State of Illinois
91st General Assembly
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Public Act 91-0395

SB211 Enrolled                                 LRB9102763EGfg

    AN ACT in relation to public employee benefits,  amending
named Acts.

    Be  it  enacted  by  the People of the State of Illinois,
represented in the General Assembly:

    Section 5.  The State Employees Group  Insurance  Act  of
1971 is amended by changing Sections 3 and 10 as follows:

    (5 ILCS 375/3) (from Ch. 127, par. 523)
    Sec.   3.  Definitions.   Unless  the  context  otherwise
requires, the following words and phrases as used in this Act
shall have the following meanings.  The Department may define
these and other words and phrases separately for the  purpose
of  implementing  specific  programs providing benefits under
this Act.
    (a)  "Administrative  service  organization"  means   any
person,  firm  or  corporation experienced in the handling of
claims  which  is  fully  qualified,  financially  sound  and
capable of meeting the service requirements of a contract  of
administration executed with the Department.
    (b)  "Annuitant"  means  (1)  an employee who retires, or
has retired, on or after January  1,  1966  on  an  immediate
annuity under the provisions of Articles 2, 14, 15 (including
an  employee  who  has  retired under the optional retirement
program established under Section 15-158.2), paragraphs  (2),
(3),  or (5) of Section 16-106, or Article 18 of the Illinois
Pension  Code;  (2)  any  person  who  was  receiving   group
insurance  coverage  under  this  Act as of March 31, 1978 by
reason of his status as an annuitant, even though the annuity
in  relation  to  which  such  coverage  was  provided  is  a
proportional annuity based on less than the minimum period of
service required for  a  retirement  annuity  in  the  system
involved;  (3)  any  person not otherwise covered by this Act
who has retired as a participating member under Article 2  of
the   Illinois   Pension  Code  but  is  ineligible  for  the
retirement  annuity  under  Section  2-119  of  the  Illinois
Pension Code; (4) the spouse of any person who is receiving a
retirement annuity under Article 18 of the  Illinois  Pension
Code  and  who  is  covered  under  a  group health insurance
program sponsored by a governmental employer other  than  the
State  of  Illinois  and who has irrevocably elected to waive
his or her coverage under this Act and to  have  his  or  her
spouse  considered  as the "annuitant" under this Act and not
as a "dependent"; or (5) an  employee  who  retires,  or  has
retired,  from  a qualified position, as determined according
to rules promulgated by the Director, under a qualified local
government  or  a  qualified  rehabilitation  facility  or  a
qualified  domestic  violence  shelter   or   service.   (For
definition of "retired employee", see (p) post).
    (b-5)  "New  SERS  annuitant"  means  a person who, on or
after January 1, 1998, becomes an annuitant,  as  defined  in
subsection   (b),   by  virtue  of  beginning  to  receive  a
retirement annuity under Article 14 of the  Illinois  Pension
Code,  and is eligible to participate in the basic program of
group health benefits provided for annuitants under this Act.
    (b-6)  "New SURS annuitant" means a person who (1), on or
after January 1, 1998, becomes an annuitant,  as  defined  in
subsection   (b),   by  virtue  of  beginning  to  receive  a
retirement annuity under Article 15 of the  Illinois  Pension
Code, (2) has not made the election authorized  under Section
15-135.1 of the Illinois Pension Code, and (3) is eligible to
participate  in  the  basic  program of group health benefits
provided for annuitants under this Act.
    (b-7)  "New TRS State annuitant" means a person  who,  on
or  after  July  1, 1998, becomes an annuitant, as defined in
subsection  (b),  by  virtue  of  beginning  to   receive   a
retirement  annuity  under Article 16 of the Illinois Pension
Code based on service as a teacher as  defined  in  paragraph
(2),  (3),  or  (5)  of  Section  16-106 of that Code, and is
eligible to participate in the basic program of group  health
benefits provided for annuitants under this Act.
    (c)  "Carrier"   means   (1)   an  insurance  company,  a
corporation  organized  under  the  Limited  Health   Service
Organization Act or the Voluntary Health Services Plan Act, a
partnership,  or other nongovernmental organization, which is
authorized  to  do  group  life  or  group  health  insurance
business in Illinois, or (2)  the  State  of  Illinois  as  a
self-insurer.
    (d)  "Compensation"  means  salary  or wages payable on a
regular payroll by the State Treasurer on a  warrant  of  the
State Comptroller out of any State, trust or federal fund, or
by  the Governor of the State through a disbursing officer of
the State out of a trust or out of federal funds, or  by  any
Department  out  of State, trust, federal or other funds held
by the State Treasurer or the Department, to any  person  for
personal   services  currently  performed,  and  ordinary  or
accidental disability  benefits  under  Articles  2,  14,  15
(including  ordinary  or accidental disability benefits under
the optional retirement  program  established  under  Section
15-158.2),  paragraphs (2), (3), or (5) of Section 16-106, or
Article 18 of  the  Illinois  Pension  Code,  for  disability
incurred after January 1, 1966, or benefits payable under the
Workers'   Compensation   or  Occupational  Diseases  Act  or
benefits  payable  under  a  sick  pay  plan  established  in
accordance  with  Section  36  of  the  State  Finance   Act.
"Compensation" also means salary or wages paid to an employee
of any qualified local government or qualified rehabilitation
facility or a qualified domestic violence shelter or service.
    (e)  "Commission"   means   the   State  Employees  Group
Insurance  Advisory  Commission  authorized  by   this   Act.
Commencing  July  1,  1984,  "Commission" as used in this Act
means  the  Illinois  Economic  and  Fiscal   Commission   as
established  by the Legislative Commission Reorganization Act
of 1984.
    (f)  "Contributory", when  referred  to  as  contributory
coverage,  shall  mean optional coverages or benefits elected
by the member toward the cost  of  which  such  member  makes
contribution, or which are funded in whole or in part through
the acceptance of a reduction in earnings or the foregoing of
an increase in earnings by an employee, as distinguished from
noncontributory  coverage or benefits which are paid entirely
by the State of Illinois without reduction  of  the  member's
salary.
    (g)  "Department"   means  any  department,  institution,
board, commission, officer, court or any agency of the  State
government  receiving  appropriations  and  having  power  to
certify  payrolls  to the Comptroller authorizing payments of
salary and wages against such appropriations as are  made  by
the  General  Assembly  from any State fund, or against trust
funds held by the State  Treasurer  and  includes  boards  of
trustees of the retirement systems created by Articles 2, 14,
15,  16  and  18  of the Illinois Pension Code.  "Department"
also includes the  Illinois  Comprehensive  Health  Insurance
Board,  the Board of Examiners established under the Illinois
Public Accounting Act, and the Illinois Rural Bond Bank.
    (h)  "Dependent", when the term is used in the context of
the health and life plan, means a  member's  spouse  and  any
unmarried child (1) from birth to age 19 including an adopted
child, a child who lives with the member from the time of the
filing  of a petition for adoption until entry of an order of
adoption, a stepchild or recognized child who lives with  the
member  in  a parent-child relationship, or a child who lives
with the member if such member is a court appointed  guardian
of  the  child,  or  (2) age 19 to 23 enrolled as a full-time
student in any accredited school, financially dependent  upon
the  member,  and  eligible as a dependent for Illinois State
income tax purposes, or (3) age 19 or over who is mentally or
physically handicapped as defined in the  Illinois  Insurance
Code.  For  the  health  plan only, the term "dependent" also
includes any person enrolled prior to the effective  date  of
this  Section  who is dependent upon the member to the extent
that the member may claim such  person  as  a  dependent  for
Illinois  State  income tax deduction purposes; no other such
person may be enrolled.
    (i)  "Director"  means  the  Director  of  the   Illinois
Department of Central Management Services.
    (j)  "Eligibility  period"  means  the  period  of time a
member has to elect  enrollment  in  programs  or  to  select
benefits without regard to age, sex or health.
    (k)  "Employee"   means  and  includes  each  officer  or
employee in the service of a department who (1) receives  his
compensation  for  service  rendered  to  the department on a
warrant  issued  pursuant  to  a  payroll  certified   by   a
department  or  on  a  warrant or check issued and drawn by a
department upon a trust,  federal  or  other  fund  or  on  a
warrant  issued pursuant to a payroll certified by an elected
or duly appointed  officer  of  the  State  or  who  receives
payment  of the performance of personal services on a warrant
issued pursuant to a payroll certified by  a  Department  and
drawn  by  the  Comptroller  upon the State Treasurer against
appropriations made by the General Assembly from any fund  or
against  trust  funds held by the State Treasurer, and (2) is
employed  full-time  or  part-time  in  a  position  normally
requiring actual performance of duty during not less than 1/2
of a normal work period, as established by  the  Director  in
cooperation with each department, except that persons elected
by  popular  vote  will  be  considered  employees during the
entire term for which they are elected  regardless  of  hours
devoted  to  the  service  of  the State, and (3) except that
"employee" does not include any person who is not eligible by
reason of such person's employment to participate in  one  of
the State retirement systems under Articles 2, 14, 15 (either
the  regular  Article  15  system  or the optional retirement
program established under Section 15-158.2) or 18,  or  under
paragraph (2), (3), or (5) of Section 16-106, of the Illinois
Pension  Code,  but  such  term  does include persons who are
employed during the 6 month qualifying period  under  Article
14 of the Illinois Pension Code.  Such term also includes any
person  who  (1) after January 1, 1966, is receiving ordinary
or accidental disability benefits under Articles  2,  14,  15
(including  ordinary  or accidental disability benefits under
the optional retirement  program  established  under  Section
15-158.2),  paragraphs (2), (3), or (5) of Section 16-106, or
Article 18 of  the  Illinois  Pension  Code,  for  disability
incurred  after January 1, 1966, (2) receives total permanent
or total temporary disability under the Workers' Compensation
Act or Occupational Disease  Act  as  a  result  of  injuries
sustained  or  illness contracted in the course of employment
with the State of Illinois, or (3) is not  otherwise  covered
under  this  Act  and  has  retired as a participating member
under  Article  2  of  the  Illinois  Pension  Code  but   is
ineligible  for the retirement annuity under Section 2-119 of
the Illinois Pension Code.  However, a person  who  satisfies
the criteria of the foregoing definition of "employee" except
that  such  person  is  made ineligible to participate in the
State  Universities  Retirement  System  by  clause  (4)   of
subsection (a) of Section 15-107 of the Illinois Pension Code
is   also  an  "employee"  for  the  purposes  of  this  Act.
"Employee" also includes any person receiving or eligible for
benefits under a sick pay plan established in accordance with
Section 36 of the State Finance Act. "Employee" also includes
each officer or employee in the service of a qualified  local
government,   including  persons  appointed  as  trustees  of
sanitary districts regardless of hours devoted to the service
of the sanitary district, and each employee in the service of
a  qualified  rehabilitation  facility  and  each   full-time
employee  in  the  service  of  a qualified domestic violence
shelter  or  service,  as  determined  according   to   rules
promulgated by the Director.
    (l)  "Member"   means  an  employee,  annuitant,  retired
employee or survivor.
    (m)  "Optional  coverages  or   benefits"   means   those
coverages  or  benefits available to the member on his or her
voluntary election, and at his or her own expense.
    (n)  "Program" means the  group  life  insurance,  health
benefits  and other employee benefits designed and contracted
for by the Director under this Act.
    (o)  "Health plan" means a self-insured health  insurance
program  offered by the State of Illinois for the purposes of
benefiting employees by means  of  providing,  among  others,
wellness  programs,  utilization reviews, second opinions and
medical fee reviews, as well as for paying for  hospital  and
medical care up to the maximum coverage provided by the plan,
to its members and their dependents.
    (p)  "Retired  employee" means any person who would be an
annuitant as that term is defined herein  but  for  the  fact
that such person retired prior to January 1, 1966.  Such term
also  includes any person formerly employed by the University
of Illinois in the Cooperative Extension Service who would be
an annuitant but for the  fact  that  such  person  was  made
ineligible   to   participate   in   the  State  Universities
Retirement System by clause (4) of subsection (a) of  Section
15-107 of the Illinois Pension Code.
    (p-6)  "New SURS retired employee" means a person who, on
or  after  January  1,  1998,  becomes a retired employee, as
defined in subsection  (p),  by  virtue  of  being  a  person
formerly  employed  by  the  University  of  Illinois  in the
Cooperative Extension Service who would be an  annuitant  but
for   the  fact  that  he  or  she  was  made  ineligible  to
participate in the State Universities  Retirement  System  by
clause  (4)  of  subsection  (a)  of  Section  15-107  of the
Illinois Pension Code, and who is eligible to participate  in
the  basic  program  of  group  health  benefits provided for
retired employees under this Act.
    (q)  "Survivor" means a person receiving an annuity as  a
survivor  of an employee or of an annuitant.  "Survivor" also
includes:  (1)  the  surviving  dependent  of  a  person  who
satisfies the  definition  of  "employee"  except  that  such
person  is  made  ineligible  to  participate  in  the  State
Universities  Retirement  System  by clause (4) of subsection
(a) of Section 15-107 of the Illinois Pension Code;  and  (2)
the  surviving  dependent  of any person formerly employed by
the University  of  Illinois  in  the  Cooperative  Extension
Service  who  would  be an annuitant except for the fact that
such person was made ineligible to participate in  the  State
Universities  Retirement  System  by clause (4) of subsection
(a) of Section 15-107 of the Illinois Pension Code.
    (q-5)  "New SERS survivor" means a survivor,  as  defined
in  subsection (q), whose annuity is paid under Article 14 of
the Illinois Pension Code and is based on the death of (i) an
employee whose death occurs on or after January 1,  1998,  or
(ii) a new SERS annuitant as defined in subsection (b-5).
    (q-6)  "New  SURS  survivor" means a survivor, as defined
in subsection (q), whose annuity is paid under Article 15  of
the Illinois Pension Code and is based on the death of (i) an
employee  whose  death occurs on or after January 1, 1998, or
(ii) a new SURS annuitant as defined in subsection (b-6),  or
(iii)  a  new  SURS retired employee as defined in subsection
(p-6).
    (q-7)  "New TRS State  survivor"  means  a  survivor,  as
defined  in  subsection  (q),  whose  annuity  is  paid under
Article 16 of the Illinois Pension Code and is based  on  the
death  of  (i)  an  employee  who  is a teacher as defined in
paragraph (2), (3), or (5) of Section 16-106 of that Code and
whose death occurs on or after July 1, 1998, or  (ii)  a  new
TRS State annuitant as defined in subsection (b-7).
    (r)  "Medical   services"  means  the  services  provided
within the scope of their licenses by  practitioners  in  all
categories licensed under the Medical Practice Act of 1987.
    (s)  "Unit   of   local  government"  means  any  county,
municipality, township, school district, special district  or
other  unit, designated as a unit of local government by law,
which exercises limited  governmental  powers  or  powers  in
respect  to limited governmental subjects, any not-for-profit
association  with  a  membership  that   primarily   includes
townships  and  township  officials,  that  has  duties  that
include  provision  of  research  service,  dissemination  of
information,  and  other  acts  for  the purpose of improving
township government, and that is funded wholly or  partly  in
accordance  with  Section  85-15  of  the  Township Code; any
not-for-profit corporation or association, with a  membership
consisting primarily of municipalities, that operates its own
utility    system,    and    provides   research,   training,
dissemination  of  information,  or  other  acts  to  promote
cooperation between and  among  municipalities  that  provide
utility  services  and  for  the advancement of the goals and
purposes of its membership; and the Illinois  Association  of
Park Districts.  "Qualified local government" means a unit of
local  government  approved by the Director and participating
in a program created under subsection (i) of  Section  10  of
this Act.
    (t)  "Qualified   rehabilitation   facility"   means  any
not-for-profit  organization  that  is  accredited   by   the
Commission  on  Accreditation of Rehabilitation Facilities or
certified by the Department of Human Services  (as  successor
to   the   Department  of  Mental  Health  and  Developmental
Disabilities)   to   provide   services   to   persons   with
disabilities and which  receives  funds  from  the  State  of
Illinois  for  providing  those  services,  approved  by  the
Director   and  participating  in  a  program  created  under
subsection (j) of Section 10 of this Act.
    (u)  "Qualified domestic  violence  shelter  or  service"
means  any  Illinois domestic violence shelter or service and
its administrative offices funded by the Department of  Human
Services  (as  successor to the Illinois Department of Public
Aid), approved by the Director and participating in a program
created under subsection (k) of Section 10.
    (v)  "TRS benefit recipient" means a person who:
         (1)  is not a "member" as defined in  this  Section;
    and
         (2)  is  receiving  a  monthly benefit or retirement
    annuity under Article 16 of the  Illinois  Pension  Code;
    and
         (3)  either  (i)  has at least 8 years of creditable
    service under Article 16 of the Illinois Pension Code, or
    (ii) was enrolled in the health insurance program offered
    under that Article on January 1, 1996, or  (iii)  is  the
    survivor  of a benefit recipient who had at least 8 years
    of creditable service under Article 16  of  the  Illinois
    Pension  Code  or  was  enrolled  in the health insurance
    program offered under that Article on the effective  date
    of this amendatory Act of 1995, or (iv) is a recipient or
    survivor  of  a  recipient  of a disability benefit under
    Article 16 of the Illinois Pension Code.
    (w)  "TRS dependent beneficiary" means a person who:
         (1)  is not a "member" or "dependent" as defined  in
    this Section; and
         (2)  is  a  TRS benefit recipient's: (A) spouse, (B)
    dependent parent who is receiving at least half of his or
    her support  from  the  TRS  benefit  recipient,  or  (C)
    unmarried  natural  or adopted child who is (i) under age
    19, or  (ii)  enrolled  as  a  full-time  student  in  an
    accredited  school,  financially  dependent  upon the TRS
    benefit recipient, eligible as a dependent  for  Illinois
    State  income tax purposes, and either is under age 24 or
    was, on January 1, 1996,  participating  as  a  dependent
    beneficiary in the health insurance program offered under
    Article  16 of the Illinois Pension Code, or (iii) age 19
    or over who is  mentally  or  physically  handicapped  as
    defined in the Illinois Insurance Code.
    (x)  "Military  leave  with  pay  and benefits" refers to
individuals in basic training for reserves,  special/advanced
training,  annual  training, emergency call up, or activation
by the President of the United States with approved  pay  and
benefits.
    (y)  "Military  leave without pay and benefits" refers to
individuals who enlist for active duty in a regular component
of the U.S. Armed Forces  or  other  duty  not  specified  or
authorized under military leave with pay and benefits.
    (z)  "Community college benefit recipient" means a person
who:
         (1)  is  not  a "member" as defined in this Section;
    and
         (2)  is receiving a monthly  survivor's  annuity  or
    retirement  annuity  under  Article  15  of  the Illinois
    Pension Code; and
         (3)  either  (i)  was  a  full-time  employee  of  a
    community college district or an association of community
    college boards created under the Public Community College
    Act (other than an employee  whose  last  employer  under
    Article  15  of the Illinois Pension Code was a community
    college district subject to Article  VII  of  the  Public
    Community College Act) and was eligible to participate in
    a  group  health  benefit  plan as an employee during the
    time of employment  with  a  community  college  district
    (other  than  a  community  college  district  subject to
    Article VII of the Public Community College  Act)  or  an
    association  of  community college boards, or (ii) is the
    survivor of a person described in item (i).
    (aa)  "Community college dependent beneficiary"  means  a
person who:
         (1)  is  not a "member" or "dependent" as defined in
    this Section; and
         (2)  is a community college benefit recipient's: (A)
    spouse, (B) dependent parent who is  receiving  at  least
    half  of  his  or  her support from the community college
    benefit recipient, or (C) unmarried  natural  or  adopted
    child  who  is  (i)  under  age 19, or (ii) enrolled as a
    full-time student in an  accredited  school,  financially
    dependent  upon  the community college benefit recipient,
    eligible as a dependent for  Illinois  State  income  tax
    purposes  and  under  age 23, or (iii) age 19 or over and
    mentally or physically  handicapped  as  defined  in  the
    Illinois Insurance Code.
(Source:  P.A.  89-21,  eff.  6-21-95;  89-25,  eff. 6-21-95;
89-76,  eff.  7-1-95;  89-324,  eff.  8-13-95;  89-430,  eff.
12-15-95; 89-502, eff. 7-1-96; 89-507, eff.  7-1-97;  89-628,
eff.  8-9-96; 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
eff. 8-16-97; 90-497, eff.  8-18-97;  90-511,  eff.  8-22-97;
90-582, eff. 5-27-98; 90-655, eff. 7-30-98.)

    (5 ILCS 375/10) (from Ch. 127, par. 530)
    Sec. 10. Payments by State; premiums.
    (a)  The    State   shall   pay   the   cost   of   basic
non-contributory group life insurance and, subject to  member
paid  contributions set by the Department or required by this
Section, the basic program of group health benefits  on  each
eligible  member,  except  a member, not otherwise covered by
this Act, who has retired as  a  participating  member  under
Article  2 of the Illinois Pension Code but is ineligible for
the retirement annuity under Section 2-119  of  the  Illinois
Pension  Code, and part of each eligible member's and retired
member's premiums for health insurance coverage for  enrolled
dependents as provided by Section 9.  The State shall pay the
cost of the basic program of group health benefits only after
benefits  are  reduced  by  the amount of benefits covered by
Medicare for all retired members and retired dependents  aged
65  years  or older who are entitled to benefits under Social
Security  or  the  Railroad  Retirement  system  or  who  had
sufficient Medicare-covered government employment except that
such reduction in benefits shall apply only to those  retired
members  or  retired dependents who (1) first become eligible
for such Medicare coverage on or after July 1, 1992;  or  (2)
remain  eligible for, but no longer receive Medicare coverage
which they had been receiving on or after July 1,  1992.  The
Department  may  determine the aggregate level of the State's
contribution on the basis of actual cost of medical  services
adjusted  for  age,  sex  or  geographic or other demographic
characteristics which affect the costs of such programs.
    (a-1)  Beginning January 1, 1998,  for  each  person  who
becomes  a  new  SERS annuitant and participates in the basic
program of group health benefits, the State shall  contribute
toward  the  cost of the annuitant's coverage under the basic
program of group health benefits an amount  equal  to  5%  of
that cost for each full year of creditable service upon which
the  annuitant's retirement annuity is based, up to a maximum
of 100% for an annuitant with 20 or more years of  creditable
service.  The remainder of the cost of a new SERS annuitant's
coverage  under  the  basic  program of group health benefits
shall be the responsibility of the annuitant.
    (a-2)  Beginning January 1, 1998,  for  each  person  who
becomes  a  new  SERS  survivor and participates in the basic
program of group health benefits, the State shall  contribute
toward  the  cost  of the survivor's coverage under the basic
program of group health benefits an amount  equal  to  5%  of
that  cost  for  each full year of the deceased employee's or
deceased  annuitant's  creditable  service   in   the   State
Employees'  Retirement  System  of  Illinois  on  the date of
death, up to a maximum of 100% for a survivor of an  employee
or  annuitant  with  20  or more years of creditable service.
The remainder of the cost of the new SERS survivor's coverage
under the basic program of group health benefits shall be the
responsibility of the survivor.
    (a-3)  Beginning January 1, 1998,  for  each  person  who
becomes  a  new  SURS annuitant and participates in the basic
program of group health benefits, the State shall  contribute
toward  the  cost of the annuitant's coverage under the basic
program of group health benefits an amount  equal  to  5%  of
that cost for each full year of creditable service upon which
the  annuitant's retirement annuity is based, up to a maximum
of 100% for an annuitant with 20 or more years of  creditable
service.  The remainder of the cost of a new SURS annuitant's
coverage  under  the  basic  program of group health benefits
shall be the responsibility of the annuitant.
    (a-4)  (Blank).  Beginning  January  1,  1998,  for  each
person  who  becomes  a  new  SURS   retired   employee   and
participates  in  the basic program of group health benefits,
the State shall contribute toward the  cost  of  the  retired
employee's  coverage  under the basic program of group health
benefits an amount equal to 5% of that  cost  for  each  full
year  that the retired employee was an employee as defined in
Section 3, up to a maximum of 100% for a retired employee who
was an employee for 20 or more years.  The remainder  of  the
cost  of  a  new  SURS  retired employee's coverage under the
basic  program  of  group  health  benefits  shall   be   the
responsibility of the retired employee.
    (a-5)  Beginning  January  1,  1998,  for each person who
becomes a new SURS survivor and  participates  in  the  basic
program  of group health benefits, the State shall contribute
toward the cost of the survivor's coverage  under  the  basic
program  of  group  health  benefits an amount equal to 5% of
that cost for each full year of the  deceased  employee's  or
deceased   annuitant's   creditable   service  in  the  State
Universities Retirement System on the date of death, up to  a
maximum  of  100%  for a survivor of an employee or annuitant
with 20 or more years of creditable service.   The  remainder
of  the  cost  of  the new SURS survivor's coverage under the
basic  program  of  group  health  benefits  shall   be   the
responsibility of the survivor.
    (a-6)  Beginning  July  1,  1998,  for  each  person  who
becomes  a  new  TRS  State annuitant and participates in the
basic program of  group  health  benefits,  the  State  shall
contribute  toward the cost of the annuitant's coverage under
the basic program of group health benefits an amount equal to
5% of that cost for each full year of creditable service as a
teacher as defined in paragraph (2), (3), or (5)  of  Section
16-106   of   the   Illinois  Pension  Code  upon  which  the
annuitant's retirement annuity is based, up to a  maximum  of
100%  for  an  annuitant  with  20  or  more  years  of  such
creditable  service.   The remainder of the cost of a new TRS
State annuitant's coverage under the basic program  of  group
health benefits shall be the responsibility of the annuitant.
    (a-7)  Beginning  July  1,  1998,  for  each  person  who
becomes  a  new  TRS  State  survivor and participates in the
basic program of  group  health  benefits,  the  State  shall
contribute  toward  the cost of the survivor's coverage under
the basic program of group health benefits an amount equal to
5% of that cost for each full year of the deceased employee's
or deceased annuitant's creditable service as  a  teacher  as
defined  in  paragraph  (2), (3), or (5) of Section 16-106 of
the Illinois Pension Code on the  date  of  death,  up  to  a
maximum  of  100%  for a survivor of an employee or annuitant
with 20 or  more  years  of  such  creditable  service.   The
remainder  of  the  cost  of  the  new  TRS  State survivor's
coverage under the basic program  of  group  health  benefits
shall be the responsibility of the survivor.
    (a-8)  A  new SERS annuitant, new SERS survivor, new SURS
annuitant, new SURS retired employee, new SURS survivor,  new
TRS  State  annuitant, or new TRS State survivor may waive or
terminate coverage in the program of group  health  benefits.
Any  such annuitant or, survivor, or retired employee who has
waived or terminated coverage may enroll or re-enroll in  the
program  of  group  health  benefits  only  during the annual
benefit choice period, as determined by the Director;  except
that   in  the  event  of  termination  of  coverage  due  to
nonpayment  of  premiums,  the  annuitant  or,  survivor,  or
retired employee may not re-enroll in the program.
    (a-9)  No later than May 1 of  each  calendar  year,  the
Director  of  Central  Management  Services  shall certify in
writing to the Executive Secretary of  the  State  Employees'
Retirement  System  of  Illinois  the amounts of the Medicare
supplement health care premiums and the amounts of the health
care premiums for all other retirees  who  are  not  Medicare
eligible.
    A  separate  calculation  of  the premiums based upon the
actual cost of each health care plan shall be so certified.
    The Director of Central Management Services shall provide
to the Executive Secretary of the State Employees' Retirement
System of Illinois such information,  statistics,  and  other
data  as  he or she may require to review the premium amounts
certified by the Director of Central Management Services.
    (b)  State employees who become eligible for this program
on or after January 1, 1980 in positions  normally  requiring
actual performance of duty not less than 1/2 of a normal work
period  but  not equal to that of a normal work period, shall
be  given  the  option  of  participating  in  the  available
program. If the employee elects  coverage,  the  State  shall
contribute  on  behalf  of  such  employee to the cost of the
employee's benefit and any applicable  dependent  supplement,
that  sum  which bears the same percentage as that percentage
of time the employee regularly works when compared to  normal
work period.
    (c)  The  basic  non-contributory coverage from the basic
program of group health benefits shall be continued for  each
employee  not in pay status or on active service by reason of
(1) leave of absence due to illness or injury, (2) authorized
educational leave of absence  or  sabbatical  leave,  or  (3)
military  leave  with  pay  and benefits. This coverage shall
continue until expiration of authorized leave and  return  to
active  service, but not to exceed 24 months for leaves under
item (1) or (2). This 24-month limitation and the requirement
of returning to active service shall  not  apply  to  persons
receiving  ordinary  or  accidental  disability  benefits  or
retirement  benefits through the appropriate State retirement
system  or  benefits  under  the  Workers'  Compensation   or
Occupational Disease Act.
    (d)  The   basic  group  life  insurance  coverage  shall
continue, with full State contribution, where such person  is
(1)  absent  from  active  service  by  reason  of disability
arising from any cause  other  than  self-inflicted,  (2)  on
authorized  educational leave of absence or sabbatical leave,
or (3) on military leave with pay and benefits.
    (e)  Where the person is in non-pay status for  a  period
in  excess  of  30 days or on leave of absence, other than by
reason of disability, educational  or  sabbatical  leave,  or
military  leave  with  pay  and  benefits,  such  person  may
continue  coverage  only  by making personal payment equal to
the amount normally contributed by the State on such person's
behalf. Such payments and  coverage  may  be  continued:  (1)
until  such  time  as the person returns to a status eligible
for coverage at State expense, but not to exceed  24  months,
(2)  until  such person's employment or annuitant status with
the State is terminated, or (3) for a  maximum  period  of  4
years for members on military leave with pay and benefits and
military  leave  without  pay  and benefits (exclusive of any
additional service imposed pursuant to law).
    (f)  The Department shall  establish by rule  the  extent
to which other employee benefits will continue for persons in
non-pay status or who are not in active service.
    (g)  The  State  shall  not  pay  the  cost  of the basic
non-contributory group  life  insurance,  program  of  health
benefits  and  other  employee  benefits  for members who are
survivors as defined by paragraphs (1) and (2) of  subsection
(q)  of  Section  3  of  this Act.  The costs of benefits for
these survivors shall be paid by  the  survivors  or  by  the
University  of Illinois Cooperative Extension Service, or any
combination thereof.
    (h)  Those   persons   occupying   positions   with   any
department as a result of emergency appointments pursuant  to
Section  8b.8  of  the  Personnel Code who are not considered
employees under  this  Act  shall  be  given  the  option  of
participating in the programs of group life insurance, health
benefits  and other employee benefits.  Such persons electing
coverage may participate only by making payment equal to  the
amount  normally  contributed  by  the  State  for  similarly
situated  employees.  Such amounts shall be determined by the
Director.  Such payments and coverage may be continued  until
such  time as the person becomes an employee pursuant to this
Act or such person's appointment is terminated.
    (i)  Any unit of local government  within  the  State  of
Illinois  may  apply  to  the Director to have its employees,
annuitants,  and  their  dependents  provided  group   health
coverage   under   this  Act  on  a  non-insured  basis.   To
participate, a unit of local government must agree to  enroll
all  of  its  employees, who may select coverage under either
the State group health insurance plan or a health maintenance
organization  that  has  contracted  with  the  State  to  be
available as a health care provider for employees as  defined
in  this  Act.   A  unit  of  local government must remit the
entire cost of  providing  coverage  under  the  State  group
health  insurance  plan  or,  for  coverage  under  a  health
maintenance   organization,   an  amount  determined  by  the
Director based on an analysis of  the  sex,  age,  geographic
location,  or  other  relevant  demographic variables for its
employees, except that the unit of local government shall not
be required to enroll those of its employees who are  covered
spouses or dependents under this plan or another group policy
or   plan  providing  health  benefits  as  long  as  (1)  an
appropriate  official  from  the  unit  of  local  government
attests that each employee not enrolled is a  covered  spouse
or dependent under this plan or another group policy or plan,
and  (2)  at  least 85% of the employees are enrolled and the
unit of local government remits the entire cost of  providing
coverage  to  those  employees.  Employees of a participating
unit of local government who are not enrolled due to coverage
under another group health policy or plan  may  enroll  at  a
later  date subject to submission of satisfactory evidence of
insurability and provided that no benefits shall  be  payable
for  services  incurred during the first 6 months of coverage
to the extent  the  services  are   in  connection  with  any
pre-existing   condition.   A  participating  unit  of  local
government may also elect to cover its annuitants.  Dependent
coverage shall be offered on  an  optional  basis,  with  the
costs paid by the unit of local government, its employees, or
some  combination  of  the  two  as determined by the unit of
local government.  The unit  of  local  government  shall  be
responsible   for   timely  collection  and  transmission  of
dependent premiums.
    The Director shall annually determine  monthly  rates  of
payment, subject to the following constraints:
         (1)  In  the first year of coverage, the rates shall
    be  equal  to  the  amount  normally  charged  to   State
    employees  for elected optional coverages or for enrolled
    dependents coverages or other contributory coverages,  or
    contributed by the State for basic insurance coverages on
    behalf of its employees, adjusted for differences between
    State  employees and employees of the local government in
    age,  sex,  geographic   location   or   other   relevant
    demographic  variables,  plus an amount sufficient to pay
    for the  additional  administrative  costs  of  providing
    coverage to employees of the unit of local government and
    their dependents.
         (2)  In subsequent years, a further adjustment shall
    be  made  to  reflect  the  actual  prior  years'  claims
    experience   of  the  employees  of  the  unit  of  local
    government.
    In the case of coverage  of  local  government  employees
under  a  health maintenance organization, the Director shall
annually determine  for  each  participating  unit  of  local
government the maximum monthly amount the unit may contribute
toward  that  coverage,  based on an analysis of (i) the age,
sex, geographic  location,  and  other  relevant  demographic
variables  of the unit's employees and (ii) the cost to cover
those employees under the State group health insurance  plan.
The  Director  may  similarly  determine  the maximum monthly
amount each unit of local government  may  contribute  toward
coverage   of   its  employees'  dependents  under  a  health
maintenance organization.
    Monthly payments by the unit of local government  or  its
employees  for  group  health insurance or health maintenance
organization  coverage  shall  be  deposited  in  the   Local
Government   Health   Insurance   Reserve  Fund.   The  Local
Government  Health  Insurance  Reserve  Fund   shall   be   a
continuing  fund not subject to fiscal year limitations.  All
expenditures from this fund shall be used  for  payments  for
health  care benefits for local government and rehabilitation
facility  employees,  annuitants,  and  dependents,  and   to
reimburse   the  Department  or  its  administrative  service
organization for all expenses incurred in the  administration
of  benefits.   No  other  State  funds may be used for these
purposes.
    A local government employer's participation or desire  to
participate  in a program created under this subsection shall
not  limit  that  employer's  duty  to   bargain   with   the
representative  of  any  collective  bargaining  unit  of its
employees.
    (j)  Any rehabilitation  facility  within  the  State  of
Illinois  may  apply  to  the Director to have its employees,
annuitants,  and  their  dependents  provided  group   health
coverage   under   this   Act  on  a  non-insured  basis.  To
participate, a rehabilitation facility must agree  to  enroll
all  of  its employees and remit the entire cost of providing
such  coverage   for   its   employees,   except   that   the
rehabilitation facility shall not be required to enroll those
of  its employees who are covered spouses or dependents under
this plan or another group policy or  plan  providing  health
benefits  as  long  as  (1)  an appropriate official from the
rehabilitation  facility  attests  that  each  employee   not
enrolled  is a covered spouse or dependent under this plan or
another group policy or plan, and (2) at  least  85%  of  the
employees are enrolled and the rehabilitation facility remits
the  entire  cost  of  providing coverage to those employees.
Employees of a participating rehabilitation facility who  are
not  enrolled  due  to  coverage  under  another group health
policy or  plan  may  enroll  at  a  later  date  subject  to
submission  of  satisfactory  evidence  of  insurability  and
provided  that  no  benefits  shall  be  payable for services
incurred during the first 6 months of coverage to the  extent
the   services   are  in  connection  with  any  pre-existing
condition. A participating rehabilitation facility  may  also
elect  to  cover  its annuitants. Dependent coverage shall be
offered on an optional basis, with  the  costs  paid  by  the
rehabilitation  facility,  its employees, or some combination
of the 2 as determined by the  rehabilitation  facility.  The
rehabilitation  facility  shall  be  responsible  for  timely
collection and transmission of dependent premiums.
    The  Director shall annually determine quarterly rates of
payment, subject to the following constraints:
         (1)  In the first year of coverage, the rates  shall
    be   equal  to  the  amount  normally  charged  to  State
    employees for elected optional coverages or for  enrolled
    dependents  coverages  or other contributory coverages on
    behalf of its employees, adjusted for differences between
    State  employees  and  employees  of  the  rehabilitation
    facility  in  age,  sex,  geographic  location  or  other
    relevant demographic variables, plus an amount sufficient
    to  pay  for  the  additional  administrative  costs   of
    providing  coverage  to  employees  of the rehabilitation
    facility and their dependents.
         (2)  In subsequent years, a further adjustment shall
    be  made  to  reflect  the  actual  prior  years'  claims
    experience  of  the  employees  of   the   rehabilitation
    facility.
    Monthly  payments  by  the rehabilitation facility or its
employees for group health insurance shall  be  deposited  in
the Local Government Health Insurance Reserve Fund.
    (k)  Any  domestic violence shelter or service within the
State of Illinois may apply  to  the  Director  to  have  its
employees,  annuitants,  and  their dependents provided group
health coverage under this Act on a  non-insured  basis.   To
participate,  a  domestic  violence  shelter  or service must
agree to enroll all of its employees and pay the entire  cost
of   providing   such   coverage   for   its   employees.   A
participating domestic violence shelter  may  also  elect  to
cover its annuitants.  Dependent coverage shall be offered on
an optional basis, with employees, or some combination of the
2  as determined by the domestic violence shelter or service.
The domestic violence shelter or service shall be responsible
for timely collection and transmission of dependent premiums.
    The Director shall annually determine quarterly rates  of
payment, subject to the following constraints:
         (1)  In  the first year of coverage, the rates shall
    be  equal  to  the  amount  normally  charged  to   State
    employees  for elected optional coverages or for enrolled
    dependents coverages or other contributory  coverages  on
    behalf of its employees, adjusted for differences between
    State  employees  and  employees of the domestic violence
    shelter or service in age, sex,  geographic  location  or
    other  relevant  demographic  variables,  plus  an amount
    sufficient to pay for the additional administrative costs
    of  providing  coverage  to  employees  of  the  domestic
    violence shelter or service and their dependents.
         (2)  In subsequent years, a further adjustment shall
    be  made  to  reflect  the  actual  prior  years'  claims
    experience of the  employees  of  the  domestic  violence
    shelter or service.
         (3)  In  no  case  shall  the  rate be less than the
    amount normally charged to State employees or contributed
    by the State on behalf of its employees.
    Monthly payments by  the  domestic  violence  shelter  or
service  or its employees for group health insurance shall be
deposited in the Local Government  Health  Insurance  Reserve
Fund.
    (l)  A  public  community  college  or  entity  organized
pursuant to the Public Community College Act may apply to the
Director  initially to have only annuitants not covered prior
to July 1, 1992 by the district's health plan provided health
coverage  under  this  Act  on  a  non-insured  basis.    The
community   college   must   execute  a  2-year  contract  to
participate in  the  Local  Government  Health  Plan.   Those
annuitants  enrolled initially under this contract shall have
no benefits payable for services incurred during the first  6
months  of  coverage  to  the  extent  the  services  are  in
connection  with  any  pre-existing condition.  Any annuitant
who may enroll after this initial enrollment period shall  be
subject   to   submission   of   satisfactory   evidence   of
insurability and to the pre-existing conditions limitation.
    The  Director  shall  annually determine monthly rates of
payment subject to  the  following  constraints:   for  those
community  colleges with annuitants only enrolled, first year
rates shall be equal to the average cost to cover claims  for
a   State   member   adjusted   for   demographics,  Medicare
participation, and other factors; and in the second  year,  a
further  adjustment  of  rates  shall  be made to reflect the
actual  first  year's  claims  experience  of   the   covered
annuitants.
    (m)  The  Director shall adopt any rules deemed necessary
for implementation of this amendatory Act of 1989 (Public Act
86-978).
(Source:  P.A.  89-53,  eff.  7-1-95;  89-236,  eff.  8-4-95;
89-324,  eff.  8-13-95;  89-626,  eff.  8-9-96;  90-65,  eff.
7-7-97; 90-582, eff. 5-27-98; 90-655, eff.  7-30-98;  revised
8-3-98.)

    Section  10.  The  Illinois  Pension  Code  is amended by
adding Section 15-135.1 as follows:

    (40 ILCS 5/15-135.1 new)
    Sec. 15-135.1. Election  to  avoid  application  of  P.A.
90-65.
    (a)  A  participant  who  was an employee on July 7, 1997
and retires on or after the effective date of this amendatory
Act of the 91st General Assembly may elect in writing at  the
time  of retirement to have the retirement annuity calculated
in accordance with the  provisions  of  Sections  15-135  and
15-136  as  they  existed  immediately  prior to amendment by
Public Act 90-65.  This election, once made, is irrevocable.
    (b)  The fact that a person has elected to participate in
the optional retirement program under Section 15-158.2 or has
elected the portability  option  under  subsection  (a-1)  of
Section  15-154  does  not  prevent the person from making an
election under subsection (a) of this Section; the fact  that
such a person makes an election under subsection (a) does not
allow  the  person to change the irrevocable election that he
or she made under Section 15-158.2  or  subsection  (a-1)  of
Section 15-154.
    (c)  The  System  shall promptly notify the Department of
Central Management Services of each election made under  this
Section.

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

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