Rep. JoAnn D. Osmond

Filed: 11/7/2011

 

 


 

 


 
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1
AMENDMENT TO SENATE BILL 1313

2    AMENDMENT NO. ______. Amend Senate Bill 1313 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Health Benefits Exchange Law is
5amended by changing Sections 5-3, 5-5, 5-15, and 5-25 and by
6adding Sections 5-4, 5-16, and 5-21 as follows:
 
7    (215 ILCS 122/5-3)
8    Sec. 5-3. Legislative intent. The General Assembly finds
9the health benefits exchanges authorized by the federal Patient
10Protection and Affordable Care Act represent one of a number of
11ways in which the State can address coverage gaps and provide
12individual consumers and small employers access to greater
13coverage options. The General Assembly also finds that the
14State is best positioned to implement an exchange that is
15sensitive to the coverage gaps and market landscape unique to
16this State.

 

 

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1    The purpose of this Law is to provide for the establishment
2of an Illinois Health Benefits Exchange (the Exchange) to
3facilitate the purchase and sale of qualified health plans and
4qualified dental plans in the individual market in this State
5and to provide for the establishment of a Small Business Health
6Options Program (SHOP Exchange) to assist qualified small
7employers in this State in facilitating the enrollment of their
8employees in qualified health plans and qualified dental plans
9offered in the small group market. The intent of the Exchange
10is to supplement the existing health insurance market to
11simplify shopping for individual and small employers by
12increasing access to benefit options, encouraging a robust and
13competitive market both inside and outside the Exchange,
14reducing the number of uninsured, and providing a transparent
15marketplace and effective consumer education and programmatic
16assistance tools. The purpose of this Law is to ensure that the
17State is making sufficient progress towards establishing an
18exchange within the guidelines outlined by the federal law and
19to protect Illinoisans from undue federal regulation. Although
20the federal law imposes a number of core requirements on
21state-level exchanges, the State has significant flexibility
22in the design and operation of a State exchange that make it
23prudent for the State to carefully analyze, plan, and prepare
24for the exchange. The General Assembly finds that in order for
25the State to craft a tenable exchange that meets the
26fundamental goals outlined by the Patient Protection and

 

 

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1Affordable Care Act of expanding access to affordable coverage
2and improving the quality of care, the implementation process
3should (1) provide for broad stakeholder representation; (2)
4foster a robust and competitive marketplace, both inside and
5outside of the exchange; and (3) provide for a broad-based
6approach to the fiscal solvency of the exchange.
7(Source: P.A. 97-142, eff. 7-14-11.)
 
8    (215 ILCS 122/5-4 new)
9    Sec. 5-4. Definitions. In this Law:
10    "Board" means the Illinois Health Benefits Exchange Board
11established pursuant to this Law.
12    "Director" means the Director of Insurance.
13    "Educated health care consumer" means an individual who is
14knowledgeable about the health care system, and has background
15or experience in making informed decisions regarding health,
16medical, and scientific matters.
17    "Essential health benefits" has the meaning provided under
18Section 1302(b) of the Federal Act.
19    "Exchange" means the Illinois Health Benefits Exchange
20established by this Law and includes the Individual Exchange
21and the SHOP Exchange, unless otherwise specified.
22    "Executive Director" means the Executive Director of the
23Illinois Health Benefits Exchange.
24    "Federal Act" means the federal Patient Protection and
25Affordable Care Act (Public Law 111-148), as amended by the

 

 

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1federal Health Care and Education Reconciliation Act of 2010
2(Public Law 111-152), and any amendments thereto, or
3regulations or guidance issued under, those Acts.
4    "Health benefit plan" means a policy, contract,
5certificate, or agreement offered or issued by a health carrier
6to provide, deliver, arrange for, pay for, or reimburse any of
7the costs of health care services. "Health benefit plan" does
8not include:
9        (1) coverage for accident only or disability income
10    insurance or any combination thereof;
11        (2) coverage issued as a supplement to liability
12    insurance;
13        (3) liability insurance, including general liability
14    insurance and automobile liability insurance;
15        (4) workers' compensation or similar insurance;
16        (5) automobile medical payment insurance;
17        (6) credit-only insurance;
18        (7) coverage for on-site medical clinics; or
19        (8) other similar insurance coverage, specified in
20    federal regulations issued pursuant to Public Law 104-191,
21    under which benefits for health care services are secondary
22    or incidental to other insurance benefits.
23    "Health benefit plan" does not include the following
24benefits if they are provided under a separate policy,
25certificate, or contract of insurance or are otherwise not an
26integral part of the plan:

 

 

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1        (a) limited scope dental or vision benefits;
2        (b) benefits for long-term care, nursing home care,
3    home health care, community-based care, or any combination
4    thereof; or
5        (c) other similar, limited benefits specified in
6    federal regulations issued pursuant to Public Law 104-191.
7    "Health benefit plan" does not include the following
8benefits if the benefits are provided under a separate policy,
9certificate, or contract of insurance, there is no coordination
10between the provision of the benefits and any exclusion of
11benefits under any group health plan maintained by the same
12plan sponsor, and the benefits are paid with respect to an
13event without regard to whether benefits are provided with
14respect to such an event under any group health plan maintained
15by the same plan sponsor:
16        (i) coverage only for a specified disease or illness;
17    or
18        (ii) hospital indemnity or other fixed indemnity
19    insurance.
20    "Health benefit plan" does not include the following if
21offered as a separate policy, certificate, or contract of
22insurance:
23        (A) Medicare supplemental health insurance as defined
24    under Section 1882(g)(1) of the federal Social Security
25    Act;
26        (B) coverage supplemental to the coverage provided

 

 

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1    under Chapter 55 of Title 10, United States Code (Civilian
2    Health and Medical Program of the Uniformed Services
3    (CHAMPUS)); or
4        (C) similar supplemental coverage provided to coverage
5    under a group health plan.
6    "Health benefit plan" does not include a group health plan
7or multiple employer welfare arrangement to the extent the plan
8or arrangement is not subject to State insurance regulation
9under Section 514 of the federal Employee Retirement Income
10Security Act of 1974.
11    "Health carrier" or "carrier" means an entity subject to
12the insurance laws and regulations of this State, or subject to
13the jurisdiction of the Director, that contracts or offers to
14contract to provide, deliver, arrange for, pay for, or
15reimburse any of the costs of health care services, including a
16sickness and accident insurance company, a health maintenance
17organization, a nonprofit hospital and health service
18corporation, or any other entity providing a plan of health
19insurance, health benefits or health services.
20    "Individual Exchange" means the exchange marketplace
21established by this Law through which qualified individuals may
22obtain coverage through an individual market qualified health
23plan.
24    "Principal place of business" means the location in a state
25where an employer has its headquarters or significant place of
26business and where the persons with direction and control

 

 

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1authority over the business are employed.
2    "Qualified dental plan" means a limited scope dental plan
3that has been certified in accordance with this Law.
4    "Qualified employee" means an eligible individual employed
5by a qualified employer who has been offered health insurance
6coverage by that qualified employer through the SHOP on the
7Exchange.
8    "Qualified employer" means a small employer that elects to
9make its full-time employees eligible for one or more qualified
10health plans or qualified dental plans offered through the SHOP
11Exchange, and at the option of the employer, some or all of its
12part-time employees, provided that the employer has its
13principal place of business in this State and elects to provide
14coverage through the SHOP Exchange to all of its eligible
15employees, wherever employed.
16    "Qualified health plan" or "QHP" means a health benefit
17plan that has in effect a certification that the plan meets the
18criteria for certification described in Section 1311(c) of the
19Federal Act.
20    "Qualified health plan issuer" or "QHP issuer" means a
21health insurance issuer that offers a health plan that the
22Exchange has certified as a qualified health plan.
23    "Qualified individual" means an individual, including a
24minor, who:
25        (1) is seeking to enroll in a qualified health plan or
26    qualified dental plan offered to individuals through the

 

 

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1    Exchange;
2        (2) resides in this State;
3        (3) at the time of enrollment, is not incarcerated,
4    other than incarceration pending the disposition of
5    charges; and
6        (4) is, and is reasonably expected to be, for the
7    entire period for which enrollment is sought, a citizen or
8    national of the United States or an alien lawfully present
9    in the United States.
10    "Secretary" means the Secretary of the federal Department
11of Health and Human Services.
12    "SHOP Exchange" means the Small Business Health Options
13Program established under this Law through which a qualified
14employer can provide small group qualified health plans to its
15qualified employees.
16    "Small employer" means, in connection with a group health
17plan with respect to a calendar year and a plan year, an
18employer who employed an average of at least 2 but not more
19than 50 employees on business days during the preceding
20calendar year and who employs at least one employee on the
21first day of the plan year. Beginning January 1, 2016, the
22definition of a "small employer" shall mean, in connection with
23a group health plan with respect to a calendar year and a plan
24year, an employer who employed an average of at least 2 but not
25more than 100 employees on business days during the preceding
26calendar year and who employs at least one employee on the

 

 

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1first day of the plan year. For purposes of this definition:
2        (a) all persons treated as a single employer under
3    subsection (b), (c), (m) or (o) of Section 414 of the
4    federal Internal Revenue Code of 1986 shall be treated as a
5    single employer;
6        (b) an employer and any predecessor employer shall be
7    treated as a single employer;
8        (c) employees shall be counted in accordance with
9    federal law and regulations and State law and regulations;
10        (d) if an employer was not in existence throughout the
11    preceding calendar year, then the determination of whether
12    that employer is a small employer shall be based on the
13    average number of employees that is reasonably expected
14    that employer will employ on business days in the current
15    calendar year; and
16        (e) an employer that makes enrollment in qualified
17    health plans or qualified dental plans available to its
18    employees through the SHOP Exchange, and would cease to be
19    a small employer by reason of an increase in the number of
20    its employees, shall continue to be treated as a small
21    employer for purposes of this Law as long as it
22    continuously makes enrollment through the SHOP Exchange
23    available to its employees.
 
24    (215 ILCS 122/5-5)
25    Sec. 5-5. Establishment of the Exchange State health

 

 

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1benefits exchange.
2    (a) It is declared that this State, beginning October 1,
32013, in accordance with Section 1311 of the federal Patient
4Protection and Affordable Care Act, shall establish a State
5health benefits exchange to be known as the Illinois Health
6Benefits Exchange in order to help individuals and small
7employers with no more than 50 employees shop for, select, and
8enroll in qualified, affordable private health plans that fit
9their needs at competitive prices. The Exchange shall separate
10coverage pools for individuals and small employers and shall
11supplement and not supplant any existing private health
12insurance market for individuals and small employers.
13    (b) There is hereby created and established an independent,
14non-profit entity formed and organized under the laws of the
15State named the Illinois Health Benefits Exchange. The Exchange
16shall be a public entity, but shall not be considered a
17department, institution, or agency of the State.
18    (c) The Exchange shall be comprised of an individual and a
19small business health options (SHOP) exchange. Pursuant to
20Section 1311(b)(2) of the Federal Act, the Exchange shall
21provide individual exchange services to qualified individuals
22and SHOP exchange services to qualified employers under a
23single governance and administrative structure.
24    (d) The Exchange shall promote a competitive and robust
25marketplace that does not limit consumer access to affordable
26health coverage options. The Exchange, therefore, shall allow

 

 

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1and certify all health insurance issuers to offer health plans
2on the individual and SHOP exchange, as applicable, provided
3that any such health plan meets the requirements set forth in
4Section 1311(c) of the Federal Act. The Exchange shall not
5solicit bids for or engage in the purchase of insurance.
6    (e) The Exchange shall not duplicate or replace the
7functions of the Department of Insurance, including, but not
8limited to, the Department of Insurance's rate review
9authority.
10(Source: P.A. 97-142, eff. 7-14-11.)
 
11    (215 ILCS 122/5-15)
12    Sec. 5-15. Illinois Health Benefits Exchange Legislative
13Oversight Study Committee.
14    (a) There is created an Illinois Health Benefits Exchange
15Legislative Oversight Study Committee within the Commission on
16Government Forecasting and Accountability to provide
17accountability for conduct a study regarding State
18implementation and establishment of the Illinois Health
19Benefits Exchange and to ensure Exchange operations and
20functions align with the goals and duties outlined by this Law.
21The Committee shall also be responsible for providing policy
22recommendations to ensure the Exchange aligns with the Federal
23Act, amendments to the Federal Act, and regulations promulgated
24pursuant to the Federal Act.
25    (b) Members of the Legislative Oversight Study Committee

 

 

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1shall be appointed as follows: 3 members of the Senate shall be
2appointed by the President of the Senate; 3 members of the
3Senate shall be appointed by the Minority Leader of the Senate;
43 members of the House of Representatives shall be appointed by
5the Speaker of the House of Representatives; and 3 members of
6the House of Representatives shall be appointed by the Minority
7Leader of the House of Representatives. Each legislative leader
8shall select one member to serve as co-chair of the committee.
9    (c) Members of the Legislative Oversight Study Committee
10shall be appointed no later than November 30, 2011 within 30
11days after the effective date of this Law. The co-chairs shall
12convene the first meeting of the committee no later than 45
13days after the effective date of this Law.
14(Source: P.A. 97-142, eff. 7-14-11.)
 
15    (215 ILCS 122/5-16 new)
16    Sec. 5-16. Exchange governance. The governing and
17administrative powers of the Exchange shall be vested in a body
18known as the Illinois Health Benefits Exchange Board. The
19following provisions shall apply:
20        (1) The Board shall consist of 9 voting members.
21    Members of the Board of Directors shall be appointed as
22    follows: 2 members shall be appointed by the President of
23    the Senate; 2 members shall be appointed by the Minority
24    Leader of the Senate; 2 members shall be appointed by the
25    Speaker of the House of Representatives; 2 members shall be

 

 

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1    appointed by the Minority Leader of the House of
2    Representatives; and the Governor shall appoint one member
3    in good standing of the American Academy of Actuaries with
4    experience in Illinois health insurance markets to serve on
5    the Board. In addition, the Director of Insurance, the
6    Director of Healthcare and Family Services, and the
7    Executive Director of the Exchange shall serve as
8    non-voting, ex-officio members of the Board. The Governor
9    shall also appoint as non-voting, ex-officio members one
10    economist with experience in the health care markets and
11    one educated health care consumer advocate. All Board
12    members shall be appointed no later than January 31, 2012.
13        (2) The President of the Senate, Minority Leader of the
14    Senate, Speaker of the House of Representatives, and
15    Minority Leader of the House of Representatives shall
16    coordinate appointments to ensure that there is broad
17    representation within the skill sets specified in this
18    Section and shall consider the geographic, cultural, and
19    ethnic diversity of this State when making the
20    appointments. A majority of the voting members must be
21    employers or individuals who are not employed by a health
22    insurance issuer and none shall be State employees or been
23    employed by the State within one year prior to their
24    appointment.
25        No more than 4 of the voting members may be individuals
26    who are employed by, consultants to, or members of a board

 

 

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1    of directors of:
2            (i) an insurer or third party administrator;
3            (ii) an insurance producer; or
4            (iii) a health care provider, health care
5        facility, or health clinic;
6        Each person appointed to the Board should have
7    demonstrated expertise in no less than 2 of the following
8    areas:
9            (A) individual health insurance coverage;
10            (B) small employer health insurance;
11            (C) health benefits administration;
12            (D) health care finance;
13            (E) administration of a public or private health
14        care delivery system;
15            (F) the provision of health care services;
16            (G) the purchase of health insurance coverage;
17            (H) health care consumer navigation or assistance;
18            (I) health care economics or health care actuarial
19    sciences;
20            (J) information technology; or
21            (K) starting a small business with 50 or fewer
22    employees.
23        (3) The Board shall elect one voting member of the
24    Board to serve as chairperson and one voting member to
25    serve as vice-chairperson, upon approval of a majority of
26    the Board.

 

 

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1        (4) The Exchange shall be administered by an Executive
2    Director, who shall be appointed, and may be removed, by a
3    majority of the Board. The Board shall have the power to
4    determine compensation for the Executive Director. The
5    Executive Director may not be a State employee or have been
6    employed by or have had a contract with the State in the 3
7    years prior to his or her appointment.
8        (5) The terms of the non-voting, ex-officio members of
9    the Board shall run concurrent with their terms of
10    appointment to office, or in the case of the Executive
11    Director, his or her term of appointment to that position,
12    subject to the determination of the Board. The terms of the
13    members, including those non-voting, ex-officio members
14    appointed by the Governor, shall be 4 years. Each member of
15    the General Assembly identified in paragraph (1) of this
16    Section shall initially appoint one member to a 3-year
17    term, and one member to a 4-year term. Upon conclusion of
18    the initial term, the next term and every term subsequent
19    to it shall run for 3 years. Voting members shall serve no
20    more than 3 consecutive terms.
21        A person appointed to fill a vacancy and complete the
22    unexpired term of a member of the Board shall only be
23    appointed to serve out the unexpired term by the individual
24    who made the original appointment within 45 days after the
25    initial vacancy. A person appointed to fill a vacancy and
26    complete the unexpired term of a member of the Board may be

 

 

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1    re-appointed to the Board for another term, but shall not
2    serve than more than 2 consecutive terms following their
3    completion of the unexpired term of a member of the Board.
4        If a voting Board member's qualifications change due to
5    a change in employment during the term of their
6    appointment, then the Board member shall resign their
7    position, subject to reappointment by the individual who
8    made the original appointment.
9        (6) The Board may, as necessary, create and appoint
10    qualified persons with requisite expertise to Exchange
11    technical advisory groups. These Exchange technical
12    advisory groups shall meet in a manner and frequency
13    determined by the Board to discuss exchange-related issues
14    and to provide exchange-related guidance, advice, and
15    recommendations to the Board and the Exchange.
16        (7) The Board shall meet no less than quarterly on a
17    schedule established by the chairperson. Meetings shall be
18    public and public records shall be maintained, subject to
19    the Open Meetings Act. A majority of the Board shall
20    constitute a quorum and the affirmative vote of a majority
21    is necessary for any action of the Board. No vacancy shall
22    impair the ability of the Board to act provided a quorum is
23    reached. Members shall serve without pay, but shall be
24    reimbursed for their actual and reasonable expenses
25    incurred in the performance of their duties. The
26    chairperson of the Board shall file a written report

 

 

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1    regarding the activities of the Board and the Exchange to
2    the Governor and General Assembly annually, and the
3    Legislative Oversight Committee established in Section
4    5-15 quarterly, beginning on July 1, 2012 through December
5    31, 2014.
6        (8) The Board shall adopt conflict of interest rules
7    and recusal procedures. Such rules and procedures shall (i)
8    prohibit a member of the Board from performing an official
9    act that may have a direct economic benefit on a business
10    or other endeavor in which that member has a direct or
11    substantial financial interest and (ii) require a member of
12    the Board to recuse himself or herself from an official
13    matter, whether direct or indirect. All recusals must be in
14    advance, in writing, and specify the reason and date of the
15    recusal. All recusals shall be maintained by the Executive
16    Director and shall be disclosed to any person upon written
17    request.
18        (9) The Board shall develop a preliminary budget for
19    the implementation and operation of the Exchange through
20    December 31, 2014. The preliminary budget shall include
21    proposed compensation levels for the Executive Director
22    and identify personnel and staffing needs for the
23    implementation and operation of the Exchange. The Board
24    shall submit its preliminary budget to the Legislative
25    Oversight Committee established in Section 5-15 no later
26    than October 1, 2012.

 

 

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1        (10) The purpose of the Board shall be to implement the
2    Exchange in accordance with this Section and shall be
3    authorized to establish procedures for the operation of the
4    Exchange, subject to legislative approval.
 
5    (215 ILCS 122/5-21 new)
6    Sec. 5-21. Enrollment through brokers and agents; producer
7compensation.
8    (a) In accordance with Section 1312(e) of the Federal Act,
9the Exchange shall allow licensed insurance producers to (1)
10enroll qualified individuals in any qualified health plan, for
11which the individual is eligible, in the individual exchange,
12(2) assist qualified individuals in applying for premium tax
13credits and cost-sharing reductions for qualified health plans
14purchased through the individual exchange, and (3) enroll
15qualified employers in any qualified health plan, for which the
16employer is eligible, offered through the SHOP exchange.
17Nothing in this subsection (a) shall be construed as to require
18a qualified individual or qualified employer to utilize a
19licensed insurance producer for any of the purposes outlined in
20this subsection (a).
21    (b) In order to enroll individuals and small employers in
22qualified health plans on the Exchange, licensed producers must
23complete a certification program. The Department of Insurance
24may develop and implement a certification program for licensed
25insurance producers who enroll individuals and employers in the

 

 

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1exchange. The Department of Insurance may charge a reasonable
2fee, by regulation, to producers for the certification program.
3The Department of Insurance may approve certification programs
4developed and instructed by others, charging a reasonable fee,
5by regulation, for approval.
6    (c) The Exchange shall include on its Internet website a
7producer locator section, featured prominently, through which
8individuals and small employers can find exchange-certified
9producers.
10    (d) The Exchange shall have no role in developing or
11determining the manner or amount of compensation producers
12receive from qualified health plans for individuals or
13employers enrolled in health plans through the Exchange.
 
14    (215 ILCS 122/5-25)
15    Sec. 5-25. Federal action. This Law shall be null and void
16if Congress and the President take action to repeal or replace,
17or both, Section 1311 of the Affordable Care Act or the U.S.
18Supreme Court strikes down the Affordable Care Act in whole or
19in part.
20(Source: P.A. 97-142, eff. 7-14-11.)
 
21    Section 99. Effective date. This Act takes effect upon
22becoming law.".