Illinois General Assembly - Full Text of HB3976
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Full Text of HB3976  97th General Assembly


Rep. Karen May

Filed: 3/2/2012





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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 care cooperatives.
8    (a) In addition to all other provisions of this Article not
9in conflict with this Section, a company seeking to organize
10under this Article as a health care cooperative shall meet all
11of the following requirements:
12        (1) The company shall comply with all provisions
13    applicable to domestic mutual insurance companies under
14    this Code.
15        (2) The articles of incorporation of the company shall
16    demonstrate that the company is to be organized as a



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1    nonprofit member corporation and that the governance of the
2    company shall be subject to a majority vote of all members.
3        (3) The activities of the company shall be limited to
4    the issuance of health care plans in the individual and
5    small group markets.
6        (4) Either the articles of incorporation or the bylaws
7    of the company 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 company 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 company 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) Excess surplus shall be used to lower premiums, to
19    improve benefits, or for other programs intended to improve
20    the 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 a company described in paragraph (5)
24    of subsection (a) of this Section may serve on the board of
25    directors of the company.
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 care cooperative need not contain the
3word "Mutual" but shall contain the phrase "Health Care
4Cooperative". The corporate name shall not be the same as, or
5deceptively similar to, the name of any domestic organization
6or of any foreign or alien organization authorized to transact
7business in this State.
8    (c) A company seeking to be organized as a health care
9cooperative shall submit an application to the Director
10according to procedures and meeting such requirements as the
11Director shall adopt by rule. No company shall transact any
12business of insurance until it has received a certificate of
13authority as set forth in Section 51 of this Article.
14    Section 10. The Co-operative Act is amended by changing
15Section 22 and by adding Section 30 as follows:
16    (805 ILCS 310/22)  (from Ch. 32, par. 326)
17    Sec. 22. No corporation or association hereafter organized
18or doing business for profit in this State shall be entitled to
19use the term "Co-operative" as a part of its corporate or other
20business name or title unless it has complied with the
21provisions of this Act, except (1) a corporation organized
22under the Business Corporation Act of 1983 for the purpose of
23ownership or administration of residential property on a
24cooperative basis, or (2) a cooperative corporation organized



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



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1        (2) All members receive their health care benefits
2    under the group health care policy or plan negotiated under
3    subsection (i) of this Section.
4        (3) The members are actively engaged in designing
5    health care benefit options that are offered by the insurer
6    and that meet the needs of their community.
7        (4) The health insurance risk of all of the members is
8    pooled.
9        (5) The members actively participate in health
10    improvement decisions for their community.
11    (d) The articles of a health benefit purchasing cooperative
12shall set forth the name and address of at least one
13incorporator who will act as the temporary board.
14    (e) Each health benefit purchasing cooperative shall be
15organized on a membership basis with no capital stock.
16    (f) Subject to subsection (g) of this Section, any person
17that does business in, is located in, has a principal office
18in, or resides in the geographic area in which a health benefit
19purchasing cooperative is organized, that meets the membership
20criteria established by the health benefit purchasing
21cooperative in its bylaws, and that pays the membership fee may
22be a member of the health benefit purchasing cooperative.
23    (g) A health benefit cooperative may limit membership of
24self-employed individuals through its membership criteria, but
25such criteria must be applied in the same manner to all
26self-employed individuals.



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1    (h) Each health benefit purchasing cooperative shall file
2its membership criteria, as well as any amendments to the
3criteria, with the Director.
4    (i) The health care benefits offered by a health benefit
5purchasing cooperative shall be negotiated between the health
6benefit purchasing cooperative and the insurer and shall be
7offered in a single group health care policy or plan. The
8insurer must offer coverage under the group health care policy
9or plan to all of the following:
10        (1) An individual who is a member, officer, or eligible
11    employee of a member of the health benefit purchasing
12    cooperative.
13        (2) A self-employed individual who is a member of the
14    health benefit purchasing cooperative.
15        (3) A dependent of an individual under subdivisions
16    (i)(1) and (2) who receives coverage.
17    (j) The contract between the health benefit purchasing
18cooperative and an insurer shall be for a term of 3 years. Upon
19enrollment in the insurer's group health care policy or plan,
20each member shall pay to the health benefit purchasing
21cooperative an amount determined by the health benefit
22purchasing cooperative that is not less than the member's
23applicable premium for the 36th month of coverage under the
24contract. If a member withdraws from the health benefit
25purchasing cooperative before the end of the contract term, the
26health benefit purchasing cooperative may retain, as a penalty,



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1an amount specified by the health benefit purchasing
2cooperative that is not less than the premium that the member
3paid for the 36th month of coverage.
4    (k) Each health benefit purchasing cooperative shall
5submit to the Director all of the following:
6        (1) Annually, no later than September 30, a report on
7    the progress of the health benefit purchasing arrangement
8    described in this Section and, to the extent possible, any
9    significant findings in the criteria under subdivision
10    (k)(2) of this Section.
11        (2) Within one year after the end of the term of the
12    contract under subsection (j) of this Section, a final
13    report that details significant findings from the project
14    and that includes, at a minimum, to the extent available,
15    information on all of the following:
16            (A) The extent to which the health benefit
17        purchasing arrangement had an impact on the number of
18        uninsured in the geographic area in which it operated.
19            (B) The effect on health care coverage premiums for
20        groups in the geographic area in which the health
21        benefit purchasing arrangement operated, including
22        groups other than the health benefit purchasing
23        cooperative.
24            (C) The degree to which health care consumers were
25        involved in the development and implementation of the
26        health benefit purchasing arrangement.



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1    (l) The Director shall designate, by order, the geographic
2areas of the State in which health benefit purchasing
3cooperatives may be organized. A geographic area may overlap
4with one or more other geographic areas.
5    (m) As used in this Section, "Director" means the Director
6of the Department of Insurance.
7    Section 99. Effective date. This Act takes effect upon
8becoming law.".