Rep. Karen May

Filed: 2/23/2012

 

 


 

 


 
09700HB3976ham001LRB097 16441 RPM 66509 a

1
AMENDMENT TO HOUSE BILL 3976

2    AMENDMENT NO. ______. Amend House Bill 3976 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Illinois Insurance Code is amended by
5adding Section 44.1 as follows:
 
6    (215 ILCS 5/44.1 new)
7    Sec. 44.1. Health insurance cooperatives.
8    (a) In addition to all other provisions of this Article not
9in conflict with this Section, an entity seeking to organize
10under this Article as a health insurance cooperative shall meet
11all of the following requirements:
12        (1) The entity shall comply with all provisions
13    applicable to domestic mutual insurance companies under
14    this Code.
15        (2) The articles of incorporation of the entity shall
16    demonstrate that the entity is to be organized as a

 

 

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1    nonprofit member corporation and that the governance of the
2    entity shall be subject to a majority vote of all members.
3        (3) The activities of the entity shall include, but not
4    be limited to, the issuance of health care plans in the
5    individual and small group markets.
6        (4) Either the articles of incorporation or the bylaws
7    of the entity shall incorporate ethics and conflict of
8    interest standards and the governance requirements set
9    forth in Section 1322(c)(3)(C) of the federal Patient
10    Protection and Affordable Care Act.
11        (5) The entity or a related entity or any predecessor
12    of either shall not have been a health insurance issuer on
13    July 16, 2009.
14        (6) The entity shall not be sponsored by a State or
15    local government, any political subdivision thereof, or
16    any instrumentality of such government or political
17    subdivision.
18        (7) Surplus shall be used to lower premiums, to improve
19    benefits, or for other programs intended to improve the
20    quality of health care delivered to its members.
21        (8) No representative of a federal, State, or local
22    government, or any political instrumentality thereof, and
23    no representative of an entity described in paragraph (5)
24    of subsection (a) of this Section may serve on the board of
25    directors of the cooperative.
26    (b) Notwithstanding Section 37 of this Article, the

 

 

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1corporate name of any organization seeking to organize under
2this Article as a health insurance cooperative need not contain
3the word "Mutual" but shall contain the phrase "Health
4Insurance Cooperative". The corporate name shall not be the
5same as, or deceptively similar to, the name of any domestic
6organization or of any foreign or alien organization authorized
7to transact business in this State.
8    (c) An entity seeking to be organized as a health insurance
9cooperative shall submit an application to the Director
10according to procedures and meeting such requirements as the
11Director shall adopt by rule. No entity shall transact any
12business of insurance until it has received a certificate of
13authority as set forth in Section 51 of this Article.
14    (d) The Department may adopt rules for the administration
15of the provisions of this Section.
 
16    Section 10. The Co-operative Act is amended by changing
17Section 22 and by adding Section 30 as follows:
 
18    (805 ILCS 310/22)  (from Ch. 32, par. 326)
19    Sec. 22. No corporation or association hereafter organized
20or doing business for profit in this State shall be entitled to
21use the term "Co-operative" as a part of its corporate or other
22business name or title unless it has complied with the
23provisions of this Act, except (1) a corporation organized
24under the Business Corporation Act of 1983 for the purpose of

 

 

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1ownership or administration of residential property on a
2cooperative basis, or (2) a cooperative corporation organized
3under the General Not For Profit Corporation Act of 1986 or its
4predecessor or successor statutes, or (3) a domestic mutual
5insurance company licensed as a health insurance cooperative by
6the Director of Insurance under Article III of the Illinois
7Insurance Code. Any corporation or association violating the
8provision of this Section may be enjoined from doing business
9under such name at the instance of any shareholder of any
10association or corporation organized under this Act.
11(Source: P.A. 95-368, eff. 8-23-07.)
 
12    (805 ILCS 310/30 new)
13    Sec. 30. Health insurance cooperative.
14    (a) Notwithstanding any other provisions of this Act,
15health insurance cooperatives may be organized under this
16Section by one or more persons.
17    (b) The purpose of a health insurance cooperative is to
18provide health care benefits for the individuals specified in
19subsection (h) of this Section as a risk-bearing entity.
20    (c) A health insurance cooperative shall be designed so
21that all of the following are accomplished:
22        (1) The members become better informed about health
23    care trends and cost increases.
24        (2) All members receive their health care benefits
25    under the group health care policy or plan negotiated under

 

 

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1    subsection (h) of this Section.
2        (3) The members are actively engaged in designing
3    health care benefit options that are offered by the insurer
4    and that meet the needs of their community.
5        (4) The health insurance risk of all of the members is
6    pooled.
7        (5) The members actively participate in health
8    improvement decisions for their community.
9    (d) The articles of a health insurance cooperative shall
10set forth the name and address of at least one incorporator who
11will act as the temporary board.
12    (e) Each health insurance cooperative shall be organized on
13a membership basis with no capital stock.
14    (f) Any person that does business in, is located in, has a
15principal office in, or resides in the geographic area in which
16a health insurance cooperative is organized, that meets the
17membership criteria established by the health insurance
18cooperative in its bylaws, and that pays the membership fee may
19be a member of the health insurance cooperative.
20    (g) Each health insurance cooperative shall file its
21membership criteria, as well as any amendments to the criteria,
22with the Director.
23    (h) Eligible members of the health insurance cooperative
24include:
25        (1) An individual who is a member, officer, or eligible
26    employee of a company or organization with 100 or fewer

 

 

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1    employees.
2        (2) A self-employed individual.
3        (3) A dependent of an individual under items (1) and
4    (2) of this subsection (h) who receives coverage.
5    (i) Each health insurance cooperative shall submit to the
6Director annually, no later than September 30, a report on the
7health insurance cooperative described in this Section.
8    (j) The membership contract between the health insurance
9cooperative and the member shall be for a term of 3 years. Upon
10membership enrollment in the health insurance cooperative,
11each member shall pay to the health insurance cooperative a
12membership fee of at least $250. If a member withdraws from the
13health insurance cooperative before the end of the contract
14term, the member shall not be eligible to rejoin the health
15insurance cooperative for a period of at least one year, and
16the health insurance cooperative may retain, as a penalty, the
17membership fee.
18    (k) As used in this Section, "Director" means the Director
19of Insurance.
 
20    Section 99. Effective date. This Act takes effect upon
21becoming law.".