Bill Text: IL SB2885 | 2011-2012 | 97th General Assembly | Chaptered

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Bill Title: Amends the Illinois Insurance Code. Sets forth provisions concerning health care cooperatives. Provides that in addition to all other provisions of the Article concerning domestic mutual companies, a company seeking to organize as a health care cooperative shall meet certain requirements. Sets forth provisions concerning the naming of and applications for entities seeking to organize as health care cooperatives. Amends the Co-operative Act. Exempts domestic mutual insurance companies licensed as health care cooperatives by the Director of Insurance from the prohibition against using the term "Co-operative" as part of a corporate or other business name or title without complying with the provisions of the Co-operative Act. Sets forth provisions concerning health benefit purchasing cooperatives. Provides that the purpose of a health benefit purchasing cooperative is to provide health care benefits for certain eligible individuals under a single group health care policy or plan through a contract between the health benefit purchasing cooperative and an insurer authorized to do health insurance business in the State. Sets forth provisions concerning the design, the articles, the membership basis and capital stock, the membership criteria, the health care benefits, and the annual progress report of health benefit purchasing cooperatives. Effective immediately.

Sponsorship: Moderate Partisan Bill (Democrat 29-6)

Status: (Passed) 2012-06-28 - Public Act . . . . . . . . . 97-0715 [SB2885 Detail]

Download: Illinois-2011-SB2885-Chaptered.html

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Public Act 097-0715
SB2885 Enrolled LRB097 16440 RPM 61603 b
AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Health Care Purchasing Group Act is amended
by changing Sections 10 and 15 as follows:
(215 ILCS 123/10)
Sec. 10. Definitions. Words and phrases used in this Act,
unless defined in this Section, have the meanings attributed to
them in Section 5 of the Illinois Health Insurance Portability
and Accountability Act.
"Director" means the Director of Insurance.
"Employer" means an individual, sole proprietorship,
partnership, firm, corporation, association, or any other
legal entity that has one or more employees and is legally
doing business in this State. "Employer" includes employers as
defined in the Illinois Health Insurance Portability and
Accountability Act.
"Health insurance contract", "group or master health
insurance contract" and "insurance" refer to the forms of
insurance obligations which a "risk-bearer" as defined in this
Section has been authorized to issue.
"Risk-bearer" means an insurance company licensed in this
State and authorized to transact the kinds of business

described in clause (b) of Class 1 and clause (a) of Class 2 of
Section 4 of the Illinois Insurance Code and entities
authorized under the Health Maintenance Organization Act.
(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)
(215 ILCS 123/15)
Sec. 15. Health care purchasing groups; membership;
formation.
(a) An HPG may be an organization formed by 2 or more
employers with no more than 2,500 500 covered employees each,
an HPG sponsor or a risk-bearer for purposes of contracting for
health insurance under this Act to cover employees and
dependents of HPG members. An HPG shall not be prevented from
supplementing health insurance coverage purchased under this
Act by contracting for services from entities licensed and
authorized in Illinois to provide those services under the
Dental Service Plan Act, the Limited Health Service
Organization Act, or Voluntary Health Services Plans Act. An
HPG may be a separate legal entity or simply a group of 2 or
more employers with no more than 2,500 500 covered employees
each aggregated under this Act by an HPG sponsor or risk-bearer
for insurance purposes. There shall be no limit as to the
number of HPGs that may operate in any geographic area of the
State. No insurance risk may be borne or retained by the HPG.
All health insurance contracts issued to the HPG must be
delivered or issued for delivery in Illinois.

(b) Members of an HPG must be Illinois domiciled employers,
except that an employer domiciled elsewhere may become a member
of an Illinois HPG for the sole purpose of insuring its
employees whose place of employment is located within this
State. HPG membership may include employers having no more than
2,500 500 covered employees each.
(c) If an HPG is formed by any 2 or more employers with no
more than 2,500 500 covered employees each, it shall utilize a
licensed insurance producer is authorized to negotiate,
solicit, market, obtain proposals for, and enter into group or
master health insurance contracts on behalf of its members and
their employees and employee dependents so long as it meets all
of the following requirements:
(1) The HPG must be an organization having the legal
capacity to contract and having its legal situs in
Illinois.
(2) The principal persons responsible for the conduct
of the HPG must perform their HPG related functions in
Illinois.
(3) No HPG may collect premium in its name or hold or
manage premium or claim fund accounts unless duly licensed
and qualified as a managing general agent pursuant to
Section 141a of the Illinois Insurance Code or a third
party administrator pursuant to Section 511.105 of the
Illinois Insurance Code.
(4) If the HPG gives an offer, application, notice, or

proposal of insurance to an employer, it must disclose to
that employer the total cost of the insurance. Dues, fees,
or charges to be paid to the HPG, HPG sponsor, or any other
entity as a condition to purchasing the insurance must be
itemized. The HPG shall also disclose to its members the
amount of any dividends, experience refunds, or other such
payments it receives from the risk-bearer.
(5) An HPG must register with the Director before
entering into a group or master health insurance contract
on behalf of its members and must renew the registration
annually on forms and at times prescribed by the Director
in rules specifying, at minimum, (i) the identity of the
officers and directors, trustees, or attorney-in-fact of
the HPG; (ii) a certification that those persons have not
been convicted of any felony offense involving a breach of
fiduciary duty or improper manipulation of accounts; and
(iii) the number of employer members then enrolled in the
HPG, together with any other information that may be needed
to carry out the purposes of this Act.
(6) At the time of initial registration and each
renewal thereof an HPG shall pay a fee of $100 to the
Director.
(d) If an HPG is formed by an HPG sponsor or risk-bearer
and the HPG performs no marketing, negotiation, solicitation,
or proposing of insurance to HPG members, exclusive of
ministerial acts performed by individual employers to service

their own employees, then a group or master health insurance
contract may be issued in the name of the HPG and held by an HPG
sponsor, risk-bearer, or designated employer member within the
State. In these cases the HPG requirements specified in
subsection (c) shall not be applicable, however:
(1) the group or master health insurance contract must
contain a provision permitting the contract to be enforced
through legal action initiated by any employer member or by
an employee of an HPG member who has paid premium for the
coverage provided;
(2) the group or master health insurance contract must
be available for inspection and copying by any HPG member,
employee, or insured dependent at a designated location
within the State at all normal business hours; and
(3) any information concerning HPG membership required
by rule under item (5) of subsection (c) must be provided
by the HPG sponsor in its registration and renewal forms or
by the risk-bearer in its annual reports.
(Source: P.A. 90-337, eff. 1-1-98; 90-655, eff. 7-30-98;
91-617, eff. 1-1-00.)