The General Assembly decisively overrode Governor Thompson's total veto of House Bill 3406. The requirements of this new Public Act 86-1444 pertain to a municipal employee's right to a continuation privilege for health insurance. The legislation specifically amends the Illinois Insurance Code to expand the list of local government employees entitled to elect continued health insurance coverage from their former employers. Currently the firefighters and police have a continuance privilege. The legislature has now expanded the option to all municipal employees that participate in the Illinois Municipal Retirement Fund.

WHAT EMPLOYEES ARE ELIGIBLE?
The employees eligible are those participating in I.M.R.F. and retire or become disabled. The benefit ceases upon reentry into active service, a refund is requested, felony conviction or employee's death. The following information has been edited from the actual language in the bill.

No policy of group accident and health insurance shall be issued or delivered in this State to a municipality unless such group policy provides for the election of continued group insurance coverage for the retirement or disability period of each employee who is insured under the provisions of the group policy on the day immediately preceding the day on which the retirement or disability period of such employee begins. An election made pursuant to this Section shall provide continued group insurance coverage for an employee throughout the retirement or disability period of the employee and for any dependents of the employee who are insured under the group policy on the day immediately preceding the day on which the retirement or disability period of the employee begins.

PREMIUM COST FOR COVERAGE, WHO PAYS?
Continued group insurance coverage shall be provided in accordance with this Section at the same premium rate from time to time charged for equivalent coverage provided under the group policy with respect to covered employees whose retirement or disability period has not begun, and no distinction or discrimination in the amount or rate of premiums or in any waiver of premium or other benefit provision shall be made between continued group insurance coverage elected pursuant to this Section and equivalent coverage provided to employees under the group policy other than pursuant to the provisions of this Section: provided that no municipality shall be required by reason of any provision of this Section to pay any group insurance premium other than one that may be negotiated in a collective bargaining agreement. If the group policy provides for a reduction in benefits and premium for insureds who become eligible for medicare, such provision shall apply to persons electing continued coverage under this Section.

NOTIFICATION OF EMPLOYEE ABOUT
OPTION FOR COVERAGE
Within 15 days of the beginning of the retirement or disability period of any employee entitled to elect continued group insurance coverage under any group policy affected by this Section, the municipality last employing such employee shall give written notice of such beginning by certified mail, return receipt requested, to the insurance company issuing such policy. The notice shall include the employee's name and last known place of residence and the beginning date of the employee's retirement or disability period.

Within 15 days of the date of receipt of such notice from the municipality, the insurance company by certified mail, return receipt requested, shall give written notice to the employee at the employee's last known place of residence that coverage under the group policy may be continued for the retirement or disability period of the employee as provided in this Section.

METHOD OF PAYMENT FOR COVERAGE
If the employee elects to continue coverage, it shall be the obligation of the employee to pay the monthly premium directly to the municipality which shall forward it to the insurance company issuing the group insurance policy, or as otherwise directed by the insurance company; provided, however, that the employee shall be entitled to designate on the statement of elec

January 1991 / Illinois Municipal Review / Page 7

SELF-INSURANCE PROGRAM COVERAGE
In the event that a municipality makes a program of accident, health, hospital or medical benefits available to its employees through self-insurance, or by participation in a pool or reciprocal insurer, or by contract in a form other than a policy of group insurance with one or more medical service plans, health care service corporations, health maintenance organizations, or any other professional corporations or plans under which health care or reimbursement for the costs thereof is provided, whether the cost of such benefits is borne by the municipality or the employees or both, such employees and their surviving spouses shall have the same right to elect continued coverage under such program of benefits as they would have if such benefits were provided by a policy of group accident and health insurance. In such cases, the notice of right to elect continued coverage shall be sent by the municipality; the statement of election shall be sent to the municipality; and references to the required premium shall refer to that portion of the cost of such benefits which is not borne by the municipality, either voluntarily or pursuant to the provisions of a collective bargaining agreement. Effective July 1, 1991.

The League and member municipalities worked diligently throughout 1990 to defeat this legislation. The obvious fiscal impact of providing coverage for retirees under the municipal health insurance plan will be felt in 1991, When your municipality discovers the impact of this legislation, please inform the League of those costs, but more importantly inform your legislators. This bill was exempted from the State Mandate Act, so no reimbursement from the State of Illinois can be expected. The General Assembly is talking about property tax relief at the same time mandating municipalities to increase property taxes to pay for this new benefit. •

Page 8 / Illinois Municipal Review / January 1991