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December 20, 2001

Governor Ryan Signs Legislation to Save Retired Teacher Insurance Plan
Legislature Passes Governor’s Plan, Huge Premium Increases Averted

SPRINGFIELD -- Governor George H. Ryan today signed a bill into law to save the state’s health insurance plan for Illinois’ 44,000 retired public school teachers and their dependents who faced the prospect of an 80 percent increase in premiums.

“This is a fair agreement where all involved parties share some of the burden in making sure this fund remains stable,” Gov. Ryan said. “Without this law retired teachers were facing an 80 percent increase in their premiums as of January first, something no one wanted to see happen.”

Governor Ryan’s TRIP task force, members of the Governor’s staff, the education community and the four legislative caucuses appointed last summer, developed the recommendations for the legislation which passed the General Assembly during the Fall Veto Session. The reforms included:

  • Increases to the premiums retirees pay will be capped at no greater than 10% in FY ’03 and 12% in FY ’04. Premiums were increased by 21% in June of this year.

  • Increased contribution by active teachers from 0.5% to 0.65% of their pay effective January 1, 2002 and an increase to 0.75% in FY ’04.

  • The state will match active teachers’ contributions in FY ’02, FY’03 and FY ’04. The state will also pay an additional $2 million per year in FY ’02, FY ’03 and FY ’04 to make up for past underestimation of the state’s contribution.

  • School districts, which previously did not contribute to TRIP, will contribute 0.4% of active teacher contributions effective January 1, 2002. In FY ’04 this amount will increase to 0.5% of active teacher contributions. School districts will be held harmless over the next 18 months by receiving a credit on their pension payments to the Teachers Retirement System, equal to their TRIP payments. The state will repay TRS for this credit over the next 40 years.

Senate Bill 1174 also calls for the creation of the Teacher Health Insurance Funding Task Force, a 23 member task force that will study the Teachers Health Insurance Security Fund, as well as the health benefit programs that receive money from that fund. The Task Force must present its findings to the Governor by April 1, 2002.

“We’re very glad that this was worked out,” said Blanche Erst, President of the Illinois Retired Teachers Association. “We hope that the Teacher Health Insurance Funding Task Force can come up with a long-term solution.”

SB 1174 goes into effect immediately and sunsets July 1, 2004, providing a 30-month remedy to the funding problems facing TRIP.

“We applaud the Governor’s support of the TRIP short-term solution and know that he will work hard to help us find a long-term fix for TRIP and the health insurance premium woes plaguing teachers and school employees,” said Anne Davis, President of the Illinois Education Association.

“We were able to make sure the state continues to provide health insurance for our retired teachers by working together,” said Steve Preckwinkle, Political Director for the Illinois Federation of Teachers. “We look forward to continue working together in the future to resolve this issue.”

SB 1174 was sponsored in the Senate by Senators Thomas Walsh (R-LaGrange Park), Denny Jacobs (D-East Moline), Vince Demuzio (D-Carlinville) and Adeline Geo-Karis (R-Zion). House Sponsors are Representatives Gary Hannig (D-Litchfield), William B. Black (R-Danville), Harold Murphy (D-Markham), Art Tenhouse (R-Liberty) and Mike Bost (R-Murphysboro).


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