Rep. Frank J. Mautino

Filed: 5/20/2011





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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 small employers to be offered coverage through the
2Exchange, (C) coverage pools for individuals and businesses
3within the Exchange, and (D) the development of standards for
4the coverage of full-time and part-time employees and their
5dependents. The Committee study shall also include
6recommendations concerning prospective action on behalf of the
7General Assembly as it relates to the establishment of the
8Exchange in 2011, 2012, 2013, 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 may make
3available to each eligible individual a health savings account
4program, if that individual chooses to enroll in the program.
5An employer shall deposit $2,750 annually into an eligible
6individual's health savings account. Unused funds in a health
7savings account shall become the property of the account holder
8at 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    Section 90-5. The Comprehensive Health Insurance Plan Act
6is amended by changing Sections 1.1, 2, 4, 7, 7.1, and 12 and
7by adding Section 20 as follows:
8    (215 ILCS 105/1.1)  (from Ch. 73, par. 1301.1)
9    Sec. 1.1. The General Assembly hereby makes the following
10findings and declarations:
11    (a) The Comprehensive Health Insurance Plan is established
12as a State program that is intended to provide an alternate
13market for health insurance for certain uninsurable Illinois
14residents, and further is intended to provide an acceptable
15alternative mechanism as described in the federal Health
16Insurance Portability and Accountability Act of 1996 for
17providing portable and accessible individual health insurance
18coverage for federally eligible individuals as defined in this
20    (b) The State of Illinois may subsidize the cost of health
21insurance coverage offered by the Plan. However, since the
22State has only a limited amount of resources, the General
23Assembly declares that it intends for this program to provide



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1portable and accessible individual health insurance coverage
2for every federally eligible individual who qualifies for
3coverage in accordance with Section 15 of this Act, but does
4not intend for every eligible person who qualifies for Plan
5coverage in accordance with Section 7 of this Act to be
6guaranteed a right to be issued a policy under this Plan as a
7matter of entitlement.
8    (c) The Comprehensive Health Insurance Plan Board shall
9operate the Plan in a manner so that the estimated cost of the
10program during any fiscal year will not exceed the total income
11it expects to receive from policy premiums, investment income,
12assessments, or fees collected or received by the Board and
13other funds which are made available from appropriations for
14the Plan by the General Assembly for that fiscal year.
15(Source: P.A. 90-30, eff. 7-1-97.)
16    (215 ILCS 105/2)  (from Ch. 73, par. 1302)
17    Sec. 2. Definitions. As used in this Act, unless the
18context otherwise requires:
19    "Plan administrator" means the insurer or third party
20administrator designated under Section 5 of this Act.
21    "Benefits plan" means the coverage to be offered by the
22Plan to eligible persons and federally eligible individuals
23pursuant to this Act.
24    "Board" means the Illinois Comprehensive Health Insurance



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1    "Church plan" has the same meaning given that term in the
2federal Health Insurance Portability and Accountability Act of
4    "Continuation coverage" means continuation of coverage
5under a group health plan or other health insurance coverage
6for former employees or dependents of former employees that
7would otherwise have terminated under the terms of that
8coverage pursuant to any continuation provisions under federal
9or State law, including the Consolidated Omnibus Budget
10Reconciliation Act of 1985 (COBRA), as amended, Sections 367.2,
11367e, and 367e.1 of the Illinois Insurance Code, or any other
12similar requirement in another State.
13    "Covered person" means a person who is and continues to
14remain eligible for Plan coverage and is covered under one of
15the benefit plans offered by the Plan.
16    "Creditable coverage" means, with respect to a federally
17eligible individual, coverage of the individual under any of
18the following:
19        (A) A group health plan.
20        (B) Health insurance coverage (including group health
21    insurance coverage).
22        (C) Medicare.
23        (D) Medical assistance.
24        (E) Chapter 55 of title 10, United States Code.
25        (F) A medical care program of the Indian Health Service
26    or of a tribal organization.



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1        (G) A state health benefits risk pool.
2        (H) A health plan offered under Chapter 89 of title 5,
3    United States Code.
4        (I) A public health plan (as defined in regulations
5    consistent with Section 104 of the Health Care Portability
6    and Accountability Act of 1996 that may be promulgated by
7    the Secretary of the U.S. Department of Health and Human
8    Services).
9        (J) A health benefit plan under Section 5(e) of the
10    Peace Corps Act (22 U.S.C. 2504(e)).
11        (K) Any other qualifying coverage required by the
12    federal Health Insurance Portability and Accountability
13    Act of 1996, as it may be amended, or regulations under
14    that Act.
15    "Creditable coverage" does not include coverage consisting
16solely of coverage of excepted benefits, as defined in Section
172791(c) of title XXVII of the Public Health Service Act (42
18U.S.C. 300 gg-91), nor does it include any period of coverage
19under any of items (A) through (K) that occurred before a break
20of more than 90 days or, if the individual has been certified
21as eligible pursuant to the federal Trade Act of 2002, a break
22of more than 63 days during all of which the individual was not
23covered under any of items (A) through (K) above.
24    Any period that an individual is in a waiting period for
25any coverage under a group health plan (or for group health
26insurance coverage) or is in an affiliation period under the



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1terms of health insurance coverage offered by a health
2maintenance organization shall not be taken into account in
3determining if there has been a break of more than 90 days in
4any creditable coverage.
5    "Department" means the Illinois Department of Insurance.
6    "Dependent" means an Illinois resident: who is a spouse; or
7who is an claimed as a dependent by the principal insured for
8purposes of filing a federal income tax return and resides in
9the principal insured's household, and is a resident unmarried
10child under the age of 26 19 years; or who is an unmarried
11child who also is a full-time student under the age of 23 years
12and who is financially dependent upon the principal insured; or
13who is an unmarried child under the age of 30 years if the
14child (i) is an Illinois resident, (ii) served as a member of
15the active or reserve components of any of the branches of the
16Armed Forces of the United States, and (iii) has received a
17release or discharge other than a dishonorable discharge; or
18who is a child of any age and who is disabled and financially
19dependent upon the principal insured.
20    "Direct Illinois premiums" means, for Illinois business,
21an insurer's direct premium income for the kinds of business
22described in clause (b) of Class 1 or clause (a) of Class 2 of
23Section 4 of the Illinois Insurance Code, and direct premium
24income of a health maintenance organization or a voluntary
25health services plan, except it shall not include credit health
26insurance as defined in Article IX 1/2 of the Illinois



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1Insurance Code.
2    "Director" means the Director of the Illinois Department of
4    "Effective date of medical assistance" means the date that
5eligibility for medical assistance for a person is approved by
6the Department of Human Services or the Department of
7Healthcare and Family Services, except when the Department of
8Human Services or the Department of Healthcare and Family
9Services determines eligibility retroactively. In such
10circumstances, the effective date of the medical assistance is
11the date the Department of Human Services or the Department of
12Healthcare and Family Services determines the person to be
13eligible for medical assistance.
14    "Eligible person" means a resident of this State who
15qualifies for Plan coverage under Section 7 of this Act.
16    "Employee" means a resident of this State who is employed
17by an employer or has entered into the employment of or works
18under contract or service of an employer including the
19officers, managers and employees of subsidiary or affiliated
20corporations and the individual proprietors, partners and
21employees of affiliated individuals and firms when the business
22of the subsidiary or affiliated corporations, firms or
23individuals is controlled by a common employer through stock
24ownership, contract, or otherwise.
25    "Employer" means any individual, partnership, association,
26corporation, business trust, or any person or group of persons



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1acting directly or indirectly in the interest of an employer in
2relation to an employee, for which one or more persons is
3gainfully employed.
4    "Family" coverage means the coverage provided by the Plan
5for the covered person and his or her eligible dependents who
6also are covered persons.
7    "Federally eligible individual" means an individual
8resident of this State:
9        (1)(A) for whom, as of the date on which the individual
10    seeks Plan coverage under Section 15 of this Act, the
11    aggregate of the periods of creditable coverage is 18 or
12    more months or, if the individual has been certified as
13    eligible pursuant to the federal Trade Act of 2002, 3 or
14    more months, and (B) whose most recent prior creditable
15    coverage was under group health insurance coverage offered
16    by a health insurance issuer, a group health plan, a
17    governmental plan, or a church plan (or health insurance
18    coverage offered in connection with any such plans) or any
19    other type of creditable coverage that may be required by
20    the federal Health Insurance Portability and
21    Accountability Act of 1996, as it may be amended, or the
22    regulations under that Act;
23        (2) who is not eligible for coverage under (A) a group
24    health plan (other than an individual who has been
25    certified as eligible pursuant to the federal Trade Act of
26    2002), (B) part A or part B of Medicare due to age (other



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1    than an individual who has been certified as eligible
2    pursuant to the federal Trade Act of 2002), or (C) medical
3    assistance, and does not have other health insurance
4    coverage (other than an individual who has been certified
5    as eligible pursuant to the federal Trade Act of 2002);
6        (3) with respect to whom (other than an individual who
7    has been certified as eligible pursuant to the federal
8    Trade Act of 2002) the most recent coverage within the
9    coverage period described in paragraph (1)(A) of this
10    definition was not terminated based upon a factor relating
11    to nonpayment of premiums or fraud;
12        (4) if the individual (other than an individual who has
13    been certified as eligible pursuant to the federal Trade
14    Act of 2002) had been offered the option of continuation
15    coverage under a COBRA continuation provision or under a
16    similar State program, who elected such coverage; and
17        (5) who, if the individual elected such continuation
18    coverage, has exhausted such continuation coverage under
19    such provision or program.
20    However, an individual who has been certified as eligible
21pursuant to the federal Trade Act of 2002 shall not be required
22to elect continuation coverage under a COBRA continuation
23provision or under a similar state program.
24    "Group health insurance coverage" means, in connection
25with a group health plan, health insurance coverage offered in
26connection with that plan.



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1    "Group health plan" has the same meaning given that term in
2the federal Health Insurance Portability and Accountability
3Act of 1996.
4    "Governmental plan" has the same meaning given that term in
5the federal Health Insurance Portability and Accountability
6Act of 1996.
7    "Health insurance coverage" means benefits consisting of
8medical care (provided directly, through insurance or
9reimbursement, or otherwise and including items and services
10paid for as medical care) under any hospital and medical
11expense-incurred policy, certificate, or contract provided by
12an insurer, non-profit health care service plan contract,
13health maintenance organization or other subscriber contract,
14or any other health care plan or arrangement that pays for or
15furnishes medical or health care services whether by insurance
16or otherwise. Health insurance coverage shall not include short
17term, accident only, disability income, hospital confinement
18or fixed indemnity, dental only, vision only, limited benefit,
19or credit insurance, coverage issued as a supplement to
20liability insurance, insurance arising out of a workers'
21compensation or similar law, automobile medical-payment
22insurance, or insurance under which benefits are payable with
23or without regard to fault and which is statutorily required to
24be contained in any liability insurance policy or equivalent
26    "Health insurance issuer" means an insurance company,



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1insurance service, or insurance organization (including a
2health maintenance organization and a voluntary health
3services plan) that is authorized to transact health insurance
4business in this State. Such term does not include a group
5health plan.
6    "Health Maintenance Organization" means an organization as
7defined in the Health Maintenance Organization Act.
8    "Hospice" means a program as defined in and licensed under
9the Hospice Program Licensing Act.
10    "Hospital" means a duly licensed institution as defined in
11the Hospital Licensing Act, an institution that meets all
12comparable conditions and requirements in effect in the state
13in which it is located, or the University of Illinois Hospital
14as defined in the University of Illinois Hospital Act.
15    "Individual health insurance coverage" means health
16insurance coverage offered to individuals in the individual
17market, but does not include short-term, limited-duration
19    "Insured" means any individual resident of this State who
20is eligible to receive benefits from any insurer (including
21health insurance coverage offered in connection with a group
22health plan) or health insurance issuer as defined in this
24    "Insurer" means any insurance company authorized to
25transact health insurance business in this State and any
26corporation that provides medical services and is organized



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1under the Voluntary Health Services Plans Act or the Health
2Maintenance Organization Act.
3    "Medical assistance" means the State medical assistance or
4medical assistance no grant (MANG) programs provided under
5Title XIX of the Social Security Act and Articles V (Medical
6Assistance) and VI (General Assistance) of the Illinois Public
7Aid Code (or any successor program) or under any similar
8program of health care benefits in a state other than Illinois.
9    "Medically necessary" means that a service, drug, or supply
10is necessary and appropriate for the diagnosis or treatment of
11an illness or injury in accord with generally accepted
12standards of medical practice at the time the service, drug, or
13supply is provided. When specifically applied to a confinement
14it further means that the diagnosis or treatment of the covered
15person's medical symptoms or condition cannot be safely
16provided to that person as an outpatient. A service, drug, or
17supply shall not be medically necessary if it: (i) is
18investigational, experimental, or for research purposes; or
19(ii) is provided solely for the convenience of the patient, the
20patient's family, physician, hospital, or any other provider;
21or (iii) exceeds in scope, duration, or intensity that level of
22care that is needed to provide safe, adequate, and appropriate
23diagnosis or treatment; or (iv) could have been omitted without
24adversely affecting the covered person's condition or the
25quality of medical care; or (v) involves the use of a medical
26device, drug, or substance not formally approved by the United



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1States Food and Drug Administration.
2    "Medical care" means the ordinary and usual professional
3services rendered by a physician or other specified provider
4during a professional visit for treatment of an illness or
6    "Medicare" means coverage under both Part A and Part B of
7Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395, et
9    "Minimum premium plan" means an arrangement whereby a
10specified amount of health care claims is self-funded, but the
11insurance company assumes the risk that claims will exceed that
13    "Participating transplant center" means a hospital
14designated by the Board as a preferred or exclusive provider of
15services for one or more specified human organ or tissue
16transplants for which the hospital has signed an agreement with
17the Board to accept a transplant payment allowance for all
18expenses related to the transplant during a transplant benefit
20    "Physician" means a person licensed to practice medicine
21pursuant to the Medical Practice Act of 1987.
22    "Plan" means the Comprehensive Health Insurance Plan
23established by this Act.
24    "Plan of operation" means the plan of operation of the
25Plan, including articles, bylaws and operating rules, adopted
26by the board pursuant to this Act.



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1    "Provider" means any hospital, skilled nursing facility,
2hospice, home health agency, physician, registered pharmacist
3acting within the scope of that registration, or any other
4person or entity licensed in Illinois to furnish medical care.
5    "Qualified high risk pool" has the same meaning given that
6term in the federal Health Insurance Portability and
7Accountability Act of 1996.
8    "Resident" means a person who is and continues to be
9legally domiciled and physically residing on a permanent and
10full-time basis in a place of permanent habitation in this
11State that remains that person's principal residence and from
12which that person is absent only for temporary or transitory
14    "Skilled nursing facility" means a facility or that portion
15of a facility that is licensed by the Illinois Department of
16Public Health under the Nursing Home Care Act or a comparable
17licensing authority in another state to provide skilled nursing
19    "Stop-loss coverage" means an arrangement whereby an
20insurer insures against the risk that any one claim will exceed
21a specific dollar amount or that the entire loss of a
22self-insurance plan will exceed a specific amount.
23    "Third party administrator" means an administrator as
24defined in Section 511.101 of the Illinois Insurance Code who
25is licensed under Article XXXI 1/4 of that Code.
26(Source: P.A. 95-965, eff. 9-23-08.)



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1    (215 ILCS 105/4)  (from Ch. 73, par. 1304)
2    Sec. 4. Powers and authority of the board. The board shall
3have the general powers and authority granted under the laws of
4this State to insurance companies licensed to transact health
5and accident insurance and in addition thereto, the specific
6authority to:
7    a. Enter into contracts as are necessary or proper to carry
8out the provisions and purposes of this Act, including the
9authority, with the approval of the Director, to enter into
10contracts with similar plans of other states for the joint
11performance of common administrative functions, or with
12persons or other organizations for the performance of
13administrative functions including, without limitation,
14utilization review and quality assurance programs, or with
15health maintenance organizations or preferred provider
16organizations for the provision of health care services.
17    b. Sue or be sued, including taking any legal actions
18necessary or proper.
19    c. Take such legal action as necessary to:
20        (1) avoid the payment of improper claims against the
21    plan or the coverage provided by or through the plan;
22        (2) to recover any amounts erroneously or improperly
23    paid by the plan;
24        (3) to recover any amounts paid by the plan as a result
25    of a mistake of fact or law; or



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1        (4) to recover or collect any other amounts, including
2    assessments, that are due or owed the Plan or have been
3    billed on its or the Plan's behalf.
4    d. Establish appropriate rates, rate schedules, rate
5adjustments, expense allowances, agents' referral fees, claim
6reserves, and formulas and any other actuarial function
7appropriate to the operation of the plan. Rates and rate
8schedules may be adjusted for appropriate risk factors such as
9age and area variation in claim costs and shall take into
10consideration appropriate risk factors in accordance with
11established actuarial and underwriting practices.
12    e. Issue policies of insurance in accordance with the
13requirements of this Act.
14    f. Appoint appropriate legal, actuarial and other
15committees as necessary to provide technical assistance in the
16operation of the plan, policy and other contract design, and
17any other function within the authority of the plan.
18    g. Borrow money to effect the purposes of the Illinois
19Comprehensive Health Insurance Plan. Any notes or other
20evidence of indebtedness of the plan not in default shall be
21legal investments for insurers and may be carried as admitted
23    h. Establish rules, conditions and procedures for
24reinsuring risks under this Act.
25    i. Employ and fix the compensation of employees. Such
26employees may be paid on a warrant issued by the State



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1Treasurer pursuant to a payroll voucher certified by the Board
2and drawn by the Comptroller against appropriations or trust
3funds held by the State Treasurer.
4    j. Enter into intergovernmental cooperation agreements
5with other agencies or entities of State government for the
6purpose of sharing the cost of providing health care services
7that are otherwise authorized by this Act for children who are
8both plan participants and eligible for financial assistance
9from the Division of Specialized Care for Children of the
10University of Illinois.
11    k. Establish conditions and procedures under which the plan
12may, if funds permit, discount or subsidize premium rates that
13are paid directly by senior citizens, as defined by the Board,
14and other plan participants, who are retired or unemployed and
15meet other qualifications.
16    l. Establish and maintain the Plan Fund authorized in
17Section 3 of this Act, which shall be divided into separate
18accounts, as follows:
19        (1) accounts to fund the administrative, claim, and
20    other expenses of the Plan associated with eligible persons
21    who qualify for Plan coverage under Section 7 of this Act,
22    which shall consist of:
23            (A) premiums paid on behalf of covered persons;
24            (B) assessments appropriated funds and other
25        revenues collected or received by the Board;
26            (C) reserves for future losses maintained by the



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1        Board; and
2            (D) interest earnings from investment of the funds
3        in the Plan Fund or any of its accounts other than the
4        funds in the account established under item 2 of this
5        subsection;
6        (2) an account, to be denominated the federally
7    eligible individuals account, to fund the administrative,
8    claim, and other expenses of the Plan associated with
9    federally eligible individuals who qualify for Plan
10    coverage under Section 15 of this Act, which shall consist
11    of:
12            (A) premiums paid on behalf of covered persons;
13            (B) assessments and other revenues collected or
14        received by the Board;
15            (C) reserves for future losses maintained by the
16        Board; and
17            (D) interest earnings from investment of the
18        federally eligible individuals account funds; and
19            (E) grants provided pursuant to the federal Trade
20        Act of 2002; and
21        (3) such other accounts as may be appropriate.
22    m. Charge and collect assessments paid by insurers pursuant
23to Section 12 of this Act and recover any assessments for, on
24behalf of, or against those insurers.
25(Source: P.A. 93-33, eff. 6-23-03; 93-34, eff. 6-23-03.)



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1    (215 ILCS 105/7)  (from Ch. 73, par. 1307)
2    Sec. 7. Eligibility.
3    a. Except as provided in subsection (e) of this Section or
4in Section 15 of this Act, any person who is either a citizen
5of the United States or an alien lawfully admitted for
6permanent residence and who has been for a period of at least
7180 days and continues to be a resident of this State shall be
8eligible for Plan coverage under this Section if evidence is
9provided of:
10        (1) A notice of rejection or refusal to issue
11    substantially similar individual health insurance coverage
12    for health reasons by a health insurance issuer; or
13        (2) A refusal by a health insurance issuer to issue
14    individual health insurance coverage except at a rate
15    exceeding the applicable Plan rate for which the person is
16    responsible.
17    A rejection or refusal by a group health plan or health
18insurance issuer offering only stop-loss or excess of loss
19insurance or contracts, agreements, or other arrangements for
20reinsurance coverage with respect to the applicant shall not be
21sufficient evidence under this subsection.
22    b. The board shall promulgate a list of medical or health
23conditions for which a person who is either a citizen of the
24United States or an alien lawfully admitted for permanent
25residence and a resident of this State would be eligible for
26Plan coverage without applying for health insurance coverage



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1pursuant to subsection a. of this Section. Persons who can
2demonstrate the existence or history of any medical or health
3conditions on the list promulgated by the board shall not be
4required to provide the evidence specified in subsection a. of
5this Section. The list shall be effective on the first day of
6the operation of the Plan and may be amended from time to time
7as appropriate.
8    c. Family members of the same household who each are
9covered persons are eligible for optional family coverage under
10the Plan.
11    d. For persons qualifying for coverage in accordance with
12Section 7 of this Act, the board shall, if it determines that
13such assessments appropriations as are made pursuant to Section
1412 of this Act are insufficient to allow the board to accept
15all of the eligible persons which it projects will apply for
16enrollment under the Plan, limit or close enrollment to ensure
17that the Plan is not over-subscribed and that it has sufficient
18resources to meet its obligations to existing enrollees. The
19board shall not limit or close enrollment for federally
20eligible individuals.
21    e. A person shall not be eligible for coverage under the
22Plan if:
23        (1) He or she has or obtains other coverage under a
24    group health plan or health insurance coverage
25    substantially similar to or better than a Plan policy as an
26    insured or covered dependent or would be eligible to have



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1    that coverage if he or she elected to obtain it. Persons
2    otherwise eligible for Plan coverage may, however, solely
3    for the purpose of having coverage for a pre-existing
4    condition, maintain other coverage only while satisfying
5    any pre-existing condition waiting period under a Plan
6    policy or a subsequent replacement policy of a Plan policy.
7        (1.1) His or her prior coverage under a group health
8    plan or health insurance coverage, provided or arranged by
9    an employer of more than 10 employees was discontinued for
10    any reason without the entire group or plan being
11    discontinued and not replaced, provided he or she remains
12    an employee, or dependent thereof, of the same employer.
13        (2) He or she is a recipient of or is approved to
14    receive medical assistance, except that a person may
15    continue to receive medical assistance through the medical
16    assistance no grant program, but only while satisfying the
17    requirements for a preexisting condition under Section 8,
18    subsection f. of this Act. Payment of premiums pursuant to
19    this Act shall be allocable to the person's spenddown for
20    purposes of the medical assistance no grant program, but
21    that person shall not be eligible for any Plan benefits
22    while that person remains eligible for medical assistance.
23    If the person continues to receive or be approved to
24    receive medical assistance through the medical assistance
25    no grant program at or after the time that requirements for
26    a preexisting condition are satisfied, the person shall not



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1    be eligible for coverage under the Plan. In that
2    circumstance, coverage under the plan shall terminate as of
3    the expiration of the preexisting condition limitation
4    period. Under all other circumstances, coverage under the
5    Plan shall automatically terminate as of the effective date
6    of any medical assistance.
7        (3) Except as provided in Section 15, the person has
8    previously participated in the Plan and voluntarily
9    terminated Plan coverage, unless 12 months have elapsed
10    since the person's latest voluntary termination of
11    coverage.
12        (4) The person fails to pay the required premium under
13    the covered person's terms of enrollment and
14    participation, in which event the liability of the Plan
15    shall be limited to benefits incurred under the Plan for
16    the time period for which premiums had been paid and the
17    covered person remained eligible for Plan coverage.
18        (5) The Plan has paid a total of $5,000,000 in benefits
19    on behalf of the covered person.
20        (6) The person is a resident of a public institution.
21        (7) The person's premium is paid for or reimbursed
22    under any government sponsored program or by any government
23    agency or health care provider, except as an otherwise
24    qualifying full-time employee, or dependent of such
25    employee, of a government agency or health care provider
26    or, except when a person's premium is paid by the U.S.



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1    Treasury Department pursuant to the federal Trade Act of
2    2002.
3        (8) The person has or later receives other benefits or
4    funds from any settlement, judgement, or award resulting
5    from any accident or injury, regardless of the date of the
6    accident or injury, or any other circumstances creating a
7    legal liability for damages due that person by a third
8    party, whether the settlement, judgment, or award is in the
9    form of a contract, agreement, or trust on behalf of a
10    minor or otherwise and whether the settlement, judgment, or
11    award is payable to the person, his or her dependent,
12    estate, personal representative, or guardian in a lump sum
13    or over time, so long as there continues to be benefits or
14    assets remaining from those sources in an amount in excess
15    of $300,000.
16        (9) Within the 5 years prior to the date a person's
17    Plan application is received by the Board, the person's
18    coverage under any health care benefit program as defined
19    in 18 U.S.C. 24, including any public or private plan or
20    contract under which any medical benefit, item, or service
21    is provided, was terminated as a result of any act or
22    practice that constitutes fraud under State or federal law
23    or as a result of an intentional misrepresentation of
24    material fact; or if that person knowingly and willfully
25    obtained or attempted to obtain, or fraudulently aided or
26    attempted to aid any other person in obtaining, any



09700SB1555ham001- 32 -LRB097 05655 CEL 55914 a

1    coverage or benefits under the Plan to which that person
2    was not entitled.
3    f. The board or the administrator shall require
4verification of residency and may require any additional
5information or documentation, or statements under oath, when
6necessary to determine residency upon initial application and
7for the entire term of the policy.
8    g. Coverage shall cease (i) on the date a person is no
9longer a resident of Illinois, (ii) on the date a person
10requests coverage to end, (iii) upon the death of the covered
11person, (iv) on the date State law requires cancellation of the
12policy, or (v) at the Plan's option, 30 days after the Plan
13makes any inquiry concerning a person's eligibility or place of
14residence to which the person does not reply.
15    h. Except under the conditions set forth in subsection g of
16this Section, the coverage of any person who ceases to meet the
17eligibility requirements of this Section shall be terminated at
18the end of the current policy period for which the necessary
19premiums have been paid.
20(Source: P.A. 95-547, eff. 8-29-07; 96-938, eff. 6-24-10.)
21    (215 ILCS 105/7.1)
22    Sec. 7.1. Premiums.
23    (a) The Board shall establish premium rates for coverage as
24provided in subsection (d) of this Section.
25    (b) Separate schedules of premium rates based on sex, age,



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1geographical location, and benefit plan shall apply for
2individual risks.
3    (c) The Board may provide for separate premium rates for
4optional family coverage for the spouse or one or more
5dependents who reside together in any eligible individual's or
6eligible person's household. The rates for each spouse or
7dependent who qualifies to be covered under this optional
8family coverage shall be such percentage of the applicable
9individual Plan rate as the Board, in accordance with
10appropriate actuarial principles, shall establish.
11    (d) The Board, with the assistance of the Director and in
12accordance with appropriate actuarial principles, shall
13determine a standard risk rate by using the average rates that
14individual standard risks in this State are charged by at least
155 of the largest health insurance issuers providing individual
16health insurance coverage to residents of Illinois that is
17substantially similar to the coverage offered by the Plan. In
18determining the average rate or charges of those health
19insurance issuers, the rates charged by those issuers shall be
20actuarially adjusted to determine the rate or charge that would
21have been charged for benefits similar to those provided by the
22Plan. The standard risk rates shall be established using
23reasonable actuarial techniques and shall reflect anticipated
24claims experience, expenses, and other appropriate risk
25factors for such coverage.
26    (e) Rates for Plan coverage shall not be less than 125% nor



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1more than 150% of rates established as applicable for
2individual standard risks pursuant to subsection (d). Rates for
3Plan coverages for Section 7 enrollees shall remain no less
4than 150% of rates established as applicable and for Section 15
5enrollees shall remain no less than 125% of rates established
6as applicable until January 1, 2014, unless a different
7percentage is established by law of the State of Illinois after
8January 1, 2014.
9(Source: P.A. 90-30, eff. 7-1-97.)
10    (215 ILCS 105/12)  (from Ch. 73, par. 1312)
11    Sec. 12. Deficit or surplus.
12    a. If premiums or other receipts by the Board exceed the
13amount required for the operation of the Plan, including actual
14losses and administrative expenses of the Plan, the Board shall
15direct that the excess be held at interest, in a bank
16designated by the Board, or used to offset future losses or to
17reduce Plan premiums. In this subsection, the term "future
18losses" includes reserves for incurred but not reported claims.
19    b. (Blank). Any deficit incurred or expected to be incurred
20on behalf of eligible persons who qualify for plan coverage
21under Section 7 of this Act shall be recouped by an
22appropriation made by the General Assembly.
23    c. For the purposes of this Section, a deficit shall be
24incurred when anticipated losses and incurred but not reported
25claims expenses exceed anticipated income from earned premiums



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1net of administrative expenses.
2    d. Any deficit incurred or expected to be incurred on
3behalf of covered persons federally eligible individuals who
4qualify for Plan coverage under Section 7 or Section 15 of this
5Act shall be recouped by an assessment of all insurers made in
6accordance with the provisions of this Section. The Board shall
7within 90 days of the effective date of this amendatory Act of
81997 and within the first quarter of each fiscal year
9thereafter assess all insurers for the anticipated deficit in
10accordance with the provisions of this Section. The board may
11also make additional assessments no more than 4 times a year to
12fund unanticipated deficits, implementation expenses, and cash
13flow needs.
14    e. An insurer's assessment shall be determined by
15multiplying the total assessment, as determined in subsection
16d. of this Section, by a fraction, the numerator of which
17equals that insurer's direct Illinois premiums during the
18preceding calendar year and the denominator of which equals the
19total of all insurers' direct Illinois premiums. The Board may
20exempt those insurers whose share as determined under this
21subsection would be so minimal as to not exceed the estimated
22cost of levying the assessment.
23    f. The Board shall charge and collect from each insurer the
24amounts determined to be due under this Section. The assessment
25shall be billed by Board invoice based upon the insurer's
26direct Illinois premium income as shown in its annual statement



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1for the preceding calendar year as filed with the Director. The
2invoice shall be due upon receipt and must be paid no later
3than 30 days after receipt by the insurer.
4    g. When an insurer fails to pay the full amount of any
5assessment of $100 or more due under this Section there shall
6be added to the amount due as a penalty the greater of $50 or an
7amount equal to 5% of the deficiency for each month or part of
8a month that the deficiency remains unpaid.
9    h. Amounts collected under this Section shall be paid to
10the Board for deposit into the Plan Fund authorized by Section
113 of this Act.
12    i. An insurer may petition the Director for an abatement or
13deferment of all or part of an assessment imposed by the Board.
14The Director may abate or defer, in whole or in part, the
15assessment if, in the opinion of the Director, payment of the
16assessment would endanger the ability of the insurer to fulfill
17its contractual obligations. In the event an assessment against
18an insurer is abated or deferred in whole or in part, the
19amount by which the assessment is abated or deferred shall be
20assessed against the other insurers in a manner consistent with
21the basis for assessments set forth in this subsection. The
22insurer receiving a deferment shall remain liable to the plan
23for the deficiency for 4 years.
24    j. The board shall establish procedures for appeal by any
25insurer subject to assessment pursuant to this Section. Such
26procedures shall require that:



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1        (1) Any insurer that wishes to appeal all or any part
2    of an assessment made pursuant to this Section shall first
3    pay the amount of the assessment as set forth in the
4    invoice provided by the board within the time provided in
5    subsection f. of this Section. The board shall hold such
6    payments in a separate interest-bearing account. The
7    payments shall be accompanied by a statement in writing
8    that the payment is made under appeal. The statement shall
9    specify the grounds for the appeal. The insurer may be
10    represented in its appeal by counsel or other
11    representative of its choosing.
12        (2) Within 90 days following the payment of an
13    assessment under appeal by any insurer, the board shall
14    notify the insurer or representative designated by the
15    insurer in writing of its determination with respect to the
16    appeal and the basis or bases for that determination unless
17    the Board notifies the insurer that a reasonable amount of
18    additional time is required to resolve the issues raised by
19    the appeal.
20        (3) The board shall refer to the Director any question
21    concerning the amount of direct Illinois premium income as
22    shown in an insurer's annual statement for the preceding
23    calendar year on file with the Director on the invoice date
24    of the assessment. Unless additional time is required to
25    resolve the question, the Director shall within 60 days
26    report to the board in writing his determination respecting



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1    the amount of direct Illinois premium income on file on the
2    invoice date of the assessment.
3        (4) In the event the board determines that the insurer
4    is entitled to a refund, the refund shall be paid within 30
5    days following the date upon which the board makes its
6    determination, together with the accrued interest.
7    Interest on any refund due an insurer shall be paid at the
8    rate actually earned by the Board on the separate account.
9        (5) The amount of any such refund shall then be
10    assessed against all insurers in a manner consistent with
11    the basis for assessment as otherwise authorized by this
12    Section.
13        (6) The board's determination with respect to any
14    appeal received pursuant to this subsection shall be a
15    final administrative decision as defined in Section 3-101
16    of the Code of Civil Procedure. The provisions of the
17    Administrative Review Law shall apply to and govern all
18    proceedings for the judicial review of final
19    administrative decisions of the board.
20        (7) If an insurer fails to appeal an assessment in
21    accordance with the provisions of this subsection, the
22    insurer shall be deemed to have waived its right of appeal.
23    The provisions of this subsection apply to all assessments
24made in any calendar year ending on or after December 31, 1997.
25    k. The total balance of funds newly appropriated into the
26Comprehensive Health Insurance Plan shall be used to pay down



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1accrued State debt.
2(Source: P.A. 90-30, eff. 7-1-97; 90-567, eff. 1-23-98.)
3    (215 ILCS 105/20 new)
4    Sec. 20. Illinois Health Benefits Exchange. Beginning on
5the date that the Illinois Health Benefits Exchange becomes
6operational in that the Exchange meets the core functions
7identified in Section 1311 of the federal Patient Protection
8and Affordable Care Act and subsequent guidelines and
9regulations, the Board shall examine the feasibility of
10operating the Plan concomitantly with the Illinois Health
11Benefits Exchange and shall report its findings to the General
12Assembly no later than 90 days after the date that the Illinois
13Health Benefits Exchange becomes operational.
14    (20 ILCS 4045/Act rep.)
15    Section 90-10. The Health Care Justice Act is repealed.

18    Section 99. Effective date. This Act takes effect upon
19becoming law.".