Bill Text: IL HB2449 | 2009-2010 | 96th General Assembly | Introduced

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Bill Title: Amends provisions concerning health care benefits for the Chicago Transit Authority in the Illinois Pension Code. Provides that the Retiree Health Care Trust shall be solely responsible for providing health care benefits to eligible retirees and their dependents and survivors upon the exhaustion of the account established by the Retirement Plan for Chicago Transit Authority Employees pursuant to Section 401(h) of the Internal Revenue Code, but no earlier than January 1, 2009 and no later than July 1, 2009 (rather than by no later than July 1, 2009, but no earlier than January 1, 2009). Provides health care coverage through a health maintenance organization may be provided at 100% (while certain health care benefit programs established by the Board of Trustees are limited to 90% coverage for in-network services or 70% coverage for out-of-network services). Makes changes concerning the annual assessment of the funding levels of the Retiree Health Care Trust. Provides that any retiree hired on or before September 5, 2001 who retires with 25 years or more of continuous service, shall be eligible for retiree health care benefits upon retirement in accordance with any rules or regulations adopted by the Board of Trustees. Provides that the Board of Trustees may adopt rules and regulations providing for the refund of the total contributions made by employees who are not eligible for retiree health care benefits or who elect to waive retiree health care benefits. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-03-13 - Rule 19(a) / Re-referred to Rules Committee [HB2449 Detail]

Download: Illinois-2009-HB2449-Introduced.html

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96TH GENERAL ASSEMBLY State of Illinois 2009 and 2010 HB2449 Introduced 2/19/2009, by Rep. David E. Miller SYNOPSIS AS INTRODUCED:
40 ILCS 5/22-101B
30 ILCS 805/8.33 new
Amends provisions concerning health care benefits for the Chicago Transit Authority in the Illinois Pension Code. Provides that the Retiree Health Care Trust shall be solely responsible for providing health care benefits to eligible retirees and their dependents and survivors upon the exhaustion of the account established by the Retirement Plan for Chicago Transit Authority Employees pursuant to Section 401(h) of the Internal Revenue Code, but no earlier than January 1, 2009 and no later than July 1, 2009 (rather than by no later than July 1, 2009, but no earlier than January 1, 2009). Provides health care coverage through a health maintenance organization may be provided at 100% (while certain health care benefit programs established by the Board of Trustees are limited to 90% coverage for in-network services or 70% coverage for out-of-network services). Makes changes concerning the annual assessment of the funding levels of the Retiree Health Care Trust. Provides that any retiree hired on or before September 5, 2001 who retires with 25 years or more of continuous service, shall be eligible for retiree health care benefits upon retirement in accordance with any rules or regulations adopted by the Board of Trustees. Provides that the Board of Trustees may adopt rules and regulations providing for the refund of the total contributions made by employees who are not eligible for retiree health care benefits or who elect to waive retiree health care benefits. Makes other changes. Amends the State Mandates Act to require implementation without reimbursement. Effective immediately.
LRB096 04657 AMC 14716 b
FISCAL NOTE ACT MAY APPLY PENSION IMPACT NOTE ACT MAY APPLY STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT
A BILL FOR
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AN ACT concerning public employee benefits.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Pension Code is amended by changing
Section 22-101B as follows:
(40 ILCS 5/22-101B)
Sec. 22-101B. Health Care Benefits.
(a) The Chicago Transit Authority (hereinafter referred to
in this Section as the "Authority") shall take all actions
lawfully available to it to separate the funding of health care
benefits for retirees and their dependents and survivors from
the funding for its retirement system. The Authority shall
endeavor to achieve this separation as soon as possible, and in
any event no later than July 1, 2009.
(b) Effective 90 days after the effective date of this
amendatory Act of the 95th General Assembly, a Retiree Health
Care Trust is established for the purpose of providing health
care benefits to eligible retirees and their dependents and
survivors in accordance with the terms and conditions set forth
in this Section 22-101B. The Retiree Health Care Trust shall be
solely responsible for providing health care benefits to
eligible retirees and their dependents and survivors upon the
exhaustion of the account established by the Retirement Plan

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for Chicago Transit Authority Employees pursuant to Section
401(h) of the Internal Revenue Code, but no earlier than
January 1, 2009 and no later than July 1, 2009 by no later than
July 1, 2009, but no earlier than January 1, 2009.
(1) The Board of Trustees shall consist of 7 members
appointed as follows: (i) 3 trustees shall be appointed by
the Chicago Transit Board; (ii) one trustee shall be
appointed by an organization representing the highest
number of Chicago Transit Authority participants; (iii)
one trustee shall be appointed by an organization
representing the second-highest number of Chicago Transit
Authority participants; (iv) one trustee shall be
appointed by the recognized coalition representatives of
participants who are not represented by an organization
with the highest or second-highest number of Chicago
Transit Authority participants; and (v) one trustee shall
be selected by the Regional Transportation Authority Board
of Directors, and the trustee shall be a professional
fiduciary who has experience in the area of collectively
bargained retiree health plans. Trustees shall serve until
a successor has been appointed and qualified, or until
resignation, death, incapacity, or disqualification.
Any person appointed as a trustee of the board shall
qualify by taking an oath of office that he or she will
diligently and honestly administer the affairs of the
system, and will not knowingly violate or willfully permit

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the violation of any of the provisions of law applicable to
the Plan, including Sections 1-109, 1-109.1, 1-109.2,
1-110, 1-111, 1-114, and 1-115 of Article 1 of the Illinois
Pension Code.
Each trustee shall cast individual votes, and a
majority vote shall be final and binding upon all
interested parties, provided that the Board of Trustees may
require a supermajority vote with respect to the investment
of the assets of the Retiree Health Care Trust, and may set
forth that requirement in the trust agreement or by-laws of
the Board of Trustees. Each trustee shall have the rights,
privileges, authority and obligations as are usual and
customary for such fiduciaries.
(2) The Board of Trustees shall establish and
administer a health care benefit program for eligible
retirees and their dependents and survivors. Any The health
care benefit program established by the Board of Trustees
for eligible retirees and their dependents and survivors
effective on or after July 1, 2009 shall not contain any
plan which provides for more than 90% coverage for
in-network services or 70% coverage for out-of-network
services after any deductible has been paid, except that
coverage through a health maintenance organization ("HMO")
may be provided at 100%.
(3) The Retiree Health Care Trust shall be administered
by the Board of Trustees according to the following

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requirements:
(i) The Board of Trustees may cause amounts on
deposit in the Retiree Health Care Trust to be invested
in those investments that are permitted investments
for the investment of moneys held under any one or more
of the pension or retirement systems of the State, any
unit of local government or school district, or any
agency or instrumentality thereof. The Board, by a vote
of at least two-thirds of the trustees, may transfer
investment management to the Illinois State Board of
Investment, which is hereby authorized to manage these
investments when so requested by the Board of Trustees.
(ii) The Board of Trustees shall establish and
maintain an appropriate funding reserve level which
shall not be less than the amount of incurred and
unreported claims plus 12 months of expected claims and
administrative expenses.
(iii) The Board of Trustees shall make an annual
assessment of the funding levels of the Retiree Health
Care Trust and shall submit a report to the Auditor
General at least 90 days prior to the end of the fiscal
year. The report shall provide the following:
(A) the actuarial present value of projected
benefits expected to be paid to current and future
retirees and their dependents and survivors;
(B) the actuarial present value of projected

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contributions and trust income plus assets;
(C) the reserve required by subsection
(b)(3)(ii); and
(D) an assessment of whether the actuarial
present value of projected benefits expected to be
paid to current and future retirees and their
dependents and survivors exceeds or is less than
the actuarial present value of projected
contributions and trust income plus assets in
excess of the reserve required by subsection
(b)(3)(ii).
If the actuarial present value of projected
benefits expected to be paid to current and future
retirees and their dependents and survivors exceeds
the actuarial present value of projected contributions
and trust income plus assets in excess of the reserve
required by subsection (b)(3)(ii), then the report
shall provide a plan, to be implemented over a period
of not more than 10 years from each valuation date,
which would make the actuarial present value of
projected contributions and trust income plus assets
equal to or exceed the actuarial present value of
projected benefits expected to be paid to current and
future retirees and their dependents and survivors.
The plan may consist of increases in employee, retiree,
dependent, or survivor contribution levels, decreases

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in benefit levels, or other plan changes or any
combination thereof both, which is projected to cure
the shortfall over a period of not more than 10 years.
If the actuarial present value of projected benefits
expected to be paid to current and future retirees and
their dependents and survivors is less than the
actuarial present value of projected contributions and
trust income plus assets in excess of the reserve
required by subsection (b)(3)(ii), then the report may
provide a plan of decreases in employee, retiree,
dependent, or survivor contribution levels, increases
in benefit levels, or other plan changes, or any
combination thereof both, to the extent of the surplus.
(iv) The Auditor General shall review the report
and plan provided in subsection (b)(3)(iii) and issue a
determination within 90 days after receiving the
report and plan, with a copy of such determination
provided to the General Assembly and the Regional
Transportation Authority, as follows:
(A) In the event of a projected shortfall, if
the Auditor General determines that the
assumptions stated in the report are not
unreasonable in the aggregate and that the plan of
increases in employee, retiree, dependent, or
survivor contribution levels, decreases in benefit
levels, or other plan changes, or any combination

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thereof, to be implemented over a period of not
more than 10 years from each valuation date both,
is reasonably projected to make the actuarial
present value of projected contributions and trust
income plus assets equal to or in excess of the
actuarial present value of projected benefits
expected to be paid to current and future retirees
and their dependents and survivors cure the
shortfall over a period of not more than 10 years,
then the Board of Trustees shall implement the
plan. If the Auditor General determines that the
assumptions stated in the report are unreasonable
in the aggregate, or that the plan of increases in
employee, retiree, dependent, or survivor
contribution levels, decreases in benefit levels,
or other plan changes to be implemented over a
period of not more than 10 years from each
valuation date both, is not reasonably projected
to make the actuarial present value of projected
contributions and trust income plus assets equal
to or in excess of the actuarial present value of
projected benefits expected to be paid to current
and future retirees and their dependents and
survivors cure the shortfall over a period of not
more than 10 years, then the Board of Trustees
shall not implement the plan, the Auditor General

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shall explain the basis for such determination to
the Board of Trustees, and the Auditor General may
make recommendations as to an alternative report
and plan.
(B) In the event of a projected surplus, if the
Auditor General determines that the assumptions
stated in the report are not unreasonable in the
aggregate and that the plan of decreases in
employee, retiree, dependent, or survivor
contribution levels, increases in benefit levels,
or both, is not unreasonable in the aggregate, then
the Board of Trustees shall implement the plan. If
the Auditor General determines that the
assumptions stated in the report are unreasonable
in the aggregate, or that the plan of decreases in
employee, retiree, dependent, or survivor
contribution levels, increases in benefit levels,
or both, is unreasonable in the aggregate, then the
Board of Trustees shall not implement the plan, the
Auditor General shall explain the basis for such
determination to the Board of Trustees, and the
Auditor General may make recommendations as to an
alternative report and plan.
(C) The Board of Trustees shall submit an
alternative report and plan within 45 days after
receiving a rejection determination by the Auditor

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General. A determination by the Auditor General on
any alternative report and plan submitted by the
Board of Trustees shall be made within 90 days
after receiving the alternative report and plan,
and shall be accepted or rejected according to the
requirements of this subsection (b)(3)(iv). The
Board of Trustees shall continue to submit
alternative reports and plans to the Auditor
General, as necessary, until a favorable
determination is made by the Auditor General.
(4) For any retiree who first retires effective on or
after January 18, 2008, to be eligible for retiree health
care benefits upon retirement, the retiree must be at least
55 years of age, retire with 10 or more years of continuous
service and satisfy the preconditions established by
Public Act 95-708 in addition to any rules or regulations
promulgated by the Board of Trustees. Notwithstanding the
foregoing, any retiree hired on or before September 5, 2001
who retires retired prior to the effective date of this
amendatory Act with 25 years or more of continuous service,
or who retires within 90 days after the effective date of
this amendatory Act or by January 1, 2009, whichever is
later, with 25 years or more of continuous service, shall
be eligible for retiree health care benefits upon
retirement in accordance with any rules or regulations
adopted by the Board of Trustees. This paragraph (4) shall

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not apply to a disability allowance.
(5) Effective January 1, 2009, the aggregate amount of
retiree, dependent and survivor contributions to the cost
of their health care benefits shall not exceed more than
45% of the total cost of such benefits. The Board of
Trustees shall have the discretion to provide different
contribution levels for retirees, dependents and survivors
based on their years of service, level of coverage or
Medicare eligibility, provided that the total contribution
from all retirees, dependents, and survivors shall be not
more than 45% of the total cost of such benefits. The term
"total cost of such benefits" for purposes of this
subsection shall be the total amount expended by the
retiree health benefit program in the prior plan year, as
calculated and certified in writing by the Retiree Health
Care Trust's enrolled actuary to be appointed and paid for
by the Board of Trustees.
(6) Effective January 18, 2008, all employees of the
Authority shall contribute to the Retiree Health Care Trust
in an amount not less than 3% of compensation. The Board of
Trustees may adopt rules and regulations providing for the
refund of the total contributions made by employees who are
not eligible for retiree health care benefits or who elect
to waive retiree health care benefits.
(7) No earlier than January 1, 2009 and no later than
July 1, 2009 as the Retiree Health Care Trust becomes

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solely responsible for providing health care benefits to
eligible retirees and their dependents and survivors in
accordance with subsection (b) of this Section 22-101B, the
Authority shall not have any obligation to provide health
care to current or future retirees and their dependents or
survivors. Employees, retirees, dependents, and survivors
who are required to make contributions to the Retiree
Health Care Trust shall make contributions at the level set
by the Board of Trustees pursuant to the requirements of
this Section 22-101B.
(Source: P.A. 95-708, eff. 1-18-08; 95-906, eff. 8-26-08.)
Section 90. The State Mandates Act is amended by adding
Section 8.33 as follows:
(30 ILCS 805/8.33 new)
Sec. 8.33. Exempt mandate. Notwithstanding Sections 6 and 8
of this Act, no reimbursement by the State is required for the
implementation of any mandate created by this amendatory Act of
the 96th General Assembly.
Section 99. Effective date. This Act takes effect upon
becoming law.