State of Illinois
91st General Assembly
Legislation

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91_HB0412

 
                                               LRB9100998EGfg

 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 based on at least 8 years of
27    service as an employee of an IMRF employer.
28        (b)  The  Board  shall establish and administer a program
29    of group health benefits  for  retired  employees  and  their
30    dependents and survivors.  This program may be self-funded or
31    operated   under  a  policy  of  group  accident  and  health
 
                            -2-                LRB9100998EGfg
 1    insurance.  As part of this program,  the  Board  shall  also
 2    establish  and  administer  a  fair  and equitable program of
 3    subsidies to offset  the  cost  of  participation  for  those
 4    retired  employees  who  elect  to continue to participate in
 5    their former IMRF employer's  group  health  plan  under  the
 6    continuation privilege.
 7        All  retired employees are eligible to participate in the
 8    program.  The Board may adopt any rules that may be necessary
 9    or   convenient   relating   to   the    establishment    and
10    administration  of the program or to the conditions and terms
11    of participation in the program.  The Board rules may require
12    use of the continuation privilege by  retired  employees  who
13    are  eligible  to use that privilege but are not eligible for
14    Medicare.
15        This program shall be entirely independent of  the  other
16    functions  and  assets  of  the  Fund,  and  the  assets  and
17    liabilities  arising  out  of  the  operation of this program
18    shall remain separate from the other assets  and  liabilities
19    of  the  Fund.   Moneys received by the Board relating to the
20    program established under this Section shall  not  be  deemed
21    contributions  to  or  assets  of  the Fund.  All such moneys
22    shall be held by the Board in separate accounts and used only
23    for the  purposes  of  the  program  established  under  this
24    Section.
25        (c)  From  the  separate  account  established  for  this
26    purpose,  the  Fund  shall  pay  a  portion  of  the  cost of
27    participation for each eligible retired employee  who  elects
28    to  participate  in  either  the former IMRF employer's group
29    health  plan  under  the  continuation   privilege   or   the
30    IMRF-sponsored  health  benefit plan, equal to 5% of the cost
31    of the retired employee's participation  (not  including  any
32    dependent  or  optional  coverages)  for  each  year  of  the
33    employee's contributions to the program under subsection (d),
34    up  to  a  maximum  of  20  years.   A  minimum of 4 years of
 
                            -3-                LRB9100998EGfg
 1    employee  contributions  to  the  program  and  8  years   of
 2    participation  in  the  Fund  are  required  in  order  to be
 3    eligible for this subsidy.
 4        The balance of the cost of participation in  the  program
 5    for  a  retired  employee who elects to participate, together
 6    with the entire cost of any optional coverage or coverage for
 7    dependent  beneficiaries,  shall  be   paid   by   deductions
 8    authorized by the retired employee to be withheld from his or
 9    her  monthly annuity payment, except that any amount by which
10    the monthly premium balance exceeds the  net  amount  of  the
11    monthly  annuity  payment  shall be paid directly to the Fund
12    (or to the  employer  in  the  case  of  utilization  of  the
13    continuation  privilege)  by the participant.  All amounts so
14    withheld or paid to the Fund shall be held in trust  for  the
15    purposes  of  paying  the  costs  of  the  retired employee's
16    participation in the health benefit program.
17        (d)  Beginning on the  first  day  of  the  fourth  month
18    following  the  month in which this Section takes effect, all
19    active employees shall contribute 1% of earnings  toward  the
20    cost  of the program established under subsection (b).  These
21    contributions shall be deducted by the employer and  paid  to
22    the  Fund  for  deposit into the separate account established
23    under subsection (c).  The Fund may use  the  same  processes
24    for  collecting the contributions required by this subsection
25    that it uses to collect contributions  from  employees  under
26    Section  7-173.  An IMRF employer may agree to pick up or pay
27    the contributions required under this subsection on behalf of
28    the employee.  Contributions made under this  subsection  are
29    not transferable to other pension funds or retirement systems
30    and  are  refundable  only upon termination of service when a
31    separation benefit is requested and taken.
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
 
                            -4-                LRB9100998EGfg
 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)  because  they  have  not  contributed  under
16    subsection (d) for at least 48 months.
17        Beginning on the first day of the fourth month  following
18    the  month in which this Section takes effect and ending upon
19    termination of the transitional subsidy program as determined
20    by the Board, in addition to the contributions required under
21    subsection (e), every IMRF employer shall  contribute  toward
22    the  cost  of  the  transitional  subsidy program established
23    under this subsection (f) an amount equal  to  0.25%  of  the
24    earnings  of its active employees.  These contributions shall
25    be paid by the employer  to  the  Fund  for  deposit  into  a
26    separate  account  established  under this subsection for the
27    transitional subsidy program.  The  Fund  may  use  the  same
28    processes  for  collecting the contributions required by this
29    subsection  that  it  uses  to  collect  contributions   from
30    employers  under  Sections  7-172 and 7-172.1.  Contributions
31    for the transitional subsidy program established  under  this
32    subsection  are  separate  from the contributions to the Fund
33    required under Section 7-172 and shall not be included in the
34    calculation of the contribution rate under that Section.
 
                            -5-                LRB9100998EGfg
 1        The Fund shall pay from the separate account  established
 2    under  this subsection a portion of the cost of participation
 3    (not including any dependent or optional coverages) for  each
 4    retired  employee  who  elects  to  participate in either the
 5    former  IMRF  employer's  group   health   plan   under   the
 6    continuation  privilege  or the IMRF-sponsored health benefit
 7    plan and who is not eligible for the subsidy under subsection
 8    (c).  The amount of the subsidy under this  subsection  shall
 9    be  determined  annually  by  the Fund on an equitable basis,
10    based on the number of years of service with IMRF  employers;
11    years of service for which contributions have been made under
12    subsection  (d)  shall be double-weighted.  The subsidy shall
13    be applied as  an  offset  to  deductions  from  the  monthly
14    annuity.
15        The  balance  of  the cost of participation in the health
16    benefit  program  for  a  retired  employee  who  elects   to
17    participate,  together  with  the entire cost of any optional
18    coverage or coverage for dependent  beneficiaries,  shall  be
19    paid  by  deductions authorized by the retired employee to be
20    withheld from his or her monthly annuity payment, except that
21    any amount by which the monthly premium balance  exceeds  the
22    net  amount  of  the  monthly  annuity  payment shall be paid
23    directly to the Fund (or to  the  employer  in  the  case  of
24    utilization   of   the   continuation   privilege)   by   the
25    participant.   All  amounts  so  withheld or paid to the Fund
26    shall be held in trust for the purposes of paying  the  costs
27    of the retired employee's participation in the health benefit
28    program.
29        This  transitional  subsidy  program shall cease to exist
30    when the Board  determines  that  there  are  no  longer  any
31    retired employees eligible to participate in the transitional
32    subsidy  program.    At that time any excess contributions in
33    the separate account for  the  transitional  subsidy  program
34    shall be returned to IMRF employers on an equitable basis, as
 
                            -6-                LRB9100998EGfg
 1    determined by the Board.
 2        (g)  The  Board  shall  submit  an  annual  report of its
 3    activities under this Section to each IMRF employer.
 4        (h)  The  group  health  benefit  and  subsidy   programs
 5    established  under  this  Section  are not intended to be and
 6    shall not be construed to be pension or  retirement  benefits
 7    for  purposes  of  Section  5 of Article XIII of the Illinois
 8    Constitution.

 9        Section 90.  The State Mandates Act is amended by  adding
10    Section 8.23 as follows:

11        (30 ILCS 805/8.23 new)
12        Sec.  8.23.  Exempt  mandate.  Notwithstanding Sections 6
13    and 8 of this Act, no reimbursement by the State is  required
14    for  the  implementation  of  any  mandate  created  by  this
15    amendatory Act of the 91st General Assembly.

16        Section  99.  Effective date.  This Act takes effect upon
17    becoming law.

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