[ Search ] [ Legislation ]
[ Home ] [ Back ] [ Bottom ]
91_HB0412
LRB9100998EGfg
1 AN ACT to amend the Illinois Pension Code by adding
2 Section 7-199.4 and to amend the State Mandates Act.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Pension Code is amended by
6 adding Section 7-199.4 as follows:
7 (40 ILCS 5/7-199.4 new)
8 Sec. 7-199.4. To administer a program of group health
9 benefits. To administer a program of group health benefits
10 for retired employees and their dependents and survivors and
11 to provide subsidies on an equitable basis for those retired
12 employees who elect to continue to participate in their
13 former IMRF employer's group health plan under the
14 continuation privilege.
15 (a) For the purposes of this Section:
16 "Active employee" means an employee of an IMRF employer
17 who is an active participant in the Fund.
18 "Continuation privilege" means the right of a former
19 employee to continue participation in the former employer's
20 group health plan, as established under the Illinois
21 Insurance Code and applicable federal law.
22 "IMRF employer" means a participating municipality or
23 participating instrumentality having employees who
24 participate in the Fund by reason of that employment.
25 "Retired employee" means a person who is receiving a
26 retirement annuity from the Fund based on at least 8 years of
27 service as an employee of an IMRF employer.
28 (b) The Board shall establish and administer a program
29 of group health benefits for retired employees and their
30 dependents and survivors. This program may be self-funded or
31 operated under a policy of group accident and health
-2- LRB9100998EGfg
1 insurance. As part of this program, the Board shall also
2 establish and administer a fair and equitable program of
3 subsidies to offset the cost of participation for those
4 retired employees who elect to continue to participate in
5 their former IMRF employer's group health plan under the
6 continuation privilege.
7 All retired employees are eligible to participate in the
8 program. The Board may adopt any rules that may be necessary
9 or convenient relating to the establishment and
10 administration of the program or to the conditions and terms
11 of participation in the program. The Board rules may require
12 use of the continuation privilege by retired employees who
13 are eligible to use that privilege but are not eligible for
14 Medicare.
15 This program shall be entirely independent of the other
16 functions and assets of the Fund, and the assets and
17 liabilities arising out of the operation of this program
18 shall remain separate from the other assets and liabilities
19 of the Fund. Moneys received by the Board relating to the
20 program established under this Section shall not be deemed
21 contributions to or assets of the Fund. All such moneys
22 shall be held by the Board in separate accounts and used only
23 for the purposes of the program established under this
24 Section.
25 (c) From the separate account established for this
26 purpose, the Fund shall pay a portion of the cost of
27 participation for each eligible retired employee who elects
28 to participate in either the former IMRF employer's group
29 health plan under the continuation privilege or the
30 IMRF-sponsored health benefit plan, equal to 5% of the cost
31 of the retired employee's participation (not including any
32 dependent or optional coverages) for each year of the
33 employee's contributions to the program under subsection (d),
34 up to a maximum of 20 years. A minimum of 4 years of
-3- LRB9100998EGfg
1 employee contributions to the program and 8 years of
2 participation in the Fund are required in order to be
3 eligible for this subsidy.
4 The balance of the cost of participation in the program
5 for a retired employee who elects to participate, together
6 with the entire cost of any optional coverage or coverage for
7 dependent beneficiaries, shall be paid by deductions
8 authorized by the retired employee to be withheld from his or
9 her monthly annuity payment, except that any amount by which
10 the monthly premium balance exceeds the net amount of the
11 monthly annuity payment shall be paid directly to the Fund
12 (or to the employer in the case of utilization of the
13 continuation privilege) by the participant. All amounts so
14 withheld or paid to the Fund shall be held in trust for the
15 purposes of paying the costs of the retired employee's
16 participation in the health benefit program.
17 (d) Beginning on the first day of the fourth month
18 following the month in which this Section takes effect, all
19 active employees shall contribute 1% of earnings toward the
20 cost of the program established under subsection (b). These
21 contributions shall be deducted by the employer and paid to
22 the Fund for deposit into the separate account established
23 under subsection (c). The Fund may use the same processes
24 for collecting the contributions required by this subsection
25 that it uses to collect contributions from employees under
26 Section 7-173. An IMRF employer may agree to pick up or pay
27 the contributions required under this subsection on behalf of
28 the employee. Contributions made under this subsection are
29 not transferable to other pension funds or retirement systems
30 and are refundable only upon termination of service when a
31 separation benefit is requested and taken.
32 (e) Beginning on the first day of the fourth month
33 following the month in which this Section takes effect, every
34 IMRF employer shall contribute toward the cost of the program
-4- LRB9100998EGfg
1 established under subsection (b) an amount equal to 1% of the
2 earnings of its active employees. These contributions shall
3 be paid by the employer to the Fund for deposit into the
4 separate account established under subsection (c). The Fund
5 may use the same processes for collecting the contributions
6 required by this subsection that it uses to collect
7 contributions from employers under Sections 7-172 and
8 7-172.1. Contributions for the program established under
9 this Section are separate from the contributions to the Fund
10 required under Section 7-172 and shall not be included in the
11 calculation of the contribution rate under that Section.
12 (f) The Board shall establish and administer a
13 transitional subsidy program under this subsection (f) for
14 retired employees who are not eligible for the subsidy under
15 subsection (c) because they have not contributed under
16 subsection (d) for at least 48 months.
17 Beginning on the first day of the fourth month following
18 the month in which this Section takes effect and ending upon
19 termination of the transitional subsidy program as determined
20 by the Board, in addition to the contributions required under
21 subsection (e), every IMRF employer shall contribute toward
22 the cost of the transitional subsidy program established
23 under this subsection (f) an amount equal to 0.25% of the
24 earnings of its active employees. These contributions shall
25 be paid by the employer to the Fund for deposit into a
26 separate account established under this subsection for the
27 transitional subsidy program. The Fund may use the same
28 processes for collecting the contributions required by this
29 subsection that it uses to collect contributions from
30 employers under Sections 7-172 and 7-172.1. Contributions
31 for the transitional subsidy program established under this
32 subsection are separate from the contributions to the Fund
33 required under Section 7-172 and shall not be included in the
34 calculation of the contribution rate under that Section.
-5- LRB9100998EGfg
1 The Fund shall pay from the separate account established
2 under this subsection a portion of the cost of participation
3 (not including any dependent or optional coverages) for each
4 retired employee who elects to participate in either the
5 former IMRF employer's group health plan under the
6 continuation privilege or the IMRF-sponsored health benefit
7 plan and who is not eligible for the subsidy under subsection
8 (c). The amount of the subsidy under this subsection shall
9 be determined annually by the Fund on an equitable basis,
10 based on the number of years of service with IMRF employers;
11 years of service for which contributions have been made under
12 subsection (d) shall be double-weighted. The subsidy shall
13 be applied as an offset to deductions from the monthly
14 annuity.
15 The balance of the cost of participation in the health
16 benefit program for a retired employee who elects to
17 participate, together with the entire cost of any optional
18 coverage or coverage for dependent beneficiaries, shall be
19 paid by deductions authorized by the retired employee to be
20 withheld from his or her monthly annuity payment, except that
21 any amount by which the monthly premium balance exceeds the
22 net amount of the monthly annuity payment shall be paid
23 directly to the Fund (or to the employer in the case of
24 utilization of the continuation privilege) by the
25 participant. All amounts so withheld or paid to the Fund
26 shall be held in trust for the purposes of paying the costs
27 of the retired employee's participation in the health benefit
28 program.
29 This transitional subsidy program shall cease to exist
30 when the Board determines that there are no longer any
31 retired employees eligible to participate in the transitional
32 subsidy program. At that time any excess contributions in
33 the separate account for the transitional subsidy program
34 shall be returned to IMRF employers on an equitable basis, as
-6- LRB9100998EGfg
1 determined by the Board.
2 (g) The Board shall submit an annual report of its
3 activities under this Section to each IMRF employer.
4 (h) The group health benefit and subsidy programs
5 established under this Section are not intended to be and
6 shall not be construed to be pension or retirement benefits
7 for purposes of Section 5 of Article XIII of the Illinois
8 Constitution.
9 Section 90. The State Mandates Act is amended by adding
10 Section 8.23 as follows:
11 (30 ILCS 805/8.23 new)
12 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
13 and 8 of this Act, no reimbursement by the State is required
14 for the implementation of any mandate created by this
15 amendatory Act of the 91st General Assembly.
16 Section 99. Effective date. This Act takes effect upon
17 becoming law.