Legal updates

August 31, 2023

On July 28, 2023, Governor Pritzker signed into law an amendment to the Public Safety Employee Benefits Act (“PSEBA”), which (depending on one’s interpretation) may make it more difficult to create and impose low-cost basic health insurance plans for PSEBA recipients. Historically, it has been quite common for Illinois public employers to designate the specific health insurance plan option in which PSEBA recipients are entitled to participate on a cost-free basis. Often called “basic plans,” these health insurance options typically cost less than other plan options (e.g., due to higher deductibles). In some cases, public employers have been able to negotiate via a collective bargaining agreement the “basic plan” option that disabled police and fire personnel will receive free-of-charge.

Public Act 103-0340 (which takes effect on January 1, 2024), may change this “basic plan” flexibility with the following language:

An individual whose entire premium is paid in accordance with this Section shall be offered by the employer the choice of any health insurance plan available to currently employed full-time law enforcement, correctional or correctional probation officers, or firefighters. For purposes of plans administered under the State Employee Group Insurance Act of 1971, changes in coverage may only be elected during open enrollment or following a qualifying event.

820 ILCS 320/10(a). Based on this plain language, a PSEBA recipient is entitled to participate in any health insurance plan option that is offered to current law enforcement or fire personnel. This is true even if that plan option has not been formally designated as a “basic plan.”

More insight into the legislature’s intent presumably will be gleaned once the legislative comments about the underlying bill have been made publicly available. Until that occurs, public employers should consult with legal counsel to determine what (if any) steps need to be taken in anticipation of the amendment taking effect on January 1, 2024. Among other things, employers with unionized police and fire personnel may want to consider strategies that can be pursued at the bargaining table to address the potential impact of Public Act 103-0340.

Please feel free to contact a Clark Baird Smith LLP attorney for more information about this PSEBA amendment.