Rep. Frank J. Mautino

Filed: 5/24/2011





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2    AMENDMENT NO. ______. Amend Senate Bill 1555 by replacing
3everything after the enacting clause with the following:

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



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1this State.
2    The purpose of this Law is to ensure that the State is
3making sufficient progress towards establishing an exchange
4within the guidelines outlined by the federal law and to
5protect Illinoisans from undue federal regulation. Although
6the federal law imposes a number of core requirements on
7state-level exchanges, the State has significant flexibility
8in the design and operation of a State exchange that make it
9prudent for the State to carefully analyze, plan, and prepare
10for the exchange. The General Assembly finds that in order for
11the State to craft a tenable exchange that meets the
12fundamental goals outlined by the Patient Protection and
13Affordable Care Act of expanding access to affordable coverage
14and improving the quality of care, the implementation process
15should (1) provide for broad stakeholder representation; (2)
16foster a robust and competitive marketplace, both inside and
17outside of the exchange; and (3) provide for a broad-based
18approach to the fiscal solvency of the exchange.
19    Section 5-5. State health benefits exchange. It is
20declared that this State, beginning October 1, 2013, in
21accordance with Section 1311 of the federal Patient Protection
22and Affordable Care Act, shall establish a State health
23benefits exchange to be known as the Illinois Health Benefits
24Exchange in order to help individuals and small employers with
25no more than 50 employees shop for, select, and enroll in



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1qualified, affordable private health plans that fit their needs
2at competitive prices. The Exchange shall separate coverage
3pools for individuals and small employers and shall supplement
4and not supplant any existing private health insurance market
5for individuals and small employers.
6    Section 5-10. Exchange functions.
7    (a) The Illinois Health Benefits Exchange shall meet the
8core functions identified by Section 1311 of the Patient
9Protection and Affordable Care Act and subsequent federal
10guidance and regulations.
11    (b) In order to meet the deadline of October 1, 2013
12established by federal law to have operational a State
13exchange, the Department of Insurance and the Commission on
14Governmental Forecasting and Accountability is authorized to
15apply for, accept, receive, and use as appropriate for and on
16behalf of the State any grant money provided by the federal
17government and to share federal grant funding with, give
18support to, and coordinate with other agencies of the State and
19federal government or third parties as determined by the
21    Section 5-15. Illinois Health Benefits Exchange
22Legislative Study Committee.
23    (a) There is created an Illinois Health Benefits Exchange
24Legislative Study Committee to conduct a study regarding State



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1implementation and establishment of the Illinois Health
2Benefits Exchange.
3    (b) Members of the Legislative Study Committee shall be
4appointed as follows: 3 members of the Senate shall be
5appointed by the President of the Senate; 3 members of the
6Senate shall be appointed by the Minority Leader of the Senate;
73 members of the House of Representatives shall be appointed by
8the Speaker of the House of Representatives; and 3 members of
9the House of Representatives shall be appointed by the Minority
10Leader of the House of Representatives. Each legislative leader
11shall select one member to serve as co-chair of the committee.
12    (c) Members of the Legislative Study Committee shall be
13appointed within 30 days after the effective date of this Law.
14The co-chairs shall convene the first meeting of the committee
15no later than 45 days after the effective date of this Law.
16    Section 5-20. Committee study. No later than September 30,
172011, the Committee shall report all findings concerning the
18implementation and establishment of the Illinois Health
19Benefits Exchange to the executive and legislative branches,
20including, but not limited to, (1) the governance and structure
21of the Exchange, (2) financial sustainability of the Exchange,
22and (3) stakeholder engagement, including an ongoing role for
23the Legislative Study Committee or other legislative oversight
24of the Exchange. The Committee shall report its findings with
25regard to (A) the operating model of the Exchange, (B) the size



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1of the employers to be offered coverage through the Exchange,
2(C) coverage pools for individuals and businesses within the
3Exchange, and (D) the development of standards for the coverage
4of full-time and part-time employees and their dependents. The
5Committee study shall also include recommendations concerning
6prospective action on behalf of the General Assembly as it
7relates to the establishment of the Exchange in 2011, 2012,
82013, and 2014.
9    Section 5-25. Federal action. This Law shall be null and
10void if Congress and the President take action to repeal or
11replace, or both, Section 1311 of the Affordable Care Act.

14    Section 10-1. Short title. This Article may be cited as
15the State Employee Health Savings Account Law.
16    Section 10-5. Definitions. As used in this Law:
17    (a) "Deductible" means the total deductible of a high
18deductible health plan for an eligible individual and all the
19dependents of that eligible individual for a calendar year.
20    (b) "Dependent" means an eligible individual's spouse or
21child, as defined in Section 152 of the Internal Revenue Code
22of 1986. "Dependent" includes a party to a civil union, as



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1defined under Section 10 of the Illinois Religious Freedom
2Protection and Civil Union Act.
3    (c) "Eligible individual" means an employee, as defined in
4Section 3 of the State Employees Group Insurance Act of 1971,
5who contributes to health savings accounts on the employees'
6behalf, who:
7        (1) is covered by a high deductible health plan
8    individually or with dependents; and
9        (2) is not covered under any health plan that is not a
10    high deductible health plan, except for:
11            (i) coverage for accidents;
12            (ii) workers' compensation insurance;
13            (iii) insurance for a specified disease or
14        illness;
15            (iv) insurance paying a fixed amount per day per
16        hospitalization; and
17            (v) tort liabilities; and
18        (3) establishes a health savings account or on whose
19    behalf the health savings account is established.
20    (d) "Employer" means a State agency, department, or other
21entity that employs an eligible individual.
22    (e) "Health savings account" or "account" means a trust or
23custodial account established under a State program
24exclusively to pay the qualified medical expenses of an
25eligible individual, or his or her dependents, that meets the
26all of the following requirements:



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1        (1) Except in the case of a rollover contribution, no
2    contribution may be accepted:
3            (A) unless it is in cash; or
4            (B) to the extent that the contribution, when added
5        to the previous contributions to the Account for the
6        calendar year, exceeds the lesser of (i) 100% of the
7        eligible individual's deductible or (ii) the
8        contribution level set for that year by the Internal
9        Revenue Service.
10        (2) The trustee or custodian is a bank, an insurance
11    company, or another person approved by the Director of
12    Insurance.
13        (3) No part of the trust assets shall be invested in
14    life insurance contracts.
15        (4) The assets of the account shall not be commingled
16    with other property except as allowed for under Individual
17    Retirement Accounts.
18        (5) Eligible individual's interest in the account is
19    nonforfeitable.
20    (f) "Health savings account program" or "program" means a
21program that includes all of the following:
22        (1) The purchase by an eligible individual or by an
23    employer of a high deductible health plan.
24        (2) The contribution into a health savings account by
25    an eligible individual or on behalf of an employee or by
26    his or her employer. The total annual contribution may not



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1    exceed the amount of the deductible or the amounts listed
2    in sub-item (B) of item (1) of subsection (f) of this
3    Section.
4    (g) "High deductible" means:
5        (1) In the case of self-only coverage, an annual
6    deductible that is not less than the level set by the
7    Internal Revenue Service and that, when added to the other
8    annual out-of-pocket expenses required to be paid under the
9    plan for covered benefits, does not exceed $5,000; and
10        (2) In the case of family coverage, an annual
11    deductible of not less than the level set by the Internal
12    Revenue Service and that, when added to the other annual
13    out-of-pocket expenses required to be paid under the plan
14    for covered benefits, does not exceed $10,000.
15    A plan shall not fail to be treated as a high deductible
16plan by reason of a failure to have a deductible for preventive
17care or, in the case of network plans, for having out-of-pocket
18expenses that exceed these limits on an annual deductible for
19services that are provided outside the network.
20    (h) "High deductible health plan" means a health coverage
21policy, certificate, or contract that provides for payments for
22covered benefits that exceed the high deductible.
23    (i) "Qualified medical expense" means an expense paid by
24the eligible individual for medical care described in Section
25213(d) of the Internal Revenue Code of 1986.



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1    Section 10-10. Application; authorized contributions.
2    (a) Beginning in taxable year 2011, each employer shall
3make available to each eligible individual a health savings
4account program, if that individual chooses to enroll in the
5program. An employer shall deposit $2,750 annually into an
6eligible individual's health savings account. Unused funds in a
7health savings account shall become the property of the account
8holder at the end of a taxable year.
9    (b) Beginning in taxable year 2011, an eligible individual
10may deposit contributions into a health savings account. The
11amount of deposit may not exceed the amount of the deductible
12for the policy.
13    Section 10-15. Use of funds.
14    (a) The trustee or custodian must use the funds held in a
15health savings account solely (i) for the purpose of paying the
16qualified medical expenses of the eligible individual or his or
17her dependents, (ii) to purchase a health coverage policy,
18certificate, or contract, or (iii) to pay for health insurance
19other than a Medicare supplemental policy for those who are
20Medicare eligible.
21    (b) Funds held in a health savings account may not be used
22to cover expenses of the eligible individual or his or her
23dependents that are otherwise covered, including, but not
24limited to, medical expense covered under an automobile
25insurance policy, worker's compensation insurance policy or



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1self-insured plan, or another employer-funded health coverage
2policy, certificate, or contract.

5    (20 ILCS 4045/Act rep.)
6    Section 90-10. The Health Care Justice Act is repealed.

9    Section 99. Effective date. This Act takes effect upon
10becoming law.".