98TH GENERAL ASSEMBLY
State of Illinois
2013 and 2014
HB3374

 

Introduced , by Rep. Darlene J. Senger

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 377/10-5
5 ILCS 377/10-10
5 ILCS 377/10-20 new

    Amends the State Employee Health Savings Account Law. In the definition of "health savings account program", removes a provision that prohibited the total annual contribution to such a program from exceeding an amount set by the Internal Revenue Service. Changes the amount an employer who makes a health savings account program available to its eligible employees must annually deposit in that account for those employees. Requires the health savings account program to be based on the creation of coverage options so that the average per person employer cost of the programs, including the contributions for the health savings accounts and high-deductible plan, does not exceed the average per person employer cost of the self-insured State employee health benefits program provided under the State Employees Group Insurance Act of 1971 for the same fiscal year. Effective immediately.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB3374LRB098 08400 JDS 38506 b

1    AN ACT concerning government.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The State Employee Health Savings Account Law is
5amended by changing Sections 10-5 and 10-10 and by adding
6Section 10-20 as follows:
 
7    (5 ILCS 377/10-5)
8    Sec. 10-5. Definitions. As used in this Law:
9    (a) "Deductible" means the total deductible of a high
10deductible health plan for an eligible individual and all the
11dependents of that eligible individual for a calendar year.
12    (b) "Dependent" means a dependent as defined in Section 3
13of the State Employees Group Insurance Act of 1971, provided
14that the dependent meets the definition of "dependent" under
15Section 152 of the Internal Revenue Code of 1986, determined
16without regard to subdivisions (b)(1), (b)(2), and (d)(1)(B) of
17that Section.
18    (c) "Eligible individual" means an employee, as defined in
19Section 3 of the State Employees Group Insurance Act of 1971,
20who contributes to health savings accounts on the employees'
21behalf, who:
22        (1) is covered by a high deductible health plan
23    individually or with dependents;

 

 

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1        (2) is not covered under any health plan that is not a
2    high deductible health plan, except for:
3            (i) coverage for accidents;
4            (ii) workers' compensation insurance;
5            (iii) insurance for a specified disease or
6        illness;
7            (iv) insurance paying a fixed amount per day per
8        hospitalization; and
9            (v) tort liabilities;
10        (3) establishes a health savings account or on whose
11    behalf the health savings account is established;
12        (4) is not entitled to Medicare; and
13        (5) cannot be claimed as a dependent on another
14    person's tax return.
15    (d) "Employer" means a State agency, department, or other
16entity that employs an eligible individual.
17    (e) "Health savings account" or "account" means a trust or
18custodial account established under a State program
19exclusively to pay the qualified medical expenses of an
20eligible individual, or his or her dependents, that meets all
21of the following requirements:
22        (1) Except in the case of a rollover contribution, no
23    contribution may be accepted:
24            (A) unless it is in cash; or
25            (B) to the extent that the contribution, when added
26        to the previous contributions to the Account for the

 

 

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1        calendar year, exceeds the maximum contribution level
2        set for that year by the Internal Revenue Service in
3        Publication 969.
4        (2) The trustee or custodian is a bank, an insurance
5    company, or another person approved by the Director of
6    Insurance.
7        (3) No part of the trust assets shall be invested in
8    life insurance contracts.
9        (4) The assets of the account shall not be commingled
10    with other property except as allowed for under Individual
11    Retirement Accounts.
12        (5) Eligible individual's interest in the account is
13    nonforfeitable.
14    (f) "Health savings account program" or "program" means a
15program that includes all of the following:
16        (1) Participation by an eligible individual in an
17    employer-sponsored high deductible health plan.
18        (2) The contribution into a health savings account by
19    an eligible individual or on behalf of an employee or by
20    his or her employer. The total annual contribution may not
21    exceed the amount listed in sub-item (B) of item (1) of
22    subsection (e) of this Section.
23    (g) "High deductible" means an annual deductible that is
24not less than the deductible level set by the Internal Revenue
25Service for that year in Publication 969. :
26        (1) In the case of self-only coverage, an annual

 

 

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1    deductible that is not less than the level set by the
2    Internal Revenue Service and that, when added to the other
3    annual out-of-pocket expenses required to be paid under the
4    plan for covered benefits, does not exceed the maximum
5    level set by the Internal Revenue Service; and
6        (2) In the case of family coverage, an annual
7    deductible of not less than the level set by the Internal
8    Revenue Service and that, when added to the other annual
9    out-of-pocket expenses required to be paid under the plan
10    for covered benefits, does not exceed the maximum level set
11    by the Internal Revenue Service.
12    A plan shall not fail to be treated as a high deductible
13plan by reason of a failure to have a deductible for preventive
14care or, in the case of network plans, for having out-of-pocket
15expenses that exceed these limits on an annual deductible for
16services that are provided outside the network.
17    (h) "High deductible health plan" means health coverage
18that provides for payments for covered benefits that exceed the
19high deductible.
20    (i) "Qualified medical expense" means an expense paid by
21the eligible individual for medical care described in Section
22213(d) of the Internal Revenue Code of 1986.
23(Source: P.A. 97-142, eff. 7-14-11; 97-644, eff. 12-30-11.)
 
24    (5 ILCS 377/10-10)
25    Sec. 10-10. Application; authorized contributions.

 

 

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1    (a) Beginning in calendar year 2012, each employer shall
2make available to each eligible individual a health savings
3account program, if that individual chooses to enroll in the
4program except that, for an employer who provides coverage
5pursuant to any one or more of subsections (i) through (n) of
6Section 10 of the State Employee Group Insurance Act, that
7employer may make available a health savings account program.
8For calendar years prior beginning before January 1, 2014, an
9An employer who makes a health savings account program
10available shall annually deposit an amount equal to one-third
11of the annual deductible into an eligible individual's health
12savings account. For calendar years beginning on or after
13January 1, 2014, an employer who makes a health savings account
14program available shall annually deposit the lesser of (i) the
15eligible individual's deductible or (ii) 90% of the maximum
16contribution level set for that year by the Internal Revenue
17Service. Unused funds in a health savings account shall become
18the property of the account holder at the end of a taxable
19year.
20    (b) Beginning in calendar year 2012, an eligible individual
21may deposit contributions into a health savings account in
22accordance with the restrictions set forth in subsection (e) of
23Section 10-5.
24(Source: P.A. 97-142, eff. 7-14-11; 97-644, eff. 12-30-11.)
 
25    (5 ILCS 377/10-20 new)

 

 

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1    Sec. 10-20. Coverage options tied to State health care
2self-insurance cost. The health savings account program shall
3be based on the creation of coverage options so that the
4average per person employer cost of the programs, including the
5contributions for the health savings accounts and
6high-deductible plan, does not exceed the average per person
7employer cost of the self-insured State employee health
8benefits program provided under the State Employees Group
9Insurance Act of 1971 for the same fiscal year.
 
10    Section 99. Effective date. This Act takes effect upon
11becoming law.