Rep. Jay Hoffman

Filed: 4/24/2017

 

 


 

 


 
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1
AMENDMENT TO HOUSE BILL 2703

2    AMENDMENT NO. ______. Amend House Bill 2703 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Intergovernmental Cooperation Act is
5amended by changing Section 6 and by adding Section 6.5 as
6follows:
 
7    (5 ILCS 220/6)  (from Ch. 127, par. 746)
8    Sec. 6. Joint self-insurance. An intergovernmental
9contract may, among other undertakings, authorize public
10agencies to jointly self-insure and authorize each public
11agency member of the contract to utilize its funds to pay to a
12joint insurance pool its costs and reserves to protect, wholly
13or partially, itself or any public agency member of the
14contract against liability or loss in the designated insurable
15area.
16    A joint insurance pool shall have an annual audit performed

 

 

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1by an independent certified public accountant and shall file an
2annual audited financial report with the Director of Insurance
3no later than 150 days after the end of the pool's immediately
4preceding fiscal year. The Director of Insurance shall issue
5rules necessary to implement this audit and report requirement.
6The rule shall establish the due date for filing the initial
7annual audited financial report. Within 30 days after January
81, 1991, and within 30 days after each January 1 thereafter,
9public agencies that are jointly self-insured to protect
10against liability under the Workers' Compensation Act and the
11Workers' Occupational Diseases Act shall file with the Illinois
12Workers' Compensation Commission a report indicating an
13election to self-insure.
14    The joint insurance pool shall also annually file with the
15Director a statement of actuarial opinion that conforms to the
16Actuarial Standards of Practice issued by the Actuarial
17Standards Board. All statements of actuarial opinion shall be
18issued by an independent actuary who is an associate or fellow
19of the Casualty Actuarial Society or of the Society of
20Actuaries. The statement of actuarial opinion shall include a
21statement that the pool's reserves are calculated in accordance
22with sound loss-reserving standards and adequate for the
23payment of claims. This opinion shall be filed no later than
24150 days after the end of each fiscal year. The joint insurance
25pool shall be exempt from filing a statement of actuarial
26opinion by an independent actuary who is an associate or fellow

 

 

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1of the Casualty Actuarial Society or of the Society of
2Actuaries that the joint insurance pool's reserves are in
3accordance with sound loss-reserving standards and payment of
4claims for the primary level of coverage if the joint insurance
5pool files with the Director, by the reporting deadline, a
6statement of actuarial opinion from the provider of the joint
7pool's aggregate coverage, reinsurance, or other similar
8excess insurance coverage. Any statement of actuarial opinion
9must be prepared by an actuary who satisfies the qualification
10standards set forth by the American Academy of Actuaries to
11issue the opinion in the particular area of actuarial practice.
12    The Director may assess penalties against a joint insurance
13pool that fails to comply with the auditing, statement of
14actuarial opinion, and examination requirements of this
15Section in an amount equal to $500 per day for each violation,
16up to a maximum of $10,000 for each violation. The Director (or
17his or her staff) or a Director-selected independent auditor
18(or actuarial firm) that is not owned or affiliated with an
19insurance brokerage firm, insurance company, or other
20insurance industry affiliated entity may examine, as often as
21the Director deems advisable, the affairs, transactions,
22accounts, records, and assets and liabilities of each joint
23insurance pool that fails to comply with this Section. The
24joint insurance pool shall cooperate fully with the Director's
25representatives in all evaluations and audits of the joint
26insurance pool and resolve issues raised in those evaluations

 

 

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1and audits. The failure to resolve those issues may constitute
2a violation of this Section, and may, after notice and an
3opportunity to be heard, result in the imposition of penalties
4pursuant to this Section. No sanctions under this Section may
5become effective until 30 days after the date that a notice of
6sanctions is delivered by registered or certified mail to the
7joint insurance pool. The Director shall have the authority to
8extend the time for filing any statement by any joint insurance
9pool for reasons that he or she considers good and sufficient.
10    Notwithstanding any other provision of law, annual audited
11financial reports and statements of actuarial opinion filed
12under this Section with the Director of Insurance shall be
13available to the public for inspection and copying under the
14Freedom of Information Act.
15    If a joint insurance pool requires a member to submit
16written notice in order for the member to withdraw from a
17qualified pool, then the period in which the member must
18provide the written notice cannot be greater than 120 days,
19except that this requirement applies only to joint insurance
20pool agreements entered into, modified, or renewed on or after
21the effective date of this amendatory Act of the 98th General
22Assembly.
23    For purposes of this Section, "public agency member" means
24any public agency defined or created under this Act, any local
25public entity as defined in Section 1-206 of the Local
26Governmental and Governmental Employees Tort Immunity Act, and

 

 

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1any public agency, authority, instrumentality, council, board,
2service region, district, unit, bureau, or, commission, or any
3municipal corporation, college, or university, whether
4corporate or otherwise, and any other local governmental body
5or similar entity that is presently existing or created after
6the effective date of this amendatory Act of the 92nd General
7Assembly, whether or not specified in this Section. Only public
8agency members with tax receipts, tax revenues, taxing
9authority, or other resources sufficient to pay costs and to
10service debt related to intergovernmental activities described
11in this Section, or public agency members created by or as part
12of a public agency with these powers, may enter into contracts
13or otherwise associate among themselves as permitted in this
14Section.
15    No joint insurance pool or other intergovernmental
16cooperative offering health insurance shall interfere with the
17statutory obligation of any public agency member to bargain
18over or to reach agreement with a labor organization over a
19mandatory subject of collective bargaining as those terms are
20used in the Illinois Public Labor Relations Act. No
21intergovernmental contract of insurance offering health
22insurance shall limit the rights or obligations of public
23agency members to engage in collective bargaining, and it shall
24be unlawful for a joint insurance pool or other
25intergovernmental cooperative offering health insurance to
26discriminate against public agency members or otherwise

 

 

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1retaliate against such members for limiting their
2participation in a joint insurance pool as a result of a
3collective bargaining agreement.
4    It shall not be considered a violation of this Section for
5an intergovernmental contract of insurance relating to health
6insurance coverage, life insurance coverage, or both to permit
7the pool or cooperative, if a member withdraws employees or
8officers into a union-sponsored program, to re-price the costs
9of benefits provided to the continuing employees or officers
10based upon the same underwriting criteria used by that pool or
11cooperative in the normal course of its business, but no member
12shall be expelled from a pool or cooperative if the continuing
13employees or officers meet the general criteria required of
14other members.
15(Source: P.A. 98-504, eff. 1-1-14; 98-969, eff. 1-1-15.)
 
16    (5 ILCS 220/6.5 new)
17    Sec. 6.5. Joint self-insurance; workers' compensation.
18    (a) A joint insurance pool or other intergovernmental
19cooperative formed under Section 6 of this Act offering
20workers' compensation insurance coverage shall post on its
21website the bylaws of the pool or cooperative, articles of
22incorporation, and the compensation contract of the
23administrator, if any.
24    (b) Beginning January 1, 2018, each joint insurance pool or
25other intergovernmental cooperative formed under this Act

 

 

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1offering workers' compensation insurance coverage shall file a
2report concerning its workers' compensation insurance coverage
3during the immediately preceding fiscal year with the Director
4of Insurance at the time it files its annual audited financial
5report under Section 6 of this Act. The report shall be posted
6on the pool or cooperative's website. The report shall include,
7at a minimum, the following:
8        (1) the number and identity of all members
9    participating in the pool or cooperative's workers'
10    compensation coverage;
11        (2) the number of claims opened;
12        (3) the number of reported medical only claims;
13        (4) the number of contested claims;
14        (5) the number of claims for which the employee has
15    attorney representation;
16        (6) the number of claims with lost time and the number
17    of claims for which temporary total disability was paid;
18        (7) the number of claim adjusters employed to adjust
19    workers' compensation claims;
20        (8) the number of claims for which temporary total
21    disability was not paid within 14 days from the first full
22    day off, regardless of reason;
23        (9) the number of medical bills paid 60 days or later
24    from date of service and the average days paid on those
25    paid after 60 days for the previous calendar year;
26        (10) the gross contributions collected from its

 

 

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1    members for workers' compensation insurance coverage;
2        (11) the contribution rate paid by each member;
3        (12) the total amount billed to members for bill
4    review;
5        (13) the total amount charged to employers for any and
6    all managed care fees;
7        (14) the total amount paid for independent medical
8    exams;
9        (15) the total amount spent on in-house utilization
10    review;
11        (16) the total amount paid for outside utilization
12    review;
13        (17) the total fees paid to the administrator of the
14    pool or cooperative;
15        (18) the total amount of indemnity payments made;
16        (19) the total amount of medical payments made;
17        (20) the growth of total paid indemnity benefits by
18    temporary total disability, scheduled and non-scheduled
19    permanent partial disability, and total disability;
20        (21) the number of injured workers receiving wage loss
21    differential awards and the average wage loss differential
22    award payout;
23        (22) the aggregate growth of medical benefit payouts;
24    and
25        (23) the total compensation paid to each member of the
26    pool or cooperative's governing board.

 

 

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1    Notwithstanding any other provision of law, the Department
2of Insurance shall make the report available for public
3inspection or copying under the Freedom of Information Act.
4    (c) Any third-party, business entity providing
5administration of the workers' compensation joint pool or
6cooperative shall be licensed and subject to the same
7regulation as administrators under Article V ¾ of the Illinois
8Insurance Code.
9    (d) The Department of Insurance may adopt rules necessary
10to implement this Section.
 
11    Section 99. Effective date. This Act takes effect upon
12becoming law.".