Bill Text: IL HB6177 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the State Employees Group Insurance Act of 1971. Deletes the following defined terms: "New SERS annuitant", "New SURS annuitant", "New TRS State annuitant", "New SERS survivor", "New SURS survivor", and "New TRS State survivor". Deletes provisions that require the State to contribute toward the cost of coverage under the basic program of group health benefits an amount that is equal to 5% of that cost for each full year of creditable service, up to a maximum of 100% for an annuitant with 20 or more years of creditable service, for those classes of persons. Changes the manner in which the cost of health benefits for community college benefit recipients and TRS benefit recipients is to be paid. Provides that, beginning on the effective date of the amendatory Act, the Director of Central Management Services shall, on an annual basis, determine the amount that each annuitant, survivor, and retired employee shall contribute toward the basic program of group health benefits on behalf of retired employees, annuitants, and survivors. Requires the Director, when determining that amount, to take into account benefit points and annual pension income. Sets the amount of the required State contribution toward the basic program of group health benefits. Effective July 1, 2012.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB6177 Detail]

Download: Illinois-2011-HB6177-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB6177 Introduced , by Rep. Karen May SYNOPSIS AS INTRODUCED:
5 ILCS 375/3 from Ch. 127, par. 523
5 ILCS 375/6.5
5 ILCS 375/6.9
5 ILCS 375/10 from Ch. 127, par. 530
Amends the State Employees Group Insurance Act of 1971. Deletes the following defined terms: "New SERS annuitant", "New SURS annuitant", "New TRS State annuitant", "New SERS survivor", "New SURS survivor", and "New TRS State survivor". Deletes provisions that require the State to contribute toward the cost of coverage under the basic program of group health benefits an amount that is equal to 5% of that cost for each full year of creditable service, up to a maximum of 100% for an annuitant with 20 or more years of creditable service, for those classes of persons. Changes the manner in which the cost of health benefits for community college benefit recipients and TRS benefit recipients is to be paid. Provides that, beginning on the effective date of the amendatory Act, the Director of Central Management Services shall, on an annual basis, determine the amount that each annuitant, survivor, and retired employee shall contribute toward the basic program of group health benefits on behalf of retired employees, annuitants, and survivors. Requires the Director, when determining that amount, to take into account benefit points and annual pension income. Sets the amount of the required State contribution toward the basic program of group health benefits. Effective July 1, 2012.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
HB6177 LRB097 21656 JDS 69976 b
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 Sections 3, 6.5, 6.9, 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 (including an employee
who has elected to receive an alternative retirement
cancellation payment under Section 14-108.5 of the Illinois
Pension Code in lieu of an annuity), 15 (including an employee

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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, a qualified rehabilitation facility, a qualified
domestic violence shelter or service, or a qualified child
advocacy center. (For definition of "retired employee", see (p)
post).

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(b-5) (Blank). "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
(including an employee who has elected to receive an
alternative retirement cancellation payment under Section
14-108.5 of that Code in lieu of an annuity), and is eligible
to participate in the basic program of group health benefits
provided for annuitants under this Act.
(b-6) (Blank). "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) (Blank). "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

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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, qualified rehabilitation facility, qualified
domestic violence shelter or service, or qualified child
advocacy center.

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(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 Commission on
Government Forecasting and Accountability 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 Finance Authority.
(h) "Dependent", when the term is used in the context of

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the health and life plan, means a member's spouse and any child
(1) from birth to age 26 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 adjudicated child, or a child who lives with the
member if such member is a court appointed guardian of the
child or (2) age 19 or over who is mentally or physically
disabled from a cause originating prior to the age of 19 (age
26 if enrolled as an adult child dependent). For the health
plan only, the term "dependent" also includes (1) 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 income tax deduction
purposes and (2) any person who has received after June 30,
2000 an organ transplant and who is financially dependent upon
the member and eligible to be claimed as a dependent for income
tax purposes. A member requesting to cover any dependent must
provide documentation as requested by the Department of Central
Management Services and file with the Department any and all
forms required by the Department.
(i) "Director" means the Director of the Illinois
Department of Central Management Services or of any successor
agency designated to administer this Act.
(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.

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(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

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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 (i) each officer or employee in the service of a
qualified local government, including persons appointed as

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trustees of sanitary districts regardless of hours devoted to
the service of the sanitary district, (ii) each employee in the
service of a qualified rehabilitation facility, (iii) each
full-time employee in the service of a qualified domestic
violence shelter or service, and (iv) each full-time employee
in the service of a qualified child advocacy center, as
determined according to rules promulgated by the Director.
(l) "Member" means an employee, annuitant, retired
employee or survivor. In the case of an annuitant or retired
employee who first becomes an annuitant or retired employee on
or after the effective date of this amendatory Act of the 97th
General Assembly, the individual must meet the minimum vesting
requirements of the applicable retirement system in order to be
eligible for group insurance benefits under that system. In the
case of a survivor who first becomes a survivor on or after the
effective date of this amendatory Act of the 97th General
Assembly, the deceased employee, annuitant, or retired
employee upon whom the annuity is based must have been eligible
to participate in the group insurance system under the
applicable retirement system in order for the survivor to be
eligible for group insurance benefits under that system.
(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

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for by the Director under this Act.
(o) "Health plan" means a health benefits program offered
by the State of Illinois for persons eligible for the plan.
(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.
(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; (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; and (3) the surviving dependent of a person who
was an annuitant under this Act by virtue of receiving an

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alternative retirement cancellation payment under Section
14-108.5 of the Illinois Pension Code.
(q-2) "SERS" means the State Employees' Retirement System
of Illinois, created under Article 14 of the Illinois Pension
Code.
(q-3) "SURS" means the State Universities Retirement
System, created under Article 15 of the Illinois Pension Code.
(q-4) "TRS" means the Teachers' Retirement System of the
State of Illinois, created under Article 16 of the Illinois
Pension Code.
(q-5) (Blank). "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).
"New SERS survivor" includes the surviving dependent of a
person who was an annuitant under this Act by virtue of
receiving an alternative retirement cancellation payment under
Section 14-108.5 of the Illinois Pension Code.
(q-6) (Blank). "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).
(q-7) (Blank). "New TRS State survivor" means a survivor,
as defined in subsection (q), whose annuity is paid under

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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 (including a
combination of school districts under the Intergovernmental
Cooperation Act), 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

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and purposes of its membership; the Southern Illinois
Collegiate Common Market, which is a consortium of higher
education institutions in Southern Illinois; the Illinois
Association of Park Districts; and any hospital provider that
is owned by a county that has 100 or fewer hospital beds and
has not already joined the program. "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:

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(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) natural,
step, adjudicated, or adopted child who is (i) under age
26, (ii) 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 disabled
from a cause originating prior to the age of 19 (age 26 if

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enrolled as an adult child).
"TRS dependent beneficiary" does not include, as indicated
under paragraph (2) of this subsection (w), a dependent of the
survivor of a TRS benefit recipient who first becomes a
dependent of a survivor of a TRS benefit recipient on or after
the effective date of this amendatory Act of the 97th General
Assembly unless that dependent would have been eligible for
coverage as a dependent of the deceased TRS benefit recipient
upon whom the survivor benefit is based.
(x) "Military leave" refers to individuals in basic
training for reserves, special/advanced training, annual
training, emergency call up, activation by the President of the
United States, or any other training or duty in service to the
United States Armed Forces.
(y) (Blank).
(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

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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) natural, step, adjudicated, or adopted
child who is (i) under age 26, or (ii) age 19 or over and
mentally or physically disabled from a cause originating
prior to the age of 19 (age 26 if enrolled as an adult
child).
"Community college dependent beneficiary" does not
include, as indicated under paragraph (2) of this subsection
(aa), a dependent of the survivor of a community college
benefit recipient who first becomes a dependent of a survivor
of a community college benefit recipient on or after the
effective date of this amendatory Act of the 97th General

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Assembly unless that dependent would have been eligible for
coverage as a dependent of the deceased community college
benefit recipient upon whom the survivor annuity is based.
(bb) "Qualified child advocacy center" means any Illinois
child advocacy center and its administrative offices funded by
the Department of Children and Family Services, as defined by
the Children's Advocacy Center Act (55 ILCS 80/), approved by
the Director and participating in a program created under
subsection (n) of Section 10.
(Source: P.A. 96-756, eff. 1-1-10; 96-1519, eff. 2-4-11;
97-668, eff. 1-13-12.)
(5 ILCS 375/6.5)
Sec. 6.5. Health benefits for TRS benefit recipients and
TRS dependent beneficiaries.
(a) Purpose. It is 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

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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
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.

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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
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

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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.
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 through Fiscal Year 2013 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 shall may be based in part on age, and
eligibility for federal medicare coverage, years of service,
pension income, and the type of insurance program selected.
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 each Medicare-covered a TRS benefit recipient
selecting a managed care program, other than a
Medicare-covered TRS benefit recipient who first becomes a
teacher, as defined under paragraphs (1), (4), and (6)

HB6177 - 21 - LRB097 21656 JDS 69976 b
through (10) of Section 16-106 of the Illinois Pension
Code, on or after the effective date of this amendatory Act
of the 97th General Assembly, up to 60% 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 each non-Medicare-covered a TRS benefit
recipient selecting the major medical coverage program,
other than a non-Medicare-covered TRS benefit recipient
who either first becomes a TRS benefit recipient on or
after the effective date of this amendatory Act of the 97th
General Assembly or first becomes a teacher, as defined
under paragraphs (1), (4), and (6) through (10) of Section
16-106 of the Illinois Pension Code, on or after the
effective date of this amendatory Act of the 97th General
Assembly, up to 60% 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
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

HB6177 - 22 - LRB097 21656 JDS 69976 b
Management Services.
(3) For each non-Medicare-covered a TRS benefit
recipient who first becomes a TRS benefit recipient on or
after the effective date of this amendatory Act of the 97th
General Assembly, other than a non-Medicare-covered TRS
benefit recipient who first becomes a teacher, as defined
under paragraphs (1), (4), and (6) through (10) of Section
16-106 of the Illinois Pension Code, on or after the
effective date of this amendatory Act of the 97th General
Assembly selecting the major medical coverage program, up
to 60% 75% of the total insurance rate that would be paid
on behalf of that TRS benefit recipient if he or she were
eligible for Medicare 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 each a TRS benefit recipient who first
becomes a teacher, as defined under paragraphs (1), (4),
and (6) through (10) of Section 16-106 of the Illinois
Pension Code, on or after the effective date of this
amendatory Act of the 97th General Assembly, no portion of

HB6177 - 23 - LRB097 21656 JDS 69976 b
the total insurance rate shall be paid from the Teacher
Health Insurance Security Fund. 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 is participating in Medicare Parts A and B.
(4) The 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

HB6177 - 24 - LRB097 21656 JDS 69976 b
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
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

HB6177 - 25 - LRB097 21656 JDS 69976 b
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
of Central Management Services.
The Department of Healthcare and Family 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

HB6177 - 26 - LRB097 21656 JDS 69976 b
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
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

HB6177 - 27 - LRB097 21656 JDS 69976 b
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
Act 97-386) this amendatory Act of the 97th General Assembly.
(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. 96-1519, eff. 2-4-11; 97-386, eff. 8-15-11;
revised 9-2-11.)
(5 ILCS 375/6.9)
Sec. 6.9. Health benefits for community college benefit
recipients and community college dependent beneficiaries.
(a) Purpose. It is the purpose of this amendatory Act of

HB6177 - 28 - LRB097 21656 JDS 69976 b
1997 to establish a uniform program of health benefits for
community college benefit recipients and their dependent
beneficiaries under the administration of the Department of
Central Management Services.
(b) Creation of program. Beginning July 1, 1999, the
Department of Central Management Services shall be responsible
for administering a program of health benefits for community
college benefit recipients and community college dependent
beneficiaries under this Section. The State Universities
Retirement System and the boards of trustees of the various
community college districts shall cooperate with the
Department in this endeavor.
(c) Eligibility. All community college benefit recipients
and community college dependent beneficiaries 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 State Universities
Retirement System. Eligibility information shall be
communicated to the Department of Central Management Services
in a format acceptable to the Department.
(d) Coverage. The health benefit coverage provided under
this Section shall be a program of health, dental, and vision
benefits.
The program of health benefits under this Section may
include any or all of the benefit limitations, including but

HB6177 - 29 - LRB097 21656 JDS 69976 b
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 community
college benefit recipients and community college dependent
beneficiaries. Rates and premiums may be based in part on age,
and eligibility for federal Medicare coverage, years of
service, pension income, and the type of insurance program
selected. The Director shall also determine premiums that will
allow for the establishment of an actuarially sound reserve for
this program.
The cost of health benefits under the program shall be paid
as follows:
(1) For each Medicare-covered a community college
benefit recipient, other than a Medicare-covered community
college benefit recipient who first becomes eligible, on or
after the effective date of this amendatory Act of the 97th
General Assembly, to participate in the program
established under this Section, up to 60% 75% of the total
insurance rate shall be paid from the Community College
Health Insurance Security Fund.
(1.1) For each non-Medicare-covered community college
benefit recipient, other than a non-Medicare-covered
community college benefit recipient who either first

HB6177 - 30 - LRB097 21656 JDS 69976 b
becomes a community college benefit recipient on or after
the effective date of this amendatory Act of the 97th
General Assembly or first becomes eligible, on or after the
effective date of this amendatory Act of the 97th General
Assembly, to participate in the program established under
this Section, up to 60% of the total insurance rate shall
be paid from the Community College Health Insurance
Security Fund.
(1.2) For each non-Medicare-covered community college
benefit recipient who first becomes a community college
benefit recipient on or after the effective date of this
amendatory Act of the 97th General Assembly, other than a
non-Medicare-covered community college benefit recipient
who first becomes eligible, on or after the effective date
of this amendatory Act of the 97th General Assembly, to
participate in the program established under this Section,
up to 60% of the total insurance rate that would be paid on
behalf of the community college benefit recipient if he or
she were eligible for Medicare shall be paid from the
Community College Health Insurance Security Fund.
(1.3) For each community college benefit recipient who
first becomes eligible, on or after the effective date of
this amendatory Act of the 97th General Assembly, to
participate in the program established under this Section,
no portion of the total insurance rate shall be paid from
the Community College Health Insurance Security Fund.

HB6177 - 31 - LRB097 21656 JDS 69976 b
(2) The balance of the rate of insurance, including the
entire premium for any coverage for community college
dependent beneficiaries that has been elected, shall be
paid by deductions authorized by the community college
benefit recipient to be withheld from his or her monthly
annuity or benefit payment from the State Universities
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 State Universities Retirement System by the
community college benefit recipient, and (ii) all or part
of the balance of the cost of coverage may, at the option
of the board of trustees of the community college district,
be paid to the State Universities Retirement System by the
board of the community college district from which the
community college benefit recipient retired. The State
Universities Retirement System shall promptly deposit all
moneys withheld by or paid to it under this subdivision
(e)(2) into the Community College Health Insurance
Security Fund. These moneys shall not be considered assets
of the State Universities Retirement System.
(f) Financing. All revenues arising from the
administration of the health benefit program established under
this Section shall be deposited into the Community College
Health Insurance Security Fund, which is hereby created as a
nonappropriated trust fund to be held outside the State

HB6177 - 32 - LRB097 21656 JDS 69976 b
Treasury, with the State Treasurer as custodian. Any interest
earned on moneys in the Community College Health Insurance
Security Fund shall be deposited into the Fund.
Moneys in the Community College 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 establishment of a program
reserve. Beginning January 1, 1999, the Department of Central
Management Services may make expenditures from the Community
College Health Insurance Security Fund for those costs.
(g) Contract for benefits. The Director shall by contract,
self-insurance, or otherwise make available the program of
health benefits for community college benefit recipients and
their community college 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 community college 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.
(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

HB6177 - 33 - LRB097 21656 JDS 69976 b
pension or retirement benefit subject to protection under
Article XIII, Section 5 of the Illinois Constitution.
(i) Other health benefit plans. A health benefit plan
provided by a community college district (other than a
community college district subject to Article VII of the Public
Community College Act) under the terms of a collective
bargaining agreement in effect on or prior to the effective
date of this amendatory Act of 1997 shall continue in force
according to the terms of that agreement, unless otherwise
mutually agreed by the parties to that agreement and the
affected retiree. A community college benefit recipient or
community college dependent beneficiary whose coverage under
such a plan expires shall be eligible to begin participating in
the program established under this Section without any
interruption or delay in coverage or limitation as to
pre-existing medical conditions.
This Act does not prohibit any community college district
from offering additional health benefits for its retirees or
their dependents or survivors.
(Source: P.A. 90-497, eff. 8-18-97; 90-655, eff. 7-30-98.)
(5 ILCS 375/10) (from Ch. 127, par. 530)
Sec. 10. Payments by State; premiums.
(a) Except as otherwise provided in this Section, the The
State shall pay the cost of basic non-contributory group life
insurance and, subject to member paid contributions set by the

HB6177 - 34 - LRB097 21656 JDS 69976 b
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 members and dependents who
are eligible for 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 members and dependents who (1) first
become eligible for such Medicare coverage on or after July 1,
1992; or (2) are Medicare-eligible members or dependents of a
local government unit which began participation in the program
on or after July 1, 1992; or (3) 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.
The cost of participation in the basic program of group

HB6177 - 35 - LRB097 21656 JDS 69976 b
health benefits for the dependent or survivor of a living or
deceased retired employee who was formerly employed by the
University of Illinois in the Cooperative Extension Service and
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 shall not be greater than the cost of
participation that would otherwise apply to that dependent or
survivor if he or she were the dependent or survivor of an
annuitant under the State Universities Retirement System.
(a-1) (Blank). 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. In the case of a new
SERS annuitant who has elected to receive an alternative
retirement cancellation payment under Section 14-108.5 of the
Illinois Pension Code in lieu of an annuity, for the purposes
of this subsection the annuitant shall be deemed to be
receiving a retirement annuity based on the number of years of

HB6177 - 36 - LRB097 21656 JDS 69976 b
creditable service that the annuitant had established at the
time of his or her termination of service under SERS.
(a-2) (Blank). 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. In the case of a new SERS survivor who was the
dependent of an annuitant who elected to receive an alternative
retirement cancellation payment under Section 14-108.5 of the
Illinois Pension Code in lieu of an annuity, for the purposes
of this subsection the deceased annuitant's creditable service
shall be determined as of the date of termination of service
rather than the date of death.
(a-3) (Blank). 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

HB6177 - 37 - LRB097 21656 JDS 69976 b
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).
(a-5) (Blank). 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) (Blank). 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

HB6177 - 38 - LRB097 21656 JDS 69976 b
Illinois Pension Code upon which the annuitant's retirement
annuity is based, up to a maximum of 100%; except that the
State contribution shall be 12.5% per year (rather than 5%) for
each full year of creditable service as a regional
superintendent or assistant regional superintendent of
schools. 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) (Blank). 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%;
except that the State contribution shall be 12.5% per year
(rather than 5%) for each full year of the deceased employee's
or deceased annuitant's creditable service as a regional
superintendent or assistant regional superintendent of
schools. 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) Any A new SERS annuitant, new SERS survivor, or
retired employee , new SURS annuitant, new SURS survivor, new

HB6177 - 39 - LRB097 21656 JDS 69976 b
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-8.5) Beginning on the effective date of this amendatory
Act of the 97th General Assembly, the Director of Central
Management Services shall annually determine the amount that
each annuitant, survivor, and retired employee shall
contribute toward the basic program of group health benefits.
To determine that amount, the Director shall take into account
benefit points (which are calculated by summing (i) in the case
of annuitants and retired employees, the age in years of the
benefit recipient when his or her benefits commence and, in the
case of survivors, the age in years of the decedent at the time
of death and (ii) the total years of service of the person upon
whose service that benefit is based) and annual pension income
in accordance with the requirements of this Act and the
schedule of required contributions set forth in paragraphs (1)
through (5) of this subsection (a-8.5):
(1) For an annuitant, survivor, or retired employee
with fewer than 63 benefit points, the required

HB6177 - 40 - LRB097 21656 JDS 69976 b
contribution shall be 100% of the cost of coverage,
regardless of pension income.
(2) For an annuitant, survivor, or retired employee
with 63 to 78 benefit points and:
(A) an annual pension income of less than $15,000,
the required contribution shall be 20% of the cost of
coverage.
(B) an annual pension income of at least $15,000
but less than $30,000, the required contribution shall
be 40% of the cost of coverage.
(C) an annual pension income of at least $30,000
but less than $50,000, the required contribution shall
be 60% of the cost of coverage.
(D) an annual pension income of at least $50,000
but less than $100,000, the required contribution
shall be 80% of the cost of coverage.
(E) an annual pension income of at least $100,000
but less than $125,000, the required contribution
shall be 100% of the cost of coverage.
(F) an annual pension income of $125,000 or more,
the required contribution shall be 100% of the
applicable premium.
(3) For an annuitant, survivor, or retired employee
with 79 to 85 benefit points and:
(A) an annual pension income of less than $15,000,
the required contribution shall be 15% of the cost of

HB6177 - 41 - LRB097 21656 JDS 69976 b
coverage.
(B) an annual pension income of at least $15,000
but less than $30,000, the required contribution shall
be 30% of the cost of coverage.
(C) an annual pension income of at least $30,000
but less than $50,000, the required contribution shall
be 50% of the cost of coverage.
(D) an annual pension income of at least $50,000
but less than $100,000, the required contribution
shall be 65% of the cost of coverage.
(E) an annual pension income of at least $100,000
but less than $125,000, the required contribution
shall be 85% of the cost of coverage.
(F) an annual pension income of $125,000 or more,
the required contribution shall be 95% of the cost of
coverage.
(4) For an annuitant, survivor, or retired employee
with 86 to 92 benefit points and:
(A) an annual pension income of less than $15,000,
the required contribution shall be 10% of the cost of
coverage.
(B) an annual pension income of at least $15,000
but less than $30,000, the required contribution shall
be 20% of the cost of coverage.
(C) an annual pension income of at least $30,000
but less than $50,000, the required contribution shall

HB6177 - 42 - LRB097 21656 JDS 69976 b
be 35% of the cost of coverage.
(D) an annual pension income of at least $50,000
but less than $100,000, the required contribution
shall be 50% of the cost of coverage.
(E) an annual pension income of at least $100,000
but less than $125,000, the required contribution
shall be 70% of the cost of coverage.
(F) an annual pension income of $125,000 or more,
the required contribution shall be 90% of the cost of
coverage.
(5) For an annuitant, survivor, or retired employee
with 93 or more benefit points and:
(A) an annual pension income of less than $15,000,
the required contribution shall be 5% of the cost of
coverage.
(B) an annual pension income of at least $15,000
but less than $30,000, the required contribution shall
be 10% of the cost of coverage.
(C) an annual pension income of at least $30,000
but less than $50,000, the required contribution shall
be 25% of the cost of coverage.
(D) an annual pension income of at least $50,000
but less than $100,000, the required contribution
shall be 35% of the cost of coverage.
(E) an annual pension income of at least $100,000
but less than $125,000, the required contribution

HB6177 - 43 - LRB097 21656 JDS 69976 b
shall be 60% of the cost of coverage.
(F) an annual pension income of $125,000 or more,
the required contribution shall be 80% of the cost of
coverage.
The Director may by administrative rule alter the schedule
of required contributions set forth in paragraphs (1) through
(5) of this subsection to ensure (i) that at least 40% of the
costs associated with the basic program of group health
benefits for retired employees are covered by retired
employees, at least 40% of the costs associated with the basic
program of group health benefits for annuitants are covered by
annuitants, and at least 40% of the costs associated with the
basic program of group health benefits for survivors are
covered by survivors and (ii) that any costs that are
associated with the basic program of group health benefits and
not covered either by the State under subsection (a-8.6) or by
the annuitant, survivor, or retired employee under paragraphs
(1) through (5) of this subsection are covered by the
annuitant, survivor, or retired employee, as applicable.
(a-8.6) Beginning on the effective date of this amendatory
Act of the 97th General Assembly, the State shall contribute
toward the basic program of group health benefits the following
amounts:
(1) for each Medicare-covered annuitant,
Medicare-covered survivor, and Medicare-covered retired
employee, other than a Medicare-covered annuitant,

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Medicare-covered survivor, or Medicare-covered retired
employee who first becomes an employee on or after the
effective date of this amendatory Act of the 97th General
Assembly, the remainder of the cost of coverage under the
basic program of group health benefits; and
(2) for each non-Medicare-covered annuitant,
non-Medicare-covered survivor, and non-Medicare-covered
retired employee, other than a non-Medicare-covered
annuitant, non-Medicare-covered survivor, and
non-Medicare-covered retired employee who either first
becomes an annuitant, survivor, or retired employee on or
after the effective date of this amendatory Act of the 97th
General Assembly or first becomes an employee on or after
the effective date of this amendatory Act of the 97th
General Assembly, the remainder of the cost of coverage
under the basic program of group health benefits; and
(3) for each non-Medicare-covered annuitant,
non-Medicare-covered survivor, and non-Medicare-covered
retired employee who first becomes an annuitant, survivor,
or retired employee on or after the effective date of this
amendatory Act of the 97th General Assembly, other than a
non-Medicare-covered annuitant, non-Medicare-covered
survivor, or non-Medicare-covered retired employee who
first becomes an employee on or after the effective date of
this amendatory Act of the 97th General Assembly, an amount
that is equal to the amount that the State would pay for

HB6177 - 45 - LRB097 21656 JDS 69976 b
that annuitant, survivor, or retired employee if he or she
were covered by Medicare.
Regardless of Medicare coverage, the State shall not
contribute toward the basic program of group health benefits
for annuitants, survivors, or retired employees who first
become employees on or after the effective date of this
amendatory Act of the 97th General Assembly. In addition, the
State's contribution for out-of-State residents shall not
exceed its contribution for in-State residents.
(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.
The Department of Healthcare and Family Services, or any
successor agency designated to procure healthcare contracts
pursuant to this Act, is authorized to establish funds,

HB6177 - 46 - LRB097 21656 JDS 69976 b
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 Local Government
Health Insurance Reserve 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 Local Government Health Insurance Reserve 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.
(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

HB6177 - 47 - LRB097 21656 JDS 69976 b
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. 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.
(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, such person may continue coverage only by making
personal payment equal to the amount normally contributed by

HB6177 - 48 - LRB097 21656 JDS 69976 b
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 or (2) until such person's employment or
annuitant status with the State is terminated (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. However, the State shall pay the amount of the
reduction in the cost of participation, if any, resulting from
the amendment to subsection (a) made by this amendatory Act of
the 91st General Assembly.
(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

HB6177 - 49 - LRB097 21656 JDS 69976 b
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 benefits 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 benefits 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

HB6177 - 50 - LRB097 21656 JDS 69976 b
dependent under this plan or another group policy or plan, and
(2) at least 50% of the employees are enrolled and the unit of
local government remits the entire cost of providing coverage
to those employees, except that a participating school district
must have enrolled at least 50% of its full-time employees who
have not waived coverage under the district's group health plan
by participating in a component of the district's cafeteria
plan. A participating school district is not required to enroll
a full-time employee who has waived coverage under the
district's health plan, provided that an appropriate official
from the participating school district attests that the
full-time employee has waived coverage by participating in a
component of the district's cafeteria plan. For the purposes of
this subsection, "participating school district" includes a
unit of local government whose primary purpose is education as
defined by the Department's rules.
Employees of a participating unit of local government who
are not enrolled due to coverage under another group health
policy or plan may enroll in the event of a qualifying change
in status, special enrollment, special circumstance as defined
by the Director, or during the annual Benefit Choice Period. 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

HB6177 - 51 - LRB097 21656 JDS 69976 b
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

HB6177 - 52 - LRB097 21656 JDS 69976 b
under the State group health benefits 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 benefits plan or health maintenance
organization coverage shall be deposited in the Local
Government Health Insurance Reserve Fund.
The Local Government Health Insurance Reserve Fund is
hereby created as a nonappropriated trust fund to be held
outside the State Treasury, with the State Treasurer as
custodian. The Local Government Health Insurance Reserve Fund
shall be a continuing fund not subject to fiscal year
limitations. The Local Government Health Insurance Reserve
Fund is not subject to administrative charges or charge-backs,
including but not limited to those authorized under Section 8h
of the State Finance Act. All revenues arising from the
administration of the health benefits program established
under this Section shall be deposited into the Local Government
Health Insurance Reserve Fund. Any interest earned on moneys in
the Local Government Health Insurance Reserve Fund shall be
deposited into the Fund. 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

HB6177 - 53 - LRB097 21656 JDS 69976 b
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 eligible 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 50% 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 in the
event of a qualifying change in status, special enrollment,

HB6177 - 54 - LRB097 21656 JDS 69976 b
special circumstance as defined by the Director, or during the
annual Benefit Choice Period. 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 benefits shall be deposited in the

HB6177 - 55 - LRB097 21656 JDS 69976 b
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. The domestic
violence shelter 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 domestic violence
shelter 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 50% of the employees are enrolled and the
domestic violence shelter remits the entire cost of providing
coverage to those employees. Employees of a participating
domestic violence shelter who are not enrolled due to coverage
under another group health policy or plan may enroll in the
event of a qualifying change in status, special enrollment, or
special circumstance as defined by the Director or during the
annual Benefit Choice Period. 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

HB6177 - 56 - LRB097 21656 JDS 69976 b
shelter or service shall be responsible for timely collection
and transmission of dependent premiums.
The Director shall annually determine 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.
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,

HB6177 - 57 - LRB097 21656 JDS 69976 b
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. Any annuitant may enroll in the event
of a qualifying change in status, special enrollment, special
circumstance as defined by the Director, or during the annual
Benefit Choice Period.
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.
(l-5) The provisions of subsection (l) become inoperative
on July 1, 1999.
(m) The Director shall adopt any rules deemed necessary for
implementation of this amendatory Act of 1989 (Public Act
86-978).
(n) Any child advocacy center 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 child advocacy
center must agree to enroll all of its employees and pay the
entire cost of providing coverage for its employees. The child

HB6177 - 58 - LRB097 21656 JDS 69976 b
advocacy center 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 child advocacy
center 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 50% of the employees are enrolled and the
child advocacy center remits the entire cost of providing
coverage to those employees. Employees of a participating child
advocacy center who are not enrolled due to coverage under
another group health policy or plan may enroll in the event of
a qualifying change in status, special enrollment, or special
circumstance as defined by the Director or during the annual
Benefit Choice Period. A participating child advocacy center
may also elect to cover its annuitants. Dependent coverage
shall be offered on an optional basis, with the costs paid by
the child advocacy center, its employees, or some combination
of the 2 as determined by the child advocacy center. The child
advocacy center shall be responsible for timely collection and
transmission of dependent premiums.
The Director shall annually determine 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

HB6177 - 59 - LRB097 21656 JDS 69976 b
employees, adjusted for differences between State
employees and employees of the child advocacy center 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 child advocacy center 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 child advocacy center.
Monthly payments by the child advocacy center or its
employees for group health insurance shall be deposited into
the Local Government Health Insurance Reserve Fund.
(Source: P.A. 95-331, eff. 8-21-07; 95-632, eff. 9-25-07;
95-707, eff. 1-11-08; 96-756, eff. 1-1-10; 96-1232, eff.
7-23-10; 96-1519, eff. 2-4-11.)
Section 99. Effective date. This Act takes effect July 1,
2012.