Prices for family coverage, are considerably steeper, and unlike the state's plan, most school districts do not contribute toward family coverage. TRS-Care 1 provides free basic catastrophic health insurance to eligible retirees who are not eligible for Medicare. TRS-Care 2 provides free catastrophic and other health benefits to retirees who have Medicare hospitalization benefits. State and active member contributions for TRS-Care are set by law at an amount equal to 0.5 percent and 0.25 percent, respectively, of employees' salaries. A portion of employee and state retirement contributions also goes to the program.
Retirees pay premiums for individual and dependent coverage that exceeds the basic plan's features.
For many school districts, TRS-Care 4 would have increased insurance costs. As of November 1996, only three school districts had enrolled in the program, covering 200 active employees. TRS is a defined benefit plan, meaning that retired teachers and other members receive fixed monthly payments based on their age at retirement, years of service, and highest three years of salary. TRS benefits are funded by member contributions based on a percentage of members' salaries, state contributions based on a percentage of total member salaries, and investment earnings on state and member contributions. The Texas Constitution sets the state contribution rate at from 6 percent to 10 percent of total salaries paid to members, while member contributions are set at not less than 6 percent of total salaries paid to members.