Full Text of HB3976 97th General Assembly
HB3976 97TH GENERAL ASSEMBLY
97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
Introduced 1/11/2012, by Rep. Karen May
SYNOPSIS AS INTRODUCED:
215 ILCS 5/44.1 new
805 ILCS 310/22
from Ch. 32, par. 326
805 ILCS 310/30 new
Amends the Illinois Insurance Code. Sets forth provisions concerning
health care cooperatives. Provides that in addition to all other provisions
of the Article concerning domestic mutual companies, a company seeking to
organize as a health care cooperative shall meet certain requirements. Sets
forth provisions concerning the naming of and applications for entities
seeking to organize as health care cooperatives. Amends the Co-operative
Act. Exempts domestic mutual insurance companies licensed as health care
cooperatives by the Director of Insurance from the prohibition against
using the term "Co-operative" as part of a corporate or other business name
or title without complying with the provisions of the Co-operative Act.
Sets forth provisions concerning health benefit purchasing cooperatives.
Provides that the purpose of a health benefit purchasing cooperative is to
provide health care benefits for certain eligible individuals under a
single group health care policy or plan through a contract between the
health benefit purchasing cooperative and an insurer authorized to do
health insurance business in the State. Sets forth provisions concerning
the design, the articles, the membership basis and capital stock, the
membership criteria, the health care benefits, and the annual progress
report of health benefit purchasing cooperatives. Effective immediately.
A BILL FOR
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AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
The Illinois Insurance Code is amended by adding
Section 44.1 as follows:
(215 ILCS 5/44.1 new)
Health care cooperatives.
(a) In addition to all other provisions of this Article not
in conflict with this Section, a company seeking to organize
under this Article as a health care cooperative shall meet all
of the following requirements:
(1) The company shall comply with all provisions
applicable to domestic mutual insurance companies under
(2) The articles of incorporation of the company shall
demonstrate that the company is to be organized as a
nonprofit member corporation and that the governance of the
company shall be subject to a majority vote of all members.
(3) The activities of the company shall be limited to
the issuance of health care plans in the individual and
small group markets.
(4) Either the articles of incorporation or the bylaws
of the company shall incorporate ethics and conflict of
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interest standards and the governance requirements set
forth in Section 1322(c)(3)(C) of the federal Patient
Protection and Affordable Care Act.
(5) The company or a related entity or any predecessor
of either shall not have been a health insurance issuer on
July 16, 2009.
(6) The company shall not be sponsored by a State or
local government, any political subdivision thereof, or
any instrumentality of such government or political
(7) Excess surplus shall be used to lower premiums, to
improve benefits, or for other programs intended to improve
the quality of health care delivered to its members.
(8) No representative of a federal, State, or local
government, or any political instrumentality thereof, and
no representative of a company described in paragraph (5)
of subsection (a) of this Section may serve on the board of
directors of the company.
(b) Notwithstanding Section 37 of this Article, the
corporate name of any organization seeking to organize under
this Article as a health care cooperative need not contain the
word "Mutual" but shall contain the phrase "Health Care
Cooperative". The corporate name shall not be the same as, or
deceptively similar to, the name of any domestic organization
or of any foreign or alien organization authorized to transact
business in this State.
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(c) A company seeking to be organized as a health care
cooperative shall submit an application to the Director
according to procedures and meeting such requirements as the
Director shall adopt by rule. No company shall transact any
business of insurance until it has received a certificate of
authority as set forth in Section 51 of this Article.
The Co-operative Act is amended by changing
Section 22 and by adding Section 30 as follows:
(805 ILCS 310/22)
(from Ch. 32, par. 326)
No corporation or association hereafter organized
business for profit in this State shall
be entitled to
use the term
"Co-operative" as a part of its corporate or other
business name or title
unless it has complied with the
provisions of this Act, except (1) a corporation
under the Business Corporation Act of 1983 for the purpose of
ownership or administration of residential property on
(2) a cooperative corporation organized
under the General Not For Profit Corporation Act of 1986 or its
predecessor or successor statutes
, or (3) a domestic mutual
insurance company licensed as a health care cooperative by the
Director of Insurance under Article III of the Illinois
. Any corporation
or association violating the
provision of this Section may be enjoined from
under such name at the instance of any shareholder of any
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association or corporation organized under this Act.
(Source: P.A. 95-368, eff. 8-23-07.)
(805 ILCS 310/30 new)
Health benefit purchasing cooperative.
(a) Notwithstanding any other provisions of this Act,
health benefit purchasing cooperatives may be organized under
this Section by one or more persons.
(b) The purpose of a health benefit purchasing cooperative
is to provide health care benefits for the individuals
specified in subsection (h) of this Section, under a single
group health care policy or plan through a contract between the
health benefit purchasing cooperative and an insurer
authorized to do health insurance business in this State.
(c) A health benefit purchasing cooperative shall be
designed so that all of the following are accomplished:
(1) The members become better informed about health
care trends and cost increases.
(2) All members receive their health care benefits
under the group health care policy or plan negotiated under
subsection (h) of this Section.
(3) The members are actively engaged in designing
health care benefit options that are offered by the insurer
and that meet the needs of their community.
(4) The health insurance risk of all of the members is
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(5) The members actively participate in health
improvement decisions for their community.
(d) The articles of a health benefit purchasing cooperative
shall set forth the name and address of at least one
incorporator who will act as the temporary board.
(e) Each health benefit purchasing cooperative shall be
organized on a membership basis with no capital stock.
(f) Any person that does business in, is located in, has a
principal office in, or resides in the geographic area in which
a health benefit purchasing cooperative is organized, that
meets the membership criteria established by the health benefit
purchasing cooperative in its bylaws, and that pays the
membership fee may be a member of the health benefit purchasing
(g) Each health benefit purchasing cooperative shall file
its membership criteria, as well as any amendments to the
criteria, with the Director.
(h) The health care benefits offered by a health benefit
purchasing cooperative shall be negotiated between the health
benefit purchasing cooperative and the insurer. Eligible
(1) An individual who is a member, officer, or eligible
employee of a member of the health benefit purchasing
(2) A self-employed individual who is a member of the
health benefit purchasing cooperative.
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(3) A dependent of an individual under items (1) and
(2) of this subsection (h) who receives coverage.
(i) Each health benefit purchasing cooperative shall
submit to the Director annually, no later than September 30, a
report on the progress of the health benefit purchasing
arrangement described in this Section.
(j) As used in this Section, "Director" means the Director
This Act takes effect upon