093_SB0870

 
                                     LRB093 02867 RCE 02883 b

 1        AN ACT concerning health benefits.

 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
 5    1971 is amended by changing Section 6.5 as follows:

 6        (5 ILCS 375/6.5)
 7        (Section scheduled to be repealed on July 1, 2004)
 8        Sec. 6.5.  Health benefits for TRS benefit recipients and
 9    TRS dependent beneficiaries.
10        (a)  Purpose.  It is The purpose of this  amendatory  Act
11    of  1995  is to transfer the administration of the program of
12    health benefits established for benefit recipients and  their
13    dependent  beneficiaries  under  Article  16  of the Illinois
14    Pension  Code  to  the  Department  of   Central   Management
15    Services.
16        (b)  Transition provisions.  The Board of Trustees of the
17    Teachers'  Retirement System shall continue to administer the
18    health benefit program established under Article  16  of  the
19    Illinois  Pension  Code through December 31, 1995.  Beginning
20    January  1,  1996,  the  Department  of  Central   Management
21    Services  shall be responsible for administering a program of
22    health benefits for TRS benefit recipients and TRS  dependent
23    beneficiaries  under this Section.  The Department of Central
24    Management Services and the Teachers' Retirement System shall
25    cooperate  in  this  endeavor  and  shall  coordinate   their
26    activities   so   as   to  ensure  a  smooth  transition  and
27    uninterrupted health benefit coverage.
28        (c)  Eligibility.  All persons who were enrolled  in  the
29    Article  16  program  at  the  time  of the transfer shall be
30    eligible to participate in the program established under this
31    Section without any interruption  or  delay  in  coverage  or
 
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 1    limitation    as    to   pre-existing   medical   conditions.
 2    Eligibility  to  participate  shall  be  determined  by   the
 3    Teachers'  Retirement  System.  Eligibility information shall
 4    be communicated  to  the  Department  of  Central  Management
 5    Services in a format acceptable to the Department.
 6        (d)  Coverage.   The  level  of  health benefits provided
 7    under this Section shall be similar to the level of  benefits
 8    provided  by the program previously established under Article
 9    16 of the Illinois Pension Code.
10        Group life insurance benefits are  not  included  in  the
11    benefits  to  be  provided  to TRS benefit recipients and TRS
12    dependent beneficiaries under this Act.
13        The program of health benefits  under  this  Section  may
14    include  any or all of the benefit limitations, including but
15    not limited to a reduction in benefits based  on  eligibility
16    for  federal  medicare  benefits,  that  are  provided  under
17    subsection  (a)  of  Section  6  of this Act for other health
18    benefit programs under this Act.
19        (e)  Insurance rates and premiums.   The  Director  shall
20    determine  the  insurance  rates and premiums for TRS benefit
21    recipients and TRS dependent beneficiaries, and shall present
22    to the Teachers' Retirement System of the State of  Illinois,
23    by   April   15  of  each  calendar  year,  the  rate-setting
24    methodology (including but not limited to utilization  levels
25    and  costs)  used  to determine the amount of the health care
26    premiums.
27        For Fiscal Year 1996, the premium shall be equal  to  the
28    premium  actually  charged in Fiscal Year 1995; in subsequent
29    years, the premium shall never  be  lower  than  the  premium
30    charged  in  Fiscal  Year  1995.   For  Fiscal Year 2003, the
31    premium shall not exceed 110% of the premium actually charged
32    in Fiscal Year 2002.  For Fiscal Year 2004, the premium shall
33    not exceed 112% of the premium  actually  charged  in  Fiscal
34    Year 2003.
 
                            -3-      LRB093 02867 RCE 02883 b
 1        Rates  and  premiums  may  be  based  in  part on age and
 2    eligibility for federal medicare coverage.
 3        The cost of health benefits under the  program  shall  be
 4    paid as follows:
 5             (1)  For a TRS benefit recipient selecting a managed
 6        care program, up to 75% of the total insurance rate shall
 7        be paid from the Teacher Health Insurance Security Fund.
 8             (2)  For a TRS benefit recipient selecting the major
 9        medical   coverage  program,  up  to  50%  of  the  total
10        insurance rate shall be  paid  from  the  Teacher  Health
11        Insurance  Security  Fund  if  a  managed care program is
12        accessible, as determined  by  the  Teachers'  Retirement
13        System.
14             (3)  For a TRS benefit recipient selecting the major
15        medical   coverage  program,  up  to  75%  of  the  total
16        insurance rate shall be  paid  from  the  Teacher  Health
17        Insurance  Security Fund if a managed care program is not
18        accessible, as determined  by  the  Teachers'  Retirement
19        System.
20             (4)  The balance of the rate of insurance, including
21        the  entire  premium  of  any  coverage for TRS dependent
22        beneficiaries that has been elected,  shall  be  paid  by
23        deductions  authorized by the TRS benefit recipient to be
24        withheld from his  or  her  monthly  annuity  or  benefit
25        payment from the Teachers' Retirement System; except that
26        (i)  if  the  balance of the cost of coverage exceeds the
27        amount of the monthly annuity  or  benefit  payment,  the
28        difference  shall  be  paid  directly  to  the  Teachers'
29        Retirement  System by the TRS benefit recipient, and (ii)
30        all or part of the balance of the cost of  coverage  may,
31        at  the  school  board's option, be paid to the Teachers'
32        Retirement System by  the  school  board  of  the  school
33        district from which the TRS benefit recipient retired, in
34        accordance with Section 10-22.3b of the School Code.  The
 
                            -4-      LRB093 02867 RCE 02883 b
 1        Teachers'  Retirement  System  shall promptly deposit all
 2        moneys withheld by or paid to it under  this  subdivision
 3        (e)(4)  into  the Teacher Health Insurance Security Fund.
 4        These moneys  shall  not  be  considered  assets  of  the
 5        Retirement System.
 6        (f)  Financing.   Beginning  July  1,  1995, all revenues
 7    arising  from  the  administration  of  the  health   benefit
 8    programs established under Article 16 of the Illinois Pension
 9    Code  or  this  Section  shall  be deposited into the Teacher
10    Health Insurance Security Fund, which is hereby created as  a
11    nonappropriated  trust  fund  to  be  held  outside the State
12    Treasury,  with  the  State  Treasurer  as  custodian.    Any
13    interest  earned  on  moneys  in the Teacher Health Insurance
14    Security Fund shall be deposited into the Fund.
15        Moneys in the  Teacher  Health  Insurance  Security  Fund
16    shall  be  used  only  to pay the costs of the health benefit
17    program established under this Section, including  associated
18    administrative  costs,  and  the  costs  associated  with the
19    health benefit program established under Article  16  of  the
20    Illinois   Pension  Code,  as  authorized  in  this  Section.
21    Beginning July 1, 1995, the Department of Central  Management
22    Services  may  make  expenditures  from  the  Teacher  Health
23    Insurance Security Fund for those costs.
24        After other funds authorized for the payment of the costs
25    of the health benefit program established under Article 16 of
26    the  Illinois Pension Code are exhausted and until January 1,
27    1996 (or such later  date  as  may  be  agreed  upon  by  the
28    Director  of Central Management Services and the Secretary of
29    the  Teachers'  Retirement  System),  the  Secretary  of  the
30    Teachers' Retirement System may make  expenditures  from  the
31    Teacher Health Insurance Security Fund as necessary to pay up
32    to  75%  of the cost of providing health coverage to eligible
33    benefit recipients  (as  defined  in  Sections  16-153.1  and
34    16-153.3  of  the  Illinois Pension Code) who are enrolled in
 
                            -5-      LRB093 02867 RCE 02883 b
 1    the Article 16 health benefit program and to  facilitate  the
 2    transfer  of  administration of the health benefit program to
 3    the Department of Central Management Services.
 4        (g)  Contract  for  benefits.   The  Director  shall   by
 5    contract,  self-insurance,  or  otherwise  make available the
 6    program of health benefits for  TRS  benefit  recipients  and
 7    their  TRS  dependent  beneficiaries  that is provided for in
 8    this Section.  The contract  or  other  arrangement  for  the
 9    provision  of  these health benefits shall be on terms deemed
10    by the Director to be in the best interest of  the  State  of
11    Illinois  and  the  TRS  benefit recipients based on, but not
12    limited to, such criteria  as  administrative  cost,  service
13    capabilities  of  the  carrier  or  other contractor, and the
14    costs of the benefits.
15        (h)  Continuation and termination of program.  It is  the
16    intention  of the General Assembly that the program of health
17    benefits provided under this  Section  be  maintained  on  an
18    ongoing, affordable basis through June 30, 2004.  The program
19    of  health benefits provided under this Section is terminated
20    on July 1, 2004.
21        The  program  of  health  benefits  provided  under  this
22    Section may be amended by the State and is not intended to be
23    a pension or retirement benefit subject to  protection  under
24    Article XIII, Section 5 of the Illinois Constitution.
25        (i)  Repeal.  This Section is repealed on July 1, 2004.
26    (Source: P.A. 92-505, eff. 12-20-01.)