Bill Text: IL SB1196 | 2015-2016 | 99th General Assembly | Introduced

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Bill Title: Amends the State Employees Group Insurance Act of 1971. Makes technical changes in a Section concerning retired teacher benefits.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2015-04-21 - Re-referred to Assignments [SB1196 Detail]

Download: Illinois-2015-SB1196-Introduced.html

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99TH GENERAL ASSEMBLY State of Illinois 2015 and 2016 SB1196 Introduced 2/11/2015, by Sen. Christine Radogno SYNOPSIS AS INTRODUCED:
5 ILCS 375/6.5
Amends the State Employees Group Insurance Act of 1971. Makes technical changes in a Section concerning retired teacher benefits.
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A BILL FOR
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AN ACT concerning government.
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 Section 6.5 as follows:
(5 ILCS 375/6.5)
Sec. 6.5. Health benefits for TRS benefit recipients and
TRS dependent beneficiaries.
(a) Purpose. It is the the purpose of this amendatory Act
of 1995 to transfer the administration of the program of health
benefits established for benefit recipients and their
dependent beneficiaries under Article 16 of the Illinois
Pension Code to the Department of Central Management Services.
(b) Transition provisions. The Board of Trustees of the
Teachers' Retirement System shall continue to administer the
health benefit program established under Article 16 of the
Illinois Pension Code through December 31, 1995. Beginning
January 1, 1996, the Department of Central Management Services
shall be responsible for administering a program of health
benefits for TRS benefit recipients and TRS dependent
beneficiaries under this Section. The Department of Central
Management Services and the Teachers' Retirement System shall
cooperate in this endeavor and shall coordinate their

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

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

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For Fiscal Year 2007, the premium shall not exceed a
weighted average of 103.9% of the premium actually charged
in Fiscal Year 2006.
For Fiscal Year 2008 and thereafter, the premium in
each fiscal year shall not exceed 105% of the premium
actually charged in the previous fiscal year.
Rates and premiums may be based in part on age and
eligibility for federal medicare coverage. However, the cost of
participation for a TRS dependent beneficiary who is an
unmarried child age 19 or over and mentally or physically
disabled shall not exceed the cost for a TRS dependent
beneficiary who is an unmarried child under age 19 and
participates in the same major medical or managed care program.
The cost of health benefits under the program shall be paid
as follows:
(1) For a TRS benefit recipient selecting a managed
care program, up to 75% of the total insurance rate shall
be paid from the Teacher Health Insurance Security Fund.
Effective with Fiscal Year 2007 and thereafter, for a TRS
benefit recipient selecting a managed care program, 75% of
the total insurance rate shall be paid from the Teacher
Health Insurance Security Fund.
(2) For a TRS benefit recipient selecting the major
medical coverage program, up to 50% of the total insurance
rate shall be paid from the Teacher Health Insurance
Security Fund if a managed care program is accessible, as

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determined by the Teachers' Retirement System. Effective
with Fiscal Year 2007 and thereafter, for a TRS benefit
recipient selecting the major medical coverage program,
50% of the total insurance rate shall be paid from the
Teacher Health Insurance Security Fund if a managed care
program is accessible, as determined by the Department of
Central Management Services.
(3) For a TRS benefit recipient selecting the major
medical coverage program, up to 75% of the total insurance
rate shall be paid from the Teacher Health Insurance
Security Fund if a managed care program is not accessible,
as determined by the Teachers' Retirement System.
Effective with Fiscal Year 2007 and thereafter, for a TRS
benefit recipient selecting the major medical coverage
program, 75% of the total insurance rate shall be paid from
the Teacher Health Insurance Security Fund if a managed
care program is not accessible, as determined by the
Department of Central Management Services.
(3.1) For a TRS dependent beneficiary who is Medicare
primary and enrolled in a managed care plan, or the major
medical coverage program if a managed care plan is not
available, 25% of the total insurance rate shall be paid
from the Teacher Health Security Fund as determined by the
Department of Central Management Services. For the purpose
of this item (3.1), the term "TRS dependent beneficiary who
is Medicare primary" means a TRS dependent beneficiary who

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is participating in Medicare Parts A and B.
(4) Except as otherwise provided in item (3.1), the
balance of the rate of insurance, including the entire
premium of any coverage for TRS dependent beneficiaries
that has been elected, shall be paid by deductions
authorized by the TRS benefit recipient to be withheld from
his or her monthly annuity or benefit payment from the
Teachers' Retirement System; except that (i) if the balance
of the cost of coverage exceeds the amount of the monthly
annuity or benefit payment, the difference shall be paid
directly to the Teachers' Retirement System by the TRS
benefit recipient, and (ii) all or part of the balance of
the cost of coverage may, at the school board's option, be
paid to the Teachers' Retirement System by the school board
of the school district from which the TRS benefit recipient
retired, in accordance with Section 10-22.3b of the School
Code. The Teachers' Retirement System shall promptly
deposit all moneys withheld by or paid to it under this
subdivision (e)(4) into the Teacher Health Insurance
Security Fund. These moneys shall not be considered assets
of the Retirement System.
(f) Financing. Beginning July 1, 1995, all revenues arising
from the administration of the health benefit programs
established under Article 16 of the Illinois Pension Code or
this Section shall be deposited into the Teacher Health
Insurance Security Fund, which is hereby created as a

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nonappropriated trust fund to be held outside the State
Treasury, with the State Treasurer as custodian. Any interest
earned on moneys in the Teacher Health Insurance Security Fund
shall be deposited into the Fund.
Moneys in the Teacher Health Insurance Security Fund shall
be used only to pay the costs of the health benefit program
established under this Section, including associated
administrative costs, and the costs associated with the health
benefit program established under Article 16 of the Illinois
Pension Code, as authorized in this Section. Beginning July 1,
1995, the Department of Central Management Services may make
expenditures from the Teacher Health Insurance Security Fund
for those costs.
After other funds authorized for the payment of the costs
of the health benefit program established under Article 16 of
the Illinois Pension Code are exhausted and until January 1,
1996 (or such later date as may be agreed upon by the Director
of Central Management Services and the Secretary of the
Teachers' Retirement System), the Secretary of the Teachers'
Retirement System may make expenditures from the Teacher Health
Insurance Security Fund as necessary to pay up to 75% of the
cost of providing health coverage to eligible benefit
recipients (as defined in Sections 16-153.1 and 16-153.3 of the
Illinois Pension Code) who are enrolled in the Article 16
health benefit program and to facilitate the transfer of
administration of the health benefit program to the Department

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of Central Management Services.
The Department of Central Management Services, or any
successor agency designated to procure healthcare contracts
pursuant to this Act, is authorized to establish funds,
separate accounts provided by any bank or banks as defined by
the Illinois Banking Act, or separate accounts provided by any
savings and loan association or associations as defined by the
Illinois Savings and Loan Act of 1985 to be held by the
Director, outside the State treasury, for the purpose of
receiving the transfer of moneys from the Teacher Health
Insurance Security Fund. The Department may promulgate rules
further defining the methodology for the transfers. Any
interest earned by moneys in the funds or accounts shall inure
to the Teacher Health Insurance Security Fund. The transferred
moneys, and interest accrued thereon, shall be used exclusively
for transfers to administrative service organizations or their
financial institutions for payments of claims to claimants and
providers under the self-insurance health plan. The
transferred moneys, and interest accrued thereon, shall not be
used for any other purpose including, but not limited to,
reimbursement of administration fees due the administrative
service organization pursuant to its contract or contracts with
the Department.
(g) Contract for benefits. The Director shall by contract,
self-insurance, or otherwise make available the program of
health benefits for TRS benefit recipients and their TRS

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dependent beneficiaries that is provided for in this Section.
The contract or other arrangement for the provision of these
health benefits shall be on terms deemed by the Director to be
in the best interest of the State of Illinois and the TRS
benefit recipients based on, but not limited to, such criteria
as administrative cost, service capabilities of the carrier or
other contractor, and the costs of the benefits.
(g-5) Committee. A Teacher Retirement Insurance Program
Committee shall be established, to consist of 10 persons
appointed by the Governor.
The Committee shall convene at least 4 times each year, and
shall consider and make recommendations on issues affecting the
program of health benefits provided under this Section.
Recommendations of the Committee shall be based on a consensus
of the members of the Committee.
If the Teacher Health Insurance Security Fund experiences a
deficit balance based upon the contribution and subsidy rates
established in this Section and Section 6.6 for Fiscal Year
2008 or thereafter, the Committee shall make recommendations
for adjustments to the funding sources established under these
Sections.
In addition, the Committee shall identify proposed
solutions to the funding shortfalls that are affecting the
Teacher Health Insurance Security Fund, and it shall report
those solutions to the Governor and the General Assembly within
6 months after August 15, 2011 (the effective date of Public

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Act 97-386).
(h) Continuation of program. It is the intention of the
General Assembly that the program of health benefits provided
under this Section be maintained on an ongoing, affordable
basis.
The program of health benefits provided under this Section
may be amended by the State and is not intended to be a pension
or retirement benefit subject to protection under Article XIII,
Section 5 of the Illinois Constitution.
(i) Repeal. (Blank).
(Source: P.A. 97-386, eff. 8-15-11; 97-813, eff. 7-13-12;
98-488, eff. 8-16-13.)