Ill. Gov. Pat Quinn has signed legislation that extends retiree healthcare benefits for Chicago employees through 2016, a move that lays the groundwork for Mayor Rahm Emanuel’s plan to eventually eliminate the subsidies for many retirees as the city seeks to shed a rising expense.

Senate Bill 1584 extends the state law that currently provides for city subsidies to cover the healthcare costs for retirees and eligible beneficiaries who are not eligible for Medicare. The former law expired June 30 in conjunction with the expiration of a court settlement on the subject. Although the city can keep the benefits in place through 2016 the law does not require the city to do so at current levels.

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