Public Act 097-0142
 
SB1555 EnrolledLRB097 05655 RPM 45717 b


  
    AN ACT concerning insurance.
  
 
    Be it enacted by the People of the State of Illinois,
 
represented in the General Assembly:
  



 
 
ARTICLE 5.
ILLINOIS HEALTH BENEFITS EXCHANGE

 
    Section 5-1. Short title. This Article may be cited as the 
Illinois Health Benefits Exchange Law.
 
    Section 5-3. Legislative intent.   The General Assembly 
finds the health benefits exchanges authorized by the federal 
Patient Protection and Affordable Care Act represent one of a 
number of ways in which the State can address coverage gaps and 
provide individual consumers and small employers access to 
greater coverage options.  The General Assembly also finds that 
the State is best positioned to implement an exchange that is 
sensitive to the coverage gaps and market landscape unique to 
this State.   
    The purpose of this Law is to ensure that the State is 
making sufficient progress towards establishing an exchange 
within the guidelines outlined by the federal law and to 
protect Illinoisans from undue federal regulation.  Although 
the federal law imposes a number of core requirements on 
state-level exchanges, the State has significant flexibility 
in the design and operation of a State exchange that make it 
prudent for the State to carefully analyze, plan, and prepare 
for the exchange.  The General Assembly finds that in order for 
the State to craft a tenable exchange that meets the 
fundamental goals outlined by the Patient Protection and 
Affordable Care Act of expanding access to affordable coverage 
and improving the quality of care, the implementation process 
should (1) provide for broad stakeholder representation; (2) 
foster a robust and competitive marketplace, both inside and 
outside of the exchange; and (3) provide for a broad-based 
approach to the fiscal solvency of the exchange.
 
    Section 5-5. State health benefits exchange.   It is 
declared that this State, beginning October 1, 2013, in 
accordance with Section 1311 of the federal Patient Protection 
and Affordable Care Act, shall establish a State health 
benefits exchange to be known as the Illinois Health Benefits 
Exchange in order to help individuals and small employers with 
no more than 50 employees shop for, select, and enroll in 
qualified, affordable private health plans that fit their needs 
at competitive prices.  The Exchange shall separate coverage 
pools for individuals and small employers and shall supplement 
and not supplant any existing private health insurance market 
for individuals and small employers.
 
    Section 5-10. Exchange functions. 
    (a) The Illinois Health Benefits Exchange shall meet the 
core functions identified by Section 1311 of the Patient 
Protection and Affordable Care Act and subsequent federal 
guidance and regulations.
    (b) In order to meet the deadline  of October 1, 2013 
established by federal law to have operational a State 
exchange, the Department of Insurance
and the Commission on 
Governmental Forecasting and Accountability is authorized to 
apply for, accept, receive, and use as appropriate
for and on 
behalf of the State any grant money provided by the
federal 
government and to share federal grant funding with, give 
support to,
and coordinate with other agencies of the State and 
federal government
or third parties as determined by the 
Governor.
 
    Section 5-15. Illinois Health Benefits Exchange 
Legislative Study Committee. 
    (a) There is created an Illinois Health Benefits Exchange 
Legislative Study Committee to conduct a study regarding State 
implementation and establishment of the Illinois Health 
Benefits Exchange.
    (b) Members of the Legislative Study Committee shall be 
appointed as follows: 3 members of the Senate shall be 
appointed by the President of the Senate; 3 members of the 
Senate shall be appointed by the Minority Leader of the Senate; 
3 members of the House of Representatives shall be appointed by 
the Speaker of the House of Representatives; and 3 members of 
the House of Representatives shall be appointed by the Minority 
Leader of the House of Representatives.  Each legislative leader 
shall select one member to serve as co-chair of the committee.
    (c) Members of the Legislative Study Committee shall be 
appointed within 30 days after the effective date of this Law.  
The co-chairs shall convene the first meeting of the committee 
no later than 45 days after the effective date of this Law.
 
    Section 5-20. Committee study.   No later than September 30, 
2011, the Committee shall report all findings concerning the 
implementation and establishment of the Illinois Health 
Benefits Exchange to the executive and legislative branches, 
including, but not limited to, (1) the governance and
structure 
of the Exchange, (2) financial sustainability of the
Exchange, 
and (3) stakeholder engagement, including an ongoing role
for 
the Legislative Study Committee or other legislative oversight 
of the
Exchange. The Committee shall report its findings with 
regard to (A) the operating model of
the Exchange, (B) the size 
of the employers to be offered
coverage through the Exchange, 
(C) coverage pools for
individuals and businesses within the 
Exchange, and (D) the development of standards for the coverage 
of full-time and part-time employees and their dependents.  The 
Committee study shall also include recommendations concerning 
prospective action on behalf of the General Assembly as it 
relates to the establishment of the Exchange in 2011, 2012, 
2013, and 2014.
 
    Section 5-25. Federal action.   This Law shall be null and 
void if Congress and the President take action to repeal or 
replace, or both, Section 1311 of the Affordable Care Act.
 
ARTICLE 10.
HEALTH SAVINGS ACCOUNT

 
    Section 10-1. Short title.  This Article may be cited as 
the State Employee Health Savings Account Law.
 
    Section 10-5. Definitions.  As used in this Law:
    (a) "Deductible" means the total deductible of a high 
deductible health plan for an eligible individual and all the 
dependents of that eligible individual for a calendar year.
    (b) "Dependent" means an eligible individual's spouse or 
child, as defined in Section 152 of the Internal Revenue Code 
of 1986.
"Dependent" includes a party to a civil union, as 
defined under Section 10 of the Illinois Religious Freedom 
Protection and Civil Union Act.
    (c) "Eligible individual" means an employee, as defined in 
Section 3 of the State Employees Group Insurance Act of 1971, 
who contributes to health savings accounts on the employees' 
behalf, who:
        (1) is covered by a high deductible health plan 
    individually or with dependents; and
        (2) is not covered under any health plan that is not a 
    high deductible health plan, except for:
            (i) coverage for accidents;
            (ii) workers' compensation insurance;
            (iii) insurance for a specified disease or 
        illness;
            (iv) insurance paying a fixed amount per day per 
        hospitalization; and
            (v) tort liabilities; and
        (3) establishes a health savings account or on whose 
    behalf the health savings account is
                          established.
    (d) "Employer" means a State agency, department, or other 
entity that employs an eligible individual.
    (e) "Health savings account" or "account" means a trust or 
custodial account established under a  State program 
exclusively to pay the qualified medical expenses of an 
eligible individual, or his or her dependents, that meets all 
of the following requirements:

        (1) Except in the case of a rollover contribution, no 
    contribution may be accepted:
            (A) unless it is in cash; or

            (B) to the extent that the contribution, when added 
        to the previous contributions to the Account for the 
        calendar year, exceeds the lesser of (i) 100% of the 
        eligible individual's deductible or (ii) the 
        contribution level set for that year by the Internal 
        Revenue Service.
        (2)
The trustee or custodian is a bank, an insurance 
    company, or another person approved by the Director of 
    Insurance.

        (3) No part of the trust assets shall be invested in 
    life insurance contracts.
        (4) The assets of the account shall not be commingled 
    with other property except as allowed for under Individual 
    Retirement Accounts.
        (5) Eligible individual's interest in the account is 
    nonforfeitable.
    (f) "Health savings account program" or "program" means a 
program that includes all of the following:

        (1) The purchase by an eligible individual or by an 
    employer of a high deductible health plan.
        (2) The contribution into a health savings account by 
    an eligible individual or on behalf of an employee or by 
    his or her employer. The total annual contribution may not 
    exceed the amount of the deductible or the amounts listed 
    in sub-item (B) of item (1) of subsection (f) of this 
    Section.
    (g) "High deductible" means:
        (1) In the case of self-only coverage, an annual 
    deductible that is not less than the level set by the 
    Internal Revenue Service and that, when added to the other 
    annual out-of-pocket expenses required to be paid under the 
    plan for covered benefits, does not exceed $5,000; and

        (2) In the case of family coverage, an annual 
    deductible of not less than the level set by the Internal 
    Revenue Service and that, when added to the  other annual 
    out-of-pocket expenses required to be paid under the plan 
    for covered benefits, does not exceed $10,000.

    A plan shall not fail to be treated as a high deductible 
plan by reason of a failure to have a deductible for preventive 
care or, in the case of network plans, for having out-of-pocket 
expenses that exceed these limits on an annual deductible for 
services that are provided outside the network.

    (h) "High deductible health plan" means a health coverage 
policy, certificate, or contract that provides for payments for 
covered benefits that exceed the high deductible.
    (i) "Qualified medical expense" means an expense paid by 
the eligible individual for medical care described in Section 
213(d) of the Internal Revenue Code of 1986.
 
    Section 10-10. Application; authorized contributions. 
    (a) Beginning in taxable year 2011, each employer shall 
make available to each eligible individual a health savings 
account program, if that individual chooses to enroll in the 
program. An employer shall deposit $2,750 annually into an 
eligible individual's health savings account. Unused funds in a 
health savings account shall become the property of the account 
holder at the end of a taxable year.
    (b) Beginning in taxable year 2011, an eligible individual 
may deposit contributions into a health savings account. The 
amount of deposit may not exceed the amount of the  deductible 
for the policy.
 
    Section 10-15. Use of funds. 
    (a) The trustee or custodian must use the funds held in a 
health savings account solely (i) for the purpose of paying the 
qualified medical expenses of the eligible individual or his or 
her dependents, (ii) to purchase a health coverage policy, 
certificate, or contract, or (iii) to pay for health insurance 
other than a Medicare supplemental policy for those who are 
Medicare eligible. 
    (b) Funds held in a health savings account may not be used 
to cover expenses of the eligible individual or his or her 
dependents that are otherwise covered, including, but not 
limited to, medical expense covered under an automobile 
insurance policy, worker's compensation insurance policy or 
self-insured plan, or another employer-funded health coverage 
policy, certificate, or contract. 
 
ARTICLE 90.
AMENDATORY PROVISIONS

 
    (20 ILCS 4045/Act rep.)
    Section 90-10. The Health Care
Justice Act is repealed.
 
ARTICLE 99.
EFFECTIVE DATE

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