Section 2160.110  Name of the Program

The name of this Program is the Local Government Health Plan.

Section 2160.120  Purpose

The purpose of the Program is to provide health benefits to Employees, Annuitants and Dependents of Qualified Units of Local Government [5 ILCS 375/3(s) and 10(i)], Qualified Rehabilitation Facilities [5 ILCS 375/3(t) and 10(j)], Qualified Domestic Violence Shelters and Services [5 ILCS 375/3(u) and 10(k)], and Qualified Child Advocacy Centers [5 ILCS 375/3(bb) and 375/10(n)].

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.130  Definitions

Whenever used in this Part, the following terms shall have the meanings set forth in this Section unless otherwise expressly provided, and when the defined meaning is intended, the term is capitalized.

"Act" means the State Employees Group Insurance Act of 1971 [5 ILCS 375].

"Administrative Service Organization" means any person, firm or corporation the Department or HFS has contracted with to administer the program.

"Agreement" means the Intergovernmental Cooperation Agreement executed by the Department and the Unit.

"Annuitant" means any former Employee, as defined in this Section, who has retired from a Unit and is receiving an annuity from an Illinois Public Pension System or another pension plan as a result of services to the Unit.

"Benefit Choice Period" means the annual election period, designated by the Department, during which Units may add or drop coverage for Annuitants or Dependents, and Members may add or drop Dependents from coverage and select coverage from available plans offered.

"Board" means the Local Government Health Plan Advisory Board.

"Certificate of Creditable Coverage" means the document that indicates the length of time a person has been continuously covered under a qualifying previous healthcare plan.

"Compensation" means salary or wages paid by a Unit to an Employee for personal services currently performed.

"Department" means the Illinois Department of Central Management Services.

"Dependent" means any person participating in the Program as a non-Member.

"Director" means the Director of the Illinois Department of Central Management Services.

"Employee" means and includes an elected government official or a person in the service of a Unit in the State of Illinois who receives Compensation through the regular payroll for work currently performed and receives benefits comparable to others in the same Unit.

"Fiscal Year" means the State's fiscal year, i.e., July 1 through June 30.

"Fund" means the Local Government Health Insurance Reserve Fund.

"Health Plan Representative" means an individual from a Unit who serves in the capacity of a liaison through whom the Department shall conduct all business necessary to provide health benefits to that Unit.

"HFS" means the Illinois Department of Healthcare and Family Services.

"Member" means an Employee or Annuitant.

"Plan" means the Local Government Health Plan.

"Pre-Existing Condition" means any disease, injury or condition, excluding maternity, for which the individual was diagnosed, received treatment/services, or took prescribed drugs during the 3 months immediately preceding the effective date of coverage under the Program.

"Program" means a benefits program, as authorized by the State Employees Group Insurance Act of 1971. The coverage offered to Units is similar to that offered to employees of the State of Illinois under the Program.

"Protected Health Information" or "PHI" means information subject to the protections of the Health Insurance Portability and Accountability Act of 1996 (HIPAA), P.L. 104-191 and 45 CFR 160-164, effective April 14, 2001 and amended October 16, 2002 (no subsequent dates or additions).

"Unit" means a "Qualified Unit of Local Government", a "Qualified Domestic Violence Shelter or Service", a "Qualified Rehabilitation Facility" or a "Qualified Child Advocacy Center", as defined in the State Employees Group Insurance Act of 1971.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.210  Determining Eligibility of Groups

a)         A Unit must be approved by the Director for participation in the Program, if the Unit:

1)         meets the definition in the Act; and

2)         agrees to the conditions specified in this Part; and

3)         has not withdrawn from the Program during the term of an Agreement within the previous 2 Fiscal Years, except that a Unit may terminate effective at the end of the first Fiscal Year without penalty if the second Fiscal Year premium rate is 20% greater than the first Fiscal Year.

b)         A Qualified Rehabilitation Facility must have a not-for-profit status and be accredited by the Commission on Accreditation of Rehabilitation Facilities or certified by the Department of Human Services to provide services to persons with disabilities and receive funds from the Department of Human Services for providing services to persons with disabilities.

c)         A Qualified Domestic Violence Shelter or Service must be funded by the Illinois Department of Human Services.

d)       A Qualified Child Advocacy Center must be funded by the Illinois Department of Children and Family Services.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.220  Enrollments and Terminations

The Department shall enroll and terminate Members and their Dependents after notification in the form and manner prescribed by the Department.

a)         The Department shall provide notification to the Unit that the enrollment or termination has been completed.

b)         The Department shall furnish the Units with forms to submit to the Department for enrollment and termination of Members.

(Source:  Amended at 25 Ill. Reg. 10306, effective August 3, 2001)

Section 2160.230  Rate Setting

a)         The Department will be responsible for setting rates at least 60 days prior to the start of the Fiscal Year except in the event that State union negotiations prevent the rates from being finalized.

b)         The Department shall not change rates during a Fiscal Year. The methodology for rate setting is described in Section 2160.620.

(Source:  Amended at 25 Ill. Reg. 10306, effective August 3, 2001)

Section 2160.240  Premium Collection and Billing

a)         The Department shall generate a billing statement for each Unit participating in the Program on or before the end of each month. This billing statement shall represent the total amount due from the Unit for the following month's coverage.

b)         Membership changes not received on or before the 20th of each month shall be reflected in the following month's billing statement.

1)         Prior month changes shall also appear on the billing and be reflected in the total amount due.

2)         In cases of administrative errors on the part of the Unit, or when the Member does not provide information to the Unit, a retroactive premium adjustment shall be made. Retroactive premium adjustments shall be made contingent upon the Department recovering any health care expenses that may have been paid because the Program was not timely notified. Retroactive premium refund adjustments shall not exceed 3 months.

(Source:  Amended at 25 Ill. Reg. 10306, effective August 3, 2001)

Section 2160.250  Other Administrative Responsibilities

a)         The Department shall offer an annual Benefits Choice Period for Units to:

1)         add or drop coverage for Annuitants as a group;

2)         allow Members to add or drop Dependent coverage;

3)         allow Members to change health plans.

b)         The Department shall provide information to the Units about the benefits and requirements of the Program in the Local Government Health Plan Benefits Handbook and the annual Benefit Choice Options booklet.

c)         The Department shall prepare and distribute an administrative procedures manual with periodic updates for the Health Plan Representatives designated by the Units.

d)         The Department will provide training seminars for Health Plan Representatives designated by the Units.

e)         The Department shall establish an Advisory Board.  The responsibilities of the Board are described in Section 2160.520.

f)         The Department shall establish formal appeal procedures to be followed when the Member is dissatisfied with the benefit determination made by the Administrative Service Organization or self-funded managed care plan as described in Section 2160.420.

g)         The Department shall notify the designated Health Plan Representatives of the Administrative Service Organizations being used and the address and forms needed to submit claims to the Administrative Service Organizations. 

h)         The Department shall audit records of participating Units, such as payroll information, to verify enrollment and enforce eligibility rules under the Plan.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.260  Program Termination

a)         Grounds for program termination by the Department include, but are not limited to:

1)         any material breach of the Agreement;

2)         failure to pay the full monthly premium by the last day of the coverage month;

3)         non-compliance with enrollment responsibilities in accordance with Section 2160.310; or

4)         failure to meet the eligibility requirements of a Unit.

b)         The Department shall issue one notice of termination.  Termination shall be effective 15 days after notice of termination.

c)         Once termination occurs, the Unit shall not be permitted to enroll in the Program for a period of 2 Fiscal Years.

d)         Coverage terminates on the last day for which premium has been paid.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.270  Health Insurance Portability and Accountability Act (HIPAA)

The State shall comply with the uses and disclosures of Protected Health Information (PHI), permitted by HIPAA and 45 CFR 160-164, where applicable, in Plan documents.

a)         The Department shall provide an annual notice of privacy practices outlining the legal duties and privacy practices concerning the PHI of Members and Dependents.

b)         PHI may be disclosed:

1)         to health care providers who take care of Members and Dependents;

2)         to process claims and make payments for covered services;

3)         for healthcare operations;

4)         to remind Members or Dependents of an upcoming appointment; and

5)         as required or authorized by law.

c)         Members and Dependents have the right to:

1)         request restrictions on how their PHI is used for purposes of treatment, payment and healthcare operations;

2)         receive confidential communications about their PHI;

3)         request to inspect information used to make decisions about them;

4)         request an amendment to their PHI;

5)         receive an accounting of disclosures that have been made of their PHI;

6)         obtain a paper copy of the annual notice of privacy practices provided by the Department; and

7)         file a complaint if they feel that their privacy rights have been violated. 

d)         PHI may not be disclosed:

1)         for any purpose other than administration of the benefit plan;

2)         for any fundraising activity;

3)         for the marketing of any products or services.

(Source:  Added at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.310  Enrollment Responsibilities

a)         Any Unit within the State of Illinois interested in the Program may apply to the Director to have its Employees provided group health coverage under the Act.  Annuitants and Dependents may also be offered coverage.

b)         To participate, Units must agree to enroll all Employees who work 90% or more of the Unit's normal work period, except as provided in subsection (b)(4).  Employees may select coverage under either the self-funded health plan or a managed care plan that has contracted with the State, with the costs paid by the Unit, its Members or some combination of both as determined by the Unit.

1)         Employees must be employed at least half of the normal work period as measured yearly or meet the standard for participation in the Illinois Municipal Retirement Fund, except that elected government officials employed by a Qualified Unit of Local Government have the option to participate in the Plan, regardless of the number of hours worked.

2)         Employees, other than elected government officials, must receive Compensation through the regular payroll process from the Unit.

3)         Units may permit Employees who work 50% to 90% of the Unit's normal work period to enroll as Members under the plan.

4)         An Employee of a participating Unit of Local Government or a Qualified Rehabilitation Facility who is covered as a spouse or Dependent under this or another group plan may elect to waive coverage, as long as the Health Plan Representative attests to this other coverage and at least 85% of the full-time Employees of the Unit are covered.  A participating school district must have enrolled at least 85% of its full-time Employees who have not waived coverage under the district's group health plan by participating in a component of the district's cafeteria plan.  A participating school district is not required to enroll a full-time Employee who has waived coverage under the district's health plan, provided that an appropriate official from the participating school district attests that the full-time Employee has waived coverage by participating in a component of the district's cafeteria plan.  For the purposes of this subsection (b)(4), "participating school district" includes school districts and career, vocational and special education school districts.

5)         Employees of a participating Unit who are not enrolled due to coverage under another group health policy or plan may enroll during the annual Benefit Choice Period or at a later date if the Employee experiences a qualifying change in status.  This coverage is subject to possible health benefit limitations based on Pre-Existing Conditions.  No benefits shall be payable for services incurred during the first 6 months of coverage to the extent the services are in connection with any Pre-Existing Condition.  The Pre-Existing Condition time period may be reduced by the amount of creditable coverage Members or Dependents may have had with another insurance plan prior to enrollment, provided there was not a break in coverage of more than 63 days.  A Certificate of Creditable Coverage from the prior plan must be provided to the employing Unit to reduce the Pre-Existing Condition time period.

c)         Units may also elect to cover their Annuitants.

1)         Units that elect to cover their Annuitants must allow Employees at the time of retiring the option to individually enroll in the Program.  The option shall only be offered once to Annuitants.

2)         Individual Annuitants terminating from the Program shall not be allowed to participate in the Program in the future.

3)         At the time of the initial enrollment, Units may elect to cover current Annuitants as a group.  During the annual Benefit Choice Period, Units may add or drop Annuitants as a group.

d)         Units may offer Dependent coverage.

e)         Units may enroll under the Program at the start of any month.

1)         The Units must give the Department at least 30 days advance written notice before enrollment.

2)         A Unit may enroll for part of the State's Fiscal Year.  If a Unit has been enrolled in the Program for a partial State Fiscal Year, the Unit must begin the second year on July 1 to coincide with the State's Fiscal Year that is also the new Plan year.

f)         Units will inform Members of the following responsibilities. Plan Members must:

1)         be responsible for notifying the Health Plan Representative of coverage options chosen, and any changes that may affect eligibility or enrollment.

2)         be responsible for reviewing the Local Government Health Plan Benefits Handbook describing coverages, eligibility, termination and claims submission requirements.

g)         Units that enroll in the Program shall designate a person to be the Health Plan Representative.  The responsibilities of the Health Plan Representative are described in Section 2160.410.

h)         If the Unit exempts Members' premiums from taxes, in compliance with section 125 of the Internal Revenue Code (26 USC 125), the Unit must comply with Internal Revenue Code requirements that prohibit changes in the Member deduction during the Fiscal Year unless the Member has a change in status.

i)          Units do not limit their duty to bargain with representatives of any collective bargaining unit of their Employees through participation in the Program.

j)          Compliance with the continuation of benefits requirements of the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) is the responsibility of the Unit.  All premiums must be collected and transmitted by the Unit.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.320  Premium Collection and Payment

The Unit shall be responsible for the collection and transmission of Member and Dependent premiums.

a)         For the first month's premium only, the Department must receive the premium by the first day of coverage.  This premium is non-refundable if the Unit does not enroll.

b)         For the subsequent months, the total amount due as specified in the billing statement, which includes the combined amount due from Members, Dependents and the Unit, shall be paid in full by the 20^th day of the month the billing is received.

c)         Payments not received by the last day of the coverage month shall be considered delinquent and shall result in the suspension of payment of claims for services provided to Members of the Unit.  Payment of claims shall be withheld until the Department receives the full monthly premium due.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.325  Program Termination (Renumbered)

(Source:  Section 2160.325 renumbered to Section 2160.260 at 25 Ill. Reg. 10306, effective August 3, 2001)

Section 2160.330  Signing the Agreement

Units must sign an Agreement with the Department.

a)         The first Agreement shall cover the actual period the Unit is enrolled between July 1 through June 30 of the first Fiscal Year and through the end of the second Fiscal Year.

b)         Subsequent Agreements shall be effective for 2 State Fiscal Years.

c)         The Agreement shall be prepared by the Department and shall contain the premium rates to be charged during the first Fiscal Year.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.335  Health Insurance Portability and Accountability Act of 1996 (HIPAA)

The Unit shall comply with the uses and disclosures of Protected Health Information, permitted by HIPAA and 45 CFR 160-164, where applicable, in Plan documents.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.410  Health Plan Representatives

Health Plan Representatives shall:

a)         enroll Members and their Dependents;

b)         provide enrollment, termination and change in status information to the Department on forms provided by the Department;

c)         provide coverage, enrollment and termination information to Members in accordance with the time schedules set by the Department, as described in the Local Government Health Plan Benefits Handbook; and

d)         disseminate to Members information regarding benefits available under the Program, changes and/or additions to the Program, and any materials provided by the Department.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.420  Appeals Process Responsibilities

The Member shall be responsible for handling appeals concerning claims payments.

a)         All correspondence concerning appeals must indicate the Unit in which the Member is enrolled in the Program.

b)         If a Member believes that an error has been made in the benefit amount allowed or disallowed, the Member should contact the claims processing office of the self-funded managed care plan or the Administrative Service Organization within 180 days after denial of the initial claim determination.

c)         Within 60 days after receiving the results of the review process by the self-funded managed care plan or Administrative Service Organization, the Member may submit a written request for review to the Department for a final determination of either an administrative or medical necessity appeal.

d)         Administrative appeals are based on Plan exclusions and limitations and Plan design, and the Department's Group Insurance Division's decision is final and binding on all parties.

e)         Within 60 days after receipt of the notice of the Department's Group Insurance Division's decision, a medical necessity appeal may be made to the Board.  The Board will review the documentation and facts presented to the Department and make a recommendation to the Director, whose decision shall be final and binding on all parties.  The Director's decision shall be in writing.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.510  Appointment of Advisors

The Director shall establish the Local Government Health Plan Advisory Board.  This Board shall consist of 7 advisors who are Members of the Plan.

a)         Advisors shall be appointed by the Director for 3-year terms beginning on September 1.

b)         Of the initial appointments, 3 advisors shall be appointed for one year, 2 advisors shall be appointed for 2 years, and 2 advisors shall be appointed for 3 years.  All subsequent appointments shall be for 3-year terms.

c)         If the Unit from which the advisor was appointed withdraws from the Plan, the advisor's appointment will terminate as of the date of the Unit's withdrawal.  The Director shall appoint another Member to serve the balance of the term.

d)         If the advisor ceases to be a Member, the advisor's appointment will terminate as of the date membership ceased.  The Director shall appoint another Member to serve the balance of the term.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.520  Responsibilities of the Board

The responsibilities of the Board shall consist of the following:

a)         annually review material to be distributed to the Units;

b)         advise the Department concerning any modifications needed to improve the administration of the Plan;

c)         review rate setting methodologies;

d)         hear medical necessity appeals and make recommendations to the Director, as provided in Section 2160.420.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.610  Local Government Health Insurance Reserve Fund

a)         Premium payments by Units for group health coverage shall be deposited in the Local Government Health Insurance Reserve Fund (see 5 ILCS 375/10(i)).  The Fund may also receive deposits of other revenues and monies.

b)         All expenditures from this Fund shall be used for payments of Members' health care benefits and to reimburse the Department, HFS, Administrative Service Organizations and insurers for all expenses incurred in the administration of the Plan.  No State funds shall be used for these purposes.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.620  Premium Rate Structure

The Director shall annually determine monthly rates of payment subject to the following  constraints.

a)         A tiered rate methodology shall be employed.

b)         Units shall be assigned a rate tier based on the projected costs for each Unit according to the following guidelines:

1)         In the first Fiscal Year of coverage the rates shall be based on the cost of administration and the cost of medical services adjusted for age, sex, geographic or demographic characteristics, or other factors that may affect the costs of the Plan. A margin to cover fluctuation in the amount of claims shall also be added to the premium.

2)         In subsequent years, premium rates shall be based on prior years' claims experience, the cost of administration and the cost of medical services adjusted for age, sex, geographic or demographic characteristics, or other factors that may affect the costs of the Plan. A margin to cover fluctuations in the amount of claims shall also be added to the premium.

3)         Premium rates shall remain unchanged throughout the Fiscal Year. A Unit shall experience a one-tier rate increase or decrease if the projected costs, based on employee demographics and actual prior years' claims experience of Members and Dependents, warrant such an increase or decrease for the following Fiscal Year.

c)         Beginning with the first year, Units that enroll more than 250 Members may be individually experience rated to determine the monthly premium rates.

(Source:  Amended at 25 Ill. Reg. 10306, effective August 3, 2001)

Section 2160.710  Local Government Health Plan

The Local Government Health Plan is similar to the benefits offered by the State of Illinois to its employees.

a)         The Local Government Health Plan benefits are described in the Local Government Health Plan Benefits Handbook that shall be provided to all Health Plan Representatives for distribution to all Members.

b)         All Units participating in the Plan shall receive sufficient Local Government Health Plan Benefits Handbooks and Benefit Choice Options booklets to distribute to each of their Members.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)

Section 2160.720  Health Care Coverage

a)         Except as provided in subsections (b) and (c), for any Member or Dependent under the Plan, there is no coverage for 6 months after enrollment for health conditions that have been treated during the 3 months prior to enrollment, as described in the Local Government Health Plan Benefits Handbook.

b)         For all Members and their covered Dependents who enroll under the Plan at the time their respective Unit initially enrolls in the Plan, the limitation described in subsection (a) shall not apply.

c)         The Pre-Existing Condition time period may be reduced by the amount of creditable coverage Members or Dependents may have had with another insurance plan prior to enrollment, provided there was not a break in coverage of more than 63 days.  A Certificate of Creditable Coverage from the prior plan must be provided to the employing Unit to reduce the Pre-Existing Condition time period.

d)         Coverage begins for all Members and their covered Dependents at 12:01 AM of the day the Unit is enrolled in the Plan.

(Source:  Amended at 32 Ill. Reg. 15994, effective September 11, 2008)