HB3236 EngrossedLRB097 09331 AEK 49466 b

1    AN ACT concerning business.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by adding
5Section 44.1 as follows:
 
6    (215 ILCS 5/44.1 new)
7    Sec. 44.1. Health care cooperatives.
8    (a) In addition to all other provisions of this Article not
9in conflict with this Section, a company seeking to organize
10under this Article as a health care cooperative shall meet all
11of the following requirements:
12        (1) The company shall comply with all provisions
13    applicable to domestic mutual insurance companies under
14    this Code.
15        (2) The articles of incorporation of the company shall
16    demonstrate that the company is to be organized as a
17    nonprofit member corporation and that the governance of the
18    company shall be subject to a majority vote of all members.
19        (3) The activities of the company shall be limited to
20    the issuance of health care plans in the individual and
21    small group markets.
22        (4) Either the articles of incorporation or the bylaws
23    of the company shall incorporate ethics and conflict of

 

 

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1    interest standards and the governance requirements set
2    forth in Section 1322(c)(3)(C) of the federal Patient
3    Protection and Affordable Care Act.
4        (5) The company or a related entity or any predecessor
5    of either shall not have been a health insurance issuer on
6    July 16, 2009.
7        (6) The company shall not be sponsored by a State or
8    local government, any political subdivision thereof, or
9    any instrumentality of such government or political
10    subdivision.
11        (7) Excess surplus shall be used to lower premiums, to
12    improve benefits, or for other programs intended to improve
13    the quality of health care delivered to its members.
14        (8) No representative of a federal, State, or local
15    government, or any political instrumentality thereof, and
16    no representative of a company described in paragraph (5)
17    of subsection (a) of this Section may serve on the board of
18    directors of the company.
19    (b) Notwithstanding Section 37 of this Article, the
20corporate name of any organization seeking to organize under
21this Article as a health care cooperative need not contain the
22word "Mutual" but shall contain the phrase "Health Care
23Cooperative". The corporate name shall not be the same as, or
24deceptively similar to, the name of any domestic organization
25or of any foreign or alien organization authorized to transact
26business in this State.

 

 

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1    (c) A company seeking to be organized as a health care
2cooperative shall submit an application to the Director
3according to procedures and meeting such requirements as the
4Director shall adopt by rule. No company shall transact any
5business of insurance until it has received a certificate of
6authority as set forth in Section 51 of this Article.
 
7    Section 10. The Co-operative Act is amended by changing
8Section 22 and by adding Section 30 as follows:
 
9    (805 ILCS 310/22)  (from Ch. 32, par. 326)
10    Sec. 22. No corporation or association hereafter organized
11or doing business for profit in this State shall be entitled to
12use the term "Co-operative" as a part of its corporate or other
13business name or title unless it has complied with the
14provisions of this Act, except (1) a corporation organized
15under the Business Corporation Act of 1983 for the purpose of
16ownership or administration of residential property on a
17cooperative basis, or (2) a cooperative corporation organized
18under the General Not For Profit Corporation Act of 1986 or its
19predecessor or successor statutes, or (3) a domestic mutual
20insurance company licensed as a health care cooperative by the
21Director of Insurance under Article III of the Illinois
22Insurance Code. Any corporation or association violating the
23provision of this Section may be enjoined from doing business
24under such name at the instance of any shareholder of any

 

 

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1association or corporation organized under this Act.
2(Source: P.A. 95-368, eff. 8-23-07.)
 
3    (805 ILCS 310/30 new)
4    Sec. 30. Health benefit purchasing cooperative.
5    (a) Notwithstanding any other provisions of this Act,
6health benefit purchasing cooperatives may be organized by one
7or more persons under this Section in each of the geographic
8areas identified in subsection (l) of this Section.
9    (b) The purpose of a health benefit purchasing cooperative
10is to provide health care benefits for the individuals
11specified in subsection (i) of this Section, under a single
12group health care policy or plan through a contract between the
13health benefit purchasing cooperative and an insurer
14authorized to do health insurance business in this State.
15    (c) A health benefit purchasing cooperative shall be
16designed so that all of the following are accomplished:
17        (1) The members become better informed about health
18    care trends and cost increases.
19        (2) All members receive their health care benefits
20    under the group health care policy or plan negotiated under
21    subsection (i) of this Section.
22        (3) The members are actively engaged in designing
23    health care benefit options that are offered by the insurer
24    and that meet the needs of their community.
25        (4) The health insurance risk of all of the members is

 

 

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1    pooled.
2        (5) The members actively participate in health
3    improvement decisions for their community.
4    (d) The articles of a health benefit purchasing cooperative
5shall set forth the name and address of at least one
6incorporator who will act as the temporary board.
7    (e) Each health benefit purchasing cooperative shall be
8organized on a membership basis with no capital stock.
9    (f) Subject to subsection (g) of this Section, any person
10that does business in, is located in, has a principal office
11in, or resides in the geographic area in which a health benefit
12purchasing cooperative is organized, that meets the membership
13criteria established by the health benefit purchasing
14cooperative in its bylaws, and that pays the membership fee may
15be a member of the health benefit purchasing cooperative.
16    (g) A health benefit cooperative may limit membership of
17self-employed individuals through its membership criteria, but
18such criteria must be applied in the same manner to all
19self-employed individuals.
20    (h) Each health benefit purchasing cooperative shall file
21its membership criteria, as well as any amendments to the
22criteria, with the Director.
23    (i) The health care benefits offered by a health benefit
24purchasing cooperative shall be negotiated between the health
25benefit purchasing cooperative and the insurer and shall be
26offered in a single group health care policy or plan. The

 

 

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1insurer must offer coverage under the group health care policy
2or plan to all of the following:
3        (1) An individual who is a member, officer, or eligible
4    employee of a member of the health benefit purchasing
5    cooperative.
6        (2) A self-employed individual who is a member of the
7    health benefit purchasing cooperative.
8        (3) A dependent of an individual under subdivisions
9    (i)(1) and (2) who receives coverage.
10    (j) The contract between the health benefit purchasing
11cooperative and an insurer shall be for a term of 3 years. Upon
12enrollment in the insurer's group health care policy or plan,
13each member shall pay to the health benefit purchasing
14cooperative an amount determined by the health benefit
15purchasing cooperative that is not less than the member's
16applicable premium for the 36th month of coverage under the
17contract. If a member withdraws from the health benefit
18purchasing cooperative before the end of the contract term, the
19health benefit purchasing cooperative may retain, as a penalty,
20an amount specified by the health benefit purchasing
21cooperative that is not less than the premium that the member
22paid for the 36th month of coverage.
23    (k) Each health benefit purchasing cooperative shall
24submit to the Director all of the following:
25        (1) Annually, no later than September 30, a report on
26    the progress of the health benefit purchasing arrangement

 

 

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1    described in this Section and, to the extent possible, any
2    significant findings in the criteria under subdivision
3    (k)(2) of this Section.
4        (2) Within one year after the end of the term of the
5    contract under subsection (j) of this Section, a final
6    report that details significant findings from the project
7    and that includes, at a minimum, to the extent available,
8    information on all of the following:
9            (A) The extent to which the health benefit
10        purchasing arrangement had an impact on the number of
11        uninsured in the geographic area in which it operated.
12            (B) The effect on health care coverage premiums for
13        groups in the geographic area in which the health
14        benefit purchasing arrangement operated, including
15        groups other than the health benefit purchasing
16        cooperative.
17            (C) The degree to which health care consumers were
18        involved in the development and implementation of the
19        health benefit purchasing arrangement.
20    (l) The Director shall designate, by order, the geographic
21areas of the State in which health benefit purchasing
22cooperatives may be organized. A geographic area may overlap
23with one or more other geographic areas.
24    (m) As used in this Section, "Director" means the Director
25of the Department of Insurance.
 
26    Section 99. Effective date. This Act takes effect upon

 

 

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1becoming law.