Public Act 097-0715
 
SB2885 EnrolledLRB097 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.)