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90_HB0347eng
5 ILCS 375/6.5
Amends the State Employees Group Insurance Act of 1971.
Provides for the termination of the separate program of
health benefits established for retired downstate teachers
and their dependent beneficiaries and moves those persons
into the State health plan. Effective immediately.
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1 AN ACT to amend the State Employees Group Insurance Act
2 of 1971 by changing Section 6.5.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The State Employees Group Insurance Act of
6 1971 is amended by changing Section 6.5 as follows:
7 (5 ILCS 375/6.5)
8 Sec. 6.5. Health benefits for TRS benefit recipients and
9 TRS dependent beneficiaries.
10 (A) Transfer to State health plan.
11 (a) Definitions. For the purposes of this Section and
12 Section 6.6:
13 "State health plan" means the program of health benefits
14 provided for annuitants and survivors under the other
15 Sections of this Act. The term does not include group life
16 insurance benefits.
17 "TRS health plan" means the separate program of health
18 benefits established under subsection (B) of this Section for
19 TRS benefit recipients and TRS dependent beneficiaries.
20 (b) Purpose. It is the purpose of this amendatory Act
21 of 1997 to provide for the termination of the separate
22 program of health benefits established under subsection (B)
23 of this Section for TRS benefit recipients and TRS dependent
24 beneficiaries and to move those persons into the State health
25 plan.
26 (c) Transfer. Upon expiration of the contract currently
27 providing for the separate program of health benefits
28 established under subsection (B) of this Section for TRS
29 benefit recipients and TRS dependent beneficiaries, but in no
30 event later than July 1, 1999, the separate program of health
31 benefits established under subsection (B) shall be
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1 terminated. All TRS benefit recipients and TRS dependent
2 beneficiaries participating in the TRS health plan on the
3 termination date shall be transferred on that date into the
4 State health plan without any interruption or delay in
5 coverage or limitation as to pre-existing medical conditions.
6 All persons who become TRS benefit recipients or TRS
7 dependent beneficiaries on or after that termination date
8 shall be eligible to participate in the State health plan
9 under this Section. A person who is a TRS benefit recipient
10 or TRS dependent beneficiary on the termination date but has
11 not elected to participate in the TRS health plan may elect
12 to participate in the State health plan under this Section
13 without any delay in coverage or limitation as to
14 pre-existing medical conditions, but that election may be
15 made during the following periods only: (i) the 30 days
16 following the date on which he or she again becomes a TRS
17 benefit recipient or dependent beneficiary by virtue of
18 beginning to receive a different type of annuity or monthly
19 benefit; (ii) the 6 months following the date on which he or
20 she becomes eligible for Medicare Hospital Insurance; (iii)
21 the 30 days following the date on which he or she attains age
22 65; and (iv) the 30 days following the date on which he or
23 she exhausts all rights to COBRA coverage after losing health
24 insurance coverage under another group health benefit plan as
25 a result of the employer terminating that coverage. TRS
26 benefit recipients and TRS dependent beneficiaries who
27 participate in the State health plan under this Section shall
28 participate on the same terms and subject to the same
29 benefits and costs as annuitants and survivors, respectively.
30 The Department of Central Management Services shall
31 continue to administer the TRS health plan established under
32 subsection (B) until that plan has been terminated and all
33 claims under that plan have been resolved.
34 (d) Financing. To the extent that moneys are available
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1 in that Fund, the Department of Central Management Services
2 shall pay the costs arising from the participation of TRS
3 benefit recipients and TRS dependent beneficiaries in the
4 State health plan from the Teacher Health Insurance Security
5 Fund, which is the nonappropriated interest-bearing trust
6 fund held outside the State Treasury with the State Treasurer
7 as custodian that is created in subsection (B).
8 The transfer of TRS benefit recipients and TRS dependent
9 beneficiaries from the separate TRS health plan to the State
10 health plan does not affect the payment of contributions into
11 the Fund under Section 6.6 of this Act or Section 1.3 of the
12 State Pension Funds Continuing Appropriation Act.
13 (B) TRS health plan.
14 (a) Purpose. It is the purpose of this amendatory Act
15 of 1995 to transfer the administration of the program of
16 health benefits established for benefit recipients and their
17 dependent beneficiaries under Article 16 of the Illinois
18 Pension Code to the Department of Central Management
19 Services.
20 (b) Transition provisions. The Board of Trustees of the
21 Teachers' Retirement System shall continue to administer the
22 health benefit program established under Article 16 of the
23 Illinois Pension Code through December 31, 1995. Beginning
24 January 1, 1996, the Department of Central Management
25 Services shall be responsible for administering a program of
26 health benefits for TRS benefit recipients and TRS dependent
27 beneficiaries under this subsection (B) Section. The
28 Department of Central Management Services and the Teachers'
29 Retirement System shall cooperate in this endeavor and shall
30 coordinate their activities so as to ensure a smooth
31 transition and uninterrupted health benefit coverage.
32 (c) Eligibility. All persons who were enrolled in the
33 Article 16 program at the time of the transfer shall be
34 eligible to participate in the program established under this
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1 subsection (B) Section without any interruption or delay in
2 coverage or limitation as to pre-existing medical conditions.
3 Eligibility to participate shall be determined by the
4 Teachers' Retirement System. Eligibility information shall
5 be communicated to the Department of Central Management
6 Services in a format acceptable to the Department.
7 (d) Coverage. The level of health benefits provided
8 under this subsection (B) Section shall be similar to the
9 level of benefits provided by the program previously
10 established under Article 16 of the Illinois Pension Code.
11 Group life insurance benefits are not included in the
12 benefits to be provided to TRS benefit recipients and TRS
13 dependent beneficiaries under this Act.
14 The program of health benefits under this subsection (B)
15 Section may include any or all of the benefit limitations,
16 including but not limited to a reduction in benefits based on
17 eligibility for federal medicare benefits, that are provided
18 under subsection (a) of Section 6 of this Act for other
19 health benefit programs under this Act.
20 (e) Insurance rates and premiums. The Director shall
21 determine the insurance rates and premiums for TRS benefit
22 recipients and TRS dependent beneficiaries under this
23 subsection (B). For Fiscal Year 1996, the premium shall be
24 equal to the premium actually charged in Fiscal Year 1995.
25 In subsequent years, the premium under this subsection (B)
26 shall never be lower than the premium charged in Fiscal Year
27 1995. Rates and premiums may be based in part on age and
28 eligibility for federal medicare coverage.
29 The cost of health benefits under the program shall be
30 paid as follows:
31 (1) For a TRS benefit recipient selecting a managed
32 care program, up to 75% of the total insurance rate shall
33 be paid from the Teacher Health Insurance Security Fund.
34 (2) For a TRS benefit recipient selecting the major
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1 medical coverage program, up to 50% of the total
2 insurance rate shall be paid from the Teacher Health
3 Insurance Security Fund if a managed care program is
4 accessible, as determined by the Teachers' Retirement
5 System.
6 (3) For a TRS benefit recipient selecting the major
7 medical coverage program, up to 75% of the total
8 insurance rate shall be paid from the Teacher Health
9 Insurance Security Fund if a managed care program is not
10 accessible, as determined by the Teachers' Retirement
11 System.
12 (4) The balance of the rate of insurance, including
13 the entire premium of any coverage for TRS dependent
14 beneficiaries that has been elected, shall be paid by
15 deductions authorized by the TRS benefit recipient to be
16 withheld from his or her monthly annuity or benefit
17 payment from the Teachers' Retirement System; except that
18 (i) if the balance of the cost of coverage exceeds the
19 amount of the monthly annuity or benefit payment, the
20 difference shall be paid directly to the Teachers'
21 Retirement System by the TRS benefit recipient, and (ii)
22 all or part of the balance of the cost of coverage may,
23 at the school board's option, be paid to the Teachers'
24 Retirement System by the school board of the school
25 district from which the TRS benefit recipient retired, in
26 accordance with Section 10-22.3b of the School Code. The
27 Teachers' Retirement System shall promptly deposit all
28 moneys withheld by or paid to it under this subdivision
29 (e)(4) into the Teacher Health Insurance Security Fund.
30 These moneys shall not be considered assets of the
31 Retirement System.
32 (f) Financing. Beginning July 1, 1995, all revenues
33 arising from the administration of the health benefit
34 programs established under Article 16 of the Illinois Pension
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1 Code or this subsection (B) Section shall be deposited into
2 the Teacher Health Insurance Security Fund, which is hereby
3 created as a nonappropriated trust fund to be held outside
4 the State Treasury, with the State Treasurer as custodian.
5 Any interest earned on moneys in the Teacher Health Insurance
6 Security Fund shall be deposited into the Fund.
7 Moneys in the Teacher Health Insurance Security Fund
8 shall be used only to pay the costs of (1) the health benefit
9 program established under this subsection (B) Section,
10 including associated administrative costs, (2) and the costs
11 associated with the health benefit program established under
12 Article 16 of the Illinois Pension Code, as authorized in
13 this Section, and (3) the costs of participation by TRS
14 benefit recipients and TRS dependent beneficiaries in the
15 State health plan. Beginning July 1, 1995, the Department of
16 Central Management Services may make expenditures from the
17 Teacher Health Insurance Security Fund for those costs.
18 After other funds authorized for the payment of the costs
19 of the health benefit program established under Article 16 of
20 the Illinois Pension Code are exhausted and until January 1,
21 1996 (or such later date as may be agreed upon by the
22 Director of Central Management Services and the Secretary of
23 the Teachers' Retirement System), the Secretary of the
24 Teachers' Retirement System may make expenditures from the
25 Teacher Health Insurance Security Fund as necessary to pay up
26 to 75% of the cost of providing health coverage to eligible
27 benefit recipients (as defined in Sections 16-153.1 and
28 16-153.3 of the Illinois Pension Code) who are enrolled in
29 the Article 16 health benefit program and to facilitate the
30 transfer of administration of the health benefit program to
31 the Department of Central Management Services.
32 (g) Contract for benefits. The Director shall by
33 contract, self-insurance, or otherwise make available the
34 program of health benefits for TRS benefit recipients and
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1 their TRS dependent beneficiaries that is provided for in
2 this subsection (B) Section. The contract or other
3 arrangement for the provision of these health benefits shall
4 be on terms deemed by the Director to be in the best interest
5 of the State of Illinois and the TRS benefit recipients based
6 on, but not limited to, such criteria as administrative cost,
7 service capabilities of the carrier or other contractor, and
8 the costs of the benefits.
9 (h) Nature Continuation of program. It is the intention
10 of the General Assembly that the program of health benefits
11 provided under this Section be maintained on an ongoing,
12 affordable basis. The program of health benefits provided
13 under this Section may be amended by the State and is not
14 intended to be a pension or retirement benefit subject to
15 protection under Article XIII, Section 5 of the Illinois
16 Constitution.
17 (Source: P.A. 89-21, eff. 6-21-95; 89-25, eff. 6-21-95.)
18 Section 99. Effective date. This Act takes effect upon
19 becoming law.