State of Illinois
90th General Assembly
Legislation

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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.
                                                     LRB9001621EGfg
HB0347 Engrossed                               LRB9001621EGfg
 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
HB0347 Engrossed            -2-                LRB9001621EGfg
 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
HB0347 Engrossed            -3-                LRB9001621EGfg
 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
HB0347 Engrossed            -4-                LRB9001621EGfg
 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
HB0347 Engrossed            -5-                LRB9001621EGfg
 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
HB0347 Engrossed            -6-                LRB9001621EGfg
 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
HB0347 Engrossed            -7-                LRB9001621EGfg
 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.

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