Illinois General Assembly - Full Text of SB2885
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Full Text of SB2885  97th General Assembly




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1    AN ACT concerning insurance.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Health Care Purchasing Group Act is amended
5by changing Sections 10 and 15 as follows:
6    (215 ILCS 123/10)
7    Sec. 10. Definitions. Words and phrases used in this Act,
8unless defined in this Section, have the meanings attributed to
9them in Section 5 of the Illinois Health Insurance Portability
10and Accountability Act.
11    "Director" means the Director of Insurance.
12    "Employer" means an individual, sole proprietorship,
13partnership, firm, corporation, association, or any other
14legal entity that has one or more employees and is legally
15doing business in this State. "Employer" includes employers as
16defined in the Illinois Health Insurance Portability and
17Accountability Act.
18    "Health insurance contract", "group or master health
19insurance contract" and "insurance" refer to the forms of
20insurance obligations which a "risk-bearer" as defined in this
21Section has been authorized to issue.
22    "Risk-bearer" means an insurance company licensed in this
23State and authorized to transact the kinds of business



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1described in clause (b) of Class 1 and clause (a) of Class 2 of
2Section 4 of the Illinois Insurance Code and entities
3authorized under the Health Maintenance Organization Act.
4(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)
5    (215 ILCS 123/15)
6    Sec. 15. Health care purchasing groups; membership;
8    (a) An HPG may be an organization formed by 2 or more
9employers with no more than 2,500 500 covered employees each,
10an HPG sponsor or a risk-bearer for purposes of contracting for
11health insurance under this Act to cover employees and
12dependents of HPG members. An HPG shall not be prevented from
13supplementing health insurance coverage purchased under this
14Act by contracting for services from entities licensed and
15authorized in Illinois to provide those services under the
16Dental Service Plan Act, the Limited Health Service
17Organization Act, or Voluntary Health Services Plans Act. An
18HPG may be a separate legal entity or simply a group of 2 or
19more employers with no more than 2,500 500 covered employees
20each aggregated under this Act by an HPG sponsor or risk-bearer
21for insurance purposes. There shall be no limit as to the
22number of HPGs that may operate in any geographic area of the
23State. No insurance risk may be borne or retained by the HPG.
24All health insurance contracts issued to the HPG must be
25delivered or issued for delivery in Illinois.



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1    (b) Members of an HPG must be Illinois domiciled employers,
2except that an employer domiciled elsewhere may become a member
3of an Illinois HPG for the sole purpose of insuring its
4employees whose place of employment is located within this
5State. HPG membership may include employers having no more than
62,500 500 covered employees each.
7    (c) If an HPG is formed by any 2 or more employers with no
8more than 2,500 500 covered employees each, it shall utilize a
9licensed insurance producer is authorized to negotiate,
10solicit, market, obtain proposals for, and enter into group or
11master health insurance contracts on behalf of its members and
12their employees and employee dependents so long as it meets all
13of the following requirements:
14        (1) The HPG must be an organization having the legal
15    capacity to contract and having its legal situs in
16    Illinois.
17        (2) The principal persons responsible for the conduct
18    of the HPG must perform their HPG related functions in
19    Illinois.
20        (3) No HPG may collect premium in its name or hold or
21    manage premium or claim fund accounts unless duly licensed
22    and qualified as a managing general agent pursuant to
23    Section 141a of the Illinois Insurance Code or a third
24    party administrator pursuant to Section 511.105 of the
25    Illinois Insurance Code.
26        (4) If the HPG gives an offer, application, notice, or



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1    proposal of insurance to an employer, it must disclose to
2    that employer the total cost of the insurance. Dues, fees,
3    or charges to be paid to the HPG, HPG sponsor, or any other
4    entity as a condition to purchasing the insurance must be
5    itemized. The HPG shall also disclose to its members the
6    amount of any dividends, experience refunds, or other such
7    payments it receives from the risk-bearer.
8        (5) An HPG must register with the Director before
9    entering into a group or master health insurance contract
10    on behalf of its members and must renew the registration
11    annually on forms and at times prescribed by the Director
12    in rules specifying, at minimum, (i) the identity of the
13    officers and directors, trustees, or attorney-in-fact of
14    the HPG; (ii) a certification that those persons have not
15    been convicted of any felony offense involving a breach of
16    fiduciary duty or improper manipulation of accounts; and
17    (iii) the number of employer members then enrolled in the
18    HPG, together with any other information that may be needed
19    to carry out the purposes of this Act.
20        (6) At the time of initial registration and each
21    renewal thereof an HPG shall pay a fee of $100 to the
22    Director.
23    (d) If an HPG is formed by an HPG sponsor or risk-bearer
24and the HPG performs no marketing, negotiation, solicitation,
25or proposing of insurance to HPG members, exclusive of
26ministerial acts performed by individual employers to service



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1their own employees, then a group or master health insurance
2contract may be issued in the name of the HPG and held by an HPG
3sponsor, risk-bearer, or designated employer member within the
4State. In these cases the HPG requirements specified in
5subsection (c) shall not be applicable, however:
6        (1) the group or master health insurance contract must
7    contain a provision permitting the contract to be enforced
8    through legal action initiated by any employer member or by
9    an employee of an HPG member who has paid premium for the
10    coverage provided;
11        (2) the group or master health insurance contract must
12    be available for inspection and copying by any HPG member,
13    employee, or insured dependent at a designated location
14    within the State at all normal business hours; and
15        (3) any information concerning HPG membership required
16    by rule under item (5) of subsection (c) must be provided
17    by the HPG sponsor in its registration and renewal forms or
18    by the risk-bearer in its annual reports.
19(Source: P.A. 90-337, eff. 1-1-98; 90-655, eff. 7-30-98;
2091-617, eff. 1-1-00.)