100TH GENERAL ASSEMBLY
State of Illinois
2017 and 2018
HB4166

 

Introduced , by Rep. Gregory Harris

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Health Insurance Claims Assessment Act. Imposes an assessment of 1% on claims paid by a health insurance carrier or third-party administrator. Provides that the moneys received and collected under the Act shall be deposited into the Healthcare Provider Relief Fund and used solely for the purpose of funding Medicaid services provided under the medical assistance programs administered by the Department of Healthcare and Family Services.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB4166LRB100 15530 HLH 30577 b

1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the Health
5Insurance Claims Assessment Act.
 
6    Section 5. Definitions. As used in this Act:
7    "Carrier" or "insurer" means:
8        (1) a company authorized to do business in this State
9    or accredited by this State to issue policies of health or
10    dental insurance, including but not limited to,
11    self-insured plans, group health plans (as defined in
12    Section 607(1) of the Employee Retirement Income Security
13    Act of 1974), service benefit plans, managed care
14    organizations, pharmacy benefit managers, or other parties
15    that are by statute, contract, or agreement legally
16    responsible for payment of a claim for a health care item
17    or service;
18        (2) a group health plan sponsor, including, but not
19    limited to, one or more of the following:
20            (A) an employer if a group health plan is
21        established or maintained by a single employer;
22            (B) an employee organization if a plan is
23        established or maintained by an employee organization;

 

 

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1        and
2            (C) the association, committee, joint board of
3        trustees, or other similar group of representatives of
4        the parties that establish or maintain a plan if the
5        plan is established or maintained by 2 or more
6        employers or jointly by one or more employers and one
7        or more employee organizations.
8    "Claims-related expenses" means all of the following:
9        (1) cost containment expenses, including, but not
10    limited to, payments for utilization review, care or case
11    management, disease management, medication review
12    management, risk assessment, and similar administrative
13    services intended to reduce the claims paid for health and
14    medical services rendered to covered individuals by
15    attempting to ensure that needed services are delivered in
16    the most efficacious manner possible or by helping those
17    covered individuals maintain or improve their health;
18        (2) payments that are made to or by an organized group
19    of health and medical service providers in accordance with
20    managed care risk arrangements or network access
21    agreements, which payments are unrelated to the provision
22    of services to specific covered individuals; and
23        (3) general administrative expenses.
24    "Department" means the Department of Revenue.
25    "Excess loss" or "stop-loss" means coverage issued by a
26carrier that provides insurance protection against the

 

 

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1accumulation of total claims exceeding a stated level for a
2group as a whole or protection against a high-dollar claim on
3any one individual.
4    "Federal employee health benefit program" means the
5program of health benefits plans, as defined in 5 U.S.C. 8901,
6available to federal employees under 5 U.S.C. 8901 to 8914.
7    "Group health plan" means an employee welfare benefit plan
8as defined in Section 3(1) of Subtitle A of Title I of the
9Employee Retirement Income Security Act of 1974, to the extent
10that the plan provides medical care, including items and
11services paid for as medical care to employees or their
12dependents as defined under the terms of the plan directly or
13through insurance, reimbursement, or otherwise.
14    "Group insurance coverage" means a form of voluntary health
15and medical services insurance that covers members, with or
16without their eligible dependents, and that is written under a
17master policy.
18    "Health and medical services" means:
19        (1) services included in furnishing medical care,
20    dental care, pharmaceutical benefits, or hospitalization,
21    including, but not limited to, services provided in a
22    hospital or other medical facility;
23        (2) ancillary services, including, but not limited to,
24    ambulatory services and emergency and nonemergency
25    transportation;
26        (3) services provided by a physician or other

 

 

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1    practitioner, including, but not limited to, health
2    professionals, other than veterinarians, marriage and
3    family therapists, athletic trainers, massage therapists,
4    and licensed professional counselors; and
5        (4) behavioral health services, including, but not
6    limited to, mental health and substance abuse services.
7    "Paid claims" means actual payments, net of recoveries,
8made to a health and medical services provider or reimbursed to
9an individual by a carrier, third-party administrator, or
10excess loss or stop-loss carrier. "Paid claims" include
11payments, net of recoveries, made under a service contract for
12administrative services only, for health and medical services
13provided under group health plans, any claims for service in
14this State by a pharmacy benefits manager, and individual,
15nongroup, and group insurance coverage to residents of this
16State in this State that affect the rights of an insured in
17this State and bear a reasonable relation to this State,
18regardless of whether the coverage is delivered, renewed, or
19issued for delivery in this State. If a carrier or a
20third-party administrator is contractually entitled to
21withhold a certain amount from payments due to providers of
22health and medical services in order to help ensure that the
23providers can fulfill any financial obligations they may have
24under a managed care risk arrangement, the full amounts due the
25providers before that amount is withheld shall be included in
26"paid claims". The term "paid claims" includes claims or

 

 

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1payments made under any federally-approved waiver or
2initiative to integrate Medicare and Medicaid funding for dual
3eligibles under the federal Patient Protection and Affordable
4Care Act or the federal Healthcare and Education Reconciliation
5Act of 2010. The term "paid claims" does not include any of the
6following:
7        (1) Claims-related expenses.
8        (2) Payments made to a qualifying provider under an
9    incentive compensation arrangement if the payments are not
10    reflected in the processing of claims submitted for
11    services rendered to specific covered individuals.
12        (3) Claims paid by carriers or third-party
13    administrators for specified accident, accident-only
14    coverage, credit, disability income, long-term care,
15    health-related claims under automobile insurance,
16    homeowners insurance, farm owners, commercial multi-peril,
17    and worker's compensation, or claims paid under coverage
18    issued as a supplement to liability insurance.
19        (4) Claims paid for services rendered to a nonresident
20    of this State.
21        (5) The proportionate share of claims paid for services
22    rendered to a person covered under a health benefit plan
23    for federal employees.
24        (6) Claims paid for services rendered outside of this
25    State to a person who is a resident of this State.
26        (7) Claims paid under a federal employee health benefit

 

 

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1    program, Medicare, Medicare Advantage, Medicare Part D,
2    Tricare, by the United States Veterans Administration, and
3    for high-risk pools established pursuant to the federal
4    Patient Protection and Affordable Care Act or the federal
5    Healthcare and Education Reconciliation Act of 2010.
6        (8) Reimbursements to individuals under a flexible
7    spending arrangement, as that term is defined in Section
8    106(c)(2) of the Internal Revenue Code; a health savings
9    account, as that term is defined in Section 223 of the
10    Internal Revenue Code; an Archer medical savings account as
11    defined in Section 220 of the Internal Revenue Code; a
12    Medicare Advantage medical savings account, as that term is
13    defined in Section 138 of the Internal Revenue Code; or
14    other similar health reimbursement arrangement authorized
15    under federal law.
16        (9) Health and medical services costs paid by an
17    individual for cost-sharing requirements, including
18    deductibles, coinsurance, or copays.
19    "Third-party administrator" means an entity that processes
20claims under a service contract and that may also provide one
21or more other administrative services under a service contract.
 
22    Section 10. Assessment; levy; limitation; adjustment;
23credit; notice; carrying forward unused credit; refund.
24    (a) For dates of service beginning on or after January 1,
252018, there is levied upon and there shall be collected from

 

 

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1every carrier and third-party administrator an assessment of 1%
2on that carrier's or third-party administrator's paid claims.
3    (b) All of the following apply to a group health plan that
4uses the services of a third-party administrator or excess loss
5or stop-loss insurer:
6        (1) A group health plan sponsor is not responsible for
7    an assessment under this Section for a paid claim if the
8    assessment on that claim has been paid by a third-party
9    administrator or excess loss or stop-loss insurer.
10        (2) Except as otherwise provided in paragraph (4), the
11    third-party administrator is responsible for all
12    assessments on paid claims paid by the third-party
13    administrator.
14        (3) Except as otherwise provided in paragraph (4), the
15    excess loss or stop-loss insurer is responsible for all
16    assessments on paid claims paid by the excess loss or
17    stop-loss insurer.
18        (4) If there is both a third-party administrator and an
19    excess loss or stop-loss insurer servicing the group health
20    plan, the third-party administrator is responsible for all
21    assessments for paid claims that are not reimbursed by the
22    excess loss or stop-loss insurer and the excess loss or
23    stop-loss insurer is responsible for all assessments for
24    paid claims that are reimbursable to the excess loss or
25    stop-loss insurer.
26    (c) The assessment under this Section shall not exceed

 

 

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1$10,000 per insured individual or covered life annually.
2    (d) To the extent an assessment paid under this Section for
3paid claims for a group health plan or individual subscriber is
4inaccurate due to subsequent claim adjustments or recoveries,
5subsequent filings shall be adjusted to accurately reflect the
6correct assessment based on actual claims paid.
 
7    Section 15. Carrier required to file rates; methodology. A
8carrier or third-party administrator shall develop and
9implement a methodology by which it will collect the assessment
10levied under this Act from an individual, employer, or group
11health plan, subject to all of the following:
12        (1) Any methodology shall be applied uniformly within a
13    line of business.
14        (2) Except as provided in paragraph (4), health status
15    or claims experience of an individual or group shall not be
16    an element or factor of any methodology to collect the
17    assessment from that individual or group.
18        (3) The amount collected from individuals and groups
19    with insured coverage shall be determined as a percentage
20    of premium.
21        (4) The amount collected from groups with uninsured or
22    self-funded coverage shall be determined as a percentage of
23    actual paid claims.
24        (5) The amount collected shall reflect only the
25    assessment levied under this Act, and shall not include any

 

 

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1    additional amounts, such as related administrative
2    expenses.
3        (6) Each carrier shall notify the Department of the
4    methodology used for the collection of the assessment
5    levied under this Act.
 
6    Section 20. Returns.
7    (a) Every carrier and third-party administrator with paid
8claims subject to the assessment under this Act shall file with
9the Department on or before April 30, July 30, October 30, and
10January 30 of each year a return for the preceding calendar
11quarter, in a form prescribed by the Department, showing all
12information that the Department considers necessary for the
13proper administration of this Act. At the same time, each
14carrier and third-party administrator shall pay to the
15Department the amount of the assessment imposed under this Act
16with respect to the paid claims included in the return. The
17Department may require each carrier and third-party
18administrator to file with the Department an annual
19reconciliation return.
20    (b) If a due date falls on a Saturday, Sunday, State
21holiday, or legal banking holiday, the returns and assessments
22are due on the next succeeding business day.
23    (c) The Department may require that payment of the
24assessment be made by an electronic funds transfer method
25approved by the Department.
 

 

 

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1    Section 25. Records.
2    (a) Each carrier or third-party administrator liable for an
3assessment under this Act shall keep accurate and complete
4records and pertinent documents as required by the Department.
5Records required by the Department shall be retained for a
6period of 4 years after the assessment imposed under this Act
7to which the records apply is due or as otherwise provided by
8law.
9    (b) If the Department considers it necessary, the
10Department may require a person, by notice served upon that
11person, to make a return, render under oath certain statements,
12or keep certain records the Department considers sufficient to
13show whether that person is liable for the assessment under
14this Act.
15    (c) If a carrier or third-party administrator fails to file
16a return or keep proper records as required under this Section,
17or if the Department has reason to believe that any records
18kept or returns filed are inaccurate or incomplete and that
19additional assessments are due, the Department may assess the
20amount of the assessment due from the carrier or third-party
21administrator based on information that is available or that
22may become available to the Department. An assessment under
23this subsection (c) is considered prima facie correct under
24this Act, and a carrier or third-party administrator has the
25burden of proof for refuting the assessment.
 

 

 

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1    Section 30. Distribution of receipts; Medicaid services.
2All moneys received and collected under this Act shall be
3deposited into the Healthcare Provider Relief Fund and used
4solely for the purpose of funding Medicaid services provided
5under the medical assistance programs administered by the
6Department of Healthcare and Family Services.