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Full Text of SB1039  100th General Assembly

SB1039 100TH GENERAL ASSEMBLY


 


 
100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
SB1039

 

Introduced 2/7/2017, by Sen. Christine Radogno

 

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.


LRB100 07621 RJF 17687 b

 

 

A BILL FOR

 

SB1039LRB100 07621 RJF 17687 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 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

 

 

SB1039- 2 -LRB100 07621 RJF 17687 b

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    (d) Coverage. The level of health benefits provided under
20this Section shall be similar to the level of benefits provided
21by the program previously established under Article 16 of the
22Illinois Pension Code.
23    Group life insurance benefits are not included in the
24benefits to be provided to TRS benefit recipients and TRS
25dependent beneficiaries under this Act.
26    The program of health benefits under this Section may

 

 

SB1039- 3 -LRB100 07621 RJF 17687 b

1include any or all of the benefit limitations, including but
2not limited to a reduction in benefits based on eligibility for
3federal medicare benefits, that are provided under subsection
4(a) of Section 6 of this Act for other health benefit programs
5under this Act.
6    (e) Insurance rates and premiums. The Director shall
7determine the insurance rates and premiums for TRS benefit
8recipients and TRS dependent beneficiaries, and shall present
9to the Teachers' Retirement System of the State of Illinois, by
10April 15 of each calendar year, the rate-setting methodology
11(including but not limited to utilization levels and costs)
12used 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.
7    Rates and premiums may be based in part on age and
8eligibility for federal medicare coverage. However, the cost of
9participation for a TRS dependent beneficiary who is an
10unmarried child age 19 or over and mentally or physically
11disabled shall not exceed the cost for a TRS dependent
12beneficiary who is an unmarried child under age 19 and
13participates in the same major medical or managed care program.
14    The cost of health benefits under the program shall be paid
15as follows:
16        (1) For a TRS benefit recipient selecting a managed
17    care program, up to 75% of the total insurance rate shall
18    be paid from the Teacher Health Insurance Security Fund.
19    Effective with Fiscal Year 2007 and thereafter, for a TRS
20    benefit recipient selecting a managed care program, 75% of
21    the total insurance rate shall be paid from the Teacher
22    Health Insurance Security Fund.
23        (2) For a TRS benefit recipient selecting the major
24    medical coverage program, up to 50% of the total insurance
25    rate shall be paid from the Teacher Health Insurance
26    Security Fund if a managed care program is accessible, as

 

 

SB1039- 5 -LRB100 07621 RJF 17687 b

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

 

 

SB1039- 6 -LRB100 07621 RJF 17687 b

1    is participating in Medicare Parts A and B.
2        (4) Except as otherwise provided in item (3.1), the
3    balance of the rate of insurance, including the entire
4    premium of any coverage for TRS dependent beneficiaries
5    that has been elected, shall be paid by deductions
6    authorized by the TRS benefit recipient to be withheld from
7    his or her monthly annuity or benefit payment from the
8    Teachers' Retirement System; except that (i) if the balance
9    of the cost of coverage exceeds the amount of the monthly
10    annuity or benefit payment, the difference shall be paid
11    directly to the Teachers' Retirement System by the TRS
12    benefit recipient, and (ii) all or part of the balance of
13    the cost of coverage may, at the school board's option, be
14    paid to the Teachers' Retirement System by the school board
15    of the school district from which the TRS benefit recipient
16    retired, in accordance with Section 10-22.3b of the School
17    Code. The Teachers' Retirement System shall promptly
18    deposit all moneys withheld by or paid to it under this
19    subdivision (e)(4) into the Teacher Health Insurance
20    Security Fund. These moneys shall not be considered assets
21    of the Retirement System.
22    (f) Financing. Beginning July 1, 1995, all revenues arising
23from the administration of the health benefit programs
24established under Article 16 of the Illinois Pension Code or
25this Section shall be deposited into the Teacher Health
26Insurance Security Fund, which is hereby created as a

 

 

SB1039- 7 -LRB100 07621 RJF 17687 b

1nonappropriated trust fund to be held outside the State
2Treasury, with the State Treasurer as custodian. Any interest
3earned on moneys in the Teacher Health Insurance Security Fund
4shall be deposited into the Fund.
5    Moneys in the Teacher Health Insurance Security Fund shall
6be used only to pay the costs of the health benefit program
7established under this Section, including associated
8administrative costs, and the costs associated with the health
9benefit program established under Article 16 of the Illinois
10Pension Code, as authorized in this Section. Beginning July 1,
111995, the Department of Central Management Services may make
12expenditures from the Teacher Health Insurance Security Fund
13for those costs.
14    After other funds authorized for the payment of the costs
15of the health benefit program established under Article 16 of
16the Illinois Pension Code are exhausted and until January 1,
171996 (or such later date as may be agreed upon by the Director
18of Central Management Services and the Secretary of the
19Teachers' Retirement System), the Secretary of the Teachers'
20Retirement System may make expenditures from the Teacher Health
21Insurance Security Fund as necessary to pay up to 75% of the
22cost of providing health coverage to eligible benefit
23recipients (as defined in Sections 16-153.1 and 16-153.3 of the
24Illinois Pension Code) who are enrolled in the Article 16
25health benefit program and to facilitate the transfer of
26administration of the health benefit program to the Department

 

 

SB1039- 8 -LRB100 07621 RJF 17687 b

1of Central Management Services.
2    The Department of Central Management Services, or any
3successor agency designated to procure healthcare contracts
4pursuant to this Act, is authorized to establish funds,
5separate accounts provided by any bank or banks as defined by
6the Illinois Banking Act, or separate accounts provided by any
7savings and loan association or associations as defined by the
8Illinois Savings and Loan Act of 1985 to be held by the
9Director, outside the State treasury, for the purpose of
10receiving the transfer of moneys from the Teacher Health
11Insurance Security Fund. The Department may promulgate rules
12further defining the methodology for the transfers. Any
13interest earned by moneys in the funds or accounts shall inure
14to the Teacher Health Insurance Security Fund. The transferred
15moneys, and interest accrued thereon, shall be used exclusively
16for transfers to administrative service organizations or their
17financial institutions for payments of claims to claimants and
18providers under the self-insurance health plan. The
19transferred moneys, and interest accrued thereon, shall not be
20used for any other purpose including, but not limited to,
21reimbursement of administration fees due the administrative
22service organization pursuant to its contract or contracts with
23the Department.
24    (g) Contract for benefits. The Director shall by contract,
25self-insurance, or otherwise make available the program of
26health benefits for TRS benefit recipients and their TRS

 

 

SB1039- 9 -LRB100 07621 RJF 17687 b

1dependent beneficiaries that is provided for in this Section.
2The contract or other arrangement for the provision of these
3health benefits shall be on terms deemed by the Director to be
4in the best interest of the State of Illinois and the TRS
5benefit recipients based on, but not limited to, such criteria
6as administrative cost, service capabilities of the carrier or
7other contractor, and the costs of the benefits.
8    (g-5) Committee. A Teacher Retirement Insurance Program
9Committee shall be established, to consist of 10 persons
10appointed by the Governor.
11    The Committee shall convene at least 4 times each year, and
12shall consider and make recommendations on issues affecting the
13program of health benefits provided under this Section.
14Recommendations of the Committee shall be based on a consensus
15of the members of the Committee.
16    If the Teacher Health Insurance Security Fund experiences a
17deficit balance based upon the contribution and subsidy rates
18established in this Section and Section 6.6 for Fiscal Year
192008 or thereafter, the Committee shall make recommendations
20for adjustments to the funding sources established under these
21Sections.
22    In addition, the Committee shall identify proposed
23solutions to the funding shortfalls that are affecting the
24Teacher Health Insurance Security Fund, and it shall report
25those solutions to the Governor and the General Assembly within
266 months after August 15, 2011 (the effective date of Public

 

 

SB1039- 10 -LRB100 07621 RJF 17687 b

1Act 97-386).
2    (h) Continuation of program. It is the intention of the
3General Assembly that the program of health benefits provided
4under this Section be maintained on an ongoing, affordable
5basis.
6    The program of health benefits provided under this Section
7may be amended by the State and is not intended to be a pension
8or retirement benefit subject to protection under Article XIII,
9Section 5 of the Illinois Constitution.
10    (i) Repeal. (Blank).
11(Source: P.A. 97-386, eff. 8-15-11; 97-813, eff. 7-13-12;
1298-488, eff. 8-16-13.)