94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
HB0905

 

Introduced 2/2/2005, by Rep. Lisa M. Dugan

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Health Benefit Purchasing Cooperatives Act. Authorizes health benefit purchasing cooperatives for the self-employed, small businesses, and farmers. Provides that one nonstock health benefit purchasing cooperative (cooperative) may be organized in geographic areas of the State designated by the Secretary of Financial and Professional Regulation. Provides that the purpose of a cooperative is to provide health care benefits to an individual who is a member of the cooperative, to officers and eligible employees of a member of the cooperative, and to eligible dependents of such individuals. Provides that each cooperative must annually submit to the Secretary a report on the significant findings from the project that includes, at a minimum, available information on: (a) the effect on health care coverage premiums in its geographic area; (b) the extent to which the cooperative has had an impact on the number of uninsureds in its geographic area; and (c) the degree to which health care consumers were involved in developing and implementing the health benefit purchasing arrangement.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 1. Short title. This Act may be cited as the Health
5 Benefit Purchasing Cooperatives Act.
 
6     Section 5. Definitions. For the purposes of this Section:
7     (a) "Secretary" means the Secretary of Financial and
8 Professional Regulation.
9     (b) "Eligible employee" includes any individual permitted
10 to work by a small business employer, as defined in this Act,
11 in an occupation, but does not include any individual permitted
12 to work:
13         (1) For an employer employing fewer than 4 employees
14     exclusive of the employer's parent, spouse, or child or
15     other members of the employer's immediate family.
16         (2) As an employee employed in agriculture or
17     aquaculture:
18             (A) if the employee is employed by an employer who
19         did not, during any calendar quarter during the
20         preceding calendar year, use more than 500 man days of
21         agricultural or aquacultural labor;
22             (B) if the employee is the parent, spouse, or child
23         or other member of the employer's immediate family;
24             (C) if the employee (i) is employed as a hand
25         harvest laborer and is paid on a piece rate basis in an
26         operation which has been, and is customarily and
27         generally recognized as having been, paid on a piece
28         rate basis in the region of employment, (ii) commutes
29         daily from his or her permanent residence to the farm
30         on which he or she is so employed, and (iii) has been
31         employed in agriculture less than 13 weeks during the
32         preceding calendar year; or

 

 

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1             (D) if the employee (other than an employee
2         described in subparagraph (C)) (i) is 16 years of age
3         or under and is employed as a hand harvest laborer, is
4         paid on a piece rate basis in an operation which has
5         been, and is customarily and generally recognized as
6         having been, paid on a piece rate basis in the region
7         of employment, (ii) is employed on the same farm as his
8         or her parent or person standing in the place of his or
9         her parent, and (iii) is paid at the same piece rate as
10         employees over 16 are paid on the same farm.
11         (3) In domestic service in or about a private home.
12         (4) As an outside salesman.
13         (5) As a member of a religious corporation or
14     organization.
15         (6) At an accredited Illinois college or university
16     employed by the college or university at which he or she is
17     a student who is covered under the provisions of the Fair
18     Labor Standards Act of 1938.
19         (7) For a motor carrier and with respect to whom the
20     U.S. Secretary of Transportation has the power to establish
21     qualifications and maximum hours of service under the
22     provisions of Title 49 U.S.C. and the Department of
23     Transportation of the State of Illinois has the authority
24     to adopt rules under Section 18b-105 of the Illinois
25     Vehicle Code. The above exclusions from the term "employee"
26     may be further defined by of the Director of Labor.
27     (c) "Farmer" has the meaning ascribed to that term in the
28 Illinois Family Farmer Support Act.
29     (d) "Person" means any corporation, limited liability
30 company, partnership, cooperative, association, trade or labor
31 organization, city, village, town, county, active farmer,
32 small business, or self-employed individual.
33     (e) "Self-employed" means people who work in their own
34 business, profession, or on their own farm and rely on their
35 self-owned business for their primary source of income. This
36 definition includes those who work in their own business,

 

 

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1 profession, or on their own farm and excludes those who operate
2 their own incorporated business or farm.
3     (f) "Small business" means a business situated in Illinois
4 having 50 or fewer employees.
 
5     Section 10. Organization and purpose.
6     (a) One health benefit purchasing cooperative may be
7 organized under this Act in each of the geographic areas
8 designated under Section 35. Each health benefit purchasing
9 cooperative may be formed by one or more persons.
10     (b) The purpose of a health benefit purchasing cooperative
11 is to provide health care benefits for the individuals
12 specified in Section 25 through a contract with an insurer
13 authorized to do business in this State in one or more lines of
14 insurance that includes health insurance.
15     (c) A health benefit purchasing cooperative shall be
16 designed so that all of the following are accomplished: (1) the
17 members become better informed about health care trends and
18 cost increases; (2) all members purchase their health care
19 benefits and prescription drug coverage from the same insurer;
20 (3) the members are actively engaged in designing health care
21 benefit options that are offered by the insurer and that meet
22 the needs of their community; (4) the health insurance risk of
23 all of the members is pooled; and (5) the members actively
24 participate in health improvement decisions for their
25 community.
 
26     Section 15. Temporary board of directors. The articles of a
27 health benefit purchasing cooperative shall set forth the name
28 and address of at least one incorporator who shall act as the
29 temporary board of directors.
 
30     Section 20. Cooperative membership.
31     (a) Each health benefit purchasing cooperative shall be
32 organized on a membership basis with no capital stock.
33     (b) Subject to subsection (c), any person that does

 

 

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1 business in, is located in, has a principal office in, or
2 resides in the geographic area in which a health benefit
3 purchasing cooperative is organized, that meets the membership
4 criteria established by the health benefit purchasing
5 cooperative in its bylaws, and that pays the membership fee may
6 be a member of the health benefit purchasing cooperative.
7     (c) A health benefit cooperative may limit membership
8 through its membership criteria, but the criteria must be
9 applied in the same manner to any person applying for
10 membership. Each health benefit purchasing cooperative shall
11 file its membership criteria, as well as any amendments to the
12 criteria, with the Secretary.
 
13     Section 25. Health care benefits.
14     (a) The health care benefits offered by a health benefit
15 purchasing cooperative shall be negotiated between the health
16 benefit purchasing cooperative and the insurer. The insurer
17 must offer coverage to all of the following:
18         (1) An individual who is a member, officer, or eligible
19     employee of a member of the health benefit purchasing
20     cooperative.
21         (2) A self-employed individual, farmer, or small
22     business that is a member of the health benefit purchasing
23     cooperative.
24         (3) A dependent of an individual who receives coverage
25     under paragraphs (1) or (2).
26     (b) The contract between the members of a health benefit
27 purchasing cooperative and the insurer shall be for a term of 3
28 years. Upon enrollment in the insurer's health benefit plan,
29 each member shall pay to the health benefit purchasing
30 cooperative an amount determined by the health benefit
31 purchasing cooperative that is not less than the member's
32 applicable premium for the 36th month of coverage under the
33 contract. If a member withdraws from the health benefit
34 purchasing cooperative before the end of the contract term, the
35 health benefit purchasing cooperative may retain, as a penalty,

 

 

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1 the premium that the member paid for the 36th month of
2 coverage.
 
3     Section 30. Additional required benefits. Each health
4 benefit purchasing cooperative shall submit to the Secretary
5 all of the following:
6     (a) Annually, no later than September 30, a report on the
7 progress of the health benefit purchasing arrangement
8 described in this Act and, to the extent possible, any
9 significant findings in the criteria under paragraphs (1)
10 through (3) of subsection (b).
11     (b) Within one year after the end of the term of the
12 contract under subsection (b) of Section 25, a final report
13 that details significant findings from the project and that
14 includes, at a minimum and to the extent available, information
15 on all of the following:
16         (1) the extent to which the health benefit purchasing
17     arrangement had an impact on the number of uninsured in the
18     geographic area in which it operated;
19         (2) the effect on health care coverage premiums for
20     groups in the geographic area in which the health benefit
21     purchasing arrangement operated, including groups other
22     than the health benefit purchasing cooperative; and
23         (3) the degree to which health care consumers were
24     involved in the development and implementation of the
25     health benefit purchasing arrangement.
 
26     Section 35. Designation of geographic areas. The Secretary
27 shall designate, by rule, the geographic areas of the State in
28 which health benefit purchasing cooperatives may be organized.
29 A geographic area may overlap with one or more other geographic
30 areas.
 
31     Section 40. The Co-operative Act. The Co-operative Act
32 shall not apply to this Act.