96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5416

 

Introduced 2/5/2010, by Rep. Kevin A. McCarthy

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.5

    Amends the State Employees Group Insurance Act of 1971. For fiscal year 2011, provides that for a TRS benefit recipient who is at least 65 years old, who is not Medicare primary, who has been a legal resident of Illinois since at least July 1, 2009, and who selects the major medical coverage program when a managed care program is accessible, the premium shall not exceed 90% of the premium actually charged in Fiscal Year 2010. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning State government.
 
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 1971
5 is 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
8 TRS dependent beneficiaries.
9     (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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1 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.
26     The program of health benefits under this Section may

 

 

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1 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%
18     of the premium actually charged in Fiscal Year 2002.
19         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
26     in Fiscal Year 2005.

 

 

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1         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; except that
7     for Fiscal Year 2011, for a TRS benefit recipient who is at
8     least 65 years old, who is not Medicare primary, who has
9     been a legal resident of Illinois since at least July 1,
10     2009, and who selects the major medical coverage program
11     when a managed care program is accessible, the premium
12     shall not exceed 90% of the premium actually charged in
13     Fiscal Year 2010.
14     Rates and premiums may be based in part on age and
15 eligibility for federal medicare coverage. However, the cost of
16 participation for a TRS dependent beneficiary who is an
17 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
20 participates in the same major medical or managed care program.
21     The cost of health benefits under the program shall be paid
22 as follows:
23         (1) For a TRS benefit recipient selecting a managed
24     care program, up to 75% of the total insurance rate shall
25     be paid from the Teacher Health Insurance Security Fund.
26     Effective with Fiscal Year 2007 and thereafter, for a TRS

 

 

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1     benefit recipient selecting a managed care program, 75% of
2     the total insurance rate shall be paid from the Teacher
3     Health Insurance Security Fund.
4         (2) For a TRS benefit recipient selecting the major
5     medical coverage program, up to 50% of the total insurance
6     rate shall be paid from the Teacher Health Insurance
7     Security Fund if a managed care program is accessible, as
8     determined by the Teachers' Retirement System. Effective
9     with Fiscal Year 2007 and thereafter, for a TRS benefit
10     recipient selecting the major medical coverage program,
11     50% of the total insurance rate shall be paid from the
12     Teacher Health Insurance Security Fund if a managed care
13     program is accessible, as determined by the Department of
14     Central Management Services.
15         (3) For a TRS benefit recipient selecting the major
16     medical coverage program, up to 75% of the total insurance
17     rate shall be paid from the Teacher Health Insurance
18     Security Fund if a managed care program is not accessible,
19     as determined by the Teachers' Retirement System.
20     Effective with Fiscal Year 2007 and thereafter, for a TRS
21     benefit recipient selecting the major medical coverage
22     program, 75% of the total insurance rate shall be paid from
23     the Teacher Health Insurance Security Fund if a managed
24     care program is not accessible, as determined by the
25     Department of Central Management Services.
26         (3.1) For a TRS dependent beneficiary who is Medicare

 

 

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

 

 

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1     Security Fund. These moneys shall not be considered assets
2     of the Retirement System.
3     (f) Financing. Beginning July 1, 1995, all revenues arising
4 from the administration of the health benefit programs
5 established under Article 16 of the Illinois Pension Code or
6 this Section shall be deposited into the Teacher Health
7 Insurance Security Fund, which is hereby created as a
8 nonappropriated trust fund to be held outside the State
9 Treasury, with the State Treasurer as custodian. Any interest
10 earned on moneys in the Teacher Health Insurance Security Fund
11 shall be deposited into the Fund.
12     Moneys in the Teacher Health Insurance Security Fund shall
13 be used only to pay the costs of the health benefit program
14 established under this Section, including associated
15 administrative costs, and the costs associated with the health
16 benefit program established under Article 16 of the Illinois
17 Pension Code, as authorized in this Section. Beginning July 1,
18 1995, the Department of Central Management Services may make
19 expenditures from the Teacher Health Insurance Security Fund
20 for those costs.
21     After other funds authorized for the payment of the costs
22 of the health benefit program established under Article 16 of
23 the Illinois Pension Code are exhausted and until January 1,
24 1996 (or such later date as may be agreed upon by the Director
25 of Central Management Services and the Secretary of the
26 Teachers' Retirement System), the Secretary of the Teachers'

 

 

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1 Retirement System may make expenditures from the Teacher Health
2 Insurance Security Fund as necessary to pay up to 75% of the
3 cost of providing health coverage to eligible benefit
4 recipients (as defined in Sections 16-153.1 and 16-153.3 of the
5 Illinois Pension Code) who are enrolled in the Article 16
6 health benefit program and to facilitate the transfer of
7 administration of the health benefit program to the Department
8 of Central Management Services.
9     The Department of Healthcare and Family Services, or any
10 successor agency designated to procure healthcare contracts
11 pursuant to this Act, is authorized to establish funds,
12 separate accounts provided by any bank or banks as defined by
13 the Illinois Banking Act, or separate accounts provided by any
14 savings and loan association or associations as defined by the
15 Illinois Savings and Loan Act of 1985 to be held by the
16 Director, outside the State treasury, for the purpose of
17 receiving the transfer of moneys from the Teacher Health
18 Insurance Security Fund. The Department may promulgate rules
19 further defining the methodology for the transfers. Any
20 interest earned by moneys in the funds or accounts shall inure
21 to the Teacher Health Insurance Security Fund. The transferred
22 moneys, and interest accrued thereon, shall be used exclusively
23 for transfers to administrative service organizations or their
24 financial institutions for payments of claims to claimants and
25 providers under the self-insurance health plan. The
26 transferred moneys, and interest accrued thereon, shall not be

 

 

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1 used for any other purpose including, but not limited to,
2 reimbursement of administration fees due the administrative
3 service organization pursuant to its contract or contracts with
4 the Department.
5     (g) Contract for benefits. The Director shall by contract,
6 self-insurance, or otherwise make available the program of
7 health benefits for TRS benefit recipients and their TRS
8 dependent beneficiaries that is provided for in this Section.
9 The contract or other arrangement for the provision of these
10 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
12 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.
15     (g-5) Committee. A Teacher Retirement Insurance Program
16 Committee shall be established, to consist of 10 persons
17 appointed by the Governor.
18     The Committee shall convene at least 4 times each year, and
19 shall consider and make recommendations on issues affecting the
20 program of health benefits provided under this Section.
21 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
24 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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1 for adjustments to the funding sources established under these
2 Sections.
3     (h) Continuation of program. It is the intention of the
4 General Assembly that the program of health benefits provided
5 under this Section be maintained on an ongoing, affordable
6 basis.
7     The program of health benefits provided under this Section
8 may be amended by the State and is not intended to be a pension
9 or retirement benefit subject to protection under Article XIII,
10 Section 5 of the Illinois Constitution.
11     (i) Repeal. (Blank).
12 (Source: P.A. 95-632, eff. 9-25-07.)
 
13     Section 99. Effective date. This Act takes effect upon
14 becoming law.