093_SB0380sam003

 










                                     LRB093 08227 JAM 12874 a

 1                    AMENDMENT TO SENATE BILL 380

 2        AMENDMENT NO.     .  Amend Senate Bill 380  by  replacing
 3    everything after the enacting clause with the following:

 4        "Section  5.   The State Employees Group Insurance Act of
 5    1971 is amended by changing Section 6.5 as follows:

 6        (5 ILCS 375/6.5)
 7        (Section scheduled to be repealed on July 1, 2004)
 8        Sec. 6.5. Health benefits for TRS benefit recipients  and
 9    TRS dependent beneficiaries.
10        (a)  Purpose.   It  is the purpose of this amendatory Act
11    of 1995 to transfer the  administration  of  the  program  of
12    health  benefits established for benefit recipients and their
13    dependent beneficiaries under  Article  16  of  the  Illinois
14    Pension   Code   to  the  Department  of  Central  Management
15    Services.
16        (b)  Transition provisions.  The Board of Trustees of the
17    Teachers' Retirement System shall continue to administer  the
18    health  benefit  program  established under Article 16 of the
19    Illinois Pension Code through December 31,  1995.   Beginning
20    January   1,  1996,  the  Department  of  Central  Management
21    Services shall be responsible for administering a program  of
22    health  benefits for TRS benefit recipients and TRS dependent
 
                            -2-      LRB093 08227 JAM 12874 a
 1    beneficiaries under this Section.  The Department of  Central
 2    Management Services and the Teachers' Retirement System shall
 3    cooperate   in  this  endeavor  and  shall  coordinate  their
 4    activities  so  as  to  ensure  a   smooth   transition   and
 5    uninterrupted health benefit coverage.
 6        (c)  Eligibility.   All  persons who were enrolled in the
 7    Article 16 program at the  time  of  the  transfer  shall  be
 8    eligible to participate in the program established under this
 9    Section  without  any  interruption  or  delay in coverage or
10    limitation   as   to   pre-existing    medical    conditions.
11    Eligibility   to  participate  shall  be  determined  by  the
12    Teachers' Retirement System.  Eligibility  information  shall
13    be  communicated  to  the  Department  of  Central Management
14    Services in a format acceptable to the Department.
15        A TRS dependent beneficiary who is an unmarried child age
16    19 or over and mentally or physically  handicapped  does  not
17    become  ineligible  to  participate by reason of (i) becoming
18    ineligible to be claimed  as  a  dependent  for  Illinois  or
19    federal  income tax purposes or (ii) receiving earned income,
20    so long as those earnings are insufficient for the  child  to
21    be fully self-sufficient.
22        (d)  Coverage.   The  level  of  health benefits provided
23    under this Section shall be similar to the level of  benefits
24    provided  by the program previously established under Article
25    16 of the Illinois Pension Code.
26        Group life insurance benefits are  not  included  in  the
27    benefits  to  be  provided  to TRS benefit recipients and TRS
28    dependent beneficiaries under this Act.
29        The program of health benefits  under  this  Section  may
30    include  any or all of the benefit limitations, including but
31    not limited to a reduction in benefits based  on  eligibility
32    for  federal  medicare  benefits,  that  are  provided  under
33    subsection  (a)  of  Section  6  of this Act for other health
34    benefit programs under this Act.
 
                            -3-      LRB093 08227 JAM 12874 a
 1        (e)  Insurance rates and premiums.   The  Director  shall
 2    determine  the  insurance  rates and premiums for TRS benefit
 3    recipients and TRS dependent beneficiaries, and shall present
 4    to the Teachers' Retirement System of the State of  Illinois,
 5    by   April   15  of  each  calendar  year,  the  rate-setting
 6    methodology (including but not limited to utilization  levels
 7    and  costs)  used  to determine the amount of the health care
 8    premiums.
 9        For Fiscal Year 1996, the premium shall be equal  to  the
10    premium  actually  charged in Fiscal Year 1995; in subsequent
11    years, the premium shall never  be  lower  than  the  premium
12    charged  in  Fiscal  Year  1995.   For  Fiscal Year 2003, the
13    premium shall not exceed 110% of the premium actually charged
14    in Fiscal Year 2002.  For Fiscal Year 2004, the premium shall
15    not exceed 112% of the premium  actually  charged  in  Fiscal
16    Year 2003.
17        Rates  and  premiums  may  be  based  in  part on age and
18    eligibility for federal medicare coverage.  However, the cost
19    of participation for a TRS dependent beneficiary  who  is  an
20    unmarried  child  age  19  or over and mentally or physically
21    handicapped shall not exceed the cost  for  a  TRS  dependent
22    beneficiary  who  is  an  unmarried  child  under  age 19 and
23    participates in  the  same  major  medical  or  managed  care
24    program.
25        The  cost  of  health benefits under the program shall be
26    paid as follows:
27             (1)  For a TRS benefit recipient selecting a managed
28        care program, up to 75% of the total insurance rate shall
29        be paid from the Teacher Health Insurance Security Fund.
30             (2)  For a TRS benefit recipient selecting the major
31        medical  coverage  program,  up  to  50%  of  the   total
32        insurance  rate  shall  be  paid  from the Teacher Health
33        Insurance Security Fund if  a  managed  care  program  is
34        accessible,  as  determined  by  the Teachers' Retirement
 
                            -4-      LRB093 08227 JAM 12874 a
 1        System.
 2             (3)  For a TRS benefit recipient selecting the major
 3        medical  coverage  program,  up  to  75%  of  the   total
 4        insurance  rate  shall  be  paid  from the Teacher Health
 5        Insurance Security Fund if a managed care program is  not
 6        accessible,  as  determined  by  the Teachers' Retirement
 7        System.
 8             (4)  The balance of the rate of insurance, including
 9        the entire premium of  any  coverage  for  TRS  dependent
10        beneficiaries  that  has  been  elected, shall be paid by
11        deductions authorized by the TRS benefit recipient to  be
12        withheld  from  his  or  her  monthly  annuity or benefit
13        payment from the Teachers' Retirement System; except that
14        (i) if the balance of the cost of  coverage  exceeds  the
15        amount  of  the  monthly  annuity or benefit payment, the
16        difference  shall  be  paid  directly  to  the  Teachers'
17        Retirement System by the TRS benefit recipient, and  (ii)
18        all  or  part of the balance of the cost of coverage may,
19        at the school  board's option, be paid to  the  Teachers'
20        Retirement  System  by  the  school  board  of the school
21        district from which the TRS benefit recipient retired, in
22        accordance with Section 10-22.3b of the School Code.  The
23        Teachers' Retirement System shall  promptly  deposit  all
24        moneys  withheld  by or paid to it under this subdivision
25        (e)(4) into the Teacher Health Insurance  Security  Fund.
26        These  moneys  shall  not  be  considered  assets  of the
27        Retirement System.
28        (f)  Financing.  Beginning July  1,  1995,  all  revenues
29    arising   from  the  administration  of  the  health  benefit
30    programs established under Article 16 of the Illinois Pension
31    Code or this Section shall  be  deposited  into  the  Teacher
32    Health  Insurance Security Fund, which is hereby created as a
33    nonappropriated trust fund  to  be  held  outside  the  State
34    Treasury,   with  the  State  Treasurer  as  custodian.   Any
 
                            -5-      LRB093 08227 JAM 12874 a
 1    interest earned on moneys in  the  Teacher  Health  Insurance
 2    Security Fund shall be deposited into the Fund.
 3        Moneys  in  the  Teacher  Health  Insurance Security Fund
 4    shall be used only to pay the costs  of  the  health  benefit
 5    program  established under this Section, including associated
 6    administrative costs,  and  the  costs  associated  with  the
 7    health  benefit  program  established under Article 16 of the
 8    Illinois  Pension  Code,  as  authorized  in  this   Section.
 9    Beginning  July 1, 1995, the Department of Central Management
10    Services  may  make  expenditures  from  the  Teacher  Health
11    Insurance Security Fund for those costs.
12        After other funds authorized for the payment of the costs
13    of the health benefit program established under Article 16 of
14    the Illinois Pension Code are exhausted and until January  1,
15    1996  (or  such  later  date  as  may  be  agreed upon by the
16    Director of Central Management Services and the Secretary  of
17    the  Teachers'  Retirement  System),  the  Secretary  of  the
18    Teachers'  Retirement  System  may make expenditures from the
19    Teacher Health Insurance Security Fund as necessary to pay up
20    to 75% of the cost of providing health coverage  to  eligible
21    benefit  recipients  (as  defined  in  Sections  16-153.1 and
22    16-153.3 of the Illinois Pension Code) who  are  enrolled  in
23    the  Article  16 health benefit program and to facilitate the
24    transfer of administration of the health benefit  program  to
25    the Department of Central Management Services.
26        (g)  Contract   for  benefits.   The  Director  shall  by
27    contract, self-insurance, or  otherwise  make  available  the
28    program  of  health  benefits  for TRS benefit recipients and
29    their TRS dependent beneficiaries that  is  provided  for  in
30    this  Section.   The  contract  or  other arrangement for the
31    provision of these health benefits shall be on  terms  deemed
32    by  the  Director  to be in the best interest of the State of
33    Illinois and the TRS benefit recipients  based  on,  but  not
34    limited  to,  such  criteria  as administrative cost, service
 
                            -6-      LRB093 08227 JAM 12874 a
 1    capabilities of the carrier  or  other  contractor,  and  the
 2    costs of the benefits.
 3        (h)  Continuation  and termination of program.  It is the
 4    intention of the General Assembly that the program of  health
 5    benefits  provided  under  this  Section  be maintained on an
 6    ongoing, affordable basis through June 30, 2006  2004.    The
 7    program  of  health  benefits  provided under this Section is
 8    terminated on July 1, 2006 2004.
 9        The  program  of  health  benefits  provided  under  this
10    Section may be amended by the State and is not intended to be
11    a pension or retirement benefit subject to  protection  under
12    Article XIII, Section 5 of the Illinois Constitution.
13        (i)  Repeal.   This  Section  is repealed on July 1, 2006
14    2004.
15    (Source: P.A. 92-505, eff.  12-20-01;  92-862,  eff.  1-3-03;
16    revised 1-10-03.)

17        Section  99.  Effective date.  This Act takes effect upon
18    becoming law.".