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November 14, 2001

Ryan Endorses Proposal for Retired Teachers’ Insurance Program

SPRINGFIELD -- Governor George H. Ryan today endorsed a plan from his Teachers’ Retirement Insurance Program Task Force that will save the state’s health insurance for nearly 44,000 public school teacher retirees and their dependents from insolvency.

TRIP, beset with skyrocketing medical expenses that outpace premiums, faces either near-certain insolvency or an 81% increase in retiree premiums in January 2002 if no action is taken by the General Assembly.

The three-year funding proposal from Ryan’s TRIP Task Force includes increased contributions in the first year of the plan from active teachers and the state, and for the first time in TRIP’s history, from local school districts, along with premium increases and benefit changes for retirees in the second and third years of the plan.

The plan also calls for a 21-member Teacher Health Insurance Task Force to convene on December 1 of this year and issue its final report on April 1, 2002 regarding funding issues.

“The public school teachers covered by TRIP served their students and the state of Illinois long and faithfully,” Ryan said. “It is imperative that they continue to have access to high quality health care at a reasonable price. The approach we are submitting to the General Assembly today, while short term in scope, will ensure that TRIP remains intact and responsive while a long term solution is worked out.”

The plan calls for the following contributors and provisions:

    Retirees: In FY02, no further premium increase; in FY03, increase premiums up to 10%; in FY04, increase premiums up to 12%.

    Retirees’ Benefits: In FY03/04: increase the lifetime maximum benefit from $1million to $2 million; reduce the indemnity plan prescription drug benefit to be the same as the state; and increase the indemnity plan deductible from $200 to $250.

    Active Teachers: In FY02, increase the contribution from .5% of their salary to 0.65% effective January 1, 2002. In FY04, the contribution would increase to 0.75%.

    State: Match the increased active teacher contribution and in FY02, FY03 and in FY04, contribute an additional $2 million to TRIP.

    School Districts: In FY02, contribute .40% (effective January 1, 2002); in FY03, no increase; FY04, increase contribution to 0.50%. School districts may levy a tax to recover the cost on their new contribution for retired teachers health insurance by local referendum.

The plan calls for the Department of Central Management Services, which administers TRIP, to present to the Teachers’ Retirement System on April 15 of each year the rate-setting methodology used to determine the amount of the health care premiums.

The Governor’s TRIP Task Force—comprised of legislators, representatives from the Illinois Retired Teachers Association, the Illinois Education Association, the Illinois Federation of Teachers, the Illinois Association of School Boards, the Illinois Association of School Administrators and the Illinois Statewide School Management Alliance, along with representatives of the Department of Central Management Services, Teachers’ Retirement System, Bureau of the Budget, and the Governor’s Office—was charged to come up with funding solutions for the TRIP insolvency problem.

The Task Force was created in June after Governor Ryan announced he was cutting in half the proposed 45% premium increase retired Illinois teachers were scheduled to pay July 1, 2001.

Several organizations concerned with the insurance issue lauded the proposal.

“We are pleased Governor Ryan has taken on this issue to stave off a massive increase that our retired teachers were facing,” said Tim Lee, Executive Director of the Illinois Retired Teachers Association. “We look forward to continuing our discussions to find a long-term solution.”

Similar sentiments were expressed by the Illinois Education Association, with Ann Davis, President of the IEA, noting that, “This is a fair solution to have all parties contribute to ensure the health of the fund. It’s the right thing to do for the men and women who have served our state so loyally, educating our children.”

Steve Preckwinkle, Political Director for the Illinois Federation of Teachers, likewise applauded the efforts.

“By working together we’re able to make sure that the state can continue to provide health insurance for our retired teachers. We will continue to work together to find a long-term solution to this funding problem.”


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