96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1469

 

Introduced 2/18/2009, by Sen. Christine Radogno

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.5

    Amends the State Employees Group Insurance Act of 1971. With respect to the retired teachers' health benefits plan, beginning with fiscal year 2010, provides that of the total insurance rate of a recipient whose primary residence is outside of Illinois and for whom a managed care program is not accessible, 50% (now, 75%) shall be paid from the Teacher Health Insurance Security Fund. In the case of a retired teacher's dependent beneficiary in such circumstances who is Medicare primary, provides that 12.5% (now, 25%) of the total insurance rate shall be paid from the Teacher Health Insurance Security Fund. Effective immediately.


LRB096 04013 JAM 14051 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

SB1469 LRB096 04013 JAM 14051 b

1     AN ACT concerning government.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The State Employees Group Insurance Act of 1971
5 is amended by changing Section 6.5 as follows:
 
6     (5 ILCS 375/6.5)
7     Sec. 6.5. Health benefits for TRS benefit recipients and
8 TRS dependent beneficiaries.
9     (a) Purpose. It is the purpose of this amendatory Act of
10 1995 to transfer the administration of the program of health
11 benefits established for benefit recipients and their
12 dependent beneficiaries under Article 16 of the Illinois
13 Pension Code to the Department of Central Management Services.
14     (b) Transition provisions. The Board of Trustees of the
15 Teachers' Retirement System shall continue to administer the
16 health benefit program established under Article 16 of the
17 Illinois Pension Code through December 31, 1995. Beginning
18 January 1, 1996, the Department of Central Management Services
19 shall be responsible for administering a program of health
20 benefits for TRS benefit recipients and TRS dependent
21 beneficiaries under this Section. The Department of Central
22 Management Services and the Teachers' Retirement System shall
23 cooperate in this endeavor and shall coordinate their

 

 

SB1469 - 2 - LRB096 04013 JAM 14051 b

1 activities so as to ensure a smooth transition and
2 uninterrupted health benefit coverage.
3     (c) Eligibility. All persons who were enrolled in the
4 Article 16 program at the time of the transfer shall be
5 eligible to participate in the program established under this
6 Section without any interruption or delay in coverage or
7 limitation as to pre-existing medical conditions. Eligibility
8 to participate shall be determined by the Teachers' Retirement
9 System. Eligibility information shall be communicated to the
10 Department of Central Management Services in a format
11 acceptable to the Department.
12     A TRS dependent beneficiary who is an unmarried child age
13 19 or over and mentally or physically disabled does not become
14 ineligible to participate by reason of (i) becoming ineligible
15 to be claimed as a dependent for Illinois or federal income tax
16 purposes or (ii) receiving earned income, so long as those
17 earnings are insufficient for the child to be fully
18 self-sufficient.
19     (d) Coverage. The level of health benefits provided under
20 this Section shall be similar to the level of benefits provided
21 by the program previously established under Article 16 of the
22 Illinois Pension Code.
23     Group life insurance benefits are not included in the
24 benefits to be provided to TRS benefit recipients and TRS
25 dependent beneficiaries under this Act.
26     The program of health benefits under this Section may

 

 

SB1469 - 3 - LRB096 04013 JAM 14051 b

1 include any or all of the benefit limitations, including but
2 not limited to a reduction in benefits based on eligibility for
3 federal medicare benefits, that are provided under subsection
4 (a) of Section 6 of this Act for other health benefit programs
5 under this Act.
6     (e) Insurance rates and premiums. The Director shall
7 determine the insurance rates and premiums for TRS benefit
8 recipients and TRS dependent beneficiaries, and shall present
9 to the Teachers' Retirement System of the State of Illinois, by
10 April 15 of each calendar year, the rate-setting methodology
11 (including but not limited to utilization levels and costs)
12 used to determine the amount of the health care premiums.
13         For Fiscal Year 1996, the premium shall be equal to the
14     premium actually charged in Fiscal Year 1995; in subsequent
15     years, the premium shall never be lower than the premium
16     charged in Fiscal Year 1995.
17         For Fiscal Year 2003, the premium shall not exceed 110%
18     of the premium actually charged in Fiscal Year 2002.
19         For Fiscal Year 2004, the premium shall not exceed 112%
20     of the premium actually charged in Fiscal Year 2003.
21         For Fiscal Year 2005, the premium shall not exceed a
22     weighted average of 106.6% of the premium actually charged
23     in Fiscal Year 2004.
24         For Fiscal Year 2006, the premium shall not exceed a
25     weighted average of 109.1% of the premium actually charged
26     in Fiscal Year 2005.

 

 

SB1469 - 4 - LRB096 04013 JAM 14051 b

1         For Fiscal Year 2007, the premium shall not exceed a
2     weighted average of 103.9% of the premium actually charged
3     in Fiscal Year 2006.
4         For Fiscal Year 2008 and thereafter, the premium in
5     each fiscal year shall not exceed 105% of the premium
6     actually charged in the previous fiscal year.
7     Rates and premiums may be based in part on age and
8 eligibility for federal medicare coverage. However, the cost of
9 participation for a TRS dependent beneficiary who is an
10 unmarried child age 19 or over and mentally or physically
11 disabled shall not exceed the cost for a TRS dependent
12 beneficiary who is an unmarried child under age 19 and
13 participates in the same major medical or managed care program.
14     The cost of health benefits under the program shall be paid
15 as follows:
16         (1) For a TRS benefit recipient selecting a managed
17     care program, up to 75% of the total insurance rate shall
18     be paid from the Teacher Health Insurance Security Fund.
19     Effective with Fiscal Year 2007 and thereafter, for a TRS
20     benefit recipient selecting a managed care program, 75% of
21     the total insurance rate shall be paid from the Teacher
22     Health Insurance Security Fund.
23         (2) Until Fiscal Year 2007, for For a TRS benefit
24     recipient selecting the major medical coverage program, up
25     to 50% of the total insurance rate shall be paid from the
26     Teacher Health Insurance Security Fund if a managed care

 

 

SB1469 - 5 - LRB096 04013 JAM 14051 b

1     program is accessible, as determined by the Teachers'
2     Retirement System. Effective with Fiscal Year 2007 and
3     thereafter, for a TRS benefit recipient selecting the major
4     medical coverage program, 50% of the total insurance rate
5     shall be paid from the Teacher Health Insurance Security
6     Fund if a managed care program is accessible, as determined
7     by the Department of Central Management Services.
8         (3) Until Fiscal Year 2007, for For a TRS benefit
9     recipient selecting the major medical coverage program, up
10     to 75% of the total insurance rate shall be paid from the
11     Teacher Health Insurance Security Fund if a managed care
12     program is not accessible, as determined by the Teachers'
13     Retirement System. Effective with Fiscal Year 2007 and
14     through Fiscal Year 2009 thereafter, for a TRS benefit
15     recipient selecting the major medical coverage program,
16     75% of the total insurance rate shall be paid from the
17     Teacher Health Insurance Security Fund if a managed care
18     program is not accessible, as determined by the Department
19     of Central Management Services. Beginning with Fiscal Year
20     2010, for a TRS benefit recipient selecting the major
21     medical coverage program and for whom a managed care
22     program is not accessible, as determined by the Department
23     of Central Management Services, (i) 75% of the total
24     insurance rate shall be paid from the Teacher Health
25     Insurance Security Fund if the recipient's primary
26     residence is in Illinois and (ii) 50% of the total

 

 

SB1469 - 6 - LRB096 04013 JAM 14051 b

1     insurance rate shall be paid from the Teacher Health
2     Insurance Security Fund if the recipient's primary
3     residence is outside of Illinois.
4         (3.1) For a TRS dependent beneficiary who is Medicare
5     primary and enrolled in a managed care plan, or the major
6     medical coverage program if a managed care plan is not
7     available, 25% of the total insurance rate shall be paid
8     from the Teacher Health Insurance Security Fund as
9     determined by the Department of Central Management
10     Services; except that, beginning with Fiscal Year 2010, for
11     a TRS dependent beneficiary whose primary residence is
12     outside of Illinois, who is enrolled in the major medical
13     coverage program, and for whom a managed care program is
14     not accessible as determined by the Department of Central
15     Management Services, 12.5% of the total insurance rate
16     shall be paid from the Teacher Health Insurance Security
17     Fund. For the purpose of this item (3.1), the term "TRS
18     dependent beneficiary who is Medicare primary" means a TRS
19     dependent beneficiary who is participating in Medicare
20     Parts A and B.
21         (4) Except as otherwise provided in item (3.1), the
22     balance of the rate of insurance, including the entire
23     premium of any coverage for TRS dependent beneficiaries
24     that has been elected, shall be paid by deductions
25     authorized by the TRS benefit recipient to be withheld from
26     his or her monthly annuity or benefit payment from the

 

 

SB1469 - 7 - LRB096 04013 JAM 14051 b

1     Teachers' Retirement System; except that (i) if the balance
2     of the cost of coverage exceeds the amount of the monthly
3     annuity or benefit payment, the difference shall be paid
4     directly to the Teachers' Retirement System by the TRS
5     benefit recipient, and (ii) all or part of the balance of
6     the cost of coverage may, at the school board's option, be
7     paid to the Teachers' Retirement System by the school board
8     of the school district from which the TRS benefit recipient
9     retired, in accordance with Section 10-22.3b of the School
10     Code. The Teachers' Retirement System shall promptly
11     deposit all moneys withheld by or paid to it under this
12     subdivision (e)(4) into the Teacher Health Insurance
13     Security Fund. These moneys shall not be considered assets
14     of the Retirement System.
15     (f) Financing. Beginning July 1, 1995, all revenues arising
16 from the administration of the health benefit programs
17 established under Article 16 of the Illinois Pension Code or
18 this Section shall be deposited into the Teacher Health
19 Insurance Security Fund, which is hereby created as a
20 nonappropriated trust fund to be held outside the State
21 Treasury, with the State Treasurer as custodian. Any interest
22 earned on moneys in the Teacher Health Insurance Security Fund
23 shall be deposited into the Fund.
24     Moneys in the Teacher Health Insurance Security Fund shall
25 be used only to pay the costs of the health benefit program
26 established under this Section, including associated

 

 

SB1469 - 8 - LRB096 04013 JAM 14051 b

1 administrative costs, and the costs associated with the health
2 benefit program established under Article 16 of the Illinois
3 Pension Code, as authorized in this Section. Beginning July 1,
4 1995, the Department of Central Management Services may make
5 expenditures from the Teacher Health Insurance Security Fund
6 for those costs.
7     After other funds authorized for the payment of the costs
8 of the health benefit program established under Article 16 of
9 the Illinois Pension Code are exhausted and until January 1,
10 1996 (or such later date as may be agreed upon by the Director
11 of Central Management Services and the Secretary of the
12 Teachers' Retirement System), the Secretary of the Teachers'
13 Retirement System may make expenditures from the Teacher Health
14 Insurance Security Fund as necessary to pay up to 75% of the
15 cost of providing health coverage to eligible benefit
16 recipients (as defined in Sections 16-153.1 and 16-153.3 of the
17 Illinois Pension Code) who are enrolled in the Article 16
18 health benefit program and to facilitate the transfer of
19 administration of the health benefit program to the Department
20 of Central Management Services.
21     The Department of Healthcare and Family Services, or any
22 successor agency designated to procure healthcare contracts
23 pursuant to this Act, is authorized to establish funds,
24 separate accounts provided by any bank or banks as defined by
25 the Illinois Banking Act, or separate accounts provided by any
26 savings and loan association or associations as defined by the

 

 

SB1469 - 9 - LRB096 04013 JAM 14051 b

1 Illinois Savings and Loan Act of 1985 to be held by the
2 Director, outside the State treasury, for the purpose of
3 receiving the transfer of moneys from the Teacher Health
4 Insurance Security Fund. The Department may promulgate rules
5 further defining the methodology for the transfers. Any
6 interest earned by moneys in the funds or accounts shall inure
7 to the Teacher Health Insurance Security Fund. The transferred
8 moneys, and interest accrued thereon, shall be used exclusively
9 for transfers to administrative service organizations or their
10 financial institutions for payments of claims to claimants and
11 providers under the self-insurance health plan. The
12 transferred moneys, and interest accrued thereon, shall not be
13 used for any other purpose including, but not limited to,
14 reimbursement of administration fees due the administrative
15 service organization pursuant to its contract or contracts with
16 the Department.
17     (g) Contract for benefits. The Director shall by contract,
18 self-insurance, or otherwise make available the program of
19 health benefits for TRS benefit recipients and their TRS
20 dependent beneficiaries that is provided for in this Section.
21 The contract or other arrangement for the provision of these
22 health benefits shall be on terms deemed by the Director to be
23 in the best interest of the State of Illinois and the TRS
24 benefit recipients based on, but not limited to, such criteria
25 as administrative cost, service capabilities of the carrier or
26 other contractor, and the costs of the benefits.

 

 

SB1469 - 10 - LRB096 04013 JAM 14051 b

1     (g-5) Committee. A Teacher Retirement Insurance Program
2 Committee shall be established, to consist of 10 persons
3 appointed by the Governor.
4     The Committee shall convene at least 4 times each year, and
5 shall consider and make recommendations on issues affecting the
6 program of health benefits provided under this Section.
7 Recommendations of the Committee shall be based on a consensus
8 of the members of the Committee.
9     If the Teacher Health Insurance Security Fund experiences a
10 deficit balance based upon the contribution and subsidy rates
11 established in this Section and Section 6.6 for Fiscal Year
12 2008 or thereafter, the Committee shall make recommendations
13 for adjustments to the funding sources established under these
14 Sections.
15     (h) Continuation of program. It is the intention of the
16 General Assembly that the program of health benefits provided
17 under this Section be maintained on an ongoing, affordable
18 basis.
19     The program of health benefits provided under this Section
20 may be amended by the State and is not intended to be a pension
21 or retirement benefit subject to protection under Article XIII,
22 Section 5 of the Illinois Constitution.
23     (i) Repeal. (Blank).
24 (Source: P.A. 95-632, eff. 9-25-07.)
 
25     Section 99. Effective date. This Act takes effect upon
26 becoming law.