TITLE 34. PUBLIC FINANCE
PART 3. TEACHER RETIREMENT SYSTEM OF TEXAS
CHAPTER 41. HEALTH CARE AND INSURANCE PROGRAMS
SUBCHAPTER
A.
The Board of Trustees of the Teacher Retirement System of Texas (TRS) adopts amended §41.12 (relating to Relating to the Alternative Plan for Medicare-Eligible Participants and Medicare Part B Requirement) of Subchapter A, Chapter 41, Title 34, Part 3, of the Texas Administrative Code with a change to the proposed text as originally published in the May 9, 2025, issue of the Texas Register (50 TexReg 2750), and the rule will be republished.
REASONED JUSTIFICATION
TRS adopts the amendments to §41.12 to close new enrollment to the TRS-Care Alternative Plan. The TRS-Care Alternative Plan, offered under §1575.158(d) of the Insurance Code and administered under Chapter 1575 of the same, no longer offers value to TRS retirees and their eligible dependents due to various factors.
First, the TRS-Care Alternative Plan was originally established to address members who lacked adequate access to TRS-Care Medicare Advantage (TRS-Care MA) providers. However, the TRS-Care MA network has since expanded significantly, and the initial justification for the TRS-Care Alternative plan ceases to exist.
Second, TRS established the TRS-Care Alternative Plan to help offset the financial burdens imposed on Medicare-eligible TRS members by federal laws such as the Government Pension Offset (GPO) and the Windfall Elimination Provision (WEP). These provisions negatively impacted Social Security benefits for public school retirees. Because Part B premiums are deducted from Social Security payments, public school retirees affected by these provisions waived Part B coverage when they first became eligible. Members who did not obtain Part B coverage when first eligible faced increasingly higher premiums over time. Since Part B coverage is required for participation in TRS-Care MA, forcing these retirees to get Part B coverage to be able to enroll in TRS-Care MA could be cost-prohibitive for them. Therefore, the TRS-Care Alternative Plan was designed to support these members. However, with the recent repeal of the GPO and the WEP, the TRS-Care Alternative Plan no longer serves this purpose.
Amended §41.12 establishes that the TRS-Care Alternative Plan will be closed to new enrollment on January 1, 2026. TRS-Care eligible members who meet the current requirements of the TRS-Care Alternative Plan may be enrolled in the program until December 31, 2025. All existing members of the TRS-Care Alternative Plan on January 1, 2026, will be grandfathered into and may remain in the program.
Beginning January 1, 2026, TRS will require Medicare-eligible retirees and their dependents to purchase and maintain Medicare Part B coverage to enroll in and remain in a TRS-Care program. This applies to both new TRS-Care enrollees and those transitioning from TRS-Care Standard to TRS-Care MA due to their new Medicare eligibility.
The change to the proposed text, as originally published in the May 9, 2025, issue of the Texas Register (50 TexReg 2750), remedies an inadvertent, nonsubstantive deletion of the term "Medicare-" from the title of the proposed amended rule. The change corrects this inadvertent deletion by reinstating the term "Medicare-" before "Eligible" in the title of amended §41.12.
COMMENTS
No comments on the proposed adoption were received.
STATUTORY AUTHORITY
Amended §41.12 is adopted under the authority of Chapter 1575 of the Insurance Code, which establishes the Texas Public School Retired Employees Group Benefits Act (TRS-CARE), §1575.052, which allows the trustee to adopt rules, plans, procedures, and orders reasonably necessary to implement Chapter 1575; Chapter 825, Government Code, which governs the administration of TRS, and §825.102 of the Government Code, which authorizes the Board of Trustees to adopt rules for the transaction of its business.
CROSS-REFERENCE TO STATUTE
Amended §41.12 implements Insurance Code §1575.158(d), concerning Group Health Benefit Plans.
§
41.12.
(a) Enrollment in the Alternative Plan. Up to and including December 31, 2025, an individual is eligible to enroll in the Alternative Plan offered under TRS-Care if:
(1) the individual is eligible to enroll in TRS-Care; and
(2) the individual is eligible for Medicare and either:
(A) does not have reasonable access to a particular provider, as determined by TRS; or
(B) as of January 1, 2018, does not have Medicare Part B coverage and the individual's ability to obtain Medicare Part B coverage is cost prohibitive, as determined by TRS.
(b) Closing Enrollment in the Alternative Plan. Effective January 1, 2026, new enrollees under TRS-Care will no longer be eligible for the Alternative Plan described under subsection (a) of this section.
(c) Medicare Part B Requirement. Effective January 1, 2026, retirees, dependents, surviving spouses, and surviving dependent children who are eligible to enroll in Medicare and desire to enroll in or stay in a TRS-Care plan must have and maintain Medicare Part B coverage.
(1) High Deductible Health Plan Transition. Effective January 1, 2026, retirees, dependents, surviving spouses, and surviving dependent children enrolled in the high deductible health plan offered under TRS-Care who turn age 65 and are eligible to enroll in Medicare must have and maintain Medicare Part B coverage to transition into the Medicare Advantage plan and the Medicare prescription drug plan offered under TRS-Care. These enrollees have until the end of their Medicare Initial Enrollment Eligibility Period (IEP) to secure Medicare Part B coverage in order to transition into the Medicare Advantage plan and the Medicare prescription drug plan offered under TRS-Care. Enrollees that fail to secure Medicare Part B coverage within this period shall be terminated from the TRS-Care program.
(2) Continued Enrollment in the TRS-Care Medicare Advantage Plan. Effective January 1, 2026, retirees, dependents, surviving spouses, and surviving dependent children enrolled in the Medicare Advantage Plan offered under TRS-Care who terminate or lose their Medicare Part B coverage no longer meet TRS-Care eligibility criteria and shall be terminated from the TRS-Care program as soon as TRS is notified of the Part B coverage loss by CMS.
The agency certifies that legal counsel has reviewed the adoption and found it to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on July 22, 2025.
TRD-202502566
Don Green
Chief Financial Officer
Teacher Retirement System of Texas
Effective date: August 11, 2025
Proposal publication date: May 9, 2025
For further information, please call: (512) 584-4773