really attractive. It was a chance to work at a great organization and to do it on behalf of state employees and retirees—to ensure we maintain quality benefits and compensation because of the critical nature of their work.

TPEA: Rising health insurance costs are very much on TPEA members’ minds. What factors are leading to this increase, and how is ERS working to address it?

Wilson: We’re not unique at ERS. Health care costs are an issue nationwide. The things that drive costs for us are similar to other plans. Diabetes is a major cost driver for us. Heart disease issues plague us as well. What I’ve been focusing on is how we get out ahead of those. You can manage costs as they present themselves, but where we would like to be is ahead of the curve, encouraging people to live healthier lives.

Take diabetes. We can help people eat healthier, be more physically active and control their weight, which ultimately can help them avoid altogether the onset of Type 2 diabetes. Real Appeal is a weight control program we’ve just introduced. I have high hopes for Real Appeal and other programs that can help us get in front of health care costs so we’re not just figuring out how to negotiate better rates with providers or pharmaceutical companies.

TPEA: ERS offers so many resources to active and retired state employees—are there resources that ERS members aren’t taking advantage of that they should?

Wilson: Primary care visits. While it’s impor-tant to take the Health Risk Assessment and have information about what your personal health issues might be, developing a relation-ship with a primary care doctor who can actively engage with you to help you manage your health is the key. The most significant achievement for us would be to get people to go see their primary care doctor annually for

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TPEA Annual Delegates Meeting

TPEA’s delegates will convene for their annual meeting June 25 in Austin.

All members are welcome!

Delegates will discuss and vote on TPEA’s 2017 Legislative Agenda,

hear updates from the state office, commemorate TPEA’s 70th

anniversary and more.

1:30 p.m. Saturday, June 25, 2016Holiday Inn Austin–Lady Bird Lake

20 North IH-35Austin, Texas 78701

Find registration & housing information at www.tpea.org/about-us/annual-delegates-meeting

A message from TPEA’s executive directorDear TPEA members,

On June 25, TPEA members will gather in Austin for our Annual Delegates Meeting. The delegates will adopt the 2017 TPEA Legislative Agenda, a statement of our pri-orities for the upcoming session. The TPEA lobby team will then present this agenda to lawmakers to help them understand the concerns and challenges of the active and retired state workforce.

The legislative agenda focuses on the three critical components of state employee compensation: enhancement of state employee pay, the preservation of affordable health benefits for state employees and retirees, and continued strengthening of the ERS pension fund. Each of these three areas is essential in ensuring the State can maintain the stable, experienced workforce necessary to carry out

its mission to taxpayers. (Visit www.tpea.org/proposed-agenda to review specifics.)

Thank you to the members of the Legislative Committee for their work in preparing this agenda for delegate review. Members are Stephanie DeWitt, Joe Gaytan, Eric Guerrero, Julia Johnson, Ted Miller, Denise Pittard and Irene Webster, along with ex-officio mem-bers President Lorie Davis and President-Elect Wanda Carter-Dyer.

I invite you to the Annual Delegates Meeting (details are below) to join in the discussion. I also invite you to share TPEA’s proposed agenda with your colleagues, particularly those who aren’t TPEA members, and to use it as a tool to explain why they should join you in supporting TPEA’s advocacy through membership.

Sincerely,

Gary W. Anderson TPEA Executive Director

3May 2016 • tpea.org

a wellness visit and then do what their doc-tor says to do. It’s free to the member. When you go to the primary care doctor for that annual wellness visit, you don’t pay a copay. That tends to be a head-scratcher to me: why people don’t go to their primary care doctor when there’s no cost and it could lead to a much healthier lifestyle.

TPEA: Can you reflect on the value of the health insurance benefit for retirees?

Wilson: It’s been many years, since 2002, since our retirees have seen a cost-of-living adjustment. Thankfully many of them are on Social Security, which has provided some relief, though less than optimal. Health care costs and inflation have an acute impact on our retirees because of their relatively fixed incomes. That’s why we’ve done what we’ve done with our Medicare Advantage plans—the ability to coordinate and provide better financial efficiencies—so that we can keep the cost of health care affordable for retirees because they are so price-sensitive and inflation-sensitive. While the actuarial posi-tion of our pension fund has been dramati-cally improved with last session’s legislative actions, we are still some ways away from being actuarially sound and able to provide the cost-of-living adjustment provided for in SB 1459, much less a 13th check. [SB 1459, passed in 2013, provides a one-time cost-of-living adjustment equal to the lesser of 3 percent or $100 per month for those retired for 20 or more years once it is determined the pension fund is actuarially sound.]

TPEA: In recent legislative committee hearings, you’ve discussed at length the health of the ERS pension fund and actuarial assumptions, especially in light of recent market volatility. What should an ERS member be most focused on?

Wilson: The most important thing is now we have a funding strategy that’s where it needs to be. House Bill 9 and House Bill 1 were criti-cal—the Legislature stepping forward to raise the state’s contribution to 9.5 percent, added to the employers’ 0.5 percent and employ-ees’ willingness to partner with the state in raising their contribution to 9.5 percent. Our funding period, while not considered actuari-

ally sound, is just on the doorstep at 33 years, and we’re looking to get it under 31 in the coming years. The most key piece is the ongoing, regular funding strat-egy. It’s critical we maintain that.

The market and our returns are not an insignificant piece, either. But we’re long-term investors. The pro-gram we administer is long-term in its nature, so the horizons we look at have to be further than one or two years. Our returns over 30 years are well in excess of 8 percent—8.29 percent—and that’s really the timeline that’s more appropriate for us to look at. As I’ve said at hearings in recent weeks, we recog-nize that our returns of today become over time our long-term returns, so it’s important to know where you are. But I think history will bear out that ERS will set appropriate return assumptions. Again, volatility right now will hopefully give way to more stable markets in the future. And we have planned for volatility by continuing to diversify our portfolio [i.e., investing in an expanded mix of asset classes, including private equity, real estate and infra-structure markets].

TPEA: Looking ahead to the next session, what do you see as TPEA’s role with the Legislature and with ERS issues?

Wilson: TPEA has been a significant player at the Capitol for years. Great team, great credibility with legislators—not just always identifying problems, but bringing potential solutions to deal with problems as well, which really adds to the credibility that TPEA has at the Capitol. That kind of approach is effective regardless of who’s in office.

Next session, one key issue is going to be continuing the path the Legislature set forth for us last session. TPEA has been impor-

tant in previous sessions at helping get a handle on pension costs, and TPEA was there to help get the funding strategy piece in place as well. I see TPEA being there to make sure that even when the budget is tight, money is there to continue the obliga-tions and commitments made last session.

ERS Sunset legislation is obviously going to be a major piece of legislation—not neces-sarily because of what will or won’t be in the bill as filed, but because of the things that might be put in it over the session. Again, it will be TPEA’s role to make sure legisla-tors understand how proposals are going to impact your members.

TPEA: Any final thoughts to share?

Wilson: It’s a great job—I get to work on behalf of state employees and retirees. These are people who carry out the mission of state government effectively, efficiently and at a high level. My job is to make sure that the compensation package offered to them when they became state employees continues to be a reality. In many cases, state employees could be making more do-ing something else. The total compensation package is important so we can continue to attract and retain a high-quality workforce. It’s a great job to help our government run as efficiently as we can for the people of this state. That’s why I was excited to take on this job. State employees are important. «

Wilson–continued from page 1

In 2014, Porter Wilson accepts TPEA’s Public Service Award for his work during the 83rd legislative session, when he served as Sen. Robert Duncan’s chief of staff.

TPEA analysis: Consumer Directed HealthSelect option is a big leap from the traditional HealthSelect planParticipants will be responsible for more out-of-pocket expenses, will have to satisfy high deductible before the plan pays for non-preventive health or prescription servicesDuring open enrollment, ERS will provide active employees and non-Medicare eligible retirees information about Consumer Directed HealthSelect, a high-deductible health plan/Health Savings Account option available beginning Sept. 1, 2016. Such plans are generically known as consumer-directed health plans, or CDHPs.

The 85th Legislature mandated the imple-mentation of this option in House Bill 966, and the ERS Board of Trustees adopted a plan design Feb. 23. The board will approve monthly premiums for all plans, including Consumer Directed HealthSelect, in May.

Under a CDHP, a participant assumes the risk of a high deductible in exchange for a tax-free employer contribution to a Health Savings Account (HSA). HSA funds may be used to meet qualified medical expenses now or in the future, and the funds are por-table, meaning the funds go with the partici-pant if he or she leaves the state workforce. Some CDHP participants choose to invest their HSA funds, making them subject to market fluctuations like a 401(k).

Consumer Directed HealthSelect is only an option. No one is required to leave the traditional HealthSelect plan.

CDHP specificsERS has a published an outline of the Consumer Directed HealthSelect program at www.ers.state.tx.us/ERS-News/Introducing-Consumer-Directed-HealthSelect/.

Following are some of the plan details:

•The high-deductible plan will be adminis-tered by UnitedHealthcare.

•The plan will operate as a network PPO without a PCP referral requirement. (This is in contrast to the traditional HealthSe-lect plan, which requires a primary care physician’s referral to see a specialist and receive better in-network benefits.)

•The in-network deductible will be $2,100/individual and $4,200/family. The out-of-network deductible will be $4,200/individ-ual and $8,400/family. The in-network and out-of-network deductibles are separate

and unrelated to each other. Participants will be responsible for 100 percent of health care costs until they have satisfied these deductibles. (Preventive services are not subject to the deductible, but prescrip-tion medications are.)

•Upon satisfaction of the deductible, ben-efits will be paid at 80 percent in-network and 60 percent out-of-network until an applicable out-of-pocket maximum is reached. The in-network out-of-pocket maximum will be $6,450 for individuals and $12,900 for families. The out-of-network out-of-pocket maximum will be $12,900 for individuals and $25,800 for families.

•Plan deductibles and out-of-pocket maxi-mums are based on the calendar year—so, if your coverage begins Sept. 1, 2016, your deductibles and out-of-pocket maximums will start over Jan. 1, 2017.

•The State will contribute $45 each month ($540 annually) to an individual HSA and $90 each month ($1,080 annually) to a family HSA. The HSAs will be adminis-tered by Optum Bank, a subsidiary of Unit-ed Healthcare Services Inc. Participants may contribute additional funds to their HSAs, subject to employer + employee IRS contribution limits of $2,810 for individu-als and $5,670 for families. (These limits are adjusted annually by the IRS.)

•As with the traditional HealthSelect plan, the State will cover 100 percent of the cost of an active employee’s premium and 50 percent of the dependent premium. The dependent premium for the CDHP will be 90 percent of the corresponding HealthSelect premium.

•CDHP participants may not participate in traditional health care flexible spending accounts (FSAs) per IRS rules. However, Consumer Directed HealthSelect

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participants may enroll in a limited flex-ible spending account (LFSA) for vision and dental care expenses only. ERS will provide additional details about rolling TexFlex health care funds into an LFSA.

TPEA’s takeTPEA believes the traditional HealthSelect plan continues to offer the best benefit to active employees and non-Medicare eligible retirees. We do not view the CDHP as a prudent choice for families or those with chronic health conditions. A CDHP only makes sense if you are comfortable with the risk of a high deductible after considering the impact that ongoing and unexpected out-of-pocket costs will have on your finances.

If you plan to consider Consumer Directed

HealthSelect, it’s a good idea to:

•Examine past Explanation of Benefits (EOB) statements. These will give you an idea of the benefits you have received under the traditional HealthSelect plan, as well as the out-of-pocket costs you might incur under the CDHP.

•Estimate your annual expected medical expenses, particularly for prescription drugs, and determine if your preferred health care providers are in-network or out-of-network.

•Evaluate the personal financial impact of meeting the high deductible as of Sept. 1, 2016, and then again as of Jan. 1, 2017. In the case of an accident or unexpected serious illness, could you afford the entire deductible? It’s important to note that you

cannot pre-spend HSA contributions. In other words, you can’t “go negative” with your account balance and spend HSA funds that haven’t yet been contributed. (This is in contrast to an FSA such as TexFlex, which allows you to do so.)

•Consider the additional responsibility a CDHP places on you in terms of record-keeping, payments, etc., compared with the traditional HealthSelect plan.

Learning more about the CDHPERS plans a series of communications regarding the CDHP between now and the close of open enrollment. If you have questions about Consumer Directed Health Select, please contact ERS at (877) 275-4377 or using the submission form on the ERS website. «

Ask TPEA: Why do you need my home email address?In each issue of Texas Public Employee, we’ll answer some of TPEA members’ most frequent questions about how to make the most of your membership.

Q. I already receive TPEA’s informational emails at work. Why do you need my home email address, too?

A. Your home email address is an important piece of information to share with TPEA. Although we may send emails about legisla-tive activities or ERS benefits to work email addresses, we may not send information about grassroots advocacy or TPEA membership benefits. Without your home email address, we cannot let you know when your

call to your legislator will make a difference—and with the 85th legislative session fast approaching, now’s the time to make sure TPEA has your home email address on file. Please send member-ship@tpea.org an email from your preferred address, and include your name, home address and member number, if possible. Doing so ensures you receive TPEA’s advocacy alerts as well as our monthly Member Mails highlighting your membership benefits.

In addition, we’ve also launched a text alert system for legislative information. Simply text TPEA to 313131 to receive a text alert when it’s time to act fast and call your legislator. Your carrier’s standard message and data rates will apply.

Q. I’m transferring agencies. Will my TPEA membership continue uninterrupted?

A. It depends on how you pay your membership dues. If your membership dues are deducted from your paycheck, then please reach out to us so that you can complete a new membership application and ensure continuation of your membership. Your new agency will require an authorization form to begin deducting your TPEA membership dues. If you pay your dues via PayPal, bank draft or credit card, no problem. Please email membership@tpea.org to let us know your new agency so we can update our database.

Q. I keep reading about all of these great TPEA member discounts, but I lost my membership card. How can I access my member benefits?

A. Just contact TPEA at membership@tpea.org or (888) FOR-TPEA (367-8732), and we’ll send you a temporary membership card that lists your member ID. If you need a new permanent card, we will add your name to our next mailout.

Current information about TPEA services and discounts is avail-able on the Member Benefits page at tpea.org. If you haven’t yet logged in to the TPEA website, you’ll need to establish a web account to access necessary codes and links. Please contact webmaster@tpea.org if you experience any technical difficulties—and be on the lookout for a new TPEA website this summer!

6 Texas Public Employee • (888) FOR-TPEA

Prep your home before you pack your bagsA message from Liberty Mutual InsuranceVacations were invented to help you leave your worries behind. Here are a few tips designed to help ensure that your trip isn’t interrupted with problems from the home front.

Tell the good guys you’re going away …Ask a neighbor to watch your house, or have a friend drive by to keep an eye on things—it will be well worth the added peace of mind. You can even bribe them with treats or a souvenir from your trip. The U.S. State Depart-ment also recommends that you have a friend or neighbor hold onto your spare key and, if possible, ask them to park their car in your driveway to make it look like someone is home. Be sure to notify the post office and have your mail delivery stopped, suspend your newspaper deliveries, and for longer trips, notify the police department.

… not the bad guysWhile it’s hard to resist sharing selfies taken on the beach, be careful about what you post to social media. AARP.org cautions against broadcasting that your home is empty. Make sure your settings allow only family and friends to view your feed. An unmowed lawn can also be a tip-off, so be sure to hire someone to keep it trimmed while you’re away.

Put lights on timersA house that is dark all evening is a sure sign that nobody’s home. Same thing with a house where the lights are on all night. A timer will not only create the illusion that someone is flipping the switch, but also it will help you use energy efficiently. If you normally keep your curtains open, don’t close them while you are away.

Lock up more than your homeIf you have a safe, throw in impor-tant documents, computers and valuables. If you need to hide money, don’t put it in your sock drawer … thieves know most people hide cash

in their dresser. Place it out of sight in a very high or very low place, outside of the bedroom. Just don’t make your hiding place so good that you can’t find it later or you forget where it is.

Install an alarmThey’re a great deterrent. Plus, they can also help you save money on your insurance. Be sure to ask your insurance agent about Liberty Mutual’s Protective Device Discount.The best way to put your mind at ease? Make sure your home is protected with good insurance, year-round. You can trust Liberty Mutual Insurance to provide superior coverage—we’ve been doing it for 100 years.

To learn more about Liberty Mutual Auto and Home Insurance or to get a free, no-obligation quote, call (800) 524-9400 or visit www.libertymutual.com/tpea.

TPEA scholarship applications due June 3The 2016 Liberty Mutual Insurance/TPEA Scholarship is a financial award based on special skills, scholarship abilities, community service and future employment needs. One $500 scholarship will be awarded at the TPEA Annual Delegates Meeting (June 25 at the Holiday Inn–Lady Bird Lake in Austin). TPEA members, their spouses and/or dependents are eligible for this award. (Applicants do not have to be Liberty Mutual policyholders.) The

application must be completed by the student. It, along with transcripts and a written state-ment, must be received at the TPEA state office by June 3. Download the scholarship applica-tion and guidelines at www.tpea.org/members/tpea-scholarship.

>> The 2015 Liberty Mutual Insurance/TPEA Scholarship recipient was Mary Ellis, a graduate of Victoria West High School in Victoria ISD.

Liberty Mutual/TPEA Scholarship

Map out your savingsTPEA membership is your passport to summer vacation fun at an affordable priceWhether your summertime itinerary includes Paris, France, or Paris, Texas, your TPEA membership can help you save on travel. Log in to the TPEA Member Benefits page at www.tpea.org/members/member-benefits/ to learn more about these valuable savings opportunities:

• AAA Texas—Join AAA Texas today for just $42! This special offer for TPEA members includes a free first-year membership for an eligible family member.

• Dallas Zoo—Buy print-and-go discount tickets through the link on the TPEA Member Benefits page.

• Fort Worth Zoo—Buy discount tickets through the link on the TPEA Member Benefits page.

• Hawaiian Falls—Save 46 percent on one-day admission tickets and 30 percent on season passes to all seven Texas locations through the link on the TPEA Member Benefits page.

• Houston Astros—Save on tickets to select home games through TPEA’s discount link and with TPEA’s coupon code.

• La Quinta Inns & Suites—Use the code TPEA at LQ.com or call (800) SLEEPQ and ask for the TX Public Employees Association Discount. (Offer valid seven days a week, based on availability at participating hotels. Offer may not be used in con-junction with any other offer, discounted rate, promotion, or during special events.)

• OrlandoEmployeeDiscounts.com—Find discount tickets to Orlando attractions and up to 60 percent off select hotels.

• The Parking Spot—Save 25 percent at Texas Parking Spot locations and 10 percent at IAH Spot Houston (value option) and other Parking Spots nationwide.

• Schlitterbahn Waterparks & Resorts—Save at parks in New Braunfels and Corpus Christi using the link and code on the TPEA Member Benefits page.

• Six Flags Fiesta Texas—Buy discount tickets through the link on the TPEA Member Benefits page.

• Six Flags Over Texas/Hurricane Harbor—Buy discount tickets through the link on the TPEA Member Benefits page.

• Texas Rangers—Save on home game tickets using TPEA’s discount code.

• Ticket Monster Perks—Save on sports, concert, theme park, theater and movie tickets using TPEA’s company identifier.

• TPEA Travel Discount Program—Member savings through this exclusive world-wide travel discount service may exceed 50 percent and average 10–20 percent below market on all hotels and car rental suppliers around the world.

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Texas Public Employees Association 512 E. 11th Street, Ste. 100 Austin, TX 78701

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CHANGE SERVICE REQUESTED

In this issue:Page 1• An interview with ERS Executive

Director Porter WilsonPages 2–3• Who develops TPEA’s legislative

agenda? Members like you• You’re invited to the 2016 TPEA

Annual Delegates MeetingPages 4–5• Analysis: Consumer Directed

HealthSelect is a big leap from traditional health plan

• Ask TPEA: Your membership questions answered

Pages 6–7• Apply for the $500 Liberty Mutual/

TPEA Scholarship• Prep your home before you pack

your bags• Map out your TPEA savings

Hindsight is 20/20 … but so is planning aheadAs you explore the insurance offerings available to you during your open enrollment period, don’t forget that TPEA offers members competitive supplemental dental and vision insurance products through TBI Insurance Agency. Members may also enroll in long-term care insurance.

For plan highlights and to enroll, visit www.tpea.org/insurance.

These insurance plans are only available to TPEA members. Please note that the dental plan is available to Texas residents only.

This information is for illustrative purposes only and is not a contract. It is intended only to provide a gen-eral overview of products and services. Only the insurance policy can give actual coverage amounts, terms, conditions, limitations and exclusions. Dental products are underwritten by Standard Life and Accident Insurance Company, Galveston, TX. Vision products are underwritten by Vision Service Plan. The long-term care insurance product is individually underwritten by LifeSecure Insurance Company and may require a medical exam.