093_HB1417

 
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 1        AN ACT concerning government employee benefits.

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

 4        Section  5.  The  State  Employees Group Insurance Act of
 5    1971 is amended by changing Section 6.5 as follows:

 6        (5 ILCS 375/6.5)
 7        (Section scheduled to be repealed on July 1, 2004)
 8        Sec. 6.5. Health benefits for TRS benefit recipients  and
 9    TRS dependent beneficiaries.
10        (a)  Purpose.   It  is The purpose of this amendatory Act
11    of 1995 is to transfer the administration of the  program  of
12    health  benefits established for benefit recipients and their
13    dependent beneficiaries under  Article  16  of  the  Illinois
14    Pension   Code   to  the  Department  of  Central  Management
15    Services.
16        (b)  Transition provisions.  The Board of Trustees of the
17    Teachers' Retirement System shall continue to administer  the
18    health  benefit  program  established under Article 16 of the
19    Illinois Pension Code through December 31,  1995.   Beginning
20    January   1,  1996,  the  Department  of  Central  Management
21    Services shall be responsible for administering a program  of
22    health  benefits for TRS benefit recipients and TRS dependent
23    beneficiaries under this Section.  The Department of  Central
24    Management Services and the Teachers' Retirement System shall
25    cooperate   in  this  endeavor  and  shall  coordinate  their
26    activities  so  as  to  ensure  a   smooth   transition   and
27    uninterrupted health benefit coverage.
28        (c)  Eligibility.   All  persons who were enrolled in the
29    Article 16 program at the  time  of  the  transfer  shall  be
30    eligible to participate in the program established under this
31    Section  without  any  interruption  or  delay in coverage or
 
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 1    limitation   as   to   pre-existing    medical    conditions.
 2    Eligibility   to  participate  shall  be  determined  by  the
 3    Teachers' Retirement System.  Eligibility  information  shall
 4    be  communicated  to  the  Department  of  Central Management
 5    Services in a format acceptable to the Department.
 6        (d)  Coverage.  The level  of  health  benefits  provided
 7    under  this Section shall be similar to the level of benefits
 8    provided by the program previously established under  Article
 9    16 of the Illinois Pension Code.
10        Group  life  insurance  benefits  are not included in the
11    benefits to be provided to TRS  benefit  recipients  and  TRS
12    dependent beneficiaries under this Act.
13        The  program  of  health  benefits under this Section may
14    include any or all of the benefit limitations, including  but
15    not  limited  to a reduction in benefits based on eligibility
16    for  federal  medicare  benefits,  that  are  provided  under
17    subsection (a) of Section 6 of  this  Act  for  other  health
18    benefit programs under this Act.
19        (e)  Insurance  rates  and  premiums.  The Director shall
20    determine the insurance rates and premiums  for  TRS  benefit
21    recipients and TRS dependent beneficiaries, and shall present
22    to  the Teachers' Retirement System of the State of Illinois,
23    by  April  15  of  each  calendar  year,   the   rate-setting
24    methodology  (including but not limited to utilization levels
25    and costs) used to determine the amount of  the  health  care
26    premiums.
27        For  Fiscal  Year 1996, the premium shall be equal to the
28    premium actually charged in Fiscal Year 1995;  in  subsequent
29    years,  the  premium  shall  never  be lower than the premium
30    charged in Fiscal Year  1995.   For  Fiscal  Year  2003,  the
31    premium shall not exceed 110% of the premium actually charged
32    in Fiscal Year 2002.  For Fiscal Year 2004, the premium shall
33    not  exceed  112%  of  the premium actually charged in Fiscal
34    Year 2003.
 
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 1        Rates and premiums may  be  based  in  part  on  age  and
 2    eligibility for federal medicare coverage.
 3        The  cost  of  health benefits under the program shall be
 4    paid as follows:
 5             (1)  For a TRS benefit recipient selecting a managed
 6        care program, up to 75% of the total insurance rate shall
 7        be paid from the Teacher Health Insurance Security Fund.
 8             (2)  For a TRS benefit recipient selecting the major
 9        medical  coverage  program,  up  to  50%  of  the   total
10        insurance  rate  shall  be  paid  from the Teacher Health
11        Insurance Security Fund if  a  managed  care  program  is
12        accessible,  as  determined  by  the Teachers' Retirement
13        System.
14             (3)  For a TRS benefit recipient selecting the major
15        medical  coverage  program,  up  to  75%  of  the   total
16        insurance  rate  shall  be  paid  from the Teacher Health
17        Insurance Security Fund if a managed care program is  not
18        accessible,  as  determined  by  the Teachers' Retirement
19        System.
20             (4)  The balance of the rate of insurance, including
21        the entire premium of  any  coverage  for  TRS  dependent
22        beneficiaries  that  has  been  elected, shall be paid by
23        deductions authorized by the TRS benefit recipient to  be
24        withheld  from  his  or  her  monthly  annuity or benefit
25        payment from the Teachers' Retirement System; except that
26        (i) if the balance of the cost of  coverage  exceeds  the
27        amount  of  the  monthly  annuity or benefit payment, the
28        difference  shall  be  paid  directly  to  the  Teachers'
29        Retirement System by the TRS benefit recipient, and  (ii)
30        all  or  part of the balance of the cost of coverage may,
31        at the school  board's option, be paid to  the  Teachers'
32        Retirement  System  by  the  school  board  of the school
33        district from which the TRS benefit recipient retired, in
34        accordance with Section 10-22.3b of the School Code.  The
 
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 1        Teachers' Retirement System shall  promptly  deposit  all
 2        moneys  withheld  by or paid to it under this subdivision
 3        (e)(4) into the Teacher Health Insurance  Security  Fund.
 4        These  moneys  shall  not  be  considered  assets  of the
 5        Retirement System.
 6        (f)  Financing.  Beginning July  1,  1995,  all  revenues
 7    arising   from  the  administration  of  the  health  benefit
 8    programs established under Article 16 of the Illinois Pension
 9    Code or this Section shall  be  deposited  into  the  Teacher
10    Health  Insurance Security Fund, which is hereby created as a
11    nonappropriated trust fund  to  be  held  outside  the  State
12    Treasury,   with  the  State  Treasurer  as  custodian.   Any
13    interest earned on moneys in  the  Teacher  Health  Insurance
14    Security Fund shall be deposited into the Fund.
15        Moneys  in  the  Teacher  Health  Insurance Security Fund
16    shall be used only to pay the costs  of  the  health  benefit
17    program  established under this Section, including associated
18    administrative costs,  and  the  costs  associated  with  the
19    health  benefit  program  established under Article 16 of the
20    Illinois  Pension  Code,  as  authorized  in  this   Section.
21    Beginning  July 1, 1995, the Department of Central Management
22    Services  may  make  expenditures  from  the  Teacher  Health
23    Insurance Security Fund for those costs.
24        After other funds authorized for the payment of the costs
25    of the health benefit program established under Article 16 of
26    the Illinois Pension Code are exhausted and until January  1,
27    1996  (or  such  later  date  as  may  be  agreed upon by the
28    Director of Central Management Services and the Secretary  of
29    the  Teachers'  Retirement  System),  the  Secretary  of  the
30    Teachers'  Retirement  System  may make expenditures from the
31    Teacher Health Insurance Security Fund as necessary to pay up
32    to 75% of the cost of providing health coverage  to  eligible
33    benefit  recipients  (as  defined  in  Sections  16-153.1 and
34    16-153.3 of the Illinois Pension Code) who  are  enrolled  in
 
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 1    the  Article  16 health benefit program and to facilitate the
 2    transfer of administration of the health benefit  program  to
 3    the Department of Central Management Services.
 4        (g)  Contract   for  benefits.   The  Director  shall  by
 5    contract, self-insurance, or  otherwise  make  available  the
 6    program  of  health  benefits  for TRS benefit recipients and
 7    their TRS dependent beneficiaries that  is  provided  for  in
 8    this  Section.   The  contract  or  other arrangement for the
 9    provision of these health benefits shall be on  terms  deemed
10    by  the  Director  to be in the best interest of the State of
11    Illinois and the TRS benefit recipients  based  on,  but  not
12    limited  to,  such  criteria  as administrative cost, service
13    capabilities of the carrier  or  other  contractor,  and  the
14    costs of the benefits.
15        (h)  Continuation  and termination of program.  It is the
16    intention of the General Assembly that the program of  health
17    benefits  provided  under  this  Section  be maintained on an
18    ongoing, affordable basis through June 30, 2004.  The program
19    of health benefits provided under this Section is  terminated
20    on July 1, 2004.
21        The  program  of  health  benefits  provided  under  this
22    Section may be amended by the State and is not intended to be
23    a  pension  or retirement benefit subject to protection under
24    Article XIII, Section 5 of the Illinois Constitution.
25        (i)  Repeal.  This Section is repealed on July 1, 2004.
26    (Source: P.A. 92-505, eff. 12-20-01.)