97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB2944

 

Introduced 2/23/2011, by Rep. Jim Watson

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the State Employee Health Savings Account Act. Provides that "eligible individual" has the same meaning as "employee" as that term is defined in the State Employees Group Insurance Act of 1971. Provides that, beginning in taxable year 2011, each employer shall make available to each eligible individual a health savings account program. Provides that an employer shall deposit $2,750 annually into an eligible individual's health savings account. Unused funds in a health savings account shall become the property of the account holder at the end of a taxable year. Provides that a trustee or custodian must use the funds held in a health savings account solely (i) for the purpose of paying the qualified medical expenses of the eligible individual or his or her dependents, (ii) to purchase a health coverage policy, certificate, or contract or (iii) to pay for health insurance other than a Medicare supplemental policy for those who are Medicare eligible. Makes other changes.


LRB097 05491 RPM 45551 b

FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB2944LRB097 05491 RPM 45551 b

1    AN ACT concerning health savings accounts.
 
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 State
5Employee Health Savings Account Act.
 
6    Section 5. Definitions. As used in this Act:
7    (a) "Deductible" means the total deductible of a high
8deductible health plan for an eligible individual and all the
9dependents of that eligible individual for a calendar year.
10    (b) "Dependent" means an eligible individual's spouse or
11child, as defined in Section 152 of the Internal Revenue Code
12of 1986.
13    (c) "Eligible individual" means an employee, as defined in
14Section 3 of the State Employees Group Insurance Act of 1971,
15who contributes to health savings accounts on the employees'
16behalf, who:
17        (1) is covered by a high deductible health plan
18    individually or with dependents; and
19        (2) is not covered under any health plan that is not a
20    high deductible health plan, except for:
21            (i) coverage for accidents;
22            (ii) workers' compensation insurance;
23            (iii) insurance for a specified disease or

 

 

HB2944- 2 -LRB097 05491 RPM 45551 b

1        illness;
2             (iv) insurance paying a fixed amount per day per
3        hospitalization; and
4             (v) tort liabilities; and
5        (3) establishes a health savings account or on whose
6    behalf the health savings account is established.
7    (d) "Employer" means a State agency, department, or other
8entity that employs an eligible individual.
9    (e) "Health savings account" or "account" means a trust or
10custodial account established under a State program
11exclusively to pay the qualified medical expenses of an
12eligible individual, or his or her dependents, that meets the
13all of the following requirements:
14        (1) Except in the case of a rollover contribution, no
15    contribution may be accepted:
16            (A) unless it is in cash; or
17            (B) to the extent that the contribution, when added
18        to the previous contributions to the Account for the
19        calendar year, exceeds the lesser of (i) 100% of the
20        eligible individual's deductible or (ii) $2,600 for an
21        individual or $5,150 per family.
22        (2) The trustee or custodian is a bank, an insurance
23    company, or another person approved by the Director of
24    Insurance.
25        (3) No part of the trust assets shall be invested in
26    life insurance contracts.

 

 

HB2944- 3 -LRB097 05491 RPM 45551 b

1        (4) The assets of the account shall not be commingled
2    with other property except as allowed for under Individual
3    Retirement Accounts.
4        (5) Eligible individual's interest in the account is
5    nonforfeitable.
6    (f) "Health savings account program" or "program" means a
7program that includes all of the following:
8        (1) The purchase by an eligible individual or by an
9    employer of a high deductible health plan.
10        (2) The contribution into a health savings account by
11    an eligible individual or on behalf of an employee or by
12    his or her employer. The total annual contribution may not
13    exceed the amount of the deductible or the amounts listed
14    in sub-item (B) of item (1) of subsection (f) of this
15    Section.
16    (g) "High deductible" means:
17        (1) In the case of self-only coverage, an annual
18    deductible that is not less than $1,000 and that, when
19    added to the other annual out-of-pocket expenses required
20    to be paid under the plan for covered benefits, does not
21    exceed $5,000; and
22        (2) In the case of family coverage, an annual
23    deductible of not less that $2,000 and that, when added to
24    the other annual out-of-pocket expenses required to be paid
25    under the plan for covered benefits, does not exceed
26    $10,000.

 

 

HB2944- 4 -LRB097 05491 RPM 45551 b

1    A plan shall not fail to be treated as a high deductible
2plan by reason of a failure to have a deductible for preventive
3care or, in the case of network plans, for having out-of-pocket
4expenses that exceed these limits on an annual deductible for
5services that are provided outside the network.
6    (h) "High deductible health plan" means a health coverage
7policy, certificate, or contract that provides for payments for
8covered benefits that exceed the high deductible.
9    (i) "Qualified medical expense" means an expense paid by
10the eligible individual for medical care described in Section
11213(d) of the Internal Revenue Code of 1986.
 
12    Section 10. Application; authorized contributions.
13    (a) Beginning in taxable year 2011, each employer shall
14make available to each eligible individual a health savings
15account program. An employer shall deposit $2,750 annually into
16an eligible individual's health savings account. Unused funds
17in a health savings account shall become the property of the
18account holder at the end of a taxable year.
19    (b) Beginning in taxable year 2011, an eligible individual
20may deposit contributions into a health savings account. The
21amount of deposit may not exceed the amount of the deductible
22for the policy.
 
23    Section 15. Use of funds.
24    (a) The trustee or custodian must use the funds held in a

 

 

HB2944- 5 -LRB097 05491 RPM 45551 b

1health savings account solely (i) for the purpose of paying the
2qualified medical expenses of the eligible individual or his or
3her dependents, (ii) to purchase a health coverage policy,
4certificate, or contract, or (iii) to pay for health insurance
5other than a Medicare supplemental policy for those who are
6Medicare eligible.
7    (b) Funds held in a health savings account may not be used
8to cover expenses of the eligible individual or his or her
9dependents that are otherwise covered, including, but not
10limited to, medical expense covered under an automobile
11insurance policy, worker's compensation insurance policy or
12self-insured plan, or another employer-funded health coverage
13policy, certificate, or contract.