Rep. Patrick J. Verschoore

Filed: 3/19/2013

 

 


 

 


 
09800HB1226ham001LRB098 03008 JDS 43541 a

1
AMENDMENT TO HOUSE BILL 1226

2    AMENDMENT NO. ______. Amend House Bill 1226 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Sections 6.5 and 8 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

 

 

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1Illinois Pension Code through December 31, 1995. Beginning
2January 1, 1996, the Department of Central Management Services
3shall be responsible for administering a program of health
4benefits for TRS benefit recipients and TRS dependent
5beneficiaries under this Section. The Department of Central
6Management Services and the Teachers' Retirement System shall
7cooperate in this endeavor and shall coordinate their
8activities so as to ensure a smooth transition and
9uninterrupted health benefit coverage.
10    (c) Eligibility. All persons who were enrolled in the
11Article 16 program at the time of the transfer 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 Teachers' Retirement
16System. Eligibility information shall be communicated to the
17Department of Central Management Services in a format
18acceptable to the Department.
19    A TRS dependent beneficiary who is a child age 19 or over
20and mentally or physically disabled does not become ineligible
21to participate by reason of (i) becoming ineligible to be
22claimed as a dependent for Illinois or federal income tax
23purposes or (ii) receiving earned income, so long as those
24earnings are insufficient for the child to be fully
25self-sufficient.
26    (d) Coverage. The level of health benefits provided under

 

 

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

 

 

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1    of the premium actually charged in Fiscal Year 2003.
2        For Fiscal Year 2005, the premium shall not exceed a
3    weighted average of 106.6% of the premium actually charged
4    in Fiscal Year 2004.
5        For Fiscal Year 2006, the premium shall not exceed a
6    weighted average of 109.1% of the premium actually charged
7    in Fiscal Year 2005.
8        For Fiscal Year 2007, the premium shall not exceed a
9    weighted average of 103.9% of the premium actually charged
10    in Fiscal Year 2006.
11        For Fiscal Year 2008 and thereafter, the premium in
12    each fiscal year shall not exceed 105% of the premium
13    actually charged in the previous fiscal year.
14    Rates and premiums may be based in part on age and
15eligibility for federal medicare coverage. However, the cost of
16participation for a TRS dependent beneficiary who is an
17unmarried child age 19 or over and mentally or physically
18disabled shall not exceed the cost for a TRS dependent
19beneficiary who is an unmarried child under age 19 and
20participates in the same major medical or managed care program.
21    The cost of health benefits under the program shall be paid
22as 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) Until Fiscal Year 2007, for For a TRS benefit
16    recipient selecting the major medical coverage program, up
17    to 75% of the total insurance rate shall be paid from the
18    Teacher Health Insurance Security Fund if a managed care
19    program is not accessible, as determined by the Teachers'
20    Retirement System. Effective with Fiscal Year 2007 and
21    through Fiscal Year 2013 thereafter, for a TRS benefit
22    recipient selecting the major medical coverage program,
23    75% of the total insurance rate shall be paid from the
24    Teacher Health Insurance Security Fund if a managed care
25    program is not accessible, as determined by the Department
26    of Central Management Services. Effective with Fiscal Year

 

 

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1    2014 and thereafter, for a TRS benefit recipient selecting
2    the major medical coverage program, 50% of the total
3    insurance rate shall be paid from the Teacher Health
4    Insurance Security Fund.
5        (3.1) Through Fiscal Year 2013, for For a TRS dependent
6    beneficiary who is Medicare primary and enrolled in a
7    managed care plan, or the major medical coverage program if
8    a managed care plan is not available, 25% of the total
9    insurance rate shall be paid from the Teacher Health
10    Security Fund as determined by the Department of Central
11    Management Services. Effective with Fiscal Year 2014 and
12    thereafter, for a TRS dependent beneficiary who is Medicare
13    primary and enrolled in a managed care plan, or the major
14    medical coverage program, 25% of the total insurance rate
15    shall be paid from the Teacher Health Security Fund. For
16    the purpose of this item (3.1), the term "TRS dependent
17    beneficiary who is Medicare primary" means a TRS dependent
18    beneficiary who is participating in Medicare Parts A and B.
19        (4) Except as otherwise provided in item (3.1), the
20    balance of the rate of insurance, including the entire
21    premium of any coverage for TRS dependent beneficiaries
22    that has been elected, shall be paid by deductions
23    authorized by the TRS benefit recipient to be withheld from
24    his or her monthly annuity or benefit payment from the
25    Teachers' Retirement System; except that (i) if the balance
26    of the cost of coverage exceeds the amount of the monthly

 

 

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1    annuity or benefit payment, the difference shall be paid
2    directly to the Teachers' Retirement System by the TRS
3    benefit recipient, and (ii) all or part of the balance of
4    the cost of coverage may, at the school board's option, be
5    paid to the Teachers' Retirement System by the school board
6    of the school district from which the TRS benefit recipient
7    retired, in accordance with Section 10-22.3b of the School
8    Code. The Teachers' Retirement System shall promptly
9    deposit all moneys withheld by or paid to it under this
10    subdivision (e)(4) into the Teacher Health Insurance
11    Security Fund. These moneys shall not be considered assets
12    of the Retirement System.
13    (f) Financing. Beginning July 1, 1995, all revenues arising
14from the administration of the health benefit programs
15established under Article 16 of the Illinois Pension Code or
16this Section shall be deposited into the Teacher Health
17Insurance Security Fund, which is hereby created as a
18nonappropriated trust fund to be held outside the State
19Treasury, with the State Treasurer as custodian. Any interest
20earned on moneys in the Teacher Health Insurance Security Fund
21shall be deposited into the Fund.
22    Moneys in the Teacher Health Insurance Security Fund shall
23be used only to pay the costs of the health benefit program
24established under this Section, including associated
25administrative costs, and the costs associated with the health
26benefit program established under Article 16 of the Illinois

 

 

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1Pension Code, as authorized in this Section. Beginning July 1,
21995, the Department of Central Management Services may make
3expenditures from the Teacher Health Insurance Security Fund
4for those costs.
5    After other funds authorized for the payment of the costs
6of the health benefit program established under Article 16 of
7the Illinois Pension Code are exhausted and until January 1,
81996 (or such later date as may be agreed upon by the Director
9of Central Management Services and the Secretary of the
10Teachers' Retirement System), the Secretary of the Teachers'
11Retirement System may make expenditures from the Teacher Health
12Insurance Security Fund as necessary to pay up to 75% of the
13cost of providing health coverage to eligible benefit
14recipients (as defined in Sections 16-153.1 and 16-153.3 of the
15Illinois Pension Code) who are enrolled in the Article 16
16health benefit program and to facilitate the transfer of
17administration of the health benefit program to the Department
18of Central Management Services.
19    The Department of Healthcare and Family Services, or any
20successor agency designated to procure healthcare contracts
21pursuant to this Act, is authorized to establish funds,
22separate accounts provided by any bank or banks as defined by
23the Illinois Banking Act, or separate accounts provided by any
24savings and loan association or associations as defined by the
25Illinois Savings and Loan Act of 1985 to be held by the
26Director, outside the State treasury, for the purpose of

 

 

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

 

 

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1appointed by the Governor.
2    The Committee shall convene at least 4 times each year, and
3shall consider and make recommendations on issues affecting the
4program of health benefits provided under this Section.
5Recommendations of the Committee shall be based on a consensus
6of the members of the Committee.
7    If the Teacher Health Insurance Security Fund experiences a
8deficit balance based upon the contribution and subsidy rates
9established in this Section and Section 6.6 for Fiscal Year
102008 or thereafter, the Committee shall make recommendations
11for adjustments to the funding sources established under these
12Sections.
13    In addition, the Committee shall identify proposed
14solutions to the funding shortfalls that are affecting the
15Teacher Health Insurance Security Fund, and it shall report
16those solutions to the Governor and the General Assembly within
176 months after August 15, 2011 (the effective date of Public
18Act 97-386).
19    (h) Continuation of program. It is the intention of the
20General Assembly that the program of health benefits provided
21under this Section be maintained on an ongoing, affordable
22basis.
23    The program of health benefits provided under this Section
24may be amended by the State and is not intended to be a pension
25or retirement benefit subject to protection under Article XIII,
26Section 5 of the Illinois Constitution.

 

 

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1    (i) Repeal. (Blank).
2(Source: P.A. 96-1519, eff. 2-4-11; 97-386, eff. 8-15-11;
397-813, eff. 7-13-12.)
 
4    (5 ILCS 375/8)  (from Ch. 127, par. 528)
5    Sec. 8. Eligibility.
6    (a) Each employee eligible under the provisions of this Act
7and any rules and regulations promulgated and adopted hereunder
8by the Director shall become immediately eligible and covered
9for all benefits available under the programs. Employees
10electing coverage for eligible dependents shall have the
11coverage effective immediately, provided that the election is
12properly filed in accordance with required filing dates and
13procedures specified by the Director, including the completion
14and submission of all documentation and forms required by the
15Director.
16        (1) Every member originally eligible to elect
17    dependent coverage, but not electing it during the original
18    eligibility period, may subsequently obtain dependent
19    coverage only in the event of a qualifying change in
20    status, special enrollment, special circumstance as
21    defined by the Director, or during the annual Benefit
22    Choice Period.
23        (2) Members described above being transferred from
24    previous coverage towards which the State has been
25    contributing shall be transferred regardless of

 

 

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1    preexisting conditions, waiting periods, or other
2    requirements that might jeopardize claim payments to which
3    they would otherwise have been entitled.
4        (3) Eligible and covered members that are eligible for
5    coverage as dependents except for the fact of being members
6    shall be transferred to, and covered under, dependent
7    status regardless of preexisting conditions, waiting
8    periods, or other requirements that might jeopardize claim
9    payments to which they would otherwise have been entitled
10    upon cessation of member status and the election of
11    dependent coverage by a member eligible to elect that
12    coverage.
13    (b) New employees shall be immediately insured for the
14basic group life insurance and covered by the program of health
15benefits on the first day of active State service. Optional
16life insurance coverage one to 4 times the basic amount, if
17elected during the relevant eligibility period, will become
18effective on the date of employment. Optional life insurance
19coverage exceeding 4 times the basic amount and all life
20insurance amounts applied for after the eligibility period will
21be effective, subject to satisfactory evidence of insurability
22when applicable, or other necessary qualifications, pursuant
23to the requirements of the applicable benefit program, unless
24there is a change in status that would confer new eligibility
25for change of enrollment under rules established supplementing
26this Act, in which event application must be made within the

 

 

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1new eligibility period.
2    (c) As to the group health benefits program contracted to
3begin or continue after June 30, 1973, each annuitant,
4survivor, and retired employee shall become immediately
5eligible for all benefits available under that program. Each
6annuitant, survivor, and retired employee shall have coverage
7effective immediately, provided that the election is properly
8filed in accordance with the required filing dates and
9procedures specified by the Director, including the completion
10and submission of all documentation and forms required by the
11Director. Annuitants, survivors, and retired employees may
12elect coverage for eligible dependents and shall have the
13coverage effective immediately, provided that the election is
14properly filed in accordance with required filing dates and
15procedures specified by the Director, except that, for a
16survivor, the dependent sought to be added on or after the
17effective date of this amendatory Act of the 97th General
18Assembly must have been eligible for coverage as a dependent
19under the deceased member upon whom the survivor's annuity is
20based in order to be eligible for coverage under the survivor.
21    Except as otherwise provided in this Act, where husband and
22wife are both eligible members, each shall be enrolled as a
23member and coverage on their eligible dependent children, if
24any, may be under the enrollment and election of either.
25    Regardless of other provisions herein regarding late
26enrollment or other qualifications, as appropriate, the

 

 

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1Director may periodically authorize open enrollment periods
2for each of the benefit programs at which time each member may
3elect enrollment or change of enrollment without regard to age,
4sex, health, or other qualification under the conditions as may
5be prescribed in rules and regulations supplementing this Act.
6Special open enrollment periods may be declared by the Director
7for certain members only when special circumstances occur that
8affect only those members.
9    (d) Beginning with fiscal year 2003 and for all subsequent
10years, eligible members may elect not to participate in the
11program of health benefits as defined in this Act. The election
12must be made during the annual benefit choice period, subject
13to the conditions in this subsection.
14        (1) Members must furnish proof of health benefit
15    coverage, either comprehensive major medical coverage or
16    comprehensive managed care plan, from a source other than
17    the Department of Central Management Services in order to
18    elect not to participate in the program.
19        (2) Members may re-enroll in the Department of Central
20    Management Services program of health benefits upon
21    showing a qualifying change in status, as defined in the
22    U.S. Internal Revenue Code, without evidence of
23    insurability and with no limitations on coverage for
24    pre-existing conditions, provided that there was not a
25    break in coverage of more than 63 days.
26        (3) Members may also re-enroll in the program of health

 

 

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1    benefits during any annual benefit choice period, without
2    evidence of insurability.
3        (4) Members who elect not to participate in the program
4    of health benefits shall be furnished a written explanation
5    of the requirements and limitations for the election not to
6    participate in the program and for re-enrolling in the
7    program. The explanation shall also be included in the
8    annual benefit choice options booklets furnished to
9    members.
10    (d-5) Beginning July 1, 2005, the Director may establish a
11program of financial incentives to encourage annuitants
12receiving a retirement annuity from the State Employees
13Retirement System, but who are not eligible for benefits under
14the federal Medicare health insurance program (Title XVIII of
15the Social Security Act, as added by Public Law 89-97) to elect
16not to participate in the program of health benefits provided
17under this Act. The election by an annuitant not to participate
18under this program must be made in accordance with the
19requirements set forth under subsection (d). The financial
20incentives provided to these annuitants under the program may
21not exceed $150 per month for each annuitant electing not to
22participate in the program of health benefits provided under
23this Act.
24    (d-6) Beginning July 1, 2013, the Director may establish a
25program of financial incentives to encourage annuitants with 20
26or more years of creditable service but who are not eligible

 

 

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1for benefits under the federal Medicare health insurance
2program (Title XVIII of the Social Security Act, as added by
3Public Law 89-97) to elect not to participate in the program of
4health benefits provided under this Act. The election by an
5annuitant not to participate under this program must be made in
6accordance with the requirements set forth under subsection
7(d). The program established under this subsection (d-6) may
8include a prorated incentive for annuitants with fewer than 20
9years of creditable service, as determined by the Director. The
10financial incentives provided to these annuitants under this
11program may not exceed $500 per month for each annuitant
12electing not to participate in the program of health benefits
13provided under this Act.
14    (e) Notwithstanding any other provision of this Act or the
15rules adopted under this Act, if a person participating in the
16program of health benefits as the dependent spouse of an
17eligible member becomes an annuitant, the person may elect, at
18the time of becoming an annuitant or during any subsequent
19annual benefit choice period, to continue participation as a
20dependent rather than as an eligible member for as long as the
21person continues to be an eligible dependent. In order to be
22eligible to make such an election, the person must have been
23enrolled as a dependent under the program of health benefits
24for no less than one year prior to becoming an annuitant.
25    An eligible member who has elected to participate as a
26dependent may re-enroll in the program of health benefits as an

 

 

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1eligible member (i) during any subsequent annual benefit choice
2period or (ii) upon showing a qualifying change in status, as
3defined in the U.S. Internal Revenue Code, without evidence of
4insurability and with no limitations on coverage for
5pre-existing conditions.
6    A person who elects to participate in the program of health
7benefits as a dependent rather than as an eligible member shall
8be furnished a written explanation of the consequences of
9electing to participate as a dependent and the conditions and
10procedures for re-enrolling as an eligible member. The
11explanation shall also be included in the annual benefit choice
12options booklet furnished to members.
13(Source: P.A. 97-668, eff. 1-13-12.)
 
14    Section 99. Effective date. This Act takes effect upon
15becoming law.".