When the Director, with the advice and consent of the Commission, determines that it would be in the best interests of the State and its employees, any program of health benefits under this Act may be administered with the State as a self-insurer in whole or in part. The State assumes the risks of any such program. The State may provide the administrative services in connection with any self-insurance health plan or purchase administrative services from an administrative service organization. A plan of self-insurance may combine forms of re-insurance or stop-loss insurance which limits the amount of State liability.
     The program of health benefits shall provide a continuation and conversion privilege for persons whose State employment is terminated and a continuation privilege for members’ spouses and dependent children who are covered under the provisions of the program, consistent with the requirements of federal law and Sections 367.2, 367e, and 367e.1 of the Illinois Insurance Code.