96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB3087


 
Introduced 2/24/2009, 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.
















LRB096 09778 RPM 19941 b

















 


 


A BILL FOR









 











HB3087

LRB096 09778 RPM 19941 b






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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: 

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



6
    (5 ILCS 375/6.5)



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    Sec. 6.5. Health benefits for TRS benefit recipients and

8
and TRS dependent
beneficiaries.
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    (a) Purpose.  It is the purpose of this amendatory Act of 
10
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.

14
    (b) Transition provisions.  The Board of Trustees of the 
15
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 
18
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 
 


 






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activities
so as to ensure a smooth transition and 
2
uninterrupted health benefit coverage.

3
    (c) Eligibility.  All persons who were enrolled in the 
4
Article 16 program at
the time of the transfer shall be 
5
eligible to participate in the program
established under this 
6
Section without any interruption or delay in coverage
or 
7
limitation as to pre-existing medical conditions.  Eligibility 
8
to
participate shall be determined by the Teachers' Retirement 
9
System.
Eligibility information shall be communicated to the 
10
Department of Central
Management Services in a format 
11
acceptable to the Department.

12
    A TRS dependent beneficiary who is an unmarried child age 
13
19 or over and
mentally or physically disabled does not become 
14
ineligible to participate
by reason of (i) becoming ineligible 
15
to be claimed as a dependent for Illinois
or federal income tax 
16
purposes or (ii) receiving earned income, so long as
those 
17
earnings are insufficient for the child to be fully 
18
self-sufficient.

19
    (d) Coverage.  The level of health benefits provided under 
20
this Section
shall be similar to the level of benefits provided 
21
by the
program previously established under Article 16 of the 
22
Illinois Pension Code.

23
    Group life insurance benefits are not included in the 
24
benefits
to be provided to TRS benefit recipients and TRS 
25
dependent beneficiaries under
this Act.

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    The program of health benefits under this Section may 
 


 






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include any or all of
the benefit limitations, including but 
2
not limited to a reduction in benefits
based on eligibility for 
3
federal medicare benefits, that are provided under
subsection 
4
(a) of Section 6 of this Act for other health benefit programs 
5
under
this Act.

6
    (e) Insurance rates and premiums.  The Director shall 
7
determine the
insurance rates and premiums for TRS benefit 
8
recipients and TRS dependent
beneficiaries,
and shall present 
9
to the Teachers' Retirement System of
the State of Illinois, by 
10
April 15 of each calendar year, the rate-setting
methodology 
11
(including but not limited to utilization levels and costs) 
12
used
to determine the amount of the health care premiums.

13
        For Fiscal Year 1996, the premium shall be equal to the 
14
    premium actually
charged in Fiscal Year 1995; in subsequent 
15
    years, the premium shall
never be lower than the premium 
16
    charged in Fiscal Year 1995.  
17
        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% 
20
    of
the premium actually charged in Fiscal Year 2003.

21
        For Fiscal Year 2005, the premium shall not exceed a 
22
    weighted average of 106.6% of
the premium actually charged 
23
    in Fiscal Year 2004.

24
        For Fiscal Year 2006, the premium shall not exceed a 
25
    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 
2
    weighted average of 103.9% of
the premium actually charged 
3
    in Fiscal Year 2006.

4
        For Fiscal Year 2008 and thereafter, the premium in 
5
    each fiscal year shall not exceed 105% of
the premium 
6
    actually charged in the previous fiscal year.

7
    Rates and premiums may be based in part on age and 
8
eligibility for federal
medicare coverage.  However, the cost of 
9
participation for a TRS dependent
beneficiary who is an 
10
unmarried child age 19 or over and mentally or physically

11
disabled shall not exceed the cost for a TRS dependent 
12
beneficiary who is
an unmarried child under age 19 and 
13
participates in the same major medical or
managed care program.

14
    The cost of health benefits under the program shall be paid 
15
as follows:


16
        (1) For a TRS benefit recipient selecting a managed 
17
    care program, up to
75% of the total insurance rate shall 
18
    be paid from the Teacher Health Insurance
Security Fund. 
19
    Effective with Fiscal Year 2007 and thereafter, for a TRS 
20
    benefit recipient selecting a managed care program, 75% of 
21
    the total insurance rate shall be paid from the Teacher 
22
    Health Insurance
Security Fund.



23
        (2) For a TRS benefit recipient selecting the major 
24
    medical coverage
program, up to 50% of the total insurance 
25
    rate shall be paid from the Teacher
Health Insurance 
26
    Security Fund if a managed care program is accessible, as

 


 






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    determined by the Teachers' Retirement System. Effective 
2
    with Fiscal Year 2007 and thereafter, for a TRS benefit 
3
    recipient selecting the major medical coverage
program, 
4
    50% of the total insurance rate shall be paid from the 
5
    Teacher
Health Insurance Security Fund if a managed care 
6
    program is accessible, as
determined by the Department of 
7
    Central Management Services.



8
        (3) For a TRS benefit recipient selecting the major 
9
    medical coverage
program, up to 75% of the total insurance 
10
    rate shall be paid from the Teacher
Health Insurance 
11
    Security Fund if a managed care program is not accessible, 
12
    as
determined by the Teachers' Retirement System. 
13
    Effective with Fiscal Year 2007 and thereafter, for a TRS 
14
    benefit recipient selecting the major medical coverage

15
    program, 75% of the total insurance rate shall be paid from 
16
    the Teacher
Health Insurance Security Fund if a managed 
17
    care program is not accessible, as
determined by the 
18
    Department of Central Management Services.

19
        (3.1) For a TRS dependent beneficiary who is Medicare 
20
    primary and enrolled in a managed care plan, or the major 
21
    medical coverage program if a managed care plan is not 
22
    available, 25% of the total insurance rate shall be paid 
23
    from the Teacher Health Security Fund as determined by the 
24
    Department of Central Management Services. For the purpose 
25
    of this item (3.1), the term "TRS dependent beneficiary who 
26
    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 
4
    premium of
any coverage for TRS dependent beneficiaries 
5
    that has been elected, shall be
paid
by deductions 
6
    authorized by the TRS benefit recipient to be withheld from 
7
    his
or her monthly annuity or benefit payment from the 
8
    Teachers' Retirement System;
except that (i) if the balance 
9
    of the cost of coverage exceeds the amount of
the monthly 
10
    annuity or benefit payment, the difference shall be paid 
11
    directly
to the Teachers' Retirement System by the TRS 
12
    benefit recipient, and (ii) all
or part of the balance of 
13
    the cost of coverage may, at the school  board's
option, be 
14
    paid to the Teachers' Retirement System by the school board 
15
    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 
17
    Code.  The Teachers' Retirement System
shall promptly 
18
    deposit all moneys withheld by or paid to it under this

19
    subdivision (e)(4) into the Teacher Health Insurance 
20
    Security Fund.  These
moneys shall not be considered assets 
21
    of the Retirement System.

22
    (f) Financing.  Beginning July 1, 1995, all revenues arising 
23
from the
administration of the health benefit programs 
24
established under Article 16 of
the Illinois Pension Code or 
25
this Section shall be deposited into the
Teacher Health 
26
Insurance Security Fund, which is hereby created as a

 


 






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nonappropriated trust fund to be held outside the State 
2
Treasury, with the
State Treasurer as custodian.  Any interest 
3
earned on moneys in the Teacher
Health Insurance Security Fund 
4
shall be deposited into the Fund.

5
    Moneys in the Teacher Health Insurance Security
Fund shall 
6
be used only to pay the costs of the health benefit program

7
established under this Section, including associated 
8
administrative costs, and
the costs associated with the health 
9
benefit program established under Article
16 of the Illinois 
10
Pension Code, as authorized in this Section.  Beginning
July 1, 
11
1995, the Department of Central Management Services may make

12
expenditures from the Teacher Health Insurance Security Fund 
13
for those costs.

14
    After other funds authorized for the payment of the costs 
15
of the health
benefit program established under Article 16 of 
16
the Illinois Pension Code are
exhausted and until January 1, 
17
1996 (or such later date as may be agreed upon
by the Director 
18
of Central Management Services and the Secretary of the

19
Teachers' Retirement System), the Secretary of the Teachers' 
20
Retirement System
may make expenditures from the Teacher Health 
21
Insurance Security Fund as
necessary to pay up to 75% of the 
22
cost of providing health coverage to eligible
benefit 
23
recipients (as defined in Sections 16-153.1 and 16-153.3 of the

24
Illinois Pension Code) who are enrolled in the Article 16 
25
health benefit
program and to facilitate the transfer of 
26
administration of the health benefit
program to the Department 
 


 






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of Central Management Services.

2
    The Department of Healthcare and Family Services, or any 
3
successor agency designated to procure healthcare contracts 
4
pursuant to this Act, is authorized to establish funds, 
5
separate accounts provided by any bank or banks as defined by 
6
the Illinois Banking Act, or separate accounts provided by any 
7
savings and loan association or associations as defined by the 
8
Illinois Savings and Loan Act of 1985 to be held by the 
9
Director, outside the State treasury, for the purpose of 
10
receiving the transfer of moneys from the Teacher Health 
11
Insurance Security Fund. The Department may promulgate rules 
12
further defining the methodology for the transfers. Any 
13
interest earned by moneys in the funds or accounts shall inure 
14
to the Teacher Health Insurance Security Fund. The transferred 
15
moneys, and interest accrued thereon, shall be used exclusively 
16
for transfers to administrative service organizations or their 
17
financial institutions for payments of claims to claimants and 
18
providers under the self-insurance health plan. The 
19
transferred moneys, and interest accrued thereon, shall not be 
20
used for any other purpose including, but not limited to, 
21
reimbursement of administration fees due the administrative 
22
service organization pursuant to its contract or contracts with 
23
the Department.

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    (g) Contract for benefits.  The Director shall by contract, 
25
self-insurance,
or otherwise make available the program of 
26
health benefits for TRS benefit
recipients and their TRS 
 


 






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dependent beneficiaries that is provided for in this
Section.  
2
The contract or other arrangement for the provision of these 
3
health
benefits shall be on terms deemed by the Director to be 
4
in the best interest of
the State of Illinois and the TRS 
5
benefit recipients based on, but not limited
to, such criteria 
6
as administrative cost, service capabilities of the carrier
or 
7
other contractor, and the costs of the benefits.

8
    (g-5) Committee.  A Teacher Retirement Insurance Program 
9
Committee shall be established, to consist of 10 persons 
10
appointed by the Governor.

11
    The Committee shall convene at least 4 times each year, and 
12
shall consider and make recommendations on issues affecting the 
13
program of health benefits provided under this
Section.  
14
Recommendations of the Committee shall be based on a consensus 
15
of the members of the Committee.

16
    If the Teacher
Health Insurance Security Fund experiences a 
17
deficit balance based upon the contribution and subsidy rates 
18
established in this Section and Section 6.6 for Fiscal Year 
19
2008 or thereafter, the Committee shall make recommendations 
20
for adjustments to the funding sources established under these 
21
Sections.
22
    (h) Continuation of program.  It is the intention of
the 
23
General Assembly that the program of health benefits provided 
24
under this
Section be maintained on an ongoing, affordable 
25
basis.

26
    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 
2
or retirement benefit subject to
protection under Article XIII, 
3
Section 5 of the Illinois Constitution.

4
    (i) Repeal.  (Blank).

5
(Source: P.A. 95-632, eff. 9-25-07.)