Personnel and Pensions Committee
Filed: 3/11/2010
 
 

 




 

 		












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AMENDMENT TO HOUSE BILL 5416




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    AMENDMENT NO. ______. Amend House Bill 5416 by replacing 
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everything after the enacting clause with the following:






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



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    (5 ILCS 375/6.5)



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    Sec. 6.5. Health benefits for TRS benefit recipients and 
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TRS dependent
beneficiaries.

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    (a) Purpose.  It is the purpose of this amendatory Act of 
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1995 to transfer
the administration of the program of health 
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benefits established for benefit
recipients and their 
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dependent beneficiaries under Article 16 of the Illinois

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Pension Code to the Department of Central Management Services.

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    (b) Transition provisions.  The Board of Trustees of the 
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Teachers'
Retirement System shall continue to administer the 
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health benefit program
established under Article 16 of the 
 


 






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Illinois Pension Code through December 31,
1995.  Beginning 
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January 1, 1996, the Department of Central Management Services

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shall be responsible for administering a program of health 
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benefits for TRS
benefit recipients and TRS dependent 
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beneficiaries under this Section.
The Department of Central 
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Management Services and the Teachers' Retirement
System shall 
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cooperate in this endeavor and shall coordinate their 
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activities
so as to ensure a smooth transition and 
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uninterrupted health benefit coverage.

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    (c) Eligibility.  All persons who were enrolled in the 
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Article 16 program at
the time of the transfer shall be 
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eligible to participate in the program
established under this 
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Section without any interruption or delay in coverage
or 
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limitation as to pre-existing medical conditions.  Eligibility 
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to
participate shall be determined by the Teachers' Retirement 
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System.
Eligibility information shall be communicated to the 
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Department of Central
Management Services in a format 
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acceptable to the Department.

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    A TRS dependent beneficiary who is an unmarried child age 
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19 or over and
mentally or physically disabled does not become 
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ineligible to participate
by reason of (i) becoming ineligible 
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to be claimed as a dependent for Illinois
or federal income tax 
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purposes or (ii) receiving earned income, so long as
those 
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earnings are insufficient for the child to be fully 
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self-sufficient.

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    (d) Coverage.  The level of health benefits provided under 
 


 






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this Section
shall be similar to the level of benefits provided 
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by the
program previously established under Article 16 of the 
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Illinois Pension Code.

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    Group life insurance benefits are not included in the 
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benefits
to be provided to TRS benefit recipients and TRS 
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dependent beneficiaries under
this Act.

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    The program of health benefits under this Section may 
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include any or all of
the benefit limitations, including but 
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not limited to a reduction in benefits
based on eligibility for 
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federal medicare benefits, that are provided under
subsection 
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(a) of Section 6 of this Act for other health benefit programs 
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under
this Act.

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    (e) Insurance rates and premiums.  The Director shall 
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determine the
insurance rates and premiums for TRS benefit 
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recipients and TRS dependent
beneficiaries,
and shall present 
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to the Teachers' Retirement System of
the State of Illinois, by 
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April 15 of each calendar year, the rate-setting
methodology 
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(including but not limited to utilization levels and costs) 
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used
to determine the amount of the health care premiums.

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        For Fiscal Year 1996, the premium shall be equal to the 
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    premium actually
charged in Fiscal Year 1995; in subsequent 
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    years, the premium shall
never be lower than the premium 
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    charged in Fiscal Year 1995.  
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        For Fiscal Year
2003, the premium shall not exceed 110% 
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    of the premium actually charged in
Fiscal Year 2002.  
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        For Fiscal Year 2004, the premium shall not exceed 112% 
 


 






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    of
the premium actually charged in Fiscal Year 2003.

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        For Fiscal Year 2005, the premium shall not exceed a 
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    weighted average of 106.6% of
the premium actually charged 
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    in Fiscal Year 2004.

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        For Fiscal Year 2006, the premium shall not exceed a 
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    weighted average of 109.1% of
the premium actually charged 
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    in Fiscal Year 2005.

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        For Fiscal Year 2007, the premium shall not exceed a 
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    weighted average of 103.9% of
the premium actually charged 
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    in Fiscal Year 2006.

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        For Fiscal Year 2008 and thereafter, the premium in 
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    each fiscal year shall not exceed 105% of
the premium 
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    actually charged in the previous fiscal year.

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    Rates and premiums may be based in part on age and 
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eligibility for federal
medicare coverage.  However, the cost of 
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participation for a TRS dependent
beneficiary who is an 
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unmarried child age 19 or over and mentally or physically

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disabled shall not exceed the cost for a TRS dependent 
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beneficiary who is
an unmarried child under age 19 and 
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participates in the same major medical or
managed care program.

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    The cost of health benefits under the program shall be paid 
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as follows:


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        (1) For a TRS benefit recipient selecting a managed 
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    care program, up to
75% of the total insurance rate shall 
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    be paid from the Teacher Health Insurance
Security Fund. 
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    Effective with Fiscal Year 2007 and thereafter, for a TRS 
 


 






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    benefit recipient selecting a managed care program, 75% of 
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    the total insurance rate shall be paid from the Teacher 
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    Health Insurance
Security Fund.



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        (2) For a TRS benefit recipient selecting the major 
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    medical coverage
program, up to 50% of the total insurance 
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    rate shall be paid from the Teacher
Health Insurance 
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    Security Fund if a managed care program is accessible, as

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    determined by the Teachers' Retirement System. Effective 
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    with Fiscal Year 2007 and thereafter, for a TRS benefit 
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    recipient selecting the major medical coverage
program, 
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    50% of the total insurance rate shall be paid from the 
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    Teacher
Health Insurance Security Fund if a managed care 
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    program is accessible, as
determined by the Department of 
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    Central Management Services.



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        (3) For a TRS benefit recipient selecting the major 
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    medical coverage
program, up to 75% of the total insurance 
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    rate shall be paid from the Teacher
Health Insurance 
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    Security Fund if a managed care program is not accessible, 
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    as
determined by the Teachers' Retirement System. 
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    Effective with Fiscal Year 2007 and thereafter, for a TRS 
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    benefit recipient selecting the major medical coverage

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    program, 75% of the total insurance rate shall be paid from 
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    the Teacher
Health Insurance Security Fund if a managed 
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    care program is not accessible, as
determined by the 
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    Department of Central Management Services.

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        (3.1) For a TRS dependent beneficiary who is Medicare 
 


 






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    primary and enrolled in a managed care plan, or the major 
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    medical coverage program if a managed care plan is not 
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    available, 25% of the total insurance rate shall be paid 
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    from the Teacher Health Security Fund as determined by the 
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    Department of Central Management Services. For the purpose 
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    of this item (3.1), the term "TRS dependent beneficiary who 
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    is Medicare primary" means a TRS dependent beneficiary who 
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    is participating in Medicare Parts A and B.


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        (4) Except as otherwise provided in item (3.1), the


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    balance of the rate of insurance, including the entire 
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    premium of
any coverage for TRS dependent beneficiaries 
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    that has been elected, shall be
paid
by deductions 
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    authorized by the TRS benefit recipient to be withheld from 
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    his
or her monthly annuity or benefit payment from the 
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    Teachers' Retirement System;
except that (i) if the balance 
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    of the cost of coverage exceeds the amount of
the monthly 
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    annuity or benefit payment, the difference shall be paid 
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    directly
to the Teachers' Retirement System by the TRS 
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    benefit recipient, and (ii) all
or part of the balance of 
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    the cost of coverage may, at the school  board's
option, be 
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    paid to the Teachers' Retirement System by the school board 
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    of the
school district from which the TRS benefit recipient 
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    retired, in accordance
with Section 10-22.3b of the School 
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    Code.  The Teachers' Retirement System
shall promptly 
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    deposit all moneys withheld by or paid to it under this

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    subdivision (e)(4) into the Teacher Health Insurance 
 


 






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    Security Fund.  These
moneys shall not be considered assets 
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    of the Retirement System.

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    (f) Financing.  Beginning July 1, 1995, all revenues arising 
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from the
administration of the health benefit programs 
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established under Article 16 of
the Illinois Pension Code or 
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this Section shall be deposited into the
Teacher Health 
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Insurance Security Fund, which is hereby created as a

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nonappropriated trust fund to be held outside the State 
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Treasury, with the
State Treasurer as custodian.  Any interest 
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earned on moneys in the Teacher
Health Insurance Security Fund 
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shall be deposited into the Fund.

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    Moneys in the Teacher Health Insurance Security
Fund shall 
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be used only to pay the costs of the health benefit program

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established under this Section, including associated 
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administrative costs, and
the costs associated with the health 
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benefit program established under Article
16 of the Illinois 
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Pension Code, as authorized in this Section.  Beginning
July 1, 
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1995, the Department of Central Management Services may make

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expenditures from the Teacher Health Insurance Security Fund 
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for those costs.

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    After other funds authorized for the payment of the costs 
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of the health
benefit program established under Article 16 of 
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the Illinois Pension Code are
exhausted and until January 1, 
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1996 (or such later date as may be agreed upon
by the Director 
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of Central Management Services and the Secretary of the

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Teachers' Retirement System), the Secretary of the Teachers' 
 


 






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Retirement System
may make expenditures from the Teacher Health 
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Insurance Security Fund as
necessary to pay up to 75% of the 
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cost of providing health coverage to eligible
benefit 
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recipients (as defined in Sections 16-153.1 and 16-153.3 of the

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Illinois Pension Code) who are enrolled in the Article 16 
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health benefit
program and to facilitate the transfer of 
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administration of the health benefit
program to the Department 
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of Central Management Services.

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    The Department of Healthcare and Family Services, or any 
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successor agency designated to procure healthcare contracts 
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pursuant to this Act, is authorized to establish funds, 
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separate accounts provided by any bank or banks as defined by 
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the Illinois Banking Act, or separate accounts provided by any 
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savings and loan association or associations as defined by the 
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Illinois Savings and Loan Act of 1985 to be held by the 
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Director, outside the State treasury, for the purpose of 
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receiving the transfer of moneys from the Teacher Health 
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Insurance Security Fund. The Department may promulgate rules 
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further defining the methodology for the transfers. Any 
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interest earned by moneys in the funds or accounts shall inure 
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to the Teacher Health Insurance Security Fund. The transferred 
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moneys, and interest accrued thereon, shall be used exclusively 
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for transfers to administrative service organizations or their 
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financial institutions for payments of claims to claimants and 
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providers under the self-insurance health plan. The 
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transferred moneys, and interest accrued thereon, shall not be 
 


 






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used for any other purpose including, but not limited to, 
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reimbursement of administration fees due the administrative 
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service organization pursuant to its contract or contracts with 
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the Department.

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    (g) Contract for benefits.  The Director shall by contract, 
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self-insurance,
or otherwise make available the program of 
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health benefits for TRS benefit
recipients and their TRS 
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dependent beneficiaries that is provided for in this
Section.  
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The contract or other arrangement for the provision of these 
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health
benefits shall be on terms deemed by the Director to be 
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in the best interest of
the State of Illinois and the TRS 
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benefit recipients based on, but not limited
to, such criteria 
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as administrative cost, service capabilities of the carrier
or 
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other contractor, and the costs of the benefits.

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    (g-5) Committee.  A Teacher Retirement Insurance Program 
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Committee shall be established, to consist of 10 persons 
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appointed by the Governor by April 30, 2010.

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    Beginning April 30, 2010, the The Committee shall convene 
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at least 4 times each year, and shall consider and make 
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recommendations on issues affecting the program of health 
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benefits provided under this
Section.  Recommendations of the 
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Committee shall be based on a consensus of the members of the 
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Committee.
Upon meeting 2 consecutive times, the Committee, 
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with the support of the Department of Healthcare and Family 
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Services, or its successor, with regard to analyses, may make 
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recommendations on modifying aspects of the plan that include, 
 


 






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but are not limited to, differences in the premiums within the 
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plan itself. 
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    If the Teacher
Health Insurance Security Fund experiences a 
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deficit balance based upon the contribution and subsidy rates 
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established in this Section and Section 6.6 for Fiscal Year 
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2008 or thereafter, the Committee shall make recommendations 
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for adjustments to the funding sources established under these 
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Sections.
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    (h) Continuation of program.  It is the intention of
the 
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General Assembly that the program of health benefits provided 
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under this
Section be maintained on an ongoing, affordable 
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basis.

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    The program of health benefits provided under this Section 
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may be amended by
the State and is not intended to be a pension 
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or retirement benefit subject to
protection under Article XIII, 
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Section 5 of the Illinois Constitution.

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    (i) Repeal.  (Blank).

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(Source: P.A. 95-632, eff. 9-25-07.)

 

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