iLvl is not associated with the player level, it's just common for the iLvL of gear to go up as you obtain higher level gear. They have the ability to implement an i110 piece useable for lvl 1 players if they wish, it just doesn't make any sense to have such a thing in the game.

For the level raise, they can simply add new piece of gear that have higher level requirements but still match the iLvL of existing gear.
Example:
lvl 51 gear can revolve around i70
lvl 52 -> i90
lvl 53 -> 110
lvl 54 -> 130
lvl 55 -> 150+

Basically what this means is that if you are sitting at 110 gear right now, you will either find some i130 gear for lvl 50 in Coil3 or level to 54 and pick up some of that gear when a level cap is raised. Both pieces will be equivalent in stats but it will be much much easier to access the level appropriate piece in the long run.