AUTHORITY: Implementing "AN ACT in relation to State employee benefits and amending Acts therein named" (P.A. 84-167, effective August 16, 1985), Section 125 of the Internal Revenue Code (26 U.S.C. 125) and authorized by Section 16 of the Civil Administrative Code of Illinois (Ill. Rev. Stat. 1985, ch. 127, par. 16).

SOURCE: Emergency Rules adopted at 9 Ill. Reg. 16347, effective October 15, 1985, for a maximum of 150 days; adopted at 10 Ill. Reg. 5098, effective March 14, 1986.

SUBPART A: ESTABLISHMENT OF PLAN AND DEFINITIONS

 

Section 2100.10  Summary

 

The rules adopted in this part shall constitute the State of Illinois Premium Payment Plan, which is hereby established as a plan within the meaning of Section 125 of the Internal Revenue Code (26 U.S.C. 125) and proposed Internal Revenue Service Regulations (49 FR 19321).

 

Section 2100.20  Purpose of Plan

 

The purpose of this Plan is to provide eligible Employees a means of obtaining benefit coverage on a favorable tax basis.

 

Section 2100.30  Applicability of Plan

 

The provisions of this Plan are applicable only to the Employees of the Employer in current employment on or after the effective date.

 

Section 2100.40  Definitions

 

a)         Whenever used in the Plan, the following terms shall have the meanings set forth below unless otherwise expressly provided, and when the defined meaning is intended, the term is capitalized.

 

            "Code" means the Internal Revenue Code (26 U.S.C. 125 [1985[) and regulations promulgated thereunder, or any successor statute.

 

            "Department" means the Department of Central Management Services.

 

            "Effective Date" means March 14, 1986.

 

            "Employee" means an Employee of the Employer.

 

            "Employer" means the State of Illinois which includes all officers, boards, commissions, and agencies created by the Illinois Constitution, whether in the executive, legislative or judicial branch, all officers, departments, boards, commissions, agencies, institutions, authorities, universities, bodies politic and corporate of the State, administrative units or corporate outgrowths of the State government which are created by or pursuant to statute other than units of local government and their officers, school districts and boards of election commissioners, and all administrative units and corporate outgrowths of the above as may be created by executive order of the Governor.

 

            "Member" means an Employee who meets the conditions of Section 2100.110 of this Part.

 

            "Plan" means the State of Illinois Premium Payment Plan, as set forth in these rules, and as may be amended from time to time in compliance with the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1991, ch. 127, pars. 1001-1 et seq.).

 

            "Plan Year" shall be the fiscal year for the State of Illinois.

 

            "Premium Dollars" means those dollar amounts specified in Section 2100.210 of this Part.  Premium Dollars differ from contributions for benefits not made under this Plan in that Premium Dollars are not included in an Employee's gross income for tax purposes.

 

b)         Gender and Number.  Except when otherwise indicated by context, any masculine terminology shall also include the feminine, and the definition of any term in singular shall also include the plural.

SUBPART B: ELIGIBILITY AND PARTICIPATION

 

Section 2100.110  Membership

 

a)         Any Employee who is eligible to participate in any of the following coverages maintained by the Department shall become a Member in the Plan on the first day of such eligibility, but not before the Effective Date.

 

1)         Group Health (including an available Health Maintenance Organization)

 

2)         Optional Group Term Life Insurance subject to combined maximum Employer provided and Employee elected limit of $50,000 (26 U.S.C. 79), or

 

3)         Any group health, life or dental coverage maintained by a unit of the Employer and approved by the Department for inclusion under this Plan.

 

b)         The coverage maintained by a unit of the Employer shall be approved by the Department for inclusion if:

 

1)         the cost of the proposed benefit coverage does not exceed the cost of like benefits offered by the Department and the coverages do not exceed the scope and cost of like policies offered in the industry, and

 

2)         the proposed coverage presents no undue administrative burden by imposing more than a de minimis increase in cost or duties upon the State.

 

3)         the unit of the Employer:

 

A)        provides written certification to the Department and Comptroller which states that the amount of Premium Dollars deducted for each Employee is for the approved coverage, and

 

B)        maintains current membership lists for the approved coverages or requires the submission of them from the insurance carriers to assure accurate submission of payroll vouchers by the unit of the Employer.

 

4)         the proposed coverage qualifies for the tax exemption provisions of Section 125 of the Code (26 U.S.C. 125), and

 

5)         inclusion of the proposed coverage would not constitute discrimination under Section 125 of the Code (26 U.S.C. 125).

 

c)         A list of the approved coverages is available upon request to the Department.

 

Section 2100.120  Duration

 

A Member shall cease to be a Member when he or she is no longer eligible for any of the coverages set forth in Section 2100.110 of this Part.

SUBPART C: BENEFITS

 

Section 2100.210  Premium Dollars

 

a)         A Member's Premium Dollars each pay period of the Plan Year shall be equal to the contribution that would, but for this Plan, be required of the Member to have the level and type of coverage of benefits elected under Section 2100.240 of this Part.

 

b)         The Member shall incur a reduction in his or her salary upon commencement of participation in this Plan equal to the amount of his or her Premium Dollars for each pay period of the Plan Year.

 

c)         The maximum reduction is equal to the highest costing combination of coverages included in the Plan under Section 2100.110 of this Part.

 

d)         The reduction in salary will not affect the amount paid into a Member's pension or Social Security, nor reduce benefits received from those sources.

 

Section 2100.220  Benefits

 

A Member's Premium Dollars may be applied toward payments that would, but for this Plan, be required of the Member for coverage of the Member and/or his or her dependents under the benefits set forth in Section 2100.110 of this Part.

 

Section 2100.230  Commencement of Participation

 

Participation will commence the first pay period the Employee is a Member.

 

Section 2100.240  Election of Benefits Coverage

 

a)         Upon the commencement of participation in the Plan and prior to the beginning of each Plan Year, a Member shall elect, on a form (IL 401-0677 or its equivalent) provided by the Employer, the desired level and type of coverage of benefits specified in Section 2100.110 of this Part.

 

b)         Elections under this section shall be irrevocable during a Plan Year except for:

 

1)         conditions stipulated in the benefit contracts, or

 

2)         on the occasion of a change in family status (e.g. marriage, divorce, birth or adoption of a child, death of spouse or child, and termination of employment of spouse).

SUBPART D: ADMINISTRATION AND FINANCING

 

Section 2100.310  Responsibilities of the Department

 

a)         In administering the Plan, the Department may establish internal management procedures which are consistent with, and necessary to implement and maintain, this Part.

 

b)         The Department, on behalf of the State of Illinois, shall distribute necessary forms to each Agency for all Members.

 

c)         Material describing this Plan and outlining the options and opportunities available shall be distributed to all Employees.

 

Section 2100.320  Expenses of Administration

 

Any expense incurred relative to the administration of the Plan shall be paid by the Employer.

 

Section 2100.330  Contributions and Financing

 

a)         All premium payments will be made by payroll reduction.

 

b)         In the event sufficient Premium Dollars are not available for the payment of all of the premiums for any reason including a change in job status, then the Member's right to participate in the Plan shall be suspended.

 

c)         In the event of suspension, the Member's participation will be automatically resumed when there are sufficient funds.

 

d)         A Member's suspension from the Plan shall not affect the Employee's rights to participate in the Group Insurance Programs, but the Employee shall not be eligible for the favorable tax basis provided herein.

SUBPART E: AMENDMENT AND TERMINATION

 

Section 2100.410  Right to Amend and Terminate Reserved

 

a)         The Department reserves the right to

 

1)         amend this Plan from time to time, or

 

2)         terminate this Plan.

 

b)         Such termination or amendment shall be made in accordance with the provisions of the Illinois Administrative Procedure Act (Ill. Rev. Stat. 1991, ch. 127, pars. 1001-1 et seq.).

SUBPART F: MISCELLANEOUS

 

Section 2100.510  Illegality of a Particular Provision

 

The illegality of any provision of this Plan shall not affect the other provisions of the Plan and the Plan shall be construed in all respects as if such invalid provision were omitted.

 

Section 2100.520  Applicable Law

 

To the extent not preempted by federal law, the Plan shall be governed by and construed according to the laws of the State of Illinois.

 

Section 2100.530  Assignment

 

This Plan shall not give to any person any assignable or exchangeable interest or right or thing of exchangeable value in advance of the time distribution is to be made to such person.

 

Section 2100.540  Rights Against the Employer

 

Neither the establishment of the Plan nor any modification thereof, nor any distributions hereunder shall be construed as giving to any Member any legal or equitable rights against the Employer, the Department, State officers or administrators, as such, or as giving any person the right to be retained in the employ of the Employer.