94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB3175


 
Introduced 2/22/2005, by Rep. Tom Cross
 
SYNOPSIS AS INTRODUCED:
 		













5 ILCS 375/6.5









    Amends the State Employees Group Insurance Act of 1971.  Makes a technical
change in a Section concerning retired teacher benefits.
















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A BILL FOR









 











HB3175

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    AN ACT concerning government.

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


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



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    (5 ILCS 375/6.5)



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    Sec. 6.5. Health benefits for TRS benefit recipients  and

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and  TRS dependent
beneficiaries.
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    (a) Purpose.  It is the purpose of this amendatory Act of 
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1995 to transfer
the administration of the program of health 
11
benefits established for benefit
recipients and their 
12
dependent beneficiaries under Article 16 of the Illinois

13
Pension Code to the Department of Central Management Services.

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    (b) Transition provisions.  The Board of Trustees of the 
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Teachers'
Retirement System shall continue to administer the 
16
health benefit program
established under Article 16 of the 
17
Illinois Pension Code through December 31,
1995.  Beginning 
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January 1, 1996, the Department of Central Management Services

19
shall be responsible for administering a program of health 
20
benefits for TRS
benefit recipients and TRS dependent 
21
beneficiaries under this Section.
The Department of Central 
22
Management Services and the Teachers' Retirement
System shall 
23
cooperate in this endeavor and shall coordinate their 
24
activities
so as to ensure a smooth transition and 
25
uninterrupted health benefit coverage.

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    (c) Eligibility.  All persons who were enrolled in the 
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Article 16 program at
the time of the transfer shall be 
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eligible to participate in the program
established under this 
29
Section without any interruption or delay in coverage
or 
30
limitation as to pre-existing medical conditions.  Eligibility 
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to
participate shall be determined by the Teachers' Retirement 
32
System.
Eligibility information shall be communicated to the 
 


 






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Department of Central
Management Services in a format 
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acceptable to the Department.

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    A TRS dependent beneficiary who is an unmarried child age 
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19 or over and
mentally or physically disabled does not become 
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ineligible to participate
by reason of (i) becoming ineligible 
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to be claimed as a dependent for Illinois
or federal income tax 
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purposes or (ii) receiving earned income, so long as
those 
8
earnings are insufficient for the child to be fully 
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self-sufficient.

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    (d) Coverage.  The level of health benefits provided under 
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this Section
shall be similar to the level of benefits provided 
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by the
program previously established under Article 16 of the 
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Illinois Pension Code.

14
    Group life insurance benefits are not included in the 
15
benefits
to be provided to TRS benefit recipients and TRS 
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dependent beneficiaries under
this Act.

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    The program of health benefits under this Section may 
18
include any or all of
the benefit limitations, including but 
19
not limited to a reduction in benefits
based on eligibility for 
20
federal medicare benefits, that are provided under
subsection 
21
(a) of Section 6 of this Act for other health benefit programs 
22
under
this Act.

23
    (e) Insurance rates and premiums.  The Director shall 
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determine the
insurance rates and premiums for TRS benefit 
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recipients and TRS dependent
beneficiaries,
and shall present 
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to the Teachers' Retirement System of
the State of Illinois, by 
27
April 15 of each calendar year, the rate-setting
methodology 
28
(including but not limited to utilization levels and costs) 
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used
to determine the amount of the health care premiums.

30
        For Fiscal Year 1996, the premium shall be equal to the 
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    premium actually
charged in Fiscal Year 1995; in subsequent 
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    years, the premium shall
never be lower than the premium 
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    charged in Fiscal Year 1995.  
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        For Fiscal Year
2003, the premium shall not exceed 110% 
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    of the premium actually charged in
Fiscal Year 2002.  
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        For Fiscal Year 2004, the premium shall not exceed 112% 
 


 






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    of
the premium actually charged in Fiscal Year 2003.

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        For Fiscal Year 2005, the premium shall not exceed a 
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    weighted average of 106.6% of
the premium actually charged 
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    in Fiscal Year 2004.

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        For Fiscal Year 2006, the premium shall not exceed a 
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    weighted average of 109.1% of
the premium actually charged 
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    in Fiscal Year 2005.

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        For Fiscal Year 2007, the premium shall not exceed a 
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    weighted average of 103.9% of
the premium actually charged 
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    in Fiscal Year 2006.

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        For Fiscal Year 2008 and thereafter, the premium in 
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    each fiscal year shall not exceed 105% of
the premium 
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    actually charged in the previous fiscal year.

14
    Rates and premiums may be based in part on age and 
15
eligibility for federal
medicare coverage.  However, the cost of 
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participation for a TRS dependent
beneficiary who is an 
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unmarried child age 19 or over and mentally or physically

18
disabled shall not exceed the cost for a TRS dependent 
19
beneficiary who is
an unmarried child under age 19 and 
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participates in the same major medical or
managed care program.

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    The cost of health benefits under the program shall be paid 
22
as follows:


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        (1) For a TRS benefit recipient selecting a managed 
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    care program, up to
75% of the total insurance rate shall 
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    be paid from the Teacher Health Insurance
Security Fund. 
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    Effective with Fiscal Year 2007 and thereafter, for a TRS 
27
    benefit recipient selecting a managed care program, 75% of 
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    the total insurance rate shall be paid from the Teacher 
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    Health Insurance
Security Fund.



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        (2) For a TRS benefit recipient selecting the major 
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    medical coverage
program, up to 50% of the total insurance 
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    rate shall be paid from the Teacher
Health Insurance 
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    Security Fund if a managed care program is accessible, as

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    determined by the Teachers' Retirement System. Effective 
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    with Fiscal Year 2007 and thereafter, for a TRS benefit 
36
    recipient selecting the major medical coverage
program, 
 


 






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    50% of the total insurance rate shall be paid from the 
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    Teacher
Health Insurance Security Fund if a managed care 
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    program is accessible, as
determined by the Department of 
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    Central Management Services.



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        (3) For a TRS benefit recipient selecting the major 
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    medical coverage
program, up to 75% of the total insurance 
7
    rate shall be paid from the Teacher
Health Insurance 
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    Security Fund if a managed care program is not accessible, 
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    as
determined by the Teachers' Retirement System. 
10
    Effective with Fiscal Year 2007 and thereafter, for a TRS 
11
    benefit recipient selecting the major medical coverage

12
    program, 75% of the total insurance rate shall be paid from 
13
    the Teacher
Health Insurance Security Fund if a managed 
14
    care program is not accessible, as
determined by the 
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    Department of Central Management Services.

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        (3.1) For a TRS dependent beneficiary who is Medicare 
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    primary and enrolled in a managed care plan, or the major 
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    medical coverage program if a managed care plan is not 
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    available, 25% of the total insurance rate shall be paid 
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    from the Teacher Health Security Fund as determined by the 
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    Department of Central Management Services. For the purpose 
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    of this item (3.1), the term "TRS dependent beneficiary who 
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    is Medicare primary" means a TRS dependent beneficiary who 
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    is participating in Medicare Parts A and B.


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        (4) Except as otherwise provided in item (3.1), the


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    balance of the rate of insurance, including the entire 
27
    premium of
any coverage for TRS dependent beneficiaries 
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    that has been elected, shall be
paid
by deductions 
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    authorized by the TRS benefit recipient to be withheld from 
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    his
or her monthly annuity or benefit payment from the 
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    Teachers' Retirement System;
except that (i) if the balance 
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    of the cost of coverage exceeds the amount of
the monthly 
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    annuity or benefit payment, the difference shall be paid 
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    directly
to the Teachers' Retirement System by the TRS 
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    benefit recipient, and (ii) all
or part of the balance of 
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    the cost of coverage may, at the school  board's
option, be 
 


 






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    paid to the Teachers' Retirement System by the school board 
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    of the
school district from which the TRS benefit recipient 
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    retired, in accordance
with Section 10-22.3b of the School 
4
    Code.  The Teachers' Retirement System
shall promptly 
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    deposit all moneys withheld by or paid to it under this

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    subdivision (e)(4) into the Teacher Health Insurance 
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    Security Fund.  These
moneys shall not be considered assets 
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    of the Retirement System.

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    (f) Financing.  Beginning July 1, 1995, all revenues arising 
10
from the
administration of the health benefit programs 
11
established under Article 16 of
the Illinois Pension Code or 
12
this Section shall be deposited into the
Teacher Health 
13
Insurance Security Fund, which is hereby created as a

14
nonappropriated trust fund to be held outside the State 
15
Treasury, with the
State Treasurer as custodian.  Any interest 
16
earned on moneys in the Teacher
Health Insurance Security Fund 
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shall be deposited into the Fund.

18
    Moneys in the Teacher Health Insurance Security
Fund shall 
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be used only to pay the costs of the health benefit program

20
established under this Section, including associated 
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administrative costs, and
the costs associated with the health 
22
benefit program established under Article
16 of the Illinois 
23
Pension Code, as authorized in this Section.  Beginning
July 1, 
24
1995, the Department of Central Management Services may make

25
expenditures from the Teacher Health Insurance Security Fund 
26
for those costs.

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    After other funds authorized for the payment of the costs 
28
of the health
benefit program established under Article 16 of 
29
the Illinois Pension Code are
exhausted and until January 1, 
30
1996 (or such later date as may be agreed upon
by the Director 
31
of Central Management Services and the Secretary of the

32
Teachers' Retirement System), the Secretary of the Teachers' 
33
Retirement System
may make expenditures from the Teacher Health 
34
Insurance Security Fund as
necessary to pay up to 75% of the 
35
cost of providing health coverage to eligible
benefit 
36
recipients (as defined in Sections 16-153.1 and 16-153.3 of the

 


 






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Illinois Pension Code) who are enrolled in the Article 16 
2
health benefit
program and to facilitate the transfer of 
3
administration of the health benefit
program to the Department 
4
of Central Management Services.

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    (g) Contract for benefits.  The Director shall by contract, 
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self-insurance,
or otherwise make available the program of 
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health benefits for TRS benefit
recipients and their TRS 
8
dependent beneficiaries that is provided for in this
Section.  
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The contract or other arrangement for the provision of these 
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health
benefits shall be on terms deemed by the Director to be 
11
in the best interest of
the State of Illinois and the TRS 
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benefit recipients based on, but not limited
to, such criteria 
13
as administrative cost, service capabilities of the carrier
or 
14
other contractor, and the costs of the benefits.

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    (g-5) Committee.  A Teacher Retirement Insurance Program 
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Committee shall be established, to consist of 10 persons 
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appointed by the Governor.

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    The Committee shall convene at least 4 times each year, and 
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shall consider and make recommendations on issues affecting the 
20
program of health benefits provided under this
Section.  
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Recommendations of the Committee shall be based on a consensus 
22
of the members of the Committee.

23
    If the Teacher
Health Insurance Security Fund experiences a 
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deficit balance based upon the contribution and subsidy rates 
25
established in this Section and Section 6.6 for Fiscal Year 
26
2008 or thereafter, the Committee shall make recommendations 
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for adjustments to the funding sources established under these 
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Sections.
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    (h) Continuation of program.  It is the intention of
the 
30
General Assembly that the program of health benefits provided 
31
under this
Section be maintained on an ongoing, affordable 
32
basis.

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    The program of health benefits provided under this Section 
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may be amended by
the State and is not intended to be a pension 
35
or retirement benefit subject to
protection under Article XIII, 
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Section 5 of the Illinois Constitution.

 


 






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    (i) Repeal.  (Blank).

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(Source: P.A. 92-505, eff. 12-20-01; 92-862, eff. 1-3-03; 
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93-679, eff. 6-30-04.)