99TH GENERAL ASSEMBLY
State of Illinois
2015 and 2016
SB1583

 

Introduced 2/20/2015, by Sen. Terry Link

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.5
5 ILCS 375/6.9

    Amends the State Employees Group Insurance Act of 1971. Sets forth provisions regarding health benefits for TRS benefit recipients, TRS dependent beneficiaries, community college benefit recipients, and community college dependent beneficiaries. Permits eligible benefit recipients and dependent beneficiaries to elect not to participate in the program of health benefits during the benefit recipient's annual open enrollment period. Permits a benefit recipient and the dependent beneficiary to re-enroll in the Department of Central Management Services program of health benefits upon showing a qualifying change in status without evidence of insurability and with no limitations on coverage for pre-existing conditions, provided that there was not a break in coverage of more than 63 days. Permits a benefit recipient and the dependent beneficiary who elected not to participate in the program of health benefits to re-enroll in the program of health benefits during any annual benefit choice period, without evidence of insurability. Provides that benefit recipients who elect not to participate in the program of health benefits shall be furnished with a written explanation of the requirements and limitations for the election not to participate in the program and for re-enrolling in the program. Further provides that the Director shall not limit re-enrollment in a manner that is inconsistent with this amendatory Act. Makes other technical changes. Effective immediately.


LRB099 09467 JLK 29675 b

 

 

A BILL FOR

 

SB1583LRB099 09467 JLK 29675 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 Sections 6.5 and 6.9 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 purpose of this amendatory Act of
101995 to transfer the administration of the program of health
11benefits 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    A TRS dependent beneficiary who is a child age 19 or over
13and mentally or physically disabled does not become ineligible
14to participate by reason of (i) becoming ineligible to be
15claimed as a dependent for Illinois or federal income tax
16purposes or (ii) receiving earned income, so long as those
17earnings are insufficient for the child to be fully
18self-sufficient.
19    (c-1) On and after the effective date of this amendatory
20Act of the 99th General Assembly, eligible TRS benefit
21recipients and TRS dependent beneficiaries may elect not to
22participate in the program of health benefits under this
23Section. The election must be made during the TRS benefit
24recipient's annual open enrollment period subject to the
25following conditions:
26        (1) TRS benefit recipients must furnish proof of health

 

 

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1    benefit coverage, either comprehensive major medical
2    coverage or comprehensive managed care plan, from a source
3    other than the Department of Central Management Services in
4    order to elect not to participate in the program.
5        (2) Regardless of the date that the TRS benefit
6    recipient or TRS dependent beneficiary elected not to
7    participate in the program of health benefits offered under
8    this Section, both the TRS benefit recipient and the TRS
9    dependent beneficiary may also re-enroll in the program of
10    health benefits during any annual open enrollment period,
11    without evidence of insurability.
12        (3) TRS benefit recipients who elect not to participate
13    in the program of health benefits shall be furnished with a
14    written explanation of the requirements and limitations
15    for the election not to participate in the program and for
16    re-enrolling in the program.
17        (4) The changes under this subsection (c-1) impact only
18    those TRS benefit recipients and TRS dependent
19    beneficiaries who choose to enroll in the Teachers'
20    Retirement Insurance Program after the effective date of
21    this amendatory Act of the 99th General Assembly or those
22    who are enrolled or had been enrolled in the Teachers'
23    Retirement Insurance Program on or before the effective
24    date of this amendatory Act of the 99th General Assembly.
25    (d) Coverage. The level of health benefits provided under
26this Section shall be similar to the level of benefits provided

 

 

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1by the program previously established under Article 16 of the
2Illinois Pension Code.
3    Group life insurance benefits are not included in the
4benefits to be provided to TRS benefit recipients and TRS
5dependent beneficiaries under this Act.
6    The program of health benefits under this Section may
7include any or all of the benefit limitations, including but
8not limited to a reduction in benefits based on eligibility for
9federal Medicare medicare benefits, that are provided under
10subsection (a) of Section 6 of this Act for other health
11benefit programs under this Act.
12    (e) Insurance rates and premiums. The Director shall
13determine the insurance rates and premiums for TRS benefit
14recipients and TRS dependent beneficiaries, and shall present
15to the Teachers' Retirement System of the State of Illinois, by
16April 15 of each calendar year, the rate-setting methodology
17(including but not limited to utilization levels and costs)
18used to determine the amount of the health care premiums.
19        For Fiscal Year 1996, the premium shall be equal to the
20    premium actually charged in Fiscal Year 1995; in subsequent
21    years, the premium shall never be lower than the premium
22    charged in Fiscal Year 1995.
23        For Fiscal Year 2003, the premium shall not exceed 110%
24    of the premium actually charged in Fiscal Year 2002.
25        For Fiscal Year 2004, the premium shall not exceed 112%
26    of the premium actually charged in Fiscal Year 2003.

 

 

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1        For Fiscal Year 2005, the premium shall not exceed a
2    weighted average of 106.6% of the premium actually charged
3    in Fiscal Year 2004.
4        For Fiscal Year 2006, the premium shall not exceed a
5    weighted average of 109.1% of the premium actually charged
6    in Fiscal Year 2005.
7        For Fiscal Year 2007, the premium shall not exceed a
8    weighted average of 103.9% of the premium actually charged
9    in Fiscal Year 2006.
10        For Fiscal Year 2008 and thereafter, the premium in
11    each fiscal year shall not exceed 105% of the premium
12    actually charged in the previous fiscal year.
13    Rates and premiums may be based in part on age and
14eligibility for federal medicare coverage. However, the cost of
15participation for a TRS dependent beneficiary who is an
16unmarried child age 19 or over and mentally or physically
17disabled shall not exceed the cost for a TRS dependent
18beneficiary who is an unmarried child under age 19 and
19participates in the same major medical or managed care program.
20    The cost of health benefits under the program shall be paid
21as follows:
22        (1) For a TRS benefit recipient selecting a managed
23    care program, up to 75% of the total insurance rate shall
24    be paid from the Teacher Health Insurance Security Fund.
25    Effective with Fiscal Year 2007 and thereafter, for a TRS
26    benefit recipient selecting a managed care program, 75% of

 

 

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

 

 

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

 

 

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1    of the Retirement System.
2    (f) Financing. Beginning July 1, 1995, all revenues arising
3from the administration of the health benefit programs
4established under Article 16 of the Illinois Pension Code or
5this Section shall be deposited into the Teacher Health
6Insurance Security Fund, which is hereby created as a
7nonappropriated trust fund to be held outside the State
8Treasury, with the State Treasurer as custodian. Any interest
9earned on moneys in the Teacher Health Insurance Security Fund
10shall be deposited into the Fund.
11    Moneys in the Teacher Health Insurance Security Fund shall
12be used only to pay the costs of the health benefit program
13established under this Section, including associated
14administrative costs, and the costs associated with the health
15benefit program established under Article 16 of the Illinois
16Pension Code, as authorized in this Section. Beginning July 1,
171995, the Department of Central Management Services may make
18expenditures from the Teacher Health Insurance Security Fund
19for those costs.
20    After other funds authorized for the payment of the costs
21of the health benefit program established under Article 16 of
22the Illinois Pension Code are exhausted and until January 1,
231996 (or such later date as may be agreed upon by the Director
24of Central Management Services and the Secretary of the
25Teachers' Retirement System), the Secretary of the Teachers'
26Retirement System may make expenditures from the Teacher Health

 

 

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

 

 

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1reimbursement of administration fees due the administrative
2service organization pursuant to its contract or contracts with
3the Department.
4    (g) Contract for benefits. The Director shall by contract,
5self-insurance, or otherwise make available the program of
6health benefits for TRS benefit recipients and their TRS
7dependent beneficiaries that is provided for in this Section.
8The contract or other arrangement for the provision of these
9health benefits shall be on terms deemed by the Director to be
10in the best interest of the State of Illinois and the TRS
11benefit recipients based on, but not limited to, such criteria
12as administrative cost, service capabilities of the carrier or
13other contractor, and the costs of the benefits.
14    (g-5) Committee. A Teacher Retirement Insurance Program
15Committee shall be established, to consist of 10 persons
16appointed by the Governor.
17    The Committee shall convene at least 4 times each year, and
18shall consider and make recommendations on issues affecting the
19program of health benefits provided under this Section.
20Recommendations of the Committee shall be based on a consensus
21of the members of the Committee.
22    If the Teacher Health Insurance Security Fund experiences a
23deficit balance based upon the contribution and subsidy rates
24established in this Section and Section 6.6 for Fiscal Year
252008 or thereafter, the Committee shall make recommendations
26for adjustments to the funding sources established under these

 

 

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1Sections.
2    In addition, the Committee shall identify proposed
3solutions to the funding shortfalls that are affecting the
4Teacher Health Insurance Security Fund, and it shall report
5those solutions to the Governor and the General Assembly within
66 months after August 15, 2011 (the effective date of Public
7Act 97-386).
8    (h) Continuation of program. It is the intention of the
9General Assembly that the program of health benefits provided
10under this Section be maintained on an ongoing, affordable
11basis.
12    The program of health benefits provided under this Section
13may be amended by the State and is not intended to be a pension
14or retirement benefit subject to protection under Article XIII,
15Section 5 of the Illinois Constitution.
16    (i) Repeal. (Blank).
17(Source: P.A. 97-386, eff. 8-15-11; 97-813, eff. 7-13-12;
1898-488, eff. 8-16-13.)
 
19    (5 ILCS 375/6.9)
20    Sec. 6.9. Health benefits for community college benefit
21recipients and community college dependent beneficiaries.
22    (a) Purpose. It is the purpose of this amendatory Act of
231997 to establish a uniform program of health benefits for
24community college benefit recipients and their dependent
25beneficiaries under the administration of the Department of

 

 

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1Central Management Services.
2    (b) Creation of program. Beginning July 1, 1999, the
3Department of Central Management Services shall be responsible
4for administering a program of health benefits for community
5college benefit recipients and community college dependent
6beneficiaries under this Section. The State Universities
7Retirement System and the boards of trustees of the various
8community college districts shall cooperate with the
9Department in this endeavor.
10    (c) Eligibility. All community college benefit recipients
11and community college dependent beneficiaries shall be
12eligible to participate in the program established under this
13Section, without any interruption or delay in coverage or
14limitation as to pre-existing medical conditions. Eligibility
15to participate shall be determined by the State Universities
16Retirement System. Eligibility information shall be
17communicated to the Department of Central Management Services
18in a format acceptable to the Department.
19    (c-1) On and after the effective date of this amendatory
20Act of the 99th General Assembly, eligible community college
21benefit recipients and community college dependent
22beneficiaries may elect not to participate in the program of
23health benefits under this Section. The election must be made
24during the community college benefit recipient's annual open
25enrollment period subject to the following conditions:
26        (1) Community college benefit recipients must furnish

 

 

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1    proof of health benefit coverage, either comprehensive
2    major medical coverage or comprehensive managed care plan,
3    from a source other than the Department of Central
4    Management Services in order to elect not to participate in
5    the program.
6        (2) Regardless of the date that the community college
7    benefit recipient or community college dependent
8    beneficiary elected not to participate in the program of
9    health benefits offered under this Section, both the
10    community college benefit recipient and the community
11    college dependent beneficiary may also re-enroll in the
12    program of health benefits during any annual open
13    enrollment period, without evidence of insurability.
14        (3) Community college benefit recipients who elect not
15    to participate in the program of health benefits shall be
16    furnished with a written explanation of the requirements
17    and limitations for the election not to participate in the
18    program and for re-enrolling in the program.
19        (4) The changes under this subsection (c-1) impact only
20    those community college benefit recipients and community
21    college dependent beneficiaries who choose to enroll in the
22    College Insurance Program after the effective date of this
23    amendatory Act of the 99th General Assembly or those who
24    are enrolled or had been enrolled in the College Insurance
25    Program on or before the effective date of this amendatory
26    Act of the 99th General Assembly.

 

 

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1    (d) Coverage. The health benefit coverage provided under
2this Section shall be a program of health, dental, and vision
3benefits.
4    The program of health benefits under this Section may
5include any or all of the benefit limitations, including but
6not limited to a reduction in benefits based on eligibility for
7federal Medicare medicare benefits, that are provided under
8subsection (a) of Section 6 of this Act for other health
9benefit programs under this Act.
10    (e) Insurance rates and premiums. The Director shall
11determine the insurance rates and premiums for community
12college benefit recipients and community college dependent
13beneficiaries. Rates and premiums may be based in part on age
14and eligibility for federal Medicare coverage. The Director
15shall also determine premiums that will allow for the
16establishment of an actuarially sound reserve for this program.
17    The cost of health benefits under the program shall be paid
18as follows:
19        (1) For a community college benefit recipient, up to
20    75% of the total insurance rate shall be paid from the
21    Community College Health Insurance Security Fund.
22        (2) The balance of the rate of insurance, including the
23    entire premium for any coverage for community college
24    dependent beneficiaries that has been elected, shall be
25    paid by deductions authorized by the community college
26    benefit recipient to be withheld from his or her monthly

 

 

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1    annuity or benefit payment from the State Universities
2    Retirement System; except that (i) if the balance of the
3    cost of coverage exceeds the amount of the monthly annuity
4    or benefit payment, the difference shall be paid directly
5    to the State Universities Retirement System by the
6    community college benefit recipient, and (ii) all or part
7    of the balance of the cost of coverage may, at the option
8    of the board of trustees of the community college district,
9    be paid to the State Universities Retirement System by the
10    board of the community college district from which the
11    community college benefit recipient retired. The State
12    Universities Retirement System shall promptly deposit all
13    moneys withheld by or paid to it under this subdivision
14    (e)(2) into the Community College Health Insurance
15    Security Fund. These moneys shall not be considered assets
16    of the State Universities Retirement System.
17    (f) Financing. All revenues arising from the
18administration of the health benefit program established under
19this Section shall be deposited into the Community College
20Health Insurance Security Fund, which is hereby created as a
21nonappropriated trust fund to be held outside the State
22Treasury, with the State Treasurer as custodian. Any interest
23earned on moneys in the Community College Health Insurance
24Security Fund shall be deposited into the Fund.
25    Moneys in the Community College Health Insurance Security
26Fund shall be used only to pay the costs of the health benefit

 

 

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1program established under this Section, including associated
2administrative costs and the establishment of a program
3reserve. Beginning January 1, 1999, the Department of Central
4Management Services may make expenditures from the Community
5College Health Insurance Security Fund for those costs.
6    (g) Contract for benefits. The Director shall by contract,
7self-insurance, or otherwise make available the program of
8health benefits for community college benefit recipients and
9their community college dependent beneficiaries that is
10provided for in this Section. The contract or other arrangement
11for the provision of these health benefits shall be on terms
12deemed by the Director to be in the best interest of the State
13of Illinois and the community college benefit recipients based
14on, but not limited to, such criteria as administrative cost,
15service capabilities of the carrier or other contractor, and
16the costs of the benefits.
17    (h) Continuation of program. It is the intention of the
18General Assembly that the program of health benefits provided
19under this Section be maintained on an ongoing, affordable
20basis. The program of health benefits provided under this
21Section may be amended by the State and is not intended to be a
22pension or retirement benefit subject to protection under
23Article XIII, Section 5 of the Illinois Constitution.
24    (i) Other health benefit plans. A health benefit plan
25provided by a community college district (other than a
26community college district subject to Article VII of the Public

 

 

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1Community College Act) under the terms of a collective
2bargaining agreement in effect on or prior to the effective
3date of this amendatory Act of 1997 shall continue in force
4according to the terms of that agreement, unless otherwise
5mutually agreed by the parties to that agreement and the
6affected retiree. A community college benefit recipient or
7community college dependent beneficiary whose coverage under
8such a plan expires shall be eligible to begin participating in
9the program established under this Section without any
10interruption or delay in coverage or limitation as to
11pre-existing medical conditions.
12    This Act does not prohibit any community college district
13from offering additional health benefits for its retirees or
14their dependents or survivors.
15(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
 
16    Section 99. Effective date. This Act takes effect upon
17becoming law.