Message from the executive director: The ERS difference

March 12, 2024

4-minute read

The ERS difference

ERS exists to offer competitive benefits to enhance the lives of our members. That’s our stated mission and the reason more than 400 ERS employees and contractors put in 40 hours (or more) of dedicated work each week.

Professional photo of Executive Director Porter Wilson

But what does it mean to offer “competitive benefits”? Well, we try to provide benefits that are as good as or better than those offered by other employers, including those in the private sector. With our retiree health insurance, we’re more than meeting that standard, as relatively few employers even offer health insurance to their retirees. Even fewer offer the level of coverage ERS does, with the employer (the State of Texas) paying most of the costs.

Maintaining competitive benefits

The state pays a portion of the monthly health insurance premium for most retirees and 100% for many, depending on how long they worked. And the plan design, which sets participants’ out-of-pocket costs like copays and coinsurance, hasn’t changed for more than a decade.

Based on funding available from the state, ERS designs the health plans, not only deciding on how much you pay when you go to the doctor or hospital. We also work with our plan administrators, like Blue Cross and Blue Shield of Texas, UnitedHealthcare® and Express Scripts, to decide if and how we should cover certain procedures and medications. We design the health plans so they provide a high standard of coverage at a good value for the state and members. We also work to keep administrative costs low, so your and the state’s contributions pay for health expenses, not overhead.

These three factors—the state’s contributions, stable plan design and effective cost management—ensure that the health plans remain competitive.

High-quality, customized coverage

The competitiveness of our plans isn’t based on cost alone. The coverage and benefits are equal to or better than other plans in the same price range. Last fall, as we were conducting Fall Enrollment events and the national Medicare enrollment period was underway, we heard from some members that there were no-cost Medicare Advantage plans on the Medicare marketplace with similar health coverage to ours, plus amenities like dental and vision care. Plans like these can sound great and, for some retirees, they might be an alternative to our plans. But it’s important to look carefully at other plans’ design and networks.

Some of these plans are able to offer so many amenities at no cost because they severely limit their provider networks. In ERS’ HealthSelectSM Medicare Advantage Plan, you can go to any doctor or facility that takes Medicare and is willing to see you. Also, our Medicare health coverage comes with Part D prescription drug coverage at no additional cost to the participant. Part D coverage is a valuable benefit that many other Medicare plans offer only for an additional premium. In addition, some other Medicare Advantage plans might have very strict prior authorizations and other requirements for certain treatments. Our plans require authorizations for some treatments, but we work with the plan administrators so they don’t cause significant delays in treatment, create undue burdens or otherwise deny needed care to our participants.

We customize all of our health plans so they best meet the needs of our membership. Does that mean every participant is going to get whatever procedure or medication they want on demand? Of course not—no health insurance plan can provide that. But our plans meet our members’ needs in ways that are hard to match.

Contracting with third-party administrators

An important factor in ERS’ ability to offer high-quality coverage at relatively low costs is contracting with external companies to administer (and in some cases, insure) our plans. Through these contracts, ERS takes advantage of the companies’ existing negotiated  agreements with providers and their claims processing systems. And we build on those for our members to achieve even larger provider networks and timelier claims.

By regularly rebidding our administrator contracts, we ensure that our plans remain competitive and cost effective. We understand that changing plan administrators, such as the recent move to Express Scripts for prescription drug coverage, is inconvenient. These transitions mean a lot of work for ERS, too. But they result in savings that help us maintain the plan overall. If we didn’t rebid our administrator contracts regularly, we would have to increase plan costs, reduce benefits or both much more frequently. Not to mention, state law requires us to go out to bid every several years.

Everyone at ERS understands how important health insurance is to retirees, and we work to make sure the insurance not only meets your needs, but also is sustainable so the state can continue to offer it and it can continue to enhance your lives.