What’s THIS? Illinois hasn’t paid its health care bill for retired teachers in 17 months. Rauner wants the payments to stop entirely.

99problems

There is trouble in Illinois for retired teachers health care benefits.

1) Governor Rauner wants to end state subsidies to retired teacher health insurance.

2) Comptroller Susan Mendoza hasn’t made the payments for 17 months.

Governor Rauner wants to cut the state subsidy to retired teacher health insurance entirely.  Some of you may think that retired teachers don’t pay anything for their state health insurance. While that is true for some state employees, it is not true for teachers.

The Teacher Retirement Insurance Program (TRIP) is paid for out of the Teacher Health Insurance System (THIS).

Active teachers may see THIS in the list of their paycheck deductions and may not know what it is. Active teachers pay into the insurance bucket called THIS.

Also paying into the THIS bucket are school districts, the feds and the state of Illinois. The state subsidy is supposed to match the retiree payment.  Rauner wants to end the state subsidy.

The Illinois Supreme Court has already ruled that public employee pension benefits cannot be reduced or impaired. And in the Kanerva decision the courts ruled that health care benefits were a part of pension benefits and were also protected from reduction or impairment.

Unknown to us until a few days ago is that the state of Illinois simply hasn’t paid their legally required contribution into the THIS bucket.

They haven’t paid it for a year and a half.

Mendoza just told us.

That would be $10 million a month.

Our lawyers believe that this is a violation of the pension protection clause if it impacts payments to our health care providers.

So here are the questions:

Will the state pay back the $170 million in payments they have missed?

How many more months will Comptroller Susan Mendoza, a Democrat, skip making the state’s payment into THIS?

Is the shortfall currently affecting retirees? Has any retired teacher been asked to pay their health care provider for services up front because the state won’t pay the bill?

If that has happened to you, the state is in violation of the pension protection clause and IRTA wants to know.

10 Replies to “What’s THIS? Illinois hasn’t paid its health care bill for retired teachers in 17 months. Rauner wants the payments to stop entirely.”

  1. Every dentist I have talked to wants payment up front for any TRS, SURS, or SERS retiree. Some doctors only take certain insurance plans, and the state non-Medicare is not accepted. The state Medicare advantage PPO is accepted so far because the insurance company is paying the bills promptly even though the state is behind in paying the insurance company.

  2. It’s inconvenient for the governor to continue to honor obligations to people who haven’t done anything for him lately, no matter the level of service they once provided. Sad state of affairs (pun intended).

  3. As I recover from open-heart surgery, I am thankful that my tutoring and realtor income, which I separately paid into Medicare and SS, made me eligible for Medicare coverage. My good wife was responsible for insisting that I do this. Prior to my retirement Illinois MANDATED that teachers must pay into the state retirement system (9.4% of gross income) and pay separately ($1,250 per month for family coverage) healthcare program.
    The doctors in my area are known for refusing payments from public employee retirees’ insurance programs from various states and cities. (Philadelphia, Detroit, Arizona, etc.)

  4. Perhaps I’m in error, but there does not appear to be a law requiring the legislature to pay $$ to the system to provide health insurance, and no law requiring payments to TRS. (which might explain the pension payment and insurance payment “holidays”). Just a law that says the pensions, COLAs and Heath insurance cannot be altered downward by some new law. No $$ equals what? No nothing. When will active teachers take action to help prevent this? Soon? Later? Too late?

    1. I believe the courts do not support your assumptions. In Kanerva they ruled pension benefits must be paid. If teachers do not receive the subsidy and medical bills are not paid we will file suit and win again.

  5. Suits filed and suits won do not turn into revenues. They do, however, generate legal fees for lawyers and legal costs for the pension funds or the state and cities (etc.) that are defaulting. The suggested approach will result in earlier depletion of the funds previously set aside. As you know, those funds are currently diminishing faster than they are being replenished (A.K.A. the leaking bucket). Apart from graduated income tax and increasing property taxes, do you think there is any solution? Obviously, the governmental entities could cut spending in other areas. What areas do you suggest? Health, welfare, highways, salaries of government workers, medical/dental reimbursements for pensioners? Would you support a constitutional amendment declaring that these various other state services are “contract rights?” I think by now people understand the problem. We need some clever solutions from those who’ve been looking at the data.

      1. Does it follow that if revenues aren’t raised then bills won’t be paid and cuts will occur anyway? That sounds like Studebaker and Toys-R-Us and Puerto Rico. Apart from taxing rich peoples’ income and taxing their property the only other solution I can think of is taking whatever other wealth they have. Google “wealth tax.” There’s a “due process” issue of course. State governments can’t impair contracts. How about the contract between you and your bank? Can the state confiscate 50% of everyone’s bank account? As you’ve noted elsewhere, Jeff Bezos is fighting a similar tax in Seattle (a tax on the “privilege” of hiring workers). It gets back to some earlier questions about how far we can or should go. We ration water during droughts. We give elders preference on flu vaccines. Disabled people have preferred seating on busses. I think you or somebody needs to articulate why pensions must be paid instead of keeping fire fighters on the job. When reality is limited resources, “must” essentially means “me first” and few fail to see the true import of your position.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s