By Roland Gilbert, Communications Specialist
Editor’s Note: As County magazine celebrates TAC’s 50th anniversary, it is featuring a series of articles that will look at the history of TAC through the lens of the services it provides to counties. This installment covers the history of TAC’s technology and communications. Responding to the needs of counties is foundational to TAC’s existence. It’s in the organization’s DNA, and it has been the animating force behind its five decades of service to the institution of county government and the county officials who serve their communities in all 254 Texas counties.
Future issues of County magazine will cover a deep dive into the TAC pools (May/June), the evolution of TAC’s education offerings (Sept./Oct.) and a look at TAC leadership throughout the years (Nov./Dec.). In January 2020 County magazine will release a commemorative 50th anniversary issue with all the 50th anniversary articles, timelines and photos.
To see the full interactive TAC Timeline, visit www.50yearsofTAC.org. Read about the history of the TAC Risk Management Pool here.
Health and employee benefit coverages had historically been a risky and expensive business for Texas counties. Pre-1980, some counties with more than 150 employees jumped into partially self-funded or self-insured arrangements as a way to control premiums. They designed their own benefits packages, rather than just take what was being offered to them by insurance providers.
“Self-funding” became the buzzword for saving money. With it, however, came the risks and some surprises. The county only saved money when it was lucky enough not to have bad claims. Plus, stop-loss negotiation, plan administration, claims investigations and banking duties often fell to county personnel with little or no experience running a health insurance business.
On top of that, “they were getting killed each year with rate increases,” explained TAC Health Program Manager Bill Norwood to County magazine in 1996. Because TAC has always been county focused and cost conscious, solutions were only a matter of time.
Pooling the Risk
TAC began providing risk control programs and services to its members in 1974 but had yet to offer employee benefits or coverages. All that changed within just a few short years. In 1978, legislation was passed requiring that governmental employers provide unemployment compensation to their employees.
In response, TAC formed the Unemployment Compensation Group Account Fund (UCGAF) that same year to assist Texas counties with unemployment coverage for their employees. The fund still works today the way it did then. After a former county employee receives unemployment benefits from the state, the Texas Workforce Commission bills the unemployment fund for the claims that person has collected. While the fund isn’t a risk pool, per se (since each county is responsible for paying its claims), county members are pooling their money for claims administration and loss control services through use of a TAC-provided third-party administrator.
Increasing administration challenges and skyrocketing premiums continued to plague counties providing health care coverage for their employees across the state. It was time for TAC’s county official-run board to step up to the plate and find an alternative solution.
In 1980, the result of scrupulous planning and mindful negotiation was the TAC Insurance Trust Fund (TAC ITF). TAC entered the health and employee benefits game with relatively swift success. Initially partnering with Prudential, TAC ITF offered health care coverage to county officials and employees in member counties. Over the next several years, TAC ITF grew to 38 groups. In 1991 the TAC Employee Benefits Pool was established for administrative services only (ASO) counties (groups that paid their own claims).
In 1995, TAC ITF moved their partnership from Prudential to BlueCross and BlueShield of Texas (BCBSTX) to obtain administrative savings and a statewide provider network, thus significantly decreasing claims costs. As part of that move, BCBSTX agreed to blend their book of business of existing Texas county clients with TAC’s, resulting in TAC ITF’s expansion from 38 to 70 groups.
TAC Pools Key Milestones (1969-1994)
See the entire History of TAC Timeline at www.50yearsofTAC.org
Enough Was Enough
In the late 90s, all counties felt the increasing burden of providing their employees with a quality health care plan. It was an environment of spiraling health care costs and decreasing options for insurance providers. The boards of TAC ITF and the TAC Employee Benefits Pool formed a subcommittee to examine their options closely.
On July 7, 2001, both boards said enough is enough and took several bold steps to take control and offer a better solution. The most significant decision was to make CountyChoice, TAC’s group health care program at the time, a partially self-funded pool rather than a fully insured program. In doing so, the Pool would bear part of the risk and purchase stop-loss insurance for catastrophic claims. It would also allow the Pool to take control of its administration, especially in three key areas that had been a source of frustration to its members: eligibility, enrollment and underwriting policies.
These decisions, of course, were approached cautiously after months of discussion and actuarial analysis. Additionally, with more administrative functions coming in-house, the TAC board and staff were addressing ways to make program administration more efficient and responsive to members.
TAC Pools Key Milestones (1969-1994)
See the entire History of TAC Timeline at www.50yearsofTAC.org
A Merger Would Be a Game Changer
Another crucial joint board vote in July 2001 was to merge the TAC ITF and TAC Employee Benefits Pool.
“We don’t need two pools to do these things, and I think combining them is a super move,” said then Marion County Judge and TAC ITF board member Gene Terry to County
magazine. “We’re becoming a more agile group where we can move and dodge and meet the challenges a lot better even than we could five years ago.” Terry, who was a practicing attorney with a health care background, attended several meetings with BCBSTX and stayed actively involved throughout negotiations.
Earlier that year, in an effort to streamline administration, Pool members were asked how they felt about moving to standardized plans. While having the flexibility to define their own plans was something counties enjoyed, having over 100 different plans made for a complicated administration. The unanimous response of the two pools’ 169 members was in favor of standardizing plans if it could help contain costs.
On Oct. 1, 2001, the trust went out of existence, and trust assets merged with pool assets to create what is now known as the TAC Health and Employee Benefits Pool (TAC HEBP). In its first year, reserves grew from $8.5 million to $13 million, and membership grew to almost 100 groups.
The Pool quickly moved to offer 14 medical plans (with BCBSTX as claims administrator) and eight prescription drug plans (with Advance PCS – now CVS Health – as claims administrator) for counties to choose from for their employee health care benefits. The board also voted to make additional employee benefits available to county employees that included a voluntary life, group term life and voluntary group accident insurance. These additional coverages were relatively inexpensive ways to enhance employee benefits at no cost to counties.
“I think the real story here is just what can happen when counties work together,” said then TAC Executive Director Karen Ann Norris in 2007 for County
magazine. “Counties created these pools because the commercial markets weren’t meeting their needs. They’re financially strong, which is so important to the counties and ultimately the local taxpayer.”
Leveraging Wellness for Success
In 2007, County
magazine reported that TAC HEBP had introduced several new programs to help keep rates low while still providing county employees excellent health care coverage. Those initiatives included new disease management programs and an emphasis on maintaining a healthy lifestyle. The Pool also embarked on what was to be a three-year Health Improvement Project focused on assessing and improving the wellness culture in Texas counties.
“With insurance costs rising yearly, TAC has led the industry in keeping costs as low as possible,” said then TAC HEBP Manager Bill Norwood. “This Health Improvement Project will be critical in keeping our performance edge high, relative to the average medical industry inflation trends.”
That project led to what is now known as Healthy County, TAC HEBP’s comprehensive and results-oriented wellness program. Since 2009, employees have become an empowered part of a county’s plan to keep health care costs down and preserve the high-quality benefits it offers. In February this year, Healthy County celebrated 10 Years Strong
at its 10th annual Healthy County Boot Camp in Georgetown. Marking a record attendance, over 200 Healthy County wellness coordinators, sponsors and other county officials and staff from across the state gathered to be educated and inspired.
TAC HEBP Today
In June 2013, to achieve better management and stewardship, TAC formed the Health Benefits Services (HBS) department to oversee both TAC HEBP and UCGAF. Before this change, TAC’s Risk Management Services department oversaw both programs.
Today, TAC HEBP is one of the oldest, largest and most successful public-sector benefit pools in the nation. It now has a membership of over 220 groups, including nine ASO groups and 34 special districts, representing over 46,000 county officials, employees, retirees and their dependents.
The Pool offers group health, dental, vision, telemedicine, group term life and retiree health coverages; wellness programs and resources; and prescription benefits. In addition to its executive leadership team and support staff, TAC HEBP assigns five employee benefits consultants, four employee benefits specialists and five wellness consultants in dedicated regions to serve its members.
“One out of nine workers in the U.S. is employed in the health care industry,” said HBS Director Quincy Quinlan. “Additionally, up to 90% of the nation’s health care spend is on chronic illness, the vast majority of which could be remediated or prevented by simple lifestyle changes. Is it any wonder why health care costs have spiraled out of control? Our mission is to provide the highest quality coverages and the finest wellness resources at the lowest possible cost.” This unwavering mission has helped to keep TAC HEBP’s renewal premiums consistently below national market trends for over a decade.
Learn more about TAC HEBP at www.county.org/tachebp