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Full Text of SB1555  97th General Assembly




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1    AN ACT concerning insurance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:

6    Section 5-1. Short title. This Article may be cited as the
7Illinois Health Benefits Exchange Law.
8    Section 5-3. Legislative intent. The General Assembly
9finds the health benefits exchanges authorized by the federal
10Patient Protection and Affordable Care Act represent one of a
11number of ways in which the State can address coverage gaps and
12provide individual consumers and small employers access to
13greater coverage options. The General Assembly also finds that
14the State is best positioned to implement an exchange that is
15sensitive to the coverage gaps and market landscape unique to
16this State.
17    The purpose of this Law is to ensure that the State is
18making sufficient progress towards establishing an exchange
19within the guidelines outlined by the federal law and to
20protect Illinoisans from undue federal regulation. Although
21the federal law imposes a number of core requirements on
22state-level exchanges, the State has significant flexibility



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1in the design and operation of a State exchange that make it
2prudent for the State to carefully analyze, plan, and prepare
3for the exchange. The General Assembly finds that in order for
4the State to craft a tenable exchange that meets the
5fundamental goals outlined by the Patient Protection and
6Affordable Care Act of expanding access to affordable coverage
7and improving the quality of care, the implementation process
8should (1) provide for broad stakeholder representation; (2)
9foster a robust and competitive marketplace, both inside and
10outside of the exchange; and (3) provide for a broad-based
11approach to the fiscal solvency of the exchange.
12    Section 5-5. State health benefits exchange. It is
13declared that this State, beginning October 1, 2013, in
14accordance with Section 1311 of the federal Patient Protection
15and Affordable Care Act, shall establish a State health
16benefits exchange to be known as the Illinois Health Benefits
17Exchange in order to help individuals and small employers with
18no more than 50 employees shop for, select, and enroll in
19qualified, affordable private health plans that fit their needs
20at competitive prices. The Exchange shall separate coverage
21pools for individuals and small employers and shall supplement
22and not supplant any existing private health insurance market
23for individuals and small employers.
24    Section 5-10. Exchange functions.



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1    (a) The Illinois Health Benefits Exchange shall meet the
2core functions identified by Section 1311 of the Patient
3Protection and Affordable Care Act and subsequent federal
4guidance and regulations.
5    (b) In order to meet the deadline of October 1, 2013
6established by federal law to have operational a State
7exchange, the Department of Insurance and the Commission on
8Governmental Forecasting and Accountability is authorized to
9apply for, accept, receive, and use as appropriate for and on
10behalf of the State any grant money provided by the federal
11government and to share federal grant funding with, give
12support to, and coordinate with other agencies of the State and
13federal government or third parties as determined by the
15    Section 5-15. Illinois Health Benefits Exchange
16Legislative Study Committee.
17    (a) There is created an Illinois Health Benefits Exchange
18Legislative Study Committee to conduct a study regarding State
19implementation and establishment of the Illinois Health
20Benefits Exchange.
21    (b) Members of the Legislative Study Committee shall be
22appointed as follows: 3 members of the Senate shall be
23appointed by the President of the Senate; 3 members of the
24Senate shall be appointed by the Minority Leader of the Senate;
253 members of the House of Representatives shall be appointed by



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1the Speaker of the House of Representatives; and 3 members of
2the House of Representatives shall be appointed by the Minority
3Leader of the House of Representatives. Each legislative leader
4shall select one member to serve as co-chair of the committee.
5    (c) Members of the Legislative Study Committee shall be
6appointed within 30 days after the effective date of this Law.
7The co-chairs shall convene the first meeting of the committee
8no later than 45 days after the effective date of this Law.
9    Section 5-20. Committee study. No later than September 30,
102011, the Committee shall report all findings concerning the
11implementation and establishment of the Illinois Health
12Benefits Exchange to the executive and legislative branches,
13including, but not limited to, (1) the governance and structure
14of the Exchange, (2) financial sustainability of the Exchange,
15and (3) stakeholder engagement, including an ongoing role for
16the Legislative Study Committee or other legislative oversight
17of the Exchange. The Committee shall report its findings with
18regard to (A) the operating model of the Exchange, (B) the size
19of the employers to be offered coverage through the Exchange,
20(C) coverage pools for individuals and businesses within the
21Exchange, and (D) the development of standards for the coverage
22of full-time and part-time employees and their dependents. The
23Committee study shall also include recommendations concerning
24prospective action on behalf of the General Assembly as it
25relates to the establishment of the Exchange in 2011, 2012,



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12013, and 2014.
2    Section 5-25. Federal action. This Law shall be null and
3void if Congress and the President take action to repeal or
4replace, or both, Section 1311 of the Affordable Care Act.

7    Section 10-1. Short title. This Article may be cited as
8the State Employee Health Savings Account Law.
9    Section 10-5. Definitions. As used in this Law:
10    (a) "Deductible" means the total deductible of a high
11deductible health plan for an eligible individual and all the
12dependents of that eligible individual for a calendar year.
13    (b) "Dependent" means an eligible individual's spouse or
14child, as defined in Section 152 of the Internal Revenue Code
15of 1986. "Dependent" includes a party to a civil union, as
16defined under Section 10 of the Illinois Religious Freedom
17Protection and Civil Union Act.
18    (c) "Eligible individual" means an employee, as defined in
19Section 3 of the State Employees Group Insurance Act of 1971,
20who contributes to health savings accounts on the employees'
21behalf, who:
22        (1) is covered by a high deductible health plan



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1    individually or with dependents; and
2        (2) is not covered under any health plan that is not a
3    high deductible health plan, except for:
4            (i) coverage for accidents;
5            (ii) workers' compensation insurance;
6            (iii) insurance for a specified disease or
7        illness;
8            (iv) insurance paying a fixed amount per day per
9        hospitalization; and
10            (v) tort liabilities; and
11        (3) establishes a health savings account or on whose
12    behalf the health savings account is established.
13    (d) "Employer" means a State agency, department, or other
14entity that employs an eligible individual.
15    (e) "Health savings account" or "account" means a trust or
16custodial account established under a State program
17exclusively to pay the qualified medical expenses of an
18eligible individual, or his or her dependents, that meets all
19of the following requirements:
20        (1) Except in the case of a rollover contribution, no
21    contribution may be accepted:
22            (A) unless it is in cash; or
23            (B) to the extent that the contribution, when added
24        to the previous contributions to the Account for the
25        calendar year, exceeds the lesser of (i) 100% of the
26        eligible individual's deductible or (ii) the



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1        contribution level set for that year by the Internal
2        Revenue Service.
3        (2) The trustee or custodian is a bank, an insurance
4    company, or another person approved by the Director of
5    Insurance.
6        (3) No part of the trust assets shall be invested in
7    life insurance contracts.
8        (4) The assets of the account shall not be commingled
9    with other property except as allowed for under Individual
10    Retirement Accounts.
11        (5) Eligible individual's interest in the account is
12    nonforfeitable.
13    (f) "Health savings account program" or "program" means a
14program that includes all of the following:
15        (1) The purchase by an eligible individual or by an
16    employer of a high deductible health plan.
17        (2) The contribution into a health savings account by
18    an eligible individual or on behalf of an employee or by
19    his or her employer. The total annual contribution may not
20    exceed the amount of the deductible or the amounts listed
21    in sub-item (B) of item (1) of subsection (f) of this
22    Section.
23    (g) "High deductible" means:
24        (1) In the case of self-only coverage, an annual
25    deductible that is not less than the level set by the
26    Internal Revenue Service and that, when added to the other



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1    annual out-of-pocket expenses required to be paid under the
2    plan for covered benefits, does not exceed $5,000; and
3        (2) In the case of family coverage, an annual
4    deductible of not less than the level set by the Internal
5    Revenue Service and that, when added to the other annual
6    out-of-pocket expenses required to be paid under the plan
7    for covered benefits, does not exceed $10,000.
8    A plan shall not fail to be treated as a high deductible
9plan by reason of a failure to have a deductible for preventive
10care or, in the case of network plans, for having out-of-pocket
11expenses that exceed these limits on an annual deductible for
12services that are provided outside the network.
13    (h) "High deductible health plan" means a health coverage
14policy, certificate, or contract that provides for payments for
15covered benefits that exceed the high deductible.
16    (i) "Qualified medical expense" means an expense paid by
17the eligible individual for medical care described in Section
18213(d) of the Internal Revenue Code of 1986.
19    Section 10-10. Application; authorized contributions.
20    (a) Beginning in taxable year 2011, each employer shall
21make available to each eligible individual a health savings
22account program, if that individual chooses to enroll in the
23program. An employer shall deposit $2,750 annually into an
24eligible individual's health savings account. Unused funds in a
25health savings account shall become the property of the account



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1holder at the end of a taxable year.
2    (b) Beginning in taxable year 2011, an eligible individual
3may deposit contributions into a health savings account. The
4amount of deposit may not exceed the amount of the deductible
5for the policy.
6    Section 10-15. Use of funds.
7    (a) The trustee or custodian must use the funds held in a
8health savings account solely (i) for the purpose of paying the
9qualified medical expenses of the eligible individual or his or
10her dependents, (ii) to purchase a health coverage policy,
11certificate, or contract, or (iii) to pay for health insurance
12other than a Medicare supplemental policy for those who are
13Medicare eligible.
14    (b) Funds held in a health savings account may not be used
15to cover expenses of the eligible individual or his or her
16dependents that are otherwise covered, including, but not
17limited to, medical expense covered under an automobile
18insurance policy, worker's compensation insurance policy or
19self-insured plan, or another employer-funded health coverage
20policy, certificate, or contract.

23    (20 ILCS 4045/Act rep.)



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1    Section 90-10. The Health Care Justice Act is repealed.

4    Section 99. Effective date. This Act takes effect upon
5becoming law.