Full Text of HB1226 98th General Assembly
HB1226ham001 98TH GENERAL ASSEMBLY | Rep. Patrick J. Verschoore Filed: 3/19/2013
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| 1 | | AMENDMENT TO HOUSE BILL 1226
| 2 | | AMENDMENT NO. ______. Amend House Bill 1226 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The State Employees Group Insurance Act of 1971 | 5 | | is 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 | 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 |
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| 1 | | Illinois Pension Code through December 31,
1995. Beginning | 2 | | January 1, 1996, the Department of Central Management Services
| 3 | | shall be responsible for administering a program of health | 4 | | benefits for TRS
benefit recipients and TRS dependent | 5 | | beneficiaries under this Section.
The Department of Central | 6 | | Management Services and the Teachers' Retirement
System shall | 7 | | cooperate in this endeavor and shall coordinate their | 8 | | activities
so as to ensure a smooth transition and | 9 | | uninterrupted health benefit coverage.
| 10 | | (c) Eligibility. All persons who were enrolled in the | 11 | | Article 16 program at
the time of the transfer shall be | 12 | | eligible to participate in the program
established under this | 13 | | Section without any interruption or delay in coverage
or | 14 | | limitation as to pre-existing medical conditions. Eligibility | 15 | | to
participate shall be determined by the Teachers' Retirement | 16 | | System.
Eligibility information shall be communicated to the | 17 | | Department of Central
Management Services in a format | 18 | | acceptable to the Department.
| 19 | | A TRS dependent beneficiary who is a child age 19 or over | 20 | | and
mentally or physically disabled does not become ineligible | 21 | | to participate
by reason of (i) becoming ineligible to be | 22 | | claimed as a dependent for Illinois
or federal income tax | 23 | | purposes or (ii) receiving earned income, so long as
those | 24 | | earnings are insufficient for the child to be fully | 25 | | self-sufficient.
| 26 | | (d) Coverage. The level of health benefits provided under |
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| 1 | | this Section
shall be similar to the level of benefits provided | 2 | | by the
program previously established under Article 16 of the | 3 | | Illinois Pension Code.
| 4 | | Group life insurance benefits are not included in the | 5 | | benefits
to be provided to TRS benefit recipients and TRS | 6 | | dependent beneficiaries under
this Act.
| 7 | | The program of health benefits under this Section may | 8 | | include any or all of
the benefit limitations, including but | 9 | | not limited to a reduction in benefits
based on eligibility for | 10 | | federal medicare benefits, that are provided under
subsection | 11 | | (a) of Section 6 of this Act for other health benefit programs | 12 | | under
this Act.
| 13 | | (e) Insurance rates and premiums. The Director shall | 14 | | determine the
insurance rates and premiums for TRS benefit | 15 | | recipients and TRS dependent
beneficiaries,
and shall present | 16 | | to the Teachers' Retirement System of
the State of Illinois, by | 17 | | April 15 of each calendar year, the rate-setting
methodology | 18 | | (including but not limited to utilization levels and costs) | 19 | | used
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 | 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) 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 | 14 | | from the
administration of the health benefit programs | 15 | | established under Article 16 of
the Illinois Pension Code or | 16 | | this Section shall be deposited into the
Teacher Health | 17 | | Insurance Security Fund, which is hereby created as a
| 18 | | nonappropriated trust fund to be held outside the State | 19 | | Treasury, with the
State Treasurer as custodian. Any interest | 20 | | earned on moneys in the Teacher
Health Insurance Security Fund | 21 | | shall be deposited into the Fund.
| 22 | | Moneys in the Teacher Health Insurance Security
Fund shall | 23 | | be used only to pay the costs of the health benefit program
| 24 | | established under this Section, including associated | 25 | | administrative costs, and
the costs associated with the health | 26 | | benefit program established under Article
16 of the Illinois |
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| 1 | | Pension Code, as authorized in this Section. Beginning
July 1, | 2 | | 1995, the Department of Central Management Services may make
| 3 | | expenditures from the Teacher Health Insurance Security Fund | 4 | | for those costs.
| 5 | | After other funds authorized for the payment of the costs | 6 | | of the health
benefit program established under Article 16 of | 7 | | the Illinois Pension Code are
exhausted and until January 1, | 8 | | 1996 (or such later date as may be agreed upon
by the Director | 9 | | of Central Management Services and the Secretary of the
| 10 | | Teachers' Retirement System), the Secretary of the Teachers' | 11 | | Retirement System
may make expenditures from the Teacher Health | 12 | | Insurance Security Fund as
necessary to pay up to 75% of the | 13 | | cost of providing health coverage to eligible
benefit | 14 | | recipients (as defined in Sections 16-153.1 and 16-153.3 of the
| 15 | | Illinois Pension Code) who are enrolled in the Article 16 | 16 | | health benefit
program and to facilitate the transfer of | 17 | | administration of the health benefit
program to the Department | 18 | | of Central Management Services.
| 19 | | The Department of Healthcare and Family Services, or any | 20 | | successor agency designated to procure healthcare contracts | 21 | | pursuant to this Act, is authorized to establish funds, | 22 | | separate accounts provided by any bank or banks as defined by | 23 | | the Illinois Banking Act, or separate accounts provided by any | 24 | | savings and loan association or associations as defined by the | 25 | | Illinois Savings and Loan Act of 1985 to be held by the | 26 | | Director, outside the State treasury, for the purpose of |
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| 1 | | receiving the transfer of moneys from the Teacher Health | 2 | | Insurance Security Fund. The Department may promulgate rules | 3 | | further defining the methodology for the transfers. Any | 4 | | interest earned by moneys in the funds or accounts shall inure | 5 | | to the Teacher Health Insurance Security Fund. The transferred | 6 | | moneys, and interest accrued thereon, shall be used exclusively | 7 | | for transfers to administrative service organizations or their | 8 | | financial institutions for payments of claims to claimants and | 9 | | providers under the self-insurance health plan. The | 10 | | transferred moneys, and interest accrued thereon, shall not be | 11 | | used for any other purpose including, but not limited to, | 12 | | reimbursement of administration fees due the administrative | 13 | | service organization pursuant to its contract or contracts with | 14 | | the Department.
| 15 | | (g) Contract for benefits. The Director shall by contract, | 16 | | self-insurance,
or otherwise make available the program of | 17 | | health benefits for TRS benefit
recipients and their TRS | 18 | | dependent beneficiaries that is provided for in this
Section. | 19 | | The contract or other arrangement for the provision of these | 20 | | health
benefits shall be on terms deemed by the Director to be | 21 | | in the best interest of
the State of Illinois and the TRS | 22 | | benefit recipients based on, but not limited
to, such criteria | 23 | | as administrative cost, service capabilities of the carrier
or | 24 | | other contractor, and the costs of the benefits.
| 25 | | (g-5) Committee. A Teacher Retirement Insurance Program | 26 | | Committee shall be established, to consist of 10 persons |
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| 1 | | appointed by the Governor.
| 2 | | The Committee shall convene at least 4 times each year, and | 3 | | shall consider and make recommendations on issues affecting the | 4 | | program of health benefits provided under this
Section. | 5 | | Recommendations of the Committee shall be based on a consensus | 6 | | of the members of the Committee.
| 7 | | If the Teacher
Health Insurance Security Fund experiences a | 8 | | deficit balance based upon the contribution and subsidy rates | 9 | | established in this Section and Section 6.6 for Fiscal Year | 10 | | 2008 or thereafter, the Committee shall make recommendations | 11 | | for adjustments to the funding sources established under these | 12 | | Sections. | 13 | | In addition, the Committee shall identify proposed | 14 | | solutions to the funding shortfalls that are affecting the | 15 | | Teacher Health Insurance Security Fund, and it shall report | 16 | | those solutions to the Governor and the General Assembly within | 17 | | 6 months after August 15, 2011 (the effective date of Public | 18 | | Act 97-386). | 19 | | (h) Continuation of program. It is the intention of
the | 20 | | General Assembly that the program of health benefits provided | 21 | | under this
Section be maintained on an ongoing, affordable | 22 | | basis.
| 23 | | The program of health benefits provided under this Section | 24 | | may be amended by
the State and is not intended to be a pension | 25 | | or retirement benefit subject to
protection under Article XIII, | 26 | | Section 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; | 3 | | 97-813, 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 | 7 | | and any rules
and regulations promulgated and adopted hereunder | 8 | | by the Director shall
become immediately eligible and covered | 9 | | for all benefits available under
the programs. Employees | 10 | | electing coverage for eligible dependents shall have
the | 11 | | coverage effective immediately, provided that the election is | 12 | | properly
filed in accordance with required filing dates and | 13 | | procedures specified by
the Director, including the completion | 14 | | and submission of all documentation and forms required by the | 15 | | Director.
| 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 | 14 | | basic group
life insurance and covered by the program of health | 15 | | benefits on the first
day of active State service. Optional | 16 | | life insurance coverage one to 4 times the basic amount, if | 17 | | elected
during the relevant eligibility period, will become | 18 | | effective on the date
of employment. Optional life insurance | 19 | | coverage exceeding 4 times the basic amount and all life | 20 | | insurance amounts applied for after the
eligibility period will | 21 | | be effective, subject to satisfactory evidence of
insurability | 22 | | when applicable, or other necessary qualifications, pursuant | 23 | | to
the requirements of the applicable benefit program, unless | 24 | | there is a change in
status that would confer new eligibility | 25 | | for change of enrollment under rules
established supplementing | 26 | | this Act, in which event application must be made
within the |
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| 1 | | new eligibility period.
| 2 | | (c) As to the group health benefits program contracted to | 3 | | begin or
continue after June 30, 1973, each annuitant, | 4 | | survivor, and retired employee shall become immediately
| 5 | | eligible for all benefits available under that program. Each | 6 | | annuitant, survivor, and retired employee shall have coverage | 7 | | effective immediately, provided that the election is properly | 8 | | filed in accordance with the required filing dates and | 9 | | procedures specified by the Director, including the completion | 10 | | and submission of all documentation and forms required by the | 11 | | Director. Annuitants, survivors, and retired
employees may | 12 | | elect coverage for eligible dependents and shall have the
| 13 | | coverage effective immediately, provided that the election is | 14 | | properly
filed in accordance with required filing dates and | 15 | | procedures specified
by the Director, except that, for a | 16 | | survivor, the dependent sought to be added on or after the | 17 | | effective date of this amendatory Act of the 97th General | 18 | | Assembly must have been eligible for coverage as a dependent | 19 | | under the deceased member upon whom the survivor's annuity is | 20 | | based in order to be eligible for coverage under the survivor.
| 21 | | Except as otherwise provided in this Act, where husband and | 22 | | wife are
both eligible members, each shall be enrolled as a | 23 | | member and coverage on
their eligible dependent children, if | 24 | | any, may be under the enrollment and
election of either.
| 25 | | Regardless of other provisions herein regarding late | 26 | | enrollment or other
qualifications, as appropriate, the
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| 1 | | Director may periodically authorize open enrollment periods | 2 | | for each of the
benefit programs at which time each member may | 3 | | elect enrollment or change
of enrollment without regard to age, | 4 | | sex, health, or other qualification
under the conditions as may | 5 | | be prescribed in rules and regulations
supplementing this Act. | 6 | | Special open enrollment periods may be declared by
the Director | 7 | | for certain members only when special circumstances occur that
| 8 | | affect only those members.
| 9 | | (d) Beginning with fiscal year 2003 and for all subsequent | 10 | | years, eligible
members may elect not to participate in the | 11 | | program of health benefits as
defined in this Act. The election | 12 | | must be made during the annual benefit
choice period, subject | 13 | | to 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 | 11 | | program of financial incentives to encourage annuitants | 12 | | receiving a retirement annuity from the State Employees | 13 | | Retirement System, but who are not eligible for benefits under | 14 | | the federal Medicare health insurance program (Title XVIII of | 15 | | the Social Security Act, as added by Public Law 89-97) to elect | 16 | | not to participate in the program of health benefits provided | 17 | | under this Act. The election by an annuitant not to participate | 18 | | under this program must be made in accordance with the | 19 | | requirements set forth under subsection (d). The financial | 20 | | incentives provided to these annuitants under the program may | 21 | | not exceed $150 per month for each annuitant electing not to | 22 | | participate in the program of health benefits provided under | 23 | | this Act.
| 24 | | (d-6) Beginning July 1, 2013, the Director may establish a | 25 | | program of financial incentives to encourage annuitants with 20 | 26 | | or more years of creditable service but who are not eligible |
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| 1 | | for benefits under the federal Medicare health insurance | 2 | | program (Title XVIII of the Social Security Act, as added by | 3 | | Public Law 89-97) to elect not to participate in the program of | 4 | | health benefits provided under this Act. The election by an | 5 | | annuitant not to participate under this program must be made in | 6 | | accordance with the requirements set forth under subsection | 7 | | (d). The program established under this subsection (d-6) may | 8 | | include a prorated incentive for annuitants with fewer than 20 | 9 | | years of creditable service, as determined by the Director. The | 10 | | financial incentives provided to these annuitants under this | 11 | | program may not exceed $500 per month for each annuitant | 12 | | electing not to participate in the program of health benefits | 13 | | provided under this Act. | 14 | | (e) Notwithstanding any other provision of this Act or the | 15 | | rules adopted
under this Act, if a person participating in the | 16 | | program of health benefits as
the dependent spouse of an | 17 | | eligible member becomes an annuitant, the person may
elect, at | 18 | | the time of becoming an annuitant or during any subsequent | 19 | | annual
benefit choice period, to continue participation as a | 20 | | dependent rather than
as an eligible member for as long as the | 21 | | person continues to be an eligible
dependent. In order to be | 22 | | eligible to make such an election, the person must have been | 23 | | enrolled as a dependent under the program of health benefits | 24 | | for no less than one year prior to becoming an annuitant.
| 25 | | An eligible member who has elected to participate as a | 26 | | dependent may
re-enroll in the program of health benefits as an |
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| 1 | | eligible member (i)
during any subsequent annual benefit choice | 2 | | period or (ii) upon showing a
qualifying change in status, as | 3 | | defined in the U.S. Internal Revenue Code,
without evidence of | 4 | | insurability and with no limitations on coverage for
| 5 | | pre-existing conditions.
| 6 | | A person who elects to participate in the program of health | 7 | | benefits as
a dependent rather than as an eligible member shall | 8 | | be furnished a written
explanation of the consequences of | 9 | | electing to participate as a dependent and
the conditions and | 10 | | procedures for re-enrolling as an eligible member. The
| 11 | | explanation shall also be included in the annual benefit choice | 12 | | options booklet
furnished to members.
| 13 | | (Source: P.A. 97-668, eff. 1-13-12.)
| 14 | | Section 99. Effective date. This Act takes effect upon | 15 | | becoming law.".
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