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.
















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FISCAL NOTE ACT MAY APPLY
















 


 


A BILL FOR









 











SB1469

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    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 
 


 






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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 
 


 






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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.

 


 






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        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 
 


 






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    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 
 


 






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    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 
 


 






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    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 
 


 






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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 
 


 






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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.

 


 






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    (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.