Municipal Employee's Health Insurance Continuation

Illinois Insurance Facts
Municipal Employee's Health Insurance Continuation

October 2003

If you participate in the Illinois Municipal Retirement Fund (IMRF), and you retire or become disabled, you may be able to continue your health insurance coverage under the Municipal Employee's Continuance Privilege law (215 ILCS 5/367j). This Fact Sheet provides specific information regarding the law.

What Is Municipal Continuation Coverage?

Municipal Continuation coverage must be offered to you and your eligible dependents who were covered under your group coverage on the day before your retirement or disability period began. The retirement or disability period begins on the day you are removed from the municipality's payroll for any of the following reasons:

You retire from active service and are immediately eligible for an IMRF pension (40 ILCS 5/7-101). You are not required to actually begin the pension, but must be eligible to immediately receive the pension on the date of termination;
You are eligible to receive an IMRF disability benefit;
You are an IMRF SLEP (Sheriff Law Employment Personnel) participant who terminates employment (at any age) with at least 20 years of SLEP credit.

NOTE: If you lose your health insurance coverage for other reasons, you may be eligible to continue coverage under COBRA, Illinois Continuation or Illinois Spousal Continuation.

What Are the Notification Requirements?

The insurance company or the municipality (if the municipality is self-insured) must notify you in writing of your right to continue your health insurance.

You should receive this notice within thirty days after your retirement or disability period begins.
Notification should include an election form, instructions on the return of the election form and the amount of premium you must pay in order to continue your health insurance.
You must elect municipal continuation coverage within 15 days after receiving the notice.

How Much Will Municipal Continuation Coverage Cost?

The premium for Municipal Continuation coverage for you, your spouse and dependent children may not exceed that of the group rate. The municipality is not required by law to pay any portion of the continuation premium. However, a collective bargaining agreement may contain terms for such an arrangement.

What Benefits Are Available With Municipal Continuation Coverage?

Benefits must be the same as they were under your previous group coverage. However, if you are Medicare eligible, you may be provided with a reduced benefit plan, even if you do not elect Medicare Part B. Be sure you understand your options under Parts A & B of Medicare. Do not waive Part B Medicare unless you are absolutely certain that your Municipal Continuation coverage will provide you with full coverage. Please contact our Senior Health Insurance Program at (800) 548-9034 prior to making any decisions regarding your Medicare Coverage. If you waive Medicare Part B coverage, there may be consequences, such as a reduced benefit under the Municipal Continuation coverage or a higher premium for Medicare Part B if you decide to buy it at a later date.

How Long Does Municipal Continuation Coverage Last?

Municipal Continuation coverage must be provided until the end of your retirement or disability period, as long as you pay premiums. The retirement or disability period ends when any of the following events occur:

You return to IMRF covered employment;
You take a refund of IMRF contributions;
You lose your pension or disability benefits due to conviction of a job-related felony;
You die;
Your former employer terminates health coverage for all employees (both active employees and those on continuation).

If your surviving spouse is entitled to receive a surviving spouse's monthly pension, Municipal Continuation coverage must be provided to your spouse and covered dependents without further election upon the timely payment of required premiums. The eligibility for the surviving spouse ends upon the death or remarriage of that spouse. Continuation for covered dependents end on the date it would have otherwise ended (such as attainment of the limiting age).

What Happens If I Am Covered By Medicare?

You are still entitled to elect or continue your Municipal Continuation coverage even if you become eligible for Medicare. However, the plan may reduce its benefits for individuals who are eligible for Medicare, even if you do not elect Medicare. It is very important that you explore all options when you become eligible for Medicare. Do Not Waive Medicare Part B unless you are absolutely certain your Municipal Continuation coverage will provide full coverage to you. Please contact our Senior Health Insurance Program at (800) 548-9034 prior to making any decisions regarding your Medicare coverage. If you waive Medicare Part B Coverage, there may be consequences, such as a reduced benefit under the Municipal Continuation coverage or a higher premium for Medicare Part B if you decide to buy it at a later date.

How Does COBRA Affect Municipal Continuation?

For employers with 20 or more employees, federal COBRA continuation must be offered as well as the Municipal Continuation. You should review both options; you may choose only one option. Please review our COBRA Fact Sheet for more information regarding that option. If you choose COBRA, you cannot select Municipal Continuation after your COBRA continuation expires.

For More Information

Call our Consumer Services Section at (312) 814-2427 or
our Office of Consumer Health Toll Free at (877) 527-9431
or visit us on our website at Division of Insurance

To find out if your employer is covered under the Illinois Municipal Retirement Fund or for questions regarding qualifications for IMRF pension or disability benefits, deduction of premiums, or the amount of your IMRF benefit, please contact the Illinois Municipal Retirement Fund at (800) 275-4673.

For copies of the Municipal Employee's Continuance Privilege and the Illinois Municipal Retirement Fund laws, click on the links below.

Municipal Employee's Continuance Privilege law: 215 ILCS 5/367j.

Illinois Municipal Retirement Fund law: 40 ILCS 5/7-101.

Illinois Insurance Facts Municipal Employee's Health Insurance Continuation