98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
SB2641

 

Introduced 1/21/2014, by Sen. Terry Link

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.5
5 ILCS 375/6.9

    Amends the State Employees Group Insurance Act of 1971. Sets forth provisions regarding health benefits for TRS benefit recipients, TRS dependent beneficiaries, community college benefit recipients, and community college dependent beneficiaries. Permits eligible benefit recipients and dependent beneficiaries to elect not to participate in the program of health benefits during the benefit recipient's annual open enrollment period. Permits a benefit recipient and the dependent beneficiary to re-enroll in the Department of Central Management Services program of health benefits upon showing a qualifying change in status without evidence of insurability and with no limitations on coverage for pre-existing conditions, provided that there was not a break in coverage of more than 63 days. Permits a benefit recipient and the dependent beneficiary who elected not to participate in the program of health benefits to re-enroll in the program of health benefits during any annual benefit choice period, without evidence of insurability. Provides that benefit recipients who elect not to participate in the program of health benefits shall be furnished with a written explanation of the requirements and limitations for the election not to participate in the program and for re-enrolling in the program. Further provides that the Director shall not limit re-enrollment in a manner that is inconsistent with this amendatory Act. Makes other technical changes. Effective immediately.


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A BILL FOR

 

SB2641LRB098 15859 OMW 50902 b

1    AN ACT concerning State government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employees Group Insurance Act of 1971
5is amended by changing Sections 6.5 and 6.9 as follows:
 
6    (5 ILCS 375/6.5)
7    Sec. 6.5. Health benefits for TRS benefit recipients and
8TRS dependent beneficiaries.
9    (a) Purpose. It is the purpose of this amendatory Act of
101995 to transfer the administration of the program of health
11benefits established for benefit recipients and their
12dependent beneficiaries under Article 16 of the Illinois
13Pension Code to the Department of Central Management Services.
14    (b) Transition provisions. The Board of Trustees of the
15Teachers' Retirement System shall continue to administer the
16health benefit program established under Article 16 of the
17Illinois Pension Code through December 31, 1995. Beginning
18January 1, 1996, the Department of Central Management Services
19shall be responsible for administering a program of health
20benefits for TRS benefit recipients and TRS dependent
21beneficiaries under this Section. The Department of Central
22Management Services and the Teachers' Retirement System shall
23cooperate in this endeavor and shall coordinate their

 

 

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1activities so as to ensure a smooth transition and
2uninterrupted health benefit coverage.
3    (c) Eligibility. All persons who were enrolled in the
4Article 16 program at the time of the transfer shall be
5eligible to participate in the program established under this
6Section without any interruption or delay in coverage or
7limitation as to pre-existing medical conditions. Eligibility
8to participate shall be determined by the Teachers' Retirement
9System. Eligibility information shall be communicated to the
10Department of Central Management Services in a format
11acceptable to the Department.
12    A TRS dependent beneficiary who is a child age 19 or over
13and mentally or physically disabled does not become ineligible
14to participate by reason of (i) becoming ineligible to be
15claimed as a dependent for Illinois or federal income tax
16purposes or (ii) receiving earned income, so long as those
17earnings are insufficient for the child to be fully
18self-sufficient.
19    (c-1) On and after the effective date of this amendatory
20Act of the 98th General Assembly, eligible TRS benefit
21recipients and TRS dependent beneficiaries may elect not to
22participate in the program of health benefits under in this
23Section. The election must be made during the TRS benefit
24recipient's annual open enrollment period subject to the
25following conditions:
26        (1) TRS benefit recipients must furnish proof of health

 

 

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1    benefit coverage, either comprehensive major medical
2    coverage or comprehensive managed care plan, from a source
3    other than the Department of Central Management Services in
4    order to elect not to participate in the program.
5        (2) Regardless of the date that the TRS benefit
6    recipient or TRS dependent beneficiary elected not to
7    participate in the program of health benefits offered under
8    this Section, both the TRS benefit recipient and the TRS
9    dependent beneficiary may re-enroll in the Department of
10    Central Management Services program of health benefits
11    upon showing a qualifying change in status, as defined in
12    the federal Internal Revenue Code, without evidence of
13    insurability and with no limitations on coverage for
14    pre-existing conditions, provided that there was not a
15    break in coverage of more than 63 days.
16        (3) Regardless of the date that the TRS benefit
17    recipient or TRS dependent beneficiary elected not to
18    participate in the program of health benefits offered under
19    this Section, both the TRS benefit recipient and the TRS
20    dependent beneficiary may also re-enroll in the program of
21    health benefits during any annual benefit choice period,
22    without evidence of insurability.
23        (4) TRS benefit recipients who elect not to participate
24    in the program of health benefits shall be furnished with a
25    written explanation of the requirements and limitations
26    for the election not to participate in the program and for

 

 

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1    re-enrolling in the program.
2        (5) The Director shall not limit re-enrollment in a
3    manner that is inconsistent with this amendatory Act of the
4    98th General Assembly.
5    (d) Coverage. The level of health benefits provided under
6this Section shall be similar to the level of benefits provided
7by the program previously established under Article 16 of the
8Illinois Pension Code.
9    Group life insurance benefits are not included in the
10benefits to be provided to TRS benefit recipients and TRS
11dependent beneficiaries under this Act.
12    The program of health benefits under this Section may
13include any or all of the benefit limitations, including but
14not limited to a reduction in benefits based on eligibility for
15federal Medicare medicare benefits, that are provided under
16subsection (a) of Section 6 of this Act for other health
17benefit programs under this Act.
18    (e) Insurance rates and premiums. The Director shall
19determine the insurance rates and premiums for TRS benefit
20recipients and TRS dependent beneficiaries, and shall present
21to the Teachers' Retirement System of the State of Illinois, by
22April 15 of each calendar year, the rate-setting methodology
23(including but not limited to utilization levels and costs)
24used to determine the amount of the health care premiums.
25        For Fiscal Year 1996, the premium shall be equal to the
26    premium actually charged in Fiscal Year 1995; in subsequent

 

 

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1    years, the premium shall never be lower than the premium
2    charged in Fiscal Year 1995.
3        For Fiscal Year 2003, the premium shall not exceed 110%
4    of the premium actually charged in Fiscal Year 2002.
5        For Fiscal Year 2004, the premium shall not exceed 112%
6    of the premium actually charged in Fiscal Year 2003.
7        For Fiscal Year 2005, the premium shall not exceed a
8    weighted average of 106.6% of the premium actually charged
9    in Fiscal Year 2004.
10        For Fiscal Year 2006, the premium shall not exceed a
11    weighted average of 109.1% of the premium actually charged
12    in Fiscal Year 2005.
13        For Fiscal Year 2007, the premium shall not exceed a
14    weighted average of 103.9% of the premium actually charged
15    in Fiscal Year 2006.
16        For Fiscal Year 2008 and thereafter, the premium in
17    each fiscal year shall not exceed 105% of the premium
18    actually charged in the previous fiscal year.
19    Rates and premiums may be based in part on age and
20eligibility for federal medicare coverage. However, the cost of
21participation for a TRS dependent beneficiary who is an
22unmarried child age 19 or over and mentally or physically
23disabled shall not exceed the cost for a TRS dependent
24beneficiary who is an unmarried child under age 19 and
25participates in the same major medical or managed care program.
26    The cost of health benefits under the program shall be paid

 

 

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

 

 

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1    program, 75% of the total insurance rate shall be paid from
2    the Teacher Health Insurance Security Fund if a managed
3    care program is not accessible, as determined by the
4    Department of Central Management Services.
5        (3.1) For a TRS dependent beneficiary who is Medicare
6    primary and enrolled in a managed care plan, or the major
7    medical coverage program if a managed care plan is not
8    available, 25% of the total insurance rate shall be paid
9    from the Teacher Health Security Fund as determined by the
10    Department of Central Management Services. For the purpose
11    of this item (3.1), the term "TRS dependent beneficiary who
12    is Medicare primary" means a TRS dependent beneficiary who
13    is participating in Medicare Parts A and B.
14        (4) Except as otherwise provided in item (3.1), the
15    balance of the rate of insurance, including the entire
16    premium of any coverage for TRS dependent beneficiaries
17    that has been elected, shall be paid by deductions
18    authorized by the TRS benefit recipient to be withheld from
19    his or her monthly annuity or benefit payment from the
20    Teachers' Retirement System; except that (i) if the balance
21    of the cost of coverage exceeds the amount of the monthly
22    annuity or benefit payment, the difference shall be paid
23    directly to the Teachers' Retirement System by the TRS
24    benefit recipient, and (ii) all or part of the balance of
25    the cost of coverage may, at the school board's option, be
26    paid to the Teachers' Retirement System by the school board

 

 

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1    of the school district from which the TRS benefit recipient
2    retired, in accordance with Section 10-22.3b of the School
3    Code. The Teachers' Retirement System shall promptly
4    deposit all moneys withheld by or paid to it under this
5    subdivision (e)(4) into the Teacher Health Insurance
6    Security Fund. These moneys shall not be considered assets
7    of the Retirement System.
8    (f) Financing. Beginning July 1, 1995, all revenues arising
9from the administration of the health benefit programs
10established under Article 16 of the Illinois Pension Code or
11this Section shall be deposited into the Teacher Health
12Insurance Security Fund, which is hereby created as a
13nonappropriated trust fund to be held outside the State
14Treasury, with the State Treasurer as custodian. Any interest
15earned on moneys in the Teacher Health Insurance Security Fund
16shall be deposited into the Fund.
17    Moneys in the Teacher Health Insurance Security Fund shall
18be used only to pay the costs of the health benefit program
19established under this Section, including associated
20administrative costs, and the costs associated with the health
21benefit program established under Article 16 of the Illinois
22Pension Code, as authorized in this Section. Beginning July 1,
231995, the Department of Central Management Services may make
24expenditures from the Teacher Health Insurance Security Fund
25for those costs.
26    After other funds authorized for the payment of the costs

 

 

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1of the health benefit program established under Article 16 of
2the Illinois Pension Code are exhausted and until January 1,
31996 (or such later date as may be agreed upon by the Director
4of Central Management Services and the Secretary of the
5Teachers' Retirement System), the Secretary of the Teachers'
6Retirement System may make expenditures from the Teacher Health
7Insurance Security Fund as necessary to pay up to 75% of the
8cost of providing health coverage to eligible benefit
9recipients (as defined in Sections 16-153.1 and 16-153.3 of the
10Illinois Pension Code) who are enrolled in the Article 16
11health benefit program and to facilitate the transfer of
12administration of the health benefit program to the Department
13of Central Management Services.
14    The Department of Central Management Services, or any
15successor agency designated to procure healthcare contracts
16pursuant to this Act, is authorized to establish funds,
17separate accounts provided by any bank or banks as defined by
18the Illinois Banking Act, or separate accounts provided by any
19savings and loan association or associations as defined by the
20Illinois Savings and Loan Act of 1985 to be held by the
21Director, outside the State treasury, for the purpose of
22receiving the transfer of moneys from the Teacher Health
23Insurance Security Fund. The Department may promulgate rules
24further defining the methodology for the transfers. Any
25interest earned by moneys in the funds or accounts shall inure
26to the Teacher Health Insurance Security Fund. The transferred

 

 

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1moneys, and interest accrued thereon, shall be used exclusively
2for transfers to administrative service organizations or their
3financial institutions for payments of claims to claimants and
4providers under the self-insurance health plan. The
5transferred moneys, and interest accrued thereon, shall not be
6used for any other purpose including, but not limited to,
7reimbursement of administration fees due the administrative
8service organization pursuant to its contract or contracts with
9the Department.
10    (g) Contract for benefits. The Director shall by contract,
11self-insurance, or otherwise make available the program of
12health benefits for TRS benefit recipients and their TRS
13dependent beneficiaries that is provided for in this Section.
14The contract or other arrangement for the provision of these
15health benefits shall be on terms deemed by the Director to be
16in the best interest of the State of Illinois and the TRS
17benefit recipients based on, but not limited to, such criteria
18as administrative cost, service capabilities of the carrier or
19other contractor, and the costs of the benefits.
20    (g-5) Committee. A Teacher Retirement Insurance Program
21Committee shall be established, to consist of 10 persons
22appointed by the Governor.
23    The Committee shall convene at least 4 times each year, and
24shall consider and make recommendations on issues affecting the
25program of health benefits provided under this Section.
26Recommendations of the Committee shall be based on a consensus

 

 

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1of the members of the Committee.
2    If the Teacher Health Insurance Security Fund experiences a
3deficit balance based upon the contribution and subsidy rates
4established in this Section and Section 6.6 for Fiscal Year
52008 or thereafter, the Committee shall make recommendations
6for adjustments to the funding sources established under these
7Sections.
8    In addition, the Committee shall identify proposed
9solutions to the funding shortfalls that are affecting the
10Teacher Health Insurance Security Fund, and it shall report
11those solutions to the Governor and the General Assembly within
126 months after August 15, 2011 (the effective date of Public
13Act 97-386).
14    (h) Continuation of program. It is the intention of the
15General Assembly that the program of health benefits provided
16under this Section be maintained on an ongoing, affordable
17basis.
18    The program of health benefits provided under this Section
19may be amended by the State and is not intended to be a pension
20or retirement benefit subject to protection under Article XIII,
21Section 5 of the Illinois Constitution.
22    (i) Repeal. (Blank).
23(Source: P.A. 97-386, eff. 8-15-11; 97-813, eff. 7-13-12;
2498-488, eff. 8-16-13.)
 
25    (5 ILCS 375/6.9)

 

 

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1    Sec. 6.9. Health benefits for community college benefit
2recipients and community college dependent beneficiaries.
3    (a) Purpose. It is the purpose of this amendatory Act of
41997 to establish a uniform program of health benefits for
5community college benefit recipients and their dependent
6beneficiaries under the administration of the Department of
7Central Management Services.
8    (b) Creation of program. Beginning July 1, 1999, the
9Department of Central Management Services shall be responsible
10for administering a program of health benefits for community
11college benefit recipients and community college dependent
12beneficiaries under this Section. The State Universities
13Retirement System and the boards of trustees of the various
14community college districts shall cooperate with the
15Department in this endeavor.
16    (c) Eligibility. All community college benefit recipients
17and community college dependent beneficiaries shall be
18eligible to participate in the program established under this
19Section, without any interruption or delay in coverage or
20limitation as to pre-existing medical conditions. Eligibility
21to participate shall be determined by the State Universities
22Retirement System. Eligibility information shall be
23communicated to the Department of Central Management Services
24in a format acceptable to the Department.
25    (c-1) On and after the effective date of this amendatory
26Act of the 98th General Assembly, eligible community college

 

 

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1benefit recipients and community college dependent
2beneficiaries may elect not to participate in the program of
3health benefits under this Section. The election must be made
4during the community college benefit recipient's annual open
5enrollment period subject to the following conditions:
6        (1) Community college benefit recipients must furnish
7    proof of health benefit coverage, either comprehensive
8    major medical coverage or comprehensive managed care plan,
9    from a source other than the Department of Central
10    Management Services in order to elect not to participate in
11    the program.
12        (2) Regardless of the date that the community college
13    benefit recipient or community college dependent
14    beneficiary elected not to participate in the program of
15    health benefits offered under this Section, both the
16    community college benefit recipient and the community
17    college dependent beneficiary may re-enroll in the
18    Department of Central Management Services program of
19    health benefits upon showing a qualifying change in status,
20    as defined in the federal Internal Revenue Code, without
21    evidence of insurability and with no limitations on
22    coverage for pre-existing conditions, provided that there
23    was not a break in coverage of more than 63 days.
24        (3) Regardless of the date that the community college
25    benefit recipient or community college dependent
26    beneficiary elected not to participate in the program of

 

 

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1    health benefits offered under this Section, both the
2    community college benefit recipient and the community
3    college dependent beneficiary may also re-enroll in the
4    program of health benefits during any annual benefit choice
5    period, without evidence of insurability.
6        (4) Community college benefit recipients who elect not
7    to participate in the program of health benefits shall be
8    furnished with a written explanation of the requirements
9    and limitations for the election not to participate in the
10    program and for re-enrolling in the program.
11        (5) The Director shall not limit re-enrollment in a
12    manner that is inconsistent with this amendatory Act of the
13    98th General Assembly.
14    (d) Coverage. The health benefit coverage provided under
15this Section shall be a program of health, dental, and vision
16benefits.
17    The program of health benefits under this Section may
18include any or all of the benefit limitations, including but
19not limited to a reduction in benefits based on eligibility for
20federal Medicare medicare benefits, that are provided under
21subsection (a) of Section 6 of this Act for other health
22benefit programs under this Act.
23    (e) Insurance rates and premiums. The Director shall
24determine the insurance rates and premiums for community
25college benefit recipients and community college dependent
26beneficiaries. Rates and premiums may be based in part on age

 

 

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1and eligibility for federal Medicare coverage. The Director
2shall also determine premiums that will allow for the
3establishment of an actuarially sound reserve for this program.
4    The cost of health benefits under the program shall be paid
5as follows:
6        (1) For a community college benefit recipient, up to
7    75% of the total insurance rate shall be paid from the
8    Community College Health Insurance Security Fund.
9        (2) The balance of the rate of insurance, including the
10    entire premium for any coverage for community college
11    dependent beneficiaries that has been elected, shall be
12    paid by deductions authorized by the community college
13    benefit recipient to be withheld from his or her monthly
14    annuity or benefit payment from the State Universities
15    Retirement System; except that (i) if the balance of the
16    cost of coverage exceeds the amount of the monthly annuity
17    or benefit payment, the difference shall be paid directly
18    to the State Universities Retirement System by the
19    community college benefit recipient, and (ii) all or part
20    of the balance of the cost of coverage may, at the option
21    of the board of trustees of the community college district,
22    be paid to the State Universities Retirement System by the
23    board of the community college district from which the
24    community college benefit recipient retired. The State
25    Universities Retirement System shall promptly deposit all
26    moneys withheld by or paid to it under this subdivision

 

 

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1    (e)(2) into the Community College Health Insurance
2    Security Fund. These moneys shall not be considered assets
3    of the State Universities Retirement System.
4    (f) Financing. All revenues arising from the
5administration of the health benefit program established under
6this Section shall be deposited into the Community College
7Health Insurance Security Fund, which is hereby created as a
8nonappropriated trust fund to be held outside the State
9Treasury, with the State Treasurer as custodian. Any interest
10earned on moneys in the Community College Health Insurance
11Security Fund shall be deposited into the Fund.
12    Moneys in the Community College Health Insurance Security
13Fund shall be used only to pay the costs of the health benefit
14program established under this Section, including associated
15administrative costs and the establishment of a program
16reserve. Beginning January 1, 1999, the Department of Central
17Management Services may make expenditures from the Community
18College Health Insurance Security Fund for those costs.
19    (g) Contract for benefits. The Director shall by contract,
20self-insurance, or otherwise make available the program of
21health benefits for community college benefit recipients and
22their community college dependent beneficiaries that is
23provided for in this Section. The contract or other arrangement
24for the provision of these health benefits shall be on terms
25deemed by the Director to be in the best interest of the State
26of Illinois and the community college benefit recipients based

 

 

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1on, but not limited to, such criteria as administrative cost,
2service capabilities of the carrier or other contractor, and
3the costs of the benefits.
4    (h) Continuation of program. It is the intention of the
5General Assembly that the program of health benefits provided
6under this Section be maintained on an ongoing, affordable
7basis. The program of health benefits provided under this
8Section may be amended by the State and is not intended to be a
9pension or retirement benefit subject to protection under
10Article XIII, Section 5 of the Illinois Constitution.
11    (i) Other health benefit plans. A health benefit plan
12provided by a community college district (other than a
13community college district subject to Article VII of the Public
14Community College Act) under the terms of a collective
15bargaining agreement in effect on or prior to the effective
16date of this amendatory Act of 1997 shall continue in force
17according to the terms of that agreement, unless otherwise
18mutually agreed by the parties to that agreement and the
19affected retiree. A community college benefit recipient or
20community college dependent beneficiary whose coverage under
21such a plan expires shall be eligible to begin participating in
22the program established under this Section without any
23interruption or delay in coverage or limitation as to
24pre-existing medical conditions.
25    This Act does not prohibit any community college district
26from offering additional health benefits for its retirees or

 

 

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1their dependents or survivors.
2(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.