SB3021 102ND GENERAL ASSEMBLY

LRB102 23037 RJF 32191 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB3021

Introduced 1/5/2022, by Sen. Adriane Johnson

SYNOPSIS AS INTRODUCED:

5 ILCS 377/10-5
5 ILCS 377/10-15

Amends the State Employee Health Savings Account Law. Provides that funds held in a health savings account may be used to cover expenses of the eligible individual or his or her dependents to pay for diapers or diaper services. Makes conforming changes.

A BILL FOR

AN ACT concerning government.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The State Employee Health Savings Account Law is amended by changing Sections 10-5 and 10-15 as follows:

(5 ILCS 377/10-5)

Sec. 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 a dependent as defined in Section 3 of the State Employees Group Insurance Act of 1971, provided that the dependent meets the definition of "dependent" under Section 152 of the Internal Revenue Code of 1986, determined without regard to subdivisions (b)(1), (b)(2), and (d)(1)(B) of that Section.

(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;

(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;

(3) establishes a health savings account or on whose behalf the health savings account is established;

(4) is not entitled to Medicare; and

(5) cannot be claimed as a dependent on another person's tax return.

(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 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) Participation by an eligible individual in an employer-sponsored 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 listed in sub-item (B) of item (1) of subsection (e) 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 the maximum level set by the Internal Revenue Service; 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 the maximum level set by the Internal Revenue Service.

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 health coverage 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, and shall include any additional use of funds as provided under Section 10-15.

(Source: P.A. 97-142, eff. 7-14-11; 97-644, eff. 12-30-11.)

(5 ILCS 377/10-15)

Sec. 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.

(c) Funds held in a health savings account may be used to cover expenses of the eligible individual or his or her dependents to pay for diapers or diaper services.

(Source: P.A. 97-142, eff. 7-14-11.)