102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
HB1309

 

Introduced 2/17/2021, by Rep. Emanuel Chris Welch

 

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.


LRB102 03319 RJF 13332 b

 

 

A BILL FOR

 

HB1309LRB102 03319 RJF 13332 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Section 6.5 as follows:
 
6    (5 ILCS 375/6.5)
7    Sec. 6.5. Health benefits for TRS benefit recipients and
8TRS dependent beneficiaries.
9    (a) Purpose. It is the the purpose of this amendatory Act
10of 1995 to transfer the administration of the program of
11health benefits established for benefit recipients and their
12dependent beneficiaries under Article 16 of the Illinois
13Pension Code to the Department of Central Management Services.
14    (b) Transition provisions. The Board of Trustees of the
15Teachers' Retirement System shall continue to administer the
16health benefit program established under Article 16 of the
17Illinois Pension Code through December 31, 1995. Beginning
18January 1, 1996, the Department of Central Management Services
19shall be responsible for administering a program of health
20benefits for TRS benefit recipients and TRS dependent
21beneficiaries under this Section. The Department of Central
22Management Services and the Teachers' Retirement System shall
23cooperate in this endeavor and shall coordinate their

 

 

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1activities so as to ensure a smooth transition and
2uninterrupted health benefit coverage.
3    (c) Eligibility. All persons who were enrolled in the
4Article 16 program at the time of the transfer shall be
5eligible to participate in the program established under this
6Section without any interruption or delay in coverage or
7limitation as to pre-existing medical conditions. Eligibility
8to participate shall be determined by the Teachers' Retirement
9System. Eligibility information shall be communicated to the
10Department of Central Management Services in a format
11acceptable to the Department.
12    Eligible TRS benefit recipients may enroll or re-enroll in
13the program of health benefits established under this Section
14during any applicable annual open enrollment period and as
15otherwise permitted by the Department of Central Management
16Services. A TRS benefit recipient shall not be deemed
17ineligible to participate solely by reason of the TRS benefit
18recipient having made a previous election to disenroll or
19otherwise not participate in the program of health benefits.
20    A TRS dependent beneficiary who is a child age 19 or over
21and mentally or physically disabled does not become ineligible
22to participate by reason of (i) becoming ineligible to be
23claimed as a dependent for Illinois or federal income tax
24purposes or (ii) receiving earned income, so long as those
25earnings are insufficient for the child to be fully
26self-sufficient.

 

 

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1    (d) Coverage. The level of health benefits provided under
2this Section shall be similar to the level of benefits
3provided by the program previously established under Article
416 of the Illinois Pension Code.
5    Group life insurance benefits are not included in the
6benefits to be provided to TRS benefit recipients and TRS
7dependent beneficiaries under this Act.
8    The program of health benefits under this Section may
9include any or all of the benefit limitations, including but
10not limited to a reduction in benefits based on eligibility
11for federal Medicare benefits, that are provided under
12subsection (a) of Section 6 of this Act for other health
13benefit programs under this Act.
14    (e) Insurance rates and premiums. The Director shall
15determine the insurance rates and premiums for TRS benefit
16recipients and TRS dependent beneficiaries, and shall present
17to the Teachers' Retirement System of the State of Illinois,
18by April 15 of each calendar year, the rate-setting
19methodology (including but not limited to utilization levels
20and costs) used to determine the amount of the health care
21premiums.
22        For Fiscal Year 1996, the premium shall be equal to
23    the premium actually charged in Fiscal Year 1995; in
24    subsequent years, the premium shall never be lower than
25    the premium charged in Fiscal Year 1995.
26        For Fiscal Year 2003, the premium shall not exceed

 

 

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1    110% of the premium actually charged in Fiscal Year 2002.
2        For Fiscal Year 2004, the premium shall not exceed
3    112% of the premium actually charged in Fiscal Year 2003.
4        For Fiscal Year 2005, the premium shall not exceed a
5    weighted average of 106.6% of the premium actually charged
6    in Fiscal Year 2004.
7        For Fiscal Year 2006, the premium shall not exceed a
8    weighted average of 109.1% of the premium actually charged
9    in Fiscal Year 2005.
10        For Fiscal Year 2007, the premium shall not exceed a
11    weighted average of 103.9% of the premium actually charged
12    in Fiscal Year 2006.
13        For Fiscal Year 2008 and thereafter, the premium in
14    each fiscal year shall not exceed 105% of the premium
15    actually charged in the previous fiscal year.
16    Rates and premiums may be based in part on age and
17eligibility for federal medicare coverage. However, the cost
18of participation for a TRS dependent beneficiary who is an
19unmarried child age 19 or over and mentally or physically
20disabled shall not exceed the cost for a TRS dependent
21beneficiary who is an unmarried child under age 19 and
22participates in the same major medical or managed care
23program.
24    The cost of health benefits under the program shall be
25paid as follows:
26        (1) For a TRS benefit recipient selecting a managed

 

 

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1    care program, up to 75% of the total insurance rate shall
2    be paid from the Teacher Health Insurance Security Fund.
3    Effective with Fiscal Year 2007 and thereafter, for a TRS
4    benefit recipient selecting a managed care program, 75% of
5    the total insurance rate shall be paid from the Teacher
6    Health Insurance Security Fund.
7        (2) For a TRS benefit recipient selecting the major
8    medical coverage program, up to 50% of the total insurance
9    rate shall be paid from the Teacher Health Insurance
10    Security Fund if a managed care program is accessible, as
11    determined by the Teachers' Retirement System. Effective
12    with Fiscal Year 2007 and thereafter, for a TRS benefit
13    recipient selecting the major medical coverage program,
14    50% of the total insurance rate shall be paid from the
15    Teacher Health Insurance Security Fund if a managed care
16    program is accessible, as determined by the Department of
17    Central Management Services.
18        (3) For a TRS benefit recipient selecting the major
19    medical coverage program, up to 75% of the total insurance
20    rate shall be paid from the Teacher Health Insurance
21    Security Fund if a managed care program is not accessible,
22    as determined by the Teachers' Retirement System.
23    Effective with Fiscal Year 2007 and thereafter, for a TRS
24    benefit recipient selecting the major medical coverage
25    program, 75% of the total insurance rate shall be paid
26    from the Teacher Health Insurance Security Fund if a

 

 

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1    managed care program is not accessible, as determined by
2    the Department of Central Management Services.
3        (3.1) For a TRS dependent beneficiary who is Medicare
4    primary and enrolled in a managed care plan, or the major
5    medical coverage program if a managed care plan is not
6    available, 25% of the total insurance rate shall be paid
7    from the Teacher Health Security Fund as determined by the
8    Department of Central Management Services. For the purpose
9    of this item (3.1), the term "TRS dependent beneficiary
10    who is Medicare primary" means a TRS dependent beneficiary
11    who is participating in Medicare Parts A and B.
12        (4) Except as otherwise provided in item (3.1), the
13    balance of the rate of insurance, including the entire
14    premium of any coverage for TRS dependent beneficiaries
15    that has been elected, shall be paid by deductions
16    authorized by the TRS benefit recipient to be withheld
17    from his or her monthly annuity or benefit payment from
18    the Teachers' Retirement System; except that (i) if the
19    balance of the cost of coverage exceeds the amount of the
20    monthly annuity or benefit payment, the difference shall
21    be paid directly to the Teachers' Retirement System by the
22    TRS benefit recipient, and (ii) all or part of the balance
23    of the cost of coverage may, at the school board's option,
24    be paid to the Teachers' Retirement System by the school
25    board of the school district from which the TRS benefit
26    recipient retired, in accordance with Section 10-22.3b of

 

 

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1    the School Code. The Teachers' Retirement System shall
2    promptly deposit all moneys withheld by or paid to it
3    under this subdivision (e)(4) into the Teacher Health
4    Insurance Security Fund. These moneys shall not be
5    considered assets of the Retirement System.
6        (5) If in any case an error is made in billing a TRS
7    benefit recipient under this Section, the Department shall
8    identify the error and refund the overpaid amount as soon
9    as practicable. A TRS benefit recipient who has overpaid
10    under this Section shall be entitled to a refund of
11    overpayments for up to 7 years of past payments.
12    (f) Financing. Beginning July 1, 1995, all revenues
13arising from the administration of the health benefit programs
14established under Article 16 of the Illinois Pension Code or
15this Section shall be deposited into the Teacher Health
16Insurance Security Fund, which is hereby created as a
17nonappropriated trust fund to be held outside the State
18Treasury, with the State Treasurer as custodian. Any interest
19earned on moneys in the Teacher Health Insurance Security Fund
20shall be deposited into the Fund.
21    Moneys in the Teacher Health Insurance Security Fund shall
22be used only to pay the costs of the health benefit program
23established under this Section, including associated
24administrative costs, and the costs associated with the health
25benefit program established under Article 16 of the Illinois
26Pension Code, as authorized in this Section. Beginning July 1,

 

 

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11995, the Department of Central Management Services may make
2expenditures from the Teacher Health Insurance Security Fund
3for those costs.
4    After other funds authorized for the payment of the costs
5of the health benefit program established under Article 16 of
6the Illinois Pension Code are exhausted and until January 1,
71996 (or such later date as may be agreed upon by the Director
8of Central Management Services and the Secretary of the
9Teachers' Retirement System), the Secretary of the Teachers'
10Retirement System may make expenditures from the Teacher
11Health Insurance Security Fund as necessary to pay up to 75% of
12the cost of providing health coverage to eligible benefit
13recipients (as defined in Sections 16-153.1 and 16-153.3 of
14the Illinois Pension Code) who are enrolled in the Article 16
15health benefit program and to facilitate the transfer of
16administration of the health benefit program to the Department
17of Central Management Services.
18    The Department of Central Management Services, or any
19successor agency designated to procure healthcare contracts
20pursuant to this Act, is authorized to establish funds,
21separate accounts provided by any bank or banks as defined by
22the Illinois Banking Act, or separate accounts provided by any
23savings and loan association or associations as defined by the
24Illinois Savings and Loan Act of 1985 to be held by the
25Director, outside the State treasury, for the purpose of
26receiving the transfer of moneys from the Teacher Health

 

 

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1Insurance Security Fund. The Department may promulgate rules
2further defining the methodology for the transfers. Any
3interest earned by moneys in the funds or accounts shall inure
4to the Teacher Health Insurance Security Fund. The transferred
5moneys, and interest accrued thereon, shall be used
6exclusively for transfers to administrative service
7organizations or their financial institutions for payments of
8claims to claimants and providers under the self-insurance
9health plan. The transferred moneys, and interest accrued
10thereon, shall not be used for any other purpose including,
11but not limited to, reimbursement of administration fees due
12the administrative service organization pursuant to its
13contract or contracts with the Department.
14    (g) Contract for benefits. The Director shall by contract,
15self-insurance, or otherwise make available the program of
16health benefits for TRS benefit recipients and their TRS
17dependent beneficiaries that is provided for in this Section.
18The contract or other arrangement for the provision of these
19health benefits shall be on terms deemed by the Director to be
20in the best interest of the State of Illinois and the TRS
21benefit recipients based on, but not limited to, such criteria
22as administrative cost, service capabilities of the carrier or
23other contractor, and the costs of the benefits.
24    (g-5) Committee. A Teacher Retirement Insurance Program
25Committee shall be established, to consist of 10 persons
26appointed by the Governor.

 

 

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1    The Committee shall convene at least 4 times each year,
2and shall consider and make recommendations on issues
3affecting the program of health benefits provided under this
4Section. Recommendations of the Committee shall be based on a
5consensus of the members of the Committee.
6    If the Teacher Health Insurance Security Fund experiences
7a deficit balance based upon the contribution and subsidy
8rates established in this Section and Section 6.6 for Fiscal
9Year 2008 or thereafter, the Committee shall make
10recommendations for adjustments to the funding sources
11established under these Sections.
12    In addition, the Committee shall identify proposed
13solutions to the funding shortfalls that are affecting the
14Teacher Health Insurance Security Fund, and it shall report
15those solutions to the Governor and the General Assembly
16within 6 months after August 15, 2011 (the effective date of
17Public Act 97-386).
18    (h) Continuation of program. It is the intention of the
19General Assembly that the program of health benefits provided
20under this Section be maintained on an ongoing, affordable
21basis.
22    The program of health benefits provided under this Section
23may be amended by the State and is not intended to be a pension
24or retirement benefit subject to protection under Article
25XIII, Section 5 of the Illinois Constitution.
26    (i) Repeal. (Blank).

 

 

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1(Source: P.A. 100-1017, eff. 8-21-18; 101-483, eff. 1-1-20.)