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91_HB0672
LRB9100721LDmb
1 AN ACT to amend the Illinois Pension Code by adding
2 Section 7-199.4 and to amend the State Mandates Act.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Pension Code is amended by
6 adding Section 7-199.4 as follows:
7 (40 ILCS 5/7-199.4 new)
8 Sec. 7-199.4. To administer a program of group health
9 benefits. To administer a program of group health benefits
10 for retired employees and their dependents and survivors and
11 to provide subsidies on an equitable basis for those retired
12 employees who elect to continue to participate in their
13 former IMRF employer's group health plan under the
14 continuation privilege.
15 (a) For the purposes of this Section:
16 "Active employee" means an employee of an IMRF employer
17 who is an active participant in the Fund.
18 "Continuation privilege" means the right of a former
19 employee to continue participation in the former employer's
20 group health plan, as established under the Illinois
21 Insurance Code and applicable federal law.
22 "IMRF employer" means a participating municipality or
23 participating instrumentality having employees who
24 participate in the Fund by reason of that employment.
25 "Retired employee" means a person who is receiving a
26 retirement annuity from the Fund and has a total of at least
27 8 years of participation in participating systems under the
28 Retirement Systems Reciprocal Act.
29 (b) The Board shall establish and administer a program
30 of group health benefits for retired employees and their
31 dependents and survivors. This program may be self-funded or
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1 operated under a policy of group accident and health
2 insurance. As part of this program, the Board shall also
3 establish and administer a fair and equitable program of
4 subsidies to offset the cost of participation for those
5 retired employees who elect to continue to participate in
6 their former IMRF employer's group health plan under the
7 continuation privilege.
8 All retired employees are eligible to participate in the
9 program. The Board may adopt any rules that may be necessary
10 or convenient relating to the establishment and
11 administration of the program or to the conditions and terms
12 of participation in the program. The Board rules may require
13 use of the continuation privilege by retired employees who
14 are eligible to use that privilege but are not eligible for
15 Medicare.
16 This program shall be entirely independent of the other
17 functions and assets of the Fund, and the assets and
18 liabilities arising out of the operation of this program
19 shall remain separate from the other assets and liabilities
20 of the Fund. Moneys received by the Board relating to the
21 program established under this Section shall not be deemed
22 contributions to or assets of the Fund. All such moneys
23 shall be held by the Board in separate accounts and used only
24 for the purposes of the program established under this
25 Section.
26 (c) From the separate account established for this
27 purpose, the Fund shall pay a portion of the cost of
28 participation for each eligible retired employee who elects
29 to participate in either the former IMRF employer's group
30 health plan under the continuation privilege or the
31 IMRF-sponsored health benefit plan, equal to 5% of the cost
32 of the retired employee's participation (not including any
33 dependent or optional coverages) for each year of the
34 employee's participation in the Fund, up to a maximum of 20
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1 years. To be eligible for this subsidy, the retired employee
2 must have a total of at least 8 years of participation in
3 participating systems under the Retirement Systems Reciprocal
4 Act.
5 The balance of the cost of participation in the program
6 for a retired employee who elects to participate, together
7 with the entire cost of any optional coverage or coverage for
8 dependent beneficiaries, shall be paid by deductions
9 authorized by the retired employee to be withheld from his or
10 her monthly annuity payment, except that any amount by which
11 the monthly premium balance exceeds the net amount of the
12 monthly annuity payment shall be paid directly to the Fund
13 (or to the employer in the case of utilization of the
14 continuation privilege) by the participant. All amounts so
15 withheld or paid to the Fund shall be held in trust for the
16 purposes of paying the costs of the retired employee's
17 participation in the health benefit program.
18 (d) Beginning on the first day of the fourth month
19 following the month in which this Section takes effect, all
20 active employees shall contribute 1% of earnings toward the
21 cost of the program established under subsection (b). These
22 contributions shall be deducted by the employer and paid to
23 the Fund for deposit into the separate account established
24 under subsection (c). The Fund may use the same processes
25 for collecting the contributions required by this subsection
26 that it uses to collect contributions from employees under
27 Section 7-173. An IMRF employer may agree to pick up or pay
28 the contributions required under this subsection on behalf of
29 the employee. Contributions made under this subsection are
30 not transferable to other pension funds or retirement systems
31 and are not refundable upon termination of service.
32 (e) Beginning on the first day of the fourth month
33 following the month in which this Section takes effect, every
34 IMRF employer shall contribute toward the cost of the program
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1 established under subsection (b) an amount equal to 1% of the
2 earnings of its active employees. These contributions shall
3 be paid by the employer to the Fund for deposit into the
4 separate account established under subsection (c). The Fund
5 may use the same processes for collecting the contributions
6 required by this subsection that it uses to collect
7 contributions from employers under Sections 7-172 and
8 7-172.1. Contributions for the program established under
9 this Section are separate from the contributions to the Fund
10 required under Section 7-172 and shall not be included in the
11 calculation of the contribution rate under that Section.
12 (f) The Board shall establish and administer a
13 transitional subsidy program under this subsection (f) for
14 retired employees who are not eligible for the subsidy under
15 subsection (c).
16 Beginning on the first day of the fourth month following
17 the month in which this Section takes effect and ending upon
18 termination of the transitional subsidy program as determined
19 by the Board, in addition to the contributions required under
20 subsection (e), every IMRF employer shall contribute toward
21 the cost of the transitional subsidy program established
22 under this subsection (f) an amount equal to 0.25% of the
23 earnings of its active employees. These contributions shall
24 be paid by the employer to the Fund for deposit into a
25 separate account established under this subsection for the
26 transitional subsidy program. The Fund may use the same
27 processes for collecting the contributions required by this
28 subsection that it uses to collect contributions from
29 employers under Sections 7-172 and 7-172.1. Contributions
30 for the transitional subsidy program established under this
31 subsection are separate from the contributions to the Fund
32 required under Section 7-172 and shall not be included in the
33 calculation of the contribution rate under that Section.
34 The Fund shall pay from the separate account established
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1 under this subsection a portion of the cost of participation
2 (not including any dependent or optional coverages) for each
3 retired employee who elects to participate in either the
4 former IMRF employer's group health plan under the
5 continuation privilege or the IMRF-sponsored health benefit
6 plan and who is not eligible for the subsidy under subsection
7 (c). The amount of the subsidy under this subsection shall
8 be determined annually by the Fund on an equitable basis,
9 based on the number of years of service with IMRF employers.
10 The subsidy shall be applied as an offset to deductions from
11 the monthly annuity.
12 The balance of the cost of participation in the health
13 benefit program for a retired employee who elects to
14 participate, together with the entire cost of any optional
15 coverage or coverage for dependent beneficiaries, shall be
16 paid by deductions authorized by the retired employee to be
17 withheld from his or her monthly annuity payment, except that
18 any amount by which the monthly premium balance exceeds the
19 net amount of the monthly annuity payment shall be paid
20 directly to the Fund (or to the employer in the case of
21 utilization of the continuation privilege) by the
22 participant. All amounts so withheld or paid to the Fund
23 shall be held in trust for the purposes of paying the costs
24 of the retired employee's participation in the health benefit
25 program.
26 This transitional subsidy program shall cease to exist
27 when the Board determines that there are no longer any
28 retired employees eligible to participate in the transitional
29 subsidy program. At that time any excess contributions in
30 the separate account for the transitional subsidy program
31 shall be returned to IMRF employers on an equitable basis, as
32 determined by the Board.
33 (g) The Board shall submit an annual report of its
34 activities under this Section to each IMRF employer.
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1 (h) The group health benefit and subsidy programs
2 established under this Section are not intended to be and
3 shall not be construed to be pension or retirement benefits
4 for purposes of Section 5 of Article XIII of the Illinois
5 Constitution.
6 Section 90. The State Mandates Act is amended by adding
7 Section 8.23 as follows:
8 (30 ILCS 805/8.23 new)
9 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
10 and 8 of this Act, no reimbursement by the State is required
11 for the implementation of any mandate created by this
12 amendatory Act of 1999.
13 Section 99. Effective date. This Act takes effect upon
14 becoming law.