State of Illinois
91st General Assembly
Legislation

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91_HB2720

 
                                              LRB9100169EGfgB

 1        AN ACT to amend the State Employees Group  Insurance  Act
 2    of 1971.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.  The State Employees Group  Insurance  Act  of
 6    1971  is  amended by changing Sections 3, 5, 6, 8, 9, 10, 13,
 7    13.1, 13.2, and 15 as follows:

 8        (5 ILCS 375/3) (from Ch. 127, par. 523)
 9        Sec.  3.  Definitions.   Unless  the  context   otherwise
10    requires, the following words and phrases as used in this Act
11    shall have the following meanings.  The Department may define
12    these  and other words and phrases separately for the purpose
13    of implementing specific programs  providing  benefits  under
14    this Act.
15        (a)  "Administrative   service  organization"  means  any
16    person, firm or corporation experienced in  the  handling  of
17    claims  which  is  fully  qualified,  financially  sound  and
18    capable  of meeting the service requirements of a contract of
19    administration executed with the Department.
20        (b)  "Annuitant" means (1) an employee  who  retires,  or
21    has  retired,  on  or  after  January 1, 1966 on an immediate
22    annuity under the provisions of Articles 2, 14, 15 (including
23    an employee who has retired  under  the  optional  retirement
24    program  established under Section 15-158.2), paragraphs (2),
25    (3), or (5) of Section 16-106, or Article 18 of the  Illinois
26    Pension   Code;  (2)  any  person  who  was  receiving  group
27    insurance coverage under this Act as of  March  31,  1978  by
28    reason of his status as an annuitant, even though the annuity
29    in  relation  to  which  such  coverage  was  provided  is  a
30    proportional annuity based on less than the minimum period of
31    service  required  for  a  retirement  annuity  in the system
 
                            -2-               LRB9100169EGfgB
 1    involved; (3) any person not otherwise covered  by  this  Act
 2    who  has retired as a participating member under Article 2 of
 3    the  Illinois  Pension  Code  but  is  ineligible   for   the
 4    retirement  annuity  under  Section  2-119  of  the  Illinois
 5    Pension Code; (4) the spouse of any person who is receiving a
 6    retirement  annuity  under Article 18 of the Illinois Pension
 7    Code and who  is  covered  under  a  group  health  insurance
 8    program  sponsored  by a governmental employer other than the
 9    State of Illinois and who has irrevocably  elected  to  waive
10    his  or  her  coverage  under this Act and to have his or her
11    spouse considered as the "annuitant" under this Act  and  not
12    as  a  "dependent";  or  (5)  an employee who retires, or has
13    retired, from a qualified position, as  determined  according
14    to rules promulgated by the Director, under a qualified local
15    government  or  a  qualified  rehabilitation  facility  or  a
16    qualified   domestic   violence   shelter  or  service.  (For
17    definition of "retired employee", see (p) post).
18        (b-5)  "New SERS annuitant" means a  person  who,  on  or
19    after  January  1,  1998, becomes an annuitant, as defined in
20    subsection  (b),  by  virtue  of  beginning  to   receive   a
21    retirement  annuity  under Article 14 of the Illinois Pension
22    Code, and is eligible to participate in the basic program  of
23    group health benefits provided for annuitants under this Act.
24        (b-6)  "New  SURS  annuitant"  means  a person who, on or
25    after January 1, 1998, becomes an annuitant,  as  defined  in
26    subsection   (b),   by  virtue  of  beginning  to  receive  a
27    retirement annuity under Article 15 of the  Illinois  Pension
28    Code,  and is eligible to participate in the basic program of
29    group health benefits provided for annuitants under this Act.
30        (b-7)  "New TRS State annuitant" means a person  who,  on
31    or  after  July  1, 1998, becomes an annuitant, as defined in
32    subsection  (b),  by  virtue  of  beginning  to   receive   a
33    retirement  annuity  under Article 16 of the Illinois Pension
34    Code based on service as a teacher as  defined  in  paragraph
 
                            -3-               LRB9100169EGfgB
 1    (2),  (3),  or  (5)  of  Section  16-106 of that Code, and is
 2    eligible to participate in the basic program of group  health
 3    benefits provided for annuitants under this Act.
 4        (c)  "Carrier"   means   (1)   an  insurance  company,  a
 5    corporation  organized  under  the  Limited  Health   Service
 6    Organization Act or the Voluntary Health Services Plan Act, a
 7    partnership,  or other nongovernmental organization, which is
 8    authorized  to  do  group  life  or  group  health  insurance
 9    business in Illinois, or (2)  the  State  of  Illinois  as  a
10    self-insurer.
11        (d)  "Compensation"  means  salary  or wages payable on a
12    regular payroll by the State Treasurer on a  warrant  of  the
13    State Comptroller out of any State, trust or federal fund, or
14    by  the Governor of the State through a disbursing officer of
15    the State out of a trust or out of federal funds, or  by  any
16    Department  out  of State, trust, federal or other funds held
17    by the State Treasurer or the Department, to any  person  for
18    personal   services  currently  performed,  and  ordinary  or
19    accidental disability  benefits  under  Articles  2,  14,  15
20    (including  ordinary  or accidental disability benefits under
21    the optional retirement  program  established  under  Section
22    15-158.2),  paragraphs (2), (3), or (5) of Section 16-106, or
23    Article 18 of  the  Illinois  Pension  Code,  for  disability
24    incurred after January 1, 1966, or benefits payable under the
25    Workers'   Compensation   or  Occupational  Diseases  Act  or
26    benefits  payable  under  a  sick  pay  plan  established  in
27    accordance  with  Section  36  of  the  State  Finance   Act.
28    "Compensation" also means salary or wages paid to an employee
29    of any qualified local government or qualified rehabilitation
30    facility or a qualified domestic violence shelter or service.
31        (e)  "Commission"   means   the   State  Employees  Group
32    Insurance  Advisory  Commission  authorized  by   this   Act.
33    Commencing  July  1,  1984,  "Commission" as used in this Act
34    means  the  Illinois  Economic  and  Fiscal   Commission   as
 
                            -4-               LRB9100169EGfgB
 1    established  by the Legislative Commission Reorganization Act
 2    of 1984.
 3        (f)  "Contributory", when  referred  to  as  contributory
 4    coverage,  shall  mean optional coverages or benefits elected
 5    by the member toward the cost  of  which  such  member  makes
 6    contribution, or which are funded in whole or in part through
 7    the acceptance of a reduction in earnings or the foregoing of
 8    an increase in earnings by an employee, as distinguished from
 9    noncontributory  coverage or benefits which are paid entirely
10    by the State of Illinois without reduction  of  the  member's
11    salary.
12        (g)  "Department"   means  any  department,  institution,
13    board, commission, officer, court or any agency of the  State
14    government  receiving  appropriations  and  having  power  to
15    certify  payrolls  to the Comptroller authorizing payments of
16    salary and wages against such appropriations as are  made  by
17    the  General  Assembly  from any State fund, or against trust
18    funds held by the State  Treasurer  and  includes  boards  of
19    trustees of the retirement systems created by Articles 2, 14,
20    15,  16  and  18  of the Illinois Pension Code.  "Department"
21    also includes the  Illinois  Comprehensive  Health  Insurance
22    Board,  the Board of Examiners established under the Illinois
23    Public Accounting Act, and the Illinois Rural Bond Bank.
24        (h)  "Dependent", when the term is used in the context of
25    the health and life plan, means a  member's  spouse  and  any
26    unmarried child (1) from birth to age 19 including an adopted
27    child, a child who lives with the member from the time of the
28    filing  of a petition for adoption until entry of an order of
29    adoption, a stepchild or recognized child who lives with  the
30    member  in  a parent-child relationship, or a child who lives
31    with the member if such member is a court appointed  guardian
32    of  the  child,  or  (2) age 19 to 23 enrolled as a full-time
33    student in any accredited school, financially dependent  upon
34    the  member,  and  eligible  to be claimed as a dependent for
 
                            -5-               LRB9100169EGfgB
 1    Illinois State income tax purposes, or (3) age 19 or over who
 2    is mentally or  physically  handicapped  as  defined  in  the
 3    Illinois  Insurance  Code. For the health plan only, the term
 4    "dependent" also includes any person enrolled  prior  to  the
 5    effective  date  of  this  Section  who is dependent upon the
 6    member to the extent that the member may claim such person as
 7    a dependent for Illinois State income tax deduction purposes;
 8    no other such person may be enrolled.
 9        (i)  "Director"  means  the  Director  of  the   Illinois
10    Department of Central Management Services.
11        (j)  "Eligibility  period"  means  the  period  of time a
12    member has to elect  enrollment  in  programs  or  to  select
13    benefits without regard to age, sex or health.
14        (k)  "Employee"   means  and  includes  each  officer  or
15    employee in the service of a department who (1) receives  his
16    compensation  for  service  rendered  to  the department on a
17    warrant  issued  pursuant  to  a  payroll  certified   by   a
18    department  or  on  a  warrant or check issued and drawn by a
19    department upon a trust,  federal  or  other  fund  or  on  a
20    warrant  issued pursuant to a payroll certified by an elected
21    or duly appointed  officer  of  the  State  or  who  receives
22    payment  of the performance of personal services on a warrant
23    issued pursuant to a payroll certified by  a  Department  and
24    drawn  by  the  Comptroller  upon the State Treasurer against
25    appropriations made by the General Assembly from any fund  or
26    against  trust  funds held by the State Treasurer, and (2) is
27    employed  full-time  or  part-time  in  a  position  normally
28    requiring actual performance of duty during not less than 1/2
29    of a normal work period, as established by  the  Director  in
30    cooperation with each department, except that persons elected
31    by  popular  vote  will  be  considered  employees during the
32    entire term for which they are elected  regardless  of  hours
33    devoted  to  the  service  of  the State, and (3) except that
34    "employee" does not include any person who is not eligible by
 
                            -6-               LRB9100169EGfgB
 1    reason of such person's employment to participate in  one  of
 2    the State retirement systems under Articles 2, 14, 15 (either
 3    the  regular  Article  15  system  or the optional retirement
 4    program established under Section 15-158.2) or 18,  or  under
 5    paragraph (2), (3), or (5) of Section 16-106, of the Illinois
 6    Pension  Code,  but  such  term  does include persons who are
 7    employed during the 6 month qualifying period  under  Article
 8    14 of the Illinois Pension Code.  Such term also includes any
 9    person  who  (1) after January 1, 1966, is receiving ordinary
10    or accidental disability benefits under Articles  2,  14,  15
11    (including  ordinary  or accidental disability benefits under
12    the optional retirement  program  established  under  Section
13    15-158.2),  paragraphs (2), (3), or (5) of Section 16-106, or
14    Article 18 of  the  Illinois  Pension  Code,  for  disability
15    incurred  after January 1, 1966, (2) receives total permanent
16    or total temporary disability under the Workers' Compensation
17    Act or Occupational Disease  Act  as  a  result  of  injuries
18    sustained  or  illness contracted in the course of employment
19    with the State of Illinois, or (3) is not  otherwise  covered
20    under  this  Act  and  has  retired as a participating member
21    under  Article  2  of  the  Illinois  Pension  Code  but   is
22    ineligible  for the retirement annuity under Section 2-119 of
23    the Illinois Pension Code.  However, a person  who  satisfies
24    the criteria of the foregoing definition of "employee" except
25    that  such  person  is  made ineligible to participate in the
26    State  Universities  Retirement  System  by  clause  (4)   of
27    subsection (a) of Section 15-107 of the Illinois Pension Code
28    is   also  an  "employee"  for  the  purposes  of  this  Act.
29    "Employee" also includes any person receiving or eligible for
30    benefits under a sick pay plan established in accordance with
31    Section 36 of the State Finance Act. "Employee" also includes
32    each officer or employee in the service of a qualified  local
33    government,   including  persons  appointed  as  trustees  of
34    sanitary districts regardless of hours devoted to the service
 
                            -7-               LRB9100169EGfgB
 1    of the sanitary district, and each employee in the service of
 2    a  qualified  rehabilitation  facility  and  each   full-time
 3    employee  in  the  service  of  a qualified domestic violence
 4    shelter  or  service,  as  determined  according   to   rules
 5    promulgated by the Director.
 6        (l)  "Member"   means  an  employee,  annuitant,  retired
 7    employee or survivor.
 8        (m)  "Optional  coverages  or   benefits"   means   those
 9    coverages  or  benefits available to the member on his or her
10    voluntary election, and at his or her own expense.
11        (n)  "Program" means the  group  life  insurance,  health
12    benefits  and other employee benefits designed and contracted
13    for by the Director under this Act.
14        (o)  "Health plan" means a self-insured  health  benefits
15    insurance  program  offered  by  the  State  of  Illinois for
16    persons eligible for the  plan  the  purposes  of  benefiting
17    employees  by  means  of  providing,  among  others, wellness
18    programs, utilization reviews, second  opinions  and  medical
19    fee  reviews,  as well as for paying for hospital and medical
20    care up to the maximum coverage provided by the plan, to  its
21    members and their dependents.
22        (p)  "Retired  employee" means any person who would be an
23    annuitant as that term is defined herein  but  for  the  fact
24    that such person retired prior to January 1, 1966.  Such term
25    also  includes any person formerly employed by the University
26    of Illinois in the Cooperative Extension Service who would be
27    an annuitant but for the  fact  that  such  person  was  made
28    ineligible   to   participate   in   the  State  Universities
29    Retirement System by clause (4) of subsection (a) of  Section
30    15-107 of the Illinois Pension Code.
31        (p-6)  "New SURS retired employee" means a person who, on
32    or  after  January  1,  1998,  becomes a retired employee, as
33    defined in subsection  (p),  by  virtue  of  being  a  person
34    formerly  employed  by  the  University  of  Illinois  in the
 
                            -8-               LRB9100169EGfgB
 1    Cooperative Extension Service who would be an  annuitant  but
 2    for   the  fact  that  he  or  she  was  made  ineligible  to
 3    participate in the State Universities  Retirement  System  by
 4    clause  (4)  of  subsection  (a)  of  Section  15-107  of the
 5    Illinois Pension Code, and who is eligible to participate  in
 6    the  basic  program  of  group  health  benefits provided for
 7    retired employees under this Act.
 8        (q)  "Survivor" means a person receiving an annuity as  a
 9    survivor  of an employee or of an annuitant.  "Survivor" also
10    includes:  (1)  the  surviving  dependent  of  a  person  who
11    satisfies the  definition  of  "employee"  except  that  such
12    person  is  made  ineligible  to  participate  in  the  State
13    Universities  Retirement  System  by clause (4) of subsection
14    (a) of Section 15-107 of the Illinois Pension Code;  and  (2)
15    the  surviving  dependent  of any person formerly employed by
16    the University  of  Illinois  in  the  Cooperative  Extension
17    Service  who  would  be an annuitant except for the fact that
18    such person was made ineligible to participate in  the  State
19    Universities  Retirement  System  by clause (4) of subsection
20    (a) of Section 15-107 of the Illinois Pension Code.
21        (q-5)  "New SERS survivor" means a survivor,  as  defined
22    in  subsection (q), whose annuity is paid under Article 14 of
23    the Illinois Pension Code and is based on the death of (i) an
24    employee whose death occurs on or after January 1,  1998,  or
25    (ii) a new SERS annuitant as defined in subsection (b-5).
26        (q-6)  "New  SURS  survivor" means a survivor, as defined
27    in subsection (q), whose annuity is paid under Article 15  of
28    the Illinois Pension Code and is based on the death of (i) an
29    employee whose death occurs on or after January 1, 1998, (ii)
30    a new SURS annuitant as defined in subsection (b-6), or (iii)
31    a new SURS retired employee as defined in subsection (p-6).
32        (q-7)  "New  TRS  State  survivor"  means  a survivor, as
33    defined in  subsection  (q),  whose  annuity  is  paid  under
34    Article  16  of the Illinois Pension Code and is based on the
 
                            -9-               LRB9100169EGfgB
 1    death of (i) an employee who  is  a  teacher  as  defined  in
 2    paragraph (2), (3), or (5) of Section 16-106 of that Code and
 3    whose  death  occurs  on or after July 1, 1998, or (ii) a new
 4    TRS State annuitant as defined in subsection (b-7).
 5        (r)  "Medical  services"  means  the  services   provided
 6    within  the  scope  of their licenses by practitioners in all
 7    categories licensed under the Medical Practice Act of 1987.
 8        (s)  "Unit  of  local  government"  means   any   county,
 9    municipality,  township, school district, special district or
10    other unit, designated as a unit of local government by  law,
11    which  exercises  limited  governmental  powers  or powers in
12    respect to limited governmental subjects, any  not-for-profit
13    association   with   a  membership  that  primarily  includes
14    townships  and  township  officials,  that  has  duties  that
15    include  provision  of  research  service,  dissemination  of
16    information, and other acts  for  the  purpose  of  improving
17    township  government,  and that is funded wholly or partly in
18    accordance with Section  85-15  of  the  Township  Code;  any
19    not-for-profit  corporation or association, with a membership
20    consisting primarily of municipalities, that operates its own
21    utility   system,   and    provides    research,    training,
22    dissemination  of  information,  or  other  acts  to  promote
23    cooperation  between  and  among  municipalities that provide
24    utility services and for the advancement  of  the  goals  and
25    purposes  of  its membership; and the Illinois Association of
26    Park Districts.  "Qualified local government" means a unit of
27    local government approved by the Director  and  participating
28    in  a  program  created under subsection (i) of Section 10 of
29    this Act.
30        (t)  "Qualified  rehabilitation   facility"   means   any
31    not-for-profit   organization   that  is  accredited  by  the
32    Commission on Accreditation of Rehabilitation  Facilities  or
33    certified  by  the Department of Human Services (as successor
34    to  the  Department  of  Mental  Health   and   Developmental
 
                            -10-              LRB9100169EGfgB
 1    Disabilities)   to   provide   services   to   persons   with
 2    disabilities  and  which  receives  funds  from  the State of
 3    Illinois  for  providing  those  services,  approved  by  the
 4    Director  and  participating  in  a  program  created   under
 5    subsection (j) of Section 10 of this Act.
 6        (u)  "Qualified  domestic  violence  shelter  or service"
 7    means any Illinois domestic violence shelter or  service  and
 8    its  administrative offices funded by the Department of Human
 9    Services (as successor to the Illinois Department  of  Public
10    Aid), approved by the Director and participating in a program
11    created under subsection (k) of Section 10.
12        (v)  "TRS benefit recipient" means a person who:
13             (1)  is  not  a "member" as defined in this Section;
14        and
15             (2)  is receiving a monthly  benefit  or  retirement
16        annuity  under  Article  16 of the Illinois Pension Code;
17        and
18             (3)  either (i) has at least 8 years  of  creditable
19        service under Article 16 of the Illinois Pension Code, or
20        (ii) was enrolled in the health insurance program offered
21        under  that  Article  on January 1, 1996, or (iii) is the
22        survivor of a benefit recipient who had at least 8  years
23        of  creditable  service  under Article 16 of the Illinois
24        Pension Code or was  enrolled  in  the  health  insurance
25        program  offered under that Article on the effective date
26        of this amendatory Act of 1995, or (iv) is a recipient or
27        survivor of a recipient of  a  disability  benefit  under
28        Article 16 of the Illinois Pension Code.
29        (w)  "TRS dependent beneficiary" means a person who:
30             (1)  is  not a "member" or "dependent" as defined in
31        this Section; and
32             (2)  is a TRS benefit recipient's: (A)  spouse,  (B)
33        dependent parent who is receiving at least half of his or
34        her  support  from  the  TRS  benefit  recipient,  or (C)
 
                            -11-              LRB9100169EGfgB
 1        unmarried natural or adopted child who is (i)  under  age
 2        19,  or  (ii)  enrolled  as  a  full-time  student  in an
 3        accredited school, financially  dependent  upon  the  TRS
 4        benefit  recipient, eligible to be claimed as a dependent
 5        for Illinois State income tax  purposes,  and  either  is
 6        under age 24 or was, on January 1, 1996, participating as
 7        a  dependent  beneficiary in the health insurance program
 8        offered under Article 16 of the Illinois Pension Code, or
 9        (iii) age 19  or  over  who  is  mentally  or  physically
10        handicapped as defined in the Illinois Insurance Code.
11        (x)  "Military  leave  with  pay  and benefits" refers to
12    individuals in basic training for reserves,  special/advanced
13    training,  annual  training, emergency call up, or activation
14    by the President of the United States with approved  pay  and
15    benefits.
16        (y)  "Military  leave without pay and benefits" refers to
17    individuals who enlist for active duty in a regular component
18    of the U.S. Armed Forces  or  other  duty  not  specified  or
19    authorized under military leave with pay and benefits.
20        (z)  "Community college benefit recipient" means a person
21    who:
22             (1)  is  not  a "member" as defined in this Section;
23        and
24             (2)  is receiving a monthly  survivor's  annuity  or
25        retirement  annuity  under  Article  15  of  the Illinois
26        Pension Code; and
27             (3)  either  (i)  was  a  full-time  employee  of  a
28        community college district or an association of community
29        college boards created under the Public Community College
30        Act (other than an employee  whose  last  employer  under
31        Article  15  of the Illinois Pension Code was a community
32        college district subject to Article  VII  of  the  Public
33        Community College Act) and was eligible to participate in
34        a  group  health  benefit  plan as an employee during the
 
                            -12-              LRB9100169EGfgB
 1        time of employment  with  a  community  college  district
 2        (other  than  a  community  college  district  subject to
 3        Article VII of the Public Community College  Act)  or  an
 4        association  of  community college boards, or (ii) is the
 5        survivor of a person described in item (i).
 6        (aa)  "Community college dependent beneficiary"  means  a
 7    person who:
 8             (1)  is  not a "member" or "dependent" as defined in
 9        this Section; and
10             (2)  is a community college benefit recipient's: (A)
11        spouse, (B) dependent parent who is  receiving  at  least
12        half  of  his  or  her support from the community college
13        benefit recipient, or (C) unmarried  natural  or  adopted
14        child  who  is  (i)  under  age 19, or (ii) enrolled as a
15        full-time student in an  accredited  school,  financially
16        dependent  upon  the community college benefit recipient,
17        eligible to be claimed as a dependent for Illinois  State
18        income  tax purposes and under age 23, or (iii) age 19 or
19        over and mentally or physically handicapped as defined in
20        the Illinois Insurance Code.
21    (Source: P.A.  89-21,  eff.  6-21-95;  89-25,  eff.  6-21-95;
22    89-76,  eff.  7-1-95;  89-324,  eff.  8-13-95;  89-430,  eff.
23    12-15-95;  89-502,  eff. 7-1-96; 89-507, eff. 7-1-97; 89-628,
24    eff. 8-9-96; 90-14, eff. 7-1-97; 90-65, eff. 7-7-97;  90-448,
25    eff.  8-16-97;  90-497,  eff.  8-18-97; 90-511, eff. 8-22-97;
26    90-582, eff. 5-27-98; 90-655, eff. 7-30-98.)

27        (5 ILCS 375/5) (from Ch. 127, par. 525)
28        Sec. 5.  The Director shall contract  or  otherwise  make
29    available  group  life  insurance,  health benefits and other
30    employee benefits to  eligible members  and,  where  elected,
31    their  eligible  dependents.  Any contract or, if applicable,
32    contracts or other  arrangement  for  provision  of  benefits
33    shall  be  on  terms deemed by the Director to be in the best
 
                            -13-              LRB9100169EGfgB
 1    interest of the State of Illinois and its members  based  on,
 2    but  not  limited  to,  such criteria as administrative cost,
 3    service capabilities of the carrier or other  contractor  and
 4    premiums, fees or charges as related to benefits.
 5        The  Director  may  prepare  and issue specifications for
 6    group  life  insurance,  health  benefits,   other   employee
 7    benefits  and  administrative  services  for  the  purpose of
 8    receiving proposals from interested parties.
 9        The Director is authorized  to  execute  a  contract,  or
10    contracts,  for  the programs of group life insurance, health
11    benefits, other employee benefits and administrative services
12    authorized by this Act. All of the  benefits  provided  under
13    this  Act  may  be  included in one or more contracts, or the
14    benefits may be classified into  different  types  with  each
15    type  included  under  one or more similar contracts with the
16    same or different companies.
17        The program of health benefits shall offer each member  a
18    choice between high and low options for dependent coverage.
19        The  term  of any contract may not extend beyond 5 fiscal
20    years. Upon recommendation of the  Commission,  the  Director
21    may exercise renewal options of the same contract for up to a
22    period  of  5  years.   Any  increases  in  premiums, fees or
23    charges requested by  a  contractor  whose  contract  may  be
24    renewed  pursuant to a renewal option contained therein, must
25    be justified on the basis of (1) audited experience data, (2)
26    increases in the costs of health care services provided under
27    the contract, (3) contractor performance,  (4)  increases  in
28    contractor responsibilities, or (5) any combination thereof.
29        Any  contractor  shall agree to abide by all requirements
30    of this Act and Rules and Regulations promulgated and adopted
31    thereto; to submit such information and data as may from time
32    to time be deemed necessary by  the  Director  for  effective
33    administration of the provisions of this Act and the programs
34    established  hereunder,  and  to  fully  cooperate in any the
 
                            -14-              LRB9100169EGfgB
 1    annual audit required under Section 15, paragraph (g) herein.
 2    (Source: P.A. 85-848.)

 3        (5 ILCS 375/6) (from Ch. 127, par. 526)
 4        Sec. 6. (a) The program of health benefits shall  provide
 5    for  protection  against  the  financial costs of health care
 6    expenses incurred in and  out  of  hospital  including  basic
 7    hospital-surgical-medical coverages. The program may include,
 8    but  shall  not be limited to, such supplemental coverages as
 9    out-patient  diagnostic  X-ray   and   laboratory   expenses,
10    prescription   drugs,   dental  services  and  similar  group
11    benefits as are  now  or  may  become  available.    However,
12    nothing in this Act shall be construed to permit, on or after
13    July  1,  1980,  the  non-contributory  portion  of  any such
14    program to include the expenses  of  obtaining  an  abortion,
15    induced miscarriage or induced premature birth unless, in the
16    opinion of a physician, such procedures are necessary for the
17    preservation of the life of the woman seeking such treatment,
18    or  except  an  induced premature birth intended to produce a
19    live viable child and such procedure  is  necessary  for  the
20    health  of  the  mother  or the unborn child. The program may
21    also include coverage for those  who  rely  on  treatment  by
22    prayer  or  spiritual  means  alone for healing in accordance
23    with the  tenets  and  practice  of  a  recognized  religious
24    denomination.
25        The  program  of health benefits shall be designed by the
26    Director (1) to provide a reasonable relationship between the
27    benefits to be included  and  the  expected  distribution  of
28    expenses  of  each  such  type  to be incurred by the covered
29    members and dependents, (2) to specify, as  covered  benefits
30    and   as   optional   benefits,   the   medical  services  of
31    practitioners in all categories licensed  under  the  Medical
32    Practice  Act  of  1987,  (3) to include reasonable controls,
33    which may include  deductible  and  co-insurance  provisions,
 
                            -15-              LRB9100169EGfgB
 1    applicable  to some or all of the benefits, or a coordination
 2    of benefits provision, to  prevent  or  minimize  unnecessary
 3    utilization  of  the  various  hospital, surgical and medical
 4    expenses to be provided and to provide  reasonable  assurance
 5    of  stability  of the program, and (4) to provide benefits to
 6    the extent possible to members throughout the State, wherever
 7    located, on an equitable  basis.  Notwithstanding  any  other
 8    provision of this Section or Act, for all retired members or
 9    retired  dependents  aged  65 years or older who are eligible
10    for  entitled  to  benefits  under  Social  Security  or  the
11    Railroad   Retirement   system   or   who   had    sufficient
12    Medicare-covered  government employment, the Department shall
13    reduce benefits which would otherwise be paid by Medicare, by
14    the amount of  benefits  for  which  the  retired  member  or
15    retired  dependents  are eligible under Medicare, except that
16    such reduction in benefits shall apply only to those  retired
17    members  or  retired dependents who (1) first become eligible
18    for such medicare coverage on or after the effective date  of
19    this  amendatory  Act  of  1992; or (2) are Medicare-eligible
20    members or dependents of a local government unit which  began
21    participation in the program on or after July 1, 1992; or (3)
22      (2)  remain  eligible  for  but  no longer receive Medicare
23    coverage which they  had  been  receiving  on  or  after  the
24    effective date of this amendatory Act of 1992.
25        Notwithstanding any other provisions of this Act, where a
26    covered  member or dependents are eligible for benefits under
27    the federal Medicare health insurance program (Title XVIII of
28    the Social Security Act as added by Public  Law  89-97,  89th
29    Congress),  benefits paid under the State of Illinois program
30    or plan will be reduced by the amount  of  benefits  paid  by
31    Medicare.   For retired members or retired dependents aged 65
32    years or older who are  eligible  for  entitled  to  benefits
33    under  Social  Security  or the Railroad Retirement system or
34    who had sufficient  Medicare-covered  government  employment,
 
                            -16-              LRB9100169EGfgB
 1    benefits shall be reduced by the amount for which the retired
 2      member  or  retired  dependent  is eligible under Medicare,
 3    except that such reduction in benefits shall  apply  only  to
 4    those  retired  members  or  retired dependents who (1) first
 5    become eligible for such Medicare coverage on  or  after  the
 6    effective  date  of  this  amendatory Act of 1992; or (2) are
 7    Medicare-eligible members or dependents of a local government
 8    unit which began participation in the  program  on  or  after
 9    July  1,  1992; or (3) (2) remain eligible for, but no longer
10    receive Medicare coverage which they had been receiving on or
11    after the effective date of  this  amendatory  Act  of  1992.
12    Premiums  may  be  adjusted,  where  applicable, to an amount
13    deemed by the Director to be reasonably consistent  with  any
14    reduction of benefits.
15        (b)  A member, not otherwise covered by this Act, who has
16    retired  as  a  participating  member  under Article 2 of the
17    "Illinois Pension Code" but is ineligible for the  retirement
18    annuity  under  Section 2-119 of the "Illinois Pension Code",
19    shall pay the premiums for coverage, not exceeding the amount
20    paid by the State for the non-contributory coverage for other
21    members, under the group health benefits insurance program or
22    the self-insurance health plan under this Act.  The  Director
23    shall  promulgate  rules  and  regulations  to  determine the
24    premiums to be paid by a member under this subsection (b).
25    (Source: P.A. 87-860.)

26        (5 ILCS 375/8) (from Ch. 127, par. 528)
27        Sec. 8.  Eligibility.
28        (a)  Each member eligible under the  provisions  of  this
29    Act  and  any  rules  and regulations promulgated and adopted
30    hereunder by the Director shall become  immediately  eligible
31    and  covered  for  all benefits available under the programs.
32    Members electing coverage for eligible dependents shall  have
33    the   coverage   effective  immediately,  provided  that  the
 
                            -17-              LRB9100169EGfgB
 1    election is properly filed in accordance with required filing
 2    dates and procedures specified by the Director.
 3             (1)  Every  member  originally  eligible  to   elect
 4        dependent  coverage,  but  not  electing  it  during  the
 5        original  eligibility  period,  may  subsequently  obtain
 6        dependent  coverage  only  in  the  event of a qualifying
 7        change   in   status,   special    enrollment,    special
 8        circumstance  as  defined  by the Director, or during the
 9        annual  Benefit  Choice   Period   upon   submission   of
10        satisfactory  evidence of insurability, unless there is a
11        change of family status that would confer new eligibility
12        for  change  of  enrollment   under   rules   established
13        supplementing  this  Act, in which event application must
14        be made within the new eligibility period.
15             (2)  Members described above being transferred  from
16        previous  coverage  towards  which  the  State  has  been
17        contributing   shall   be   transferred   regardless   of
18        preexisting   conditions,   waiting   periods,  or  other
19        requirements that  might  jeopardize  claim  payments  to
20        which they would otherwise have been entitled.
21             (3)  Eligible  and covered members that are eligible
22        for coverage as dependents except for the fact  of  being
23        members  shall  be  transferred  to,  and  covered under,
24        dependent status regardless  of  preexisting  conditions,
25        waiting   periods,   or  other  requirements  that  might
26        jeopardize claim payments to which they  would  otherwise
27        have  been  entitled  upon cessation of member status and
28        the election of dependent coverage by a  member  eligible
29        to elect that coverage.
30        (b)  New  employees  shall be immediately insured for the
31    basic group life insurance and  covered  by  the  program  of
32    health  benefits  on  the  first day of active State service.
33    Optional  coverages  or  benefits,  if  elected  during   the
34    relevant  eligibility  period,  will  become effective on the
 
                            -18-              LRB9100169EGfgB
 1    date of election or date of employment, whichever  is  later.
 2    Optional   coverages   or  benefits  applied  for  after  the
 3    eligibility period will be effective, subject to satisfactory
 4    evidence of insurability when applicable, or other  necessary
 5    qualifications,   pursuant   to   the   requirements  of  the
 6    applicable benefit program, unless there is a  change  in  of
 7    family status that would confer new eligibility for change of
 8    enrollment under rules established supplementing this Act, in
 9    which   event   application  must  be  made  within  the  new
10    eligibility period.
11        (c)  As to the group health  benefits  insurance  program
12    contracted  to  begin  or  continue after June 30, 1973, each
13    retired  employee  shall  become  immediately  eligible   and
14    covered  for  all  benefits  available  under  that  program.
15    Retired  employees may elect coverage for eligible dependents
16    and shall have the coverage effective  immediately,  provided
17    that  the  election  is  properly  filed  in  accordance with
18    required  filing  dates  and  procedures  specified  by   the
19    Director.
20        Where  husband  and  wife are both eligible members, each
21    shall be enrolled as a member and coverage on  all  of  their
22    eligible  dependent  children, if any, may shall be under the
23    enrollment and election of either.
24        Regardless of  other  provisions  herein  regarding  late
25    enrollment   or  changes  of  enrollments  being  subject  to
26    submission of satisfactory evidence of insurability or  other
27    qualifications, as appropriate, the Director may periodically
28    authorize  open  enrollment  periods  for each of the benefit
29    programs at which time each member may  elect  enrollment  or
30    change  of  enrollment without regard to age, sex, health, or
31    other qualification under the conditions as may be prescribed
32    in rules and regulations  supplementing  this  Act.   Special
33    open  enrollment  periods may be declared by the Director for
34    certain members only when special  circumstances  occur  that
 
                            -19-              LRB9100169EGfgB
 1    affect only those members.
 2    (Source: P.A. 87-367.)

 3        (5 ILCS 375/9) (from Ch. 127, par. 529)
 4        Sec. 9.  (a) The eligible member shall be responsible for
 5    his  or  her  portion  100% of the premiums, charges or other
 6    fees for all elected optional coverages  or  benefits,  which
 7    shall  be  paid  by means of the acceptance of a reduction in
 8    earnings or the foregoing of an increase in  earnings  by  an
 9    employee; provided, however, subject to rules and regulations
10    promulgated  by  the Department, the eligible member may make
11    personal payment of  the  premium,  charge  or  fee  for  any
12    wellness  programs  implemented  under  the program of health
13    benefits.  For any fiscal year beginning after June 30,  1974
14    the  State  shall  contribute  $7 per month for each eligible
15    member who has enrolled one or more dependents  for  coverage
16    under  the  program of health benefits established under this
17    Act.  All contributions and payments by the eligible  members
18    and the State for all elected optional coverages and benefits
19    shall  be deposited in the Health Insurance Reserve Fund. The
20    Department may determine the aggregate level of  contribution
21    required  under  this  Section on the basis of actual cost of
22    services adjusted for age, sex or the geographical  or  other
23    demographic   characteristics   which  affect  costs  of  the
24    benefit.
25        (b)  If a member is not entitled to receive  any  salary,
26    wages   or  other  compensation  during  a  period  in  which
27    premiums, charges or other fees are due or does  not  receive
28    compensation  sufficient  to  allow deduction of the required
29    payment of the premium, charge or other fee, such member  may
30    continue   the  contributory  benefit  in  effect  by  making
31    personal payment of the premium, charge or other fee for  the
32    period in such manner, in such amount, and for such duration,
33    as may be prescribed in rules and regulations promulgated for
 
                            -20-              LRB9100169EGfgB
 1    the administration of this Act.
 2    (Source: P.A. 85-848.)

 3        (5 ILCS 375/10) (from Ch. 127, par. 530)
 4        Sec. 10. Payments by State; premiums.
 5        (a)  The    State   shall   pay   the   cost   of   basic
 6    non-contributory group life insurance and, subject to  member
 7    paid  contributions set by the Department or required by this
 8    Section, the basic program of group health benefits  on  each
 9    eligible  member,  except  a member, not otherwise covered by
10    this Act, who has retired as  a  participating  member  under
11    Article  2 of the Illinois Pension Code but is ineligible for
12    the retirement annuity under Section 2-119  of  the  Illinois
13    Pension  Code, and part of each eligible member's and retired
14    member's premiums for health insurance coverage for  enrolled
15    dependents as provided by Section 9.  The State shall pay the
16    cost of the basic program of group health benefits only after
17    benefits  are  reduced  by  the amount of benefits covered by
18    Medicare for all retired members and retired dependents  aged
19    65  years  or older who are eligible for entitled to benefits
20    under Social Security or the Railroad  Retirement  system  or
21    who  had  sufficient  Medicare-covered government employment,
22    except that such reduction in benefits shall  apply  only  to
23    those retired members and or retired dependents who (1) first
24    become  eligible  for such Medicare coverage on or after July
25    1, 1992; or (2) are Medicare-eligible members  or  dependents
26    of  a  local government unit which began participation in the
27    program on or after July 1, 1992; or (3) (2) remain  eligible
28    for,  but  no longer receive Medicare coverage which they had
29    been receiving on or after July 1, 1992.  The Department  may
30    determine  the aggregate level of the State's contribution on
31    the basis of actual cost of  medical  services  adjusted  for
32    age,  sex  or geographic or other demographic characteristics
33    which affect the costs of such programs.
 
                            -21-              LRB9100169EGfgB
 1        (a-1)  Beginning January 1, 1998,  for  each  person  who
 2    becomes  a  new  SERS annuitant and participates in the basic
 3    program of group health benefits, the State shall  contribute
 4    toward  the  cost of the annuitant's coverage under the basic
 5    program of group health benefits an amount  equal  to  5%  of
 6    that cost for each full year of creditable service upon which
 7    the  annuitant's retirement annuity is based, up to a maximum
 8    of 100% for an annuitant with 20 or more years of  creditable
 9    service.  The remainder of the cost of a new SERS annuitant's
10    coverage  under  the  basic  program of group health benefits
11    shall be the responsibility of the annuitant.
12        (a-2)  Beginning January 1, 1998,  for  each  person  who
13    becomes  a  new  SERS  survivor and participates in the basic
14    program of group health benefits, the State shall  contribute
15    toward  the  cost  of the survivor's coverage under the basic
16    program of group health benefits an amount  equal  to  5%  of
17    that  cost  for  each full year of the deceased employee's or
18    deceased  annuitant's  creditable  service   in   the   State
19    Employees'  Retirement  System  of  Illinois  on  the date of
20    death, up to a maximum of 100% for a survivor of an  employee
21    or  annuitant  with  20  or more years of creditable service.
22    The remainder of the cost of the new SERS survivor's coverage
23    under the basic program of group health benefits shall be the
24    responsibility of the survivor.
25        (a-3)  Beginning January 1, 1998,  for  each  person  who
26    becomes  a  new  SURS annuitant and participates in the basic
27    program of group health benefits, the State shall  contribute
28    toward  the  cost of the annuitant's coverage under the basic
29    program of group health benefits an amount  equal  to  5%  of
30    that cost for each full year of creditable service upon which
31    the  annuitant's retirement annuity is based, up to a maximum
32    of 100% for an annuitant with 20 or more years of  creditable
33    service.  The remainder of the cost of a new SURS annuitant's
34    coverage  under  the  basic  program of group health benefits
 
                            -22-              LRB9100169EGfgB
 1    shall be the responsibility of the annuitant.
 2        (a-4)  Beginning January 1, 1998,  for  each  person  who
 3    becomes  a  new SURS retired employee and participates in the
 4    basic program of  group  health  benefits,  the  State  shall
 5    contribute toward the cost of the retired employee's coverage
 6    under  the  basic  program of group health benefits an amount
 7    equal to 5% of that cost for each full year that the  retired
 8    employee  was  an  employee  as defined in Section 3, up to a
 9    maximum of 100% for a retired employee who  was  an  employee
10    for  20  or  more  years.  The remainder of the cost of a new
11    SURS retired employee's coverage under the basic  program  of
12    group  health  benefits  shall  be  the responsibility of the
13    retired employee.
14        (a-5)  Beginning January 1, 1998,  for  each  person  who
15    becomes  a  new  SURS  survivor and participates in the basic
16    program of group health benefits, the State shall  contribute
17    toward  the  cost  of the survivor's coverage under the basic
18    program of group health benefits an amount  equal  to  5%  of
19    that  cost  for  each full year of the deceased employee's or
20    deceased  annuitant's  creditable  service   in   the   State
21    Universities  Retirement System on the date of death, up to a
22    maximum of 100% for a survivor of an  employee  or  annuitant
23    with  20  or more years of creditable service.  The remainder
24    of the cost of the new SURS  survivor's  coverage  under  the
25    basic   program   of  group  health  benefits  shall  be  the
26    responsibility of the survivor.
27        (a-6)  Beginning  July  1,  1998,  for  each  person  who
28    becomes a new TRS State annuitant  and  participates  in  the
29    basic  program  of  group  health  benefits,  the State shall
30    contribute toward the cost of the annuitant's coverage  under
31    the basic program of group health benefits an amount equal to
32    5% of that cost for each full year of creditable service as a
33    teacher  as  defined in paragraph (2), (3), or (5) of Section
34    16-106  of  the  Illinois  Pension  Code   upon   which   the
 
                            -23-              LRB9100169EGfgB
 1    annuitant's  retirement  annuity is based, up to a maximum of
 2    100%  for  an  annuitant  with  20  or  more  years  of  such
 3    creditable service.  The remainder of the cost of a  new  TRS
 4    State  annuitant's  coverage under the basic program of group
 5    health benefits shall be the responsibility of the annuitant.
 6        (a-7)  Beginning  July  1,  1998,  for  each  person  who
 7    becomes a new TRS State  survivor  and  participates  in  the
 8    basic  program  of  group  health  benefits,  the State shall
 9    contribute toward the cost of the survivor's  coverage  under
10    the basic program of group health benefits an amount equal to
11    5% of that cost for each full year of the deceased employee's
12    or  deceased  annuitant's  creditable service as a teacher as
13    defined in paragraph (2), (3), or (5) of  Section  16-106  of
14    the  Illinois  Pension  Code  on  the  date of death, up to a
15    maximum of 100% for a survivor of an  employee  or  annuitant
16    with  20  or  more  years  of  such  creditable service.  The
17    remainder of  the  cost  of  the  new  TRS  State  survivor's
18    coverage  under  the  basic  program of group health benefits
19    shall be the responsibility of the survivor.
20        (a-8)  A new SERS annuitant, new SERS survivor, new  SURS
21    annuitant,  new SURS retired employee, new SURS survivor, new
22    TRS State annuitant, or new TRS State survivor may  waive  or
23    terminate  coverage  in the program of group health benefits.
24    Any such annuitant, survivor, or  retired  employee  who  has
25    waived  or terminated coverage may enroll or re-enroll in the
26    program of group  health  benefits  only  during  the  annual
27    benefit  choice period, as determined by the Director; except
28    that  in  the  event  of  termination  of  coverage  due   to
29    nonpayment  of  premiums, the annuitant, survivor, or retired
30    employee may not re-enroll in the program.
31        (a-9)  No later than May 1 of  each  calendar  year,  the
32    Director  of  Central  Management  Services  shall certify in
33    writing to the Executive Secretary of  the  State  Employees'
34    Retirement  System  of  Illinois  the amounts of the Medicare
 
                            -24-              LRB9100169EGfgB
 1    supplement health care premiums and the amounts of the health
 2    care premiums for all other retirees  who  are  not  Medicare
 3    eligible.
 4        A  separate  calculation  of  the premiums based upon the
 5    actual cost of each health care plan shall be so certified.
 6        The Director of Central Management Services shall provide
 7    to the Executive Secretary of the State Employees' Retirement
 8    System of Illinois such information,  statistics,  and  other
 9    data  as  he or she may require to review the premium amounts
10    certified by the Director of Central Management Services.
11        (b)  State employees who become eligible for this program
12    on or after January 1, 1980 in positions  normally  requiring
13    actual performance of duty not less than 1/2 of a normal work
14    period  but  not equal to that of a normal work period, shall
15    be  given  the  option  of  participating  in  the  available
16    program. If the employee elects  coverage,  the  State  shall
17    contribute  on  behalf  of  such  employee to the cost of the
18    employee's benefit and any applicable  dependent  supplement,
19    that  sum  which bears the same percentage as that percentage
20    of time the employee regularly works when compared to  normal
21    work period.
22        (c)  The  basic  non-contributory coverage from the basic
23    program of group health benefits shall be continued for  each
24    employee  not in pay status or on active service by reason of
25    (1) leave of absence due to illness or injury, (2) authorized
26    educational leave of absence  or  sabbatical  leave,  or  (3)
27    military  leave  with  pay  and benefits. This coverage shall
28    continue until expiration of authorized leave and  return  to
29    active  service, but not to exceed 24 months for leaves under
30    item (1) or (2). This 24-month limitation and the requirement
31    of returning to active service shall  not  apply  to  persons
32    receiving  ordinary  or  accidental  disability  benefits  or
33    retirement  benefits through the appropriate State retirement
34    system  or  benefits  under  the  Workers'  Compensation   or
 
                            -25-              LRB9100169EGfgB
 1    Occupational Disease Act.
 2        (d)  The   basic  group  life  insurance  coverage  shall
 3    continue, with full State contribution, where such person  is
 4    (1)  absent  from  active  service  by  reason  of disability
 5    arising from any cause  other  than  self-inflicted,  (2)  on
 6    authorized  educational leave of absence or sabbatical leave,
 7    or (3) on military leave with pay and benefits.
 8        (e)  Where the person is in non-pay status for  a  period
 9    in  excess  of  30 days or on leave of absence, other than by
10    reason of disability, educational  or  sabbatical  leave,  or
11    military  leave  with  pay  and  benefits,  such  person  may
12    continue  coverage  only  by making personal payment equal to
13    the amount normally contributed by the State on such person's
14    behalf. Such payments and  coverage  may  be  continued:  (1)
15    until  such  time  as the person returns to a status eligible
16    for coverage at State expense, but not to exceed  24  months,
17    (2)  until  such person's employment or annuitant status with
18    the State is terminated, or (3) for a  maximum  period  of  4
19    years for members on military leave with pay and benefits and
20    military  leave  without  pay  and benefits (exclusive of any
21    additional service imposed pursuant to law).
22        (f)  The Department shall  establish by rule  the  extent
23    to which other employee benefits will continue for persons in
24    non-pay status or who are not in active service.
25        (g)  The  State  shall  not  pay  the  cost  of the basic
26    non-contributory group  life  insurance,  program  of  health
27    benefits  and  other  employee  benefits  for members who are
28    survivors as defined by paragraphs (1) and (2) of  subsection
29    (q)  of  Section  3  of  this Act.  The costs of benefits for
30    these survivors shall be paid by  the  survivors  or  by  the
31    University  of Illinois Cooperative Extension Service, or any
32    combination thereof.
33        (h)  Those   persons   occupying   positions   with   any
34    department as a result of emergency appointments pursuant  to
 
                            -26-              LRB9100169EGfgB
 1    Section  8b.8  of  the  Personnel Code who are not considered
 2    employees under  this  Act  shall  be  given  the  option  of
 3    participating in the programs of group life insurance, health
 4    benefits  and other employee benefits.  Such persons electing
 5    coverage may participate only by making payment equal to  the
 6    amount  normally  contributed  by  the  State  for  similarly
 7    situated  employees.  Such amounts shall be determined by the
 8    Director.  Such payments and coverage may be continued  until
 9    such  time as the person becomes an employee pursuant to this
10    Act or such person's appointment is terminated.
11        (i)  Any unit of local government  within  the  State  of
12    Illinois  may  apply  to  the Director to have its employees,
13    annuitants,  and  their  dependents  provided  group   health
14    coverage   under   this  Act  on  a  non-insured  basis.   To
15    participate, a unit of local government must agree to  enroll
16    all  of  its  employees, who may select coverage under either
17    the State group health benefits insurance plan  or  a  health
18    maintenance  organization  that has contracted with the State
19    to be available as a health care provider  for  employees  as
20    defined  in  this Act.  A unit of local government must remit
21    the entire cost of providing coverage under the  State  group
22    health  benefits  insurance  plan  or,  for  coverage under a
23    health maintenance organization, an amount determined by  the
24    Director  based  on  an  analysis of the sex, age, geographic
25    location, or other relevant  demographic  variables  for  its
26    employees, except that the unit of local government shall not
27    be  required to enroll those of its employees who are covered
28    spouses or dependents under this plan or another group policy
29    or  plan  providing  health  benefits  as  long  as  (1)   an
30    appropriate  official  from  the  unit  of  local  government
31    attests  that  each employee not enrolled is a covered spouse
32    or dependent under this plan or another group policy or plan,
33    and (2) at least 85% of the employees are  enrolled  and  the
34    unit  of local government remits the entire cost of providing
 
                            -27-              LRB9100169EGfgB
 1    coverage to those employees.  Employees  of  a  participating
 2    unit of local government who are not enrolled due to coverage
 3    under  another  group health policy or plan may enroll in the
 4    event of a qualifying change in status,  special  enrollment,
 5    special  circumstance  as  defined by the Director, or during
 6    the annual Benefit Choice Period at a later date  subject  to
 7    submission  of  satisfactory  evidence  of  insurability  and
 8    provided  that  no  benefits  shall  be  payable for services
 9    incurred during the first 6 months of coverage to the  extent
10    the   services  are   in  connection  with  any  pre-existing
11    condition.  A participating unit of local government may also
12    elect to cover its annuitants.  Dependent coverage  shall  be
13    offered on an optional basis, with the costs paid by the unit
14    of  local  government,  its employees, or some combination of
15    the two as determined by the unit of local  government.   The
16    unit  of  local  government  shall  be responsible for timely
17    collection and transmission of dependent premiums.
18        The Director shall annually determine  monthly  rates  of
19    payment, subject to the following constraints:
20             (1)  In  the first year of coverage, the rates shall
21        be  equal  to  the  amount  normally  charged  to   State
22        employees  for elected optional coverages or for enrolled
23        dependents coverages or other contributory coverages,  or
24        contributed by the State for basic insurance coverages on
25        behalf of its employees, adjusted for differences between
26        State  employees and employees of the local government in
27        age,  sex,  geographic   location   or   other   relevant
28        demographic  variables,  plus an amount sufficient to pay
29        for the  additional  administrative  costs  of  providing
30        coverage to employees of the unit of local government and
31        their dependents.
32             (2)  In subsequent years, a further adjustment shall
33        be  made  to  reflect  the  actual  prior  years'  claims
34        experience   of  the  employees  of  the  unit  of  local
 
                            -28-              LRB9100169EGfgB
 1        government.
 2        In the case of coverage  of  local  government  employees
 3    under  a  health maintenance organization, the Director shall
 4    annually determine  for  each  participating  unit  of  local
 5    government the maximum monthly amount the unit may contribute
 6    toward  that  coverage,  based on an analysis of (i) the age,
 7    sex, geographic  location,  and  other  relevant  demographic
 8    variables  of the unit's employees and (ii) the cost to cover
 9    those  employees  under  the  State  group  health   benefits
10    insurance  plan.   The  Director  may similarly determine the
11    maximum monthly amount each  unit  of  local  government  may
12    contribute toward coverage of its employees' dependents under
13    a health maintenance organization.
14        Monthly  payments  by the unit of local government or its
15    employees for group health benefits plan insurance or  health
16    maintenance  organization  coverage shall be deposited in the
17    Local Government Health Insurance Reserve  Fund.   The  Local
18    Government   Health   Insurance   Reserve  Fund  shall  be  a
19    continuing fund not subject to fiscal year limitations.   All
20    expenditures  from  this  fund shall be used for payments for
21    health care benefits for local government and  rehabilitation
22    facility   employees,  annuitants,  and  dependents,  and  to
23    reimburse  the  Department  or  its  administrative   service
24    organization  for all expenses incurred in the administration
25    of benefits.  No other State funds  may  be  used  for  these
26    purposes.
27        A  local government employer's participation or desire to
28    participate in a program created under this subsection  shall
29    not   limit   that   employer's  duty  to  bargain  with  the
30    representative of  any  collective  bargaining  unit  of  its
31    employees.
32        (j)  Any  rehabilitation  facility  within  the  State of
33    Illinois may apply to the Director  to  have  its  employees,
34    annuitants,  and  their  eligible  dependents  provided group
 
                            -29-              LRB9100169EGfgB
 1    health coverage under this Act on  a  non-insured  basis.  To
 2    participate,  a  rehabilitation facility must agree to enroll
 3    all of its employees and remit the entire cost  of  providing
 4    such   coverage   for   its   employees,   except   that  the
 5    rehabilitation facility shall not be required to enroll those
 6    of its employees who are covered spouses or dependents  under
 7    this  plan  or  another group policy or plan providing health
 8    benefits as long as (1)  an  appropriate  official  from  the
 9    rehabilitation   facility  attests  that  each  employee  not
10    enrolled is a covered spouse or dependent under this plan  or
11    another  group  policy  or  plan, and (2) at least 85% of the
12    employees are enrolled and the rehabilitation facility remits
13    the entire cost of providing  coverage  to  those  employees.
14    Employees  of a participating rehabilitation facility who are
15    not enrolled due  to  coverage  under  another  group  health
16    policy or plan may enroll in the event of a qualifying change
17    in   status,  special  enrollment,  special  circumstance  as
18    defined by the Director, or during the annual Benefit  Choice
19    Period  at a later date subject to submission of satisfactory
20    evidence of insurability and provided that no benefits  shall
21    be payable for services incurred during the first 6 months of
22    coverage  to  the  extent the services are in connection with
23    any pre-existing condition.  A  participating  rehabilitation
24    facility  may  also  elect to cover its annuitants. Dependent
25    coverage shall be offered on  an  optional  basis,  with  the
26    costs  paid by the rehabilitation facility, its employees, or
27    some combination of the 2 as determined by the rehabilitation
28    facility. The rehabilitation facility  shall  be  responsible
29    for timely collection and transmission of dependent premiums.
30        The  Director shall annually determine quarterly rates of
31    payment, subject to the following constraints:
32             (1)  In the first year of coverage, the rates  shall
33        be   equal  to  the  amount  normally  charged  to  State
34        employees for elected optional coverages or for  enrolled
 
                            -30-              LRB9100169EGfgB
 1        dependents  coverages  or other contributory coverages on
 2        behalf of its employees, adjusted for differences between
 3        State  employees  and  employees  of  the  rehabilitation
 4        facility  in  age,  sex,  geographic  location  or  other
 5        relevant demographic variables, plus an amount sufficient
 6        to  pay  for  the  additional  administrative  costs   of
 7        providing  coverage  to  employees  of the rehabilitation
 8        facility and their dependents.
 9             (2)  In subsequent years, a further adjustment shall
10        be  made  to  reflect  the  actual  prior  years'  claims
11        experience  of  the  employees  of   the   rehabilitation
12        facility.
13        Monthly  payments  by  the rehabilitation facility or its
14    employees  for  group  health  benefits  insurance  shall  be
15    deposited in the Local Government  Health  Insurance  Reserve
16    Fund.
17        (k)  Any  domestic violence shelter or service within the
18    State of Illinois may apply  to  the  Director  to  have  its
19    employees,  annuitants,  and  their dependents provided group
20    health coverage under this Act on a  non-insured  basis.   To
21    participate,  a  domestic  violence  shelter  or service must
22    agree to enroll all of its employees and pay the entire  cost
23    of   providing   such   coverage   for   its   employees.   A
24    participating domestic violence shelter  may  also  elect  to
25    cover its annuitants.  Dependent coverage shall be offered on
26    an optional basis, with employees, or some combination of the
27    2  as determined by the domestic violence shelter or service.
28    The domestic violence shelter or service shall be responsible
29    for timely collection and transmission of dependent premiums.
30        The Director shall annually determine quarterly rates  of
31    payment, subject to the following constraints:
32             (1)  In  the first year of coverage, the rates shall
33        be  equal  to  the  amount  normally  charged  to   State
34        employees  for elected optional coverages or for enrolled
 
                            -31-              LRB9100169EGfgB
 1        dependents coverages or other contributory  coverages  on
 2        behalf of its employees, adjusted for differences between
 3        State  employees  and  employees of the domestic violence
 4        shelter or service in age, sex,  geographic  location  or
 5        other  relevant  demographic  variables,  plus  an amount
 6        sufficient to pay for the additional administrative costs
 7        of  providing  coverage  to  employees  of  the  domestic
 8        violence shelter or service and their dependents.
 9             (2)  In subsequent years, a further adjustment shall
10        be  made  to  reflect  the  actual  prior  years'  claims
11        experience of the  employees  of  the  domestic  violence
12        shelter or service.
13             (3)  In  no  case  shall  the  rate be less than the
14        amount normally charged to State employees or contributed
15        by the State on behalf of its employees.
16        Monthly payments by  the  domestic  violence  shelter  or
17    service  or its employees for group health insurance shall be
18    deposited in the Local Government  Health  Insurance  Reserve
19    Fund.
20        (l)  A  public  community  college  or  entity  organized
21    pursuant to the Public Community College Act may apply to the
22    Director  initially to have only annuitants not covered prior
23    to July 1, 1992 by the district's health plan provided health
24    coverage  under  this  Act  on  a  non-insured  basis.    The
25    community   college   must   execute  a  2-year  contract  to
26    participate in  the  Local  Government  Health  Plan.   Those
27    annuitants  enrolled initially under this contract shall have
28    no benefits payable for services incurred during the first  6
29    months  of  coverage  to  the  extent  the  services  are  in
30    connection  with  any  pre-existing condition.  Any annuitant
31    who may enroll in the event of a qualifying change in status,
32    special enrollment, special circumstance as  defined  by  the
33    Director,  or  during  the annual Benefit Choice Period after
34    this initial enrollment period shall be subject to submission
 
                            -32-              LRB9100169EGfgB
 1    of  satisfactory  evidence  of  insurability   and   to   the
 2    pre-existing conditions limitation.
 3        The  Director  shall  annually determine monthly rates of
 4    payment subject to  the  following  constraints:   for  those
 5    community  colleges with annuitants only enrolled, first year
 6    rates shall be equal to the average cost to cover claims  for
 7    a   State   member   adjusted   for   demographics,  Medicare
 8    participation, and other factors; and in the second  year,  a
 9    further  adjustment  of  rates  shall  be made to reflect the
10    actual  first  year's  claims  experience  of   the   covered
11    annuitants.
12        (l-5)  The    provisions   of   subsection   (l)   become
13    inoperative on July 1, 1999.
14        (m)  The Director shall adopt any rules deemed  necessary
15    for implementation of this amendatory Act of 1989 (Public Act
16    86-978).
17    (Source:  P.A.  89-53,  eff.  7-1-95;  89-236,  eff.  8-4-95;
18    89-324,  eff.  8-13-95;  89-626,  eff.  8-9-96;  90-65,  eff.
19    7-7-97;  90-582,  eff. 5-27-98; 90-655, eff. 7-30-98; revised
20    8-3-98.)

21        (5 ILCS 375/13) (from Ch. 127, par. 533)
22        Sec. 13.  There is established a Group Insurance  Premium
23    Fund  administered  by  the Director which shall include: (1)
24    amounts paid by covered members for optional  life  insurance
25    or health benefits insurance coverages, and (2) refunds which
26    may  be received from (a) the group carrier or carriers which
27    may result from favorable experience as described in  Section
28    12  herein  or (b) from any other source from which the State
29    is reasonably and properly entitled to refund as a result  of
30    the  group  health  benefits  insurance  program.   The Group
31    Insurance Premium Fund shall be a continuing fund not subject
32    to fiscal year limitations.
33        The State of Illinois shall at least once each month make
 
                            -33-              LRB9100169EGfgB
 1    payment on behalf of each member, except one who is a  member
 2    by  virtue  of  participation  in  a  program  created  under
 3    subsection  (i),  (j), (k), or (l) of Section 10 of this Act,
 4    to  the  appropriate  carrier  or,  if  applicable,  carriers
 5    insuring  State  members  under  the  contracted  group  life
 6    insurance  and  group  health  benefits   insurance   program
 7    authorized by this Act.
 8        Refunds  to  members  for  premiums paid for coverage for
 9    their dependents may be paid from the Group Insurance Premium
10    Fund  without regard  to the fact  that  the  premium   being
11    refunded may have been paid in a different fiscal year.
12    (Source: P.A. 86-978; 87-627; 87-1259.)

13        (5 ILCS 375/13.1) (from Ch. 127, par. 533.1)
14        Sec.   13.1.    (a)  All  contributions,  appropriations,
15    interest, and dividend payments to fund the program of health
16    benefits and other employee benefits shall be deposited in  a
17    trust  fund  outside  the  State  Treasury,  with  the  State
18    Treasurer  as ex-officio custodian, to be known as the Health
19    Insurance Reserve Fund.
20        (b)  Upon the adoption of a self-insurance  health  plan,
21    any monies attributable to the group health insurance program
22    shall  be deposited in or transferred to the Health Insurance
23    Reserve Fund for use by the Department. As of  the  effective
24    date  of  this  amendatory  Act of 1986, the Department shall
25    certify to the Comptroller the amount of money in  the  Group
26    Insurance Premium Fund attributable to the State group health
27    insurance  program  and  the  Comptroller shall transfer such
28    money from the Group Insurance Premium  Fund  to  the  Health
29    Insurance  Reserve  Fund.  Contributions  by the State to the
30    Health Insurance Reserve Fund to  meet  the  requirements  of
31    this  Act,  as  established by the Director, from the General
32    Revenue Fund and  the  Road  Fund  to  the  Health  Insurance
33    Reserve Fund shall be by annual appropriations, and all other
 
                            -34-              LRB9100169EGfgB
 1    contributions  to  meet  the  requirements of the programs of
 2    health benefits or other employee benefits shall be deposited
 3    in the Health Insurance Reserve Fund.  The  Department  shall
 4    draw  the appropriation from the General Revenue Fund and the
 5    Road Fund from time to time as necessary to make expenditures
 6    authorized under this Act.
 7        The Director may employ such assistance and services  and
 8    may  purchase  such  goods as may be necessary for the proper
 9    development and administration of any of the benefit programs
10    authorized by this Act.  The Director  may  promulgate  rules
11    and  regulations  in  regard  to  the administration of these
12    programs.
13        All monies received by the Department for deposit  in  or
14    transfer  to  the  Health  Insurance  Reserve  Fund,  through
15    appropriation  or otherwise, shall be used to provide for the
16    making  of  payments  to  claimants  and  providers  and   to
17    reimburse  the  Department for all expenses directly incurred
18    relating to Department development and administration of  the
19    program of health benefits and other employee benefits.
20        Any administrative service organization administering any
21    self-insurance  health  plan  and  paying claims and benefits
22    under authority of this Act may receive, pursuant to  written
23    authorization  and  direction  of  the  Director,  an initial
24    transfer and periodic transfers  of  funds  from  the  Health
25    Insurance  Reserve Fund in amounts determined by the Director
26    who may consider the amount recommended by the administrative
27    service organization.   Notwithstanding  any  other  statute,
28    such   transferred   funds   shall   be   retained   by   the
29    administrative  service  organization  in  a separate account
30    provided by any bank as defined by the Illinois Banking  Act.
31    The  Department  may  promulgate regulations further defining
32    the banks authorized to accept such funds and all methodology
33    for transfer of such funds.  Any interest earned by monies in
34    such account shall inure  to  the  Health  Insurance  Reserve
 
                            -35-              LRB9100169EGfgB
 1    Fund,  shall  remain  in  such  account  and  shall  be  used
 2    exclusively  to pay claims and benefits under this Act.  Such
 3    transferred   funds   shall   be   used    exclusively    for
 4    administrative  service  organization  payment  of  claims to
 5    claimants and providers under the self-insurance health  plan
 6    by   the   drawing  of  checks  against  such  account.   The
 7    administrative  service  organization  may   not   use   such
 8    transferred funds, or interest accrued thereon, for any other
 9    purpose  including,  but  not  limited  to,  reimbursement of
10    administrative expenses or payments  of  administration  fees
11    due  the  organization  pursuant to its contract or contracts
12    with the Department of Central Management Services.
13        The account of the  administrative  service  organization
14    established under this Section, any transfers from the Health
15    Insurance  Reserve  Fund  to such account and the use of such
16    account and funds shall  be  subject  to  (1)  audit  by  the
17    Department or private contractor authorized by the Department
18    to  conduct  audits,  such audit including but not limited to
19    the annual audit required by this Act,  and  (2)  post  audit
20    pursuant to the Illinois State Auditing Act.
21        (c)  The  Director,  with  the  advice and consent of the
22    Commission, shall establish premiums  for  optional  coverage
23    for  dependents  of  eligible  members for the self-insurance
24    health plans plan.  The eligible members shall be responsible
25    for their portion payment of 100% of  such  optional  premium
26    and shall pay by means of payroll deduction.  The State shall
27    contribute  an  amount  $7 per month for each eligible member
28    who  has  enrolled  one  or   more   dependents   under   the
29    self-insurance health plans plan.  Such contribution shall be
30    made  directly  to  the Health Insurance Reserve Fund.  Those
31    employees described in subsection (b) of Section  9  of  this
32    Act shall be allowed to continue in the self-insurance health
33    plan  by  making  personal  payments  with the premiums to be
34    deposited in the Health Insurance Reserve Fund.
 
                            -36-              LRB9100169EGfgB
 1        (d)  The  Health  Insurance  Reserve  Fund  shall  be   a
 2    continuing  fund not subject to fiscal year limitations.  All
 3    expenditures from that fund shall be at the direction of  the
 4    Director and shall be only for the purpose of:
 5        (1)  the  payment  of administrative expenses incurred by
 6    the Department for the program of health  benefits  or  other
 7    employee  benefit  programs, including but not limited to the
 8    costs of audits or actuarial consultations, professional  and
 9    contractual  services, electronic data processing systems and
10    services, and expenses in connection with the development and
11    administration of such programs;
12        (2)  the payment of administrative expenses  incurred  by
13    the Administrative Service Organization;
14        (3)  the payment of health benefits;
15        (4)  refunds to employees for erroneous payments of their
16    selected dependent coverage;
17        (5)  payment of premium for stop-loss or re-insurance;
18        (6)  payment    of    premium   to   health   maintenance
19    organizations pursuant to Section 6.1 of this Act;
20        (7)  payment of adoption program benefits; and
21        (8)  payment of other benefits  offered  to  members  and
22    dependents under this Act.
23    (Source: P.A. 85-848.)

24        (5 ILCS 375/13.2) (from Ch. 127, par. 533.2)
25        Sec.  13.2.  Insurance  reserve  funds; investments.  All
26    amounts held in the Health Insurance Reserve Fund, the  Group
27    Insurance  Premium  Fund,  and  the  Local  Government Health
28    Insurance Reserve Fund shall be invested, at interest, by the
29    State Treasurer.  The investments shall be subject to  terms,
30    conditions,  and  limitations imposed by the laws of Illinois
31    on State funds.  All  income  derived  from  the  investments
32    shall accrue and be deposited to the respective funds no less
33    frequently than quarterly.  The Health Insurance Reserve Fund
 
                            -37-              LRB9100169EGfgB
 1    and  the Local Government Health Insurance Reserve Fund shall
 2    be administered by the Director.
 3    (Source: P.A. 87-771.)

 4        (5 ILCS 375/15) (from Ch. 127, par. 535)
 5        Sec. 15. Administration; rules; audit; review.
 6        (a)  The Director shall administer  this  Act  and  shall
 7    prescribe such rules and regulations as are necessary to give
 8    full effect to the purposes of this Act.
 9        (b)  These  rules  may  fix  reasonable standards for the
10    group life  and  group  health  programs  and  other  benefit
11    programs  offered  under  this  Act,  and for the contractors
12    providing them.
13        (c)  These rules shall specify that covered and  optional
14    medical  services of the program are services provided within
15    the  scope  of  their  licenses  by  practitioners   in   all
16    categories  licensed  under  the Medical Practice Act of 1987
17    and shall provide that all eligible persons be fully informed
18    of this specification.
19        (d)  These rules shall establish eligibility requirements
20    for members and dependents as may be necessary to  supplement
21    or clarify requirements contained in this Act.
22        (e)  Each  affected  department  of  the State, the State
23    Universities  Retirement  System,  the  Teachers'  Retirement
24    System, and each qualified local  government,  rehabilitation
25    facility, or domestic violence shelter or service, shall keep
26    such  records,  make  such  certifications,  and  furnish the
27    Director  such  information  as  may  be  necessary  for  the
28    administration of this Act, including information  concerning
29    number  and  total  amounts  of  payroll  of employees of the
30    department who are paid from trust funds or federal funds.
31        (f)  Each  member,   each   community   college   benefit
32    recipient  to  whom  this  Act  applies, and each TRS benefit
33    recipient  to  whom  this  Act  applies  shall  furnish   the
 
                            -38-              LRB9100169EGfgB
 1    Director,  in  such  form as may be required, any information
 2    that may be  necessary  to  enroll  such  member  or  benefit
 3    recipient  and,  if  applicable,  his  or  her  dependents or
 4    dependent beneficiaries under the programs or plan, including
 5    such data as  may  be  required  to  allow  the  Director  to
 6    accumulate   statistics   on   data  normally  considered  in
 7    actuarial studies  of  employee  groups.   Information  about
 8    community  college  benefit  recipients and community college
 9    dependent beneficiaries shall be furnished through the  State
10    Universities   Retirement   System.   Information  about  TRS
11    benefit recipients and TRS dependent beneficiaries  shall  be
12    furnished through the Teachers' Retirement System.
13        (g)  There  shall  be  audits an annual audit and reports
14    report on the programs authorized and established by this Act
15    prepared by the Director with the assistance of a  qualified,
16    independent accounting firm.  The reports annual report shall
17    provide  information  on  the  experience, and administrative
18    effectiveness and adequacy of  the  program  including,  when
19    applicable,  recommendations  on  up-grading  of benefits and
20    improvement of the program.
21        (h)  Any final order,  decision  or  other  determination
22    made, issued or executed by the Director under the provisions
23    of  this  Act  whereby  any contractor or person is aggrieved
24    shall be subject to review in accordance with the  provisions
25    of  the  Administrative  Review  Law  and  all amendments and
26    modifications  thereof,  and  the  rules   adopted   pursuant
27    thereto,  shall  apply  to and govern all proceedings for the
28    judicial review of  final  administrative  decisions  of  the
29    Director.
30    (Source:  P.A.  89-21,  eff.  6-21-95;  89-25,  eff. 6-21-95;
31    90-497, eff. 8-18-97.)

32        Section 99. Effective date.  This Act takes  effect  upon
33    becoming law.

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