215 ILCS 123/ Health Care Purchasing Group Act.

(215 ILCS 123/1)

Sec. 1. Short title. This Act may be cited as the Health Care Purchasing Group Act.

(Source: P.A. 90-337, eff. 1-1-98.)

(215 ILCS 123/5)

Sec. 5. Purpose; applicability of Illinois Health Insurance Portability and Accountability Act.

(a) The purpose and intent of this Act is to authorize the formation, operation, and regulation of health care purchasing groups (referred to in this Act as "HPGs") as described by this Act, to authorize the sale and regulation of health insurance products for employers that are sold to HPGs, and to encourage the development of financially secure and cost effective markets for the basic health care needs of employers, employees, and their dependents in this State. Nothing in this Act authorizes an employer to join with other employers to self-insure through risk pooling.

(b) All health insurance contracts issued under this Act are subject to the Illinois Health Insurance Portability and Accountability Act.

(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)

(215 ILCS 123/10)

Sec. 10. Definitions. Words and phrases used in this Act, unless defined in this Section, have the meanings attributed to them in Section 5 of the Illinois Health Insurance Portability and Accountability Act.

"Director" means the Director of Insurance.

"Employer" means an individual, sole proprietorship, partnership, firm, corporation, association, or any other legal entity that has one or more employees and is legally doing business in this State. "Employer" includes employers as defined in the Illinois Health Insurance Portability and Accountability Act.

"Health insurance contract", "group or master health insurance contract" and "insurance" refer to the forms of insurance obligations which a "risk-bearer" as defined in this Section has been authorized to issue.

"Risk-bearer" means an insurance company licensed in this State and authorized to transact the kinds of business described in clause (b) of Class 1 and clause (a) of Class 2 of Section 4 of the Illinois Insurance Code and entities authorized under the Health Maintenance Organization Act.

(Source: P.A. 97-715, eff. 1-1-13.)

(215 ILCS 123/15)

Sec. 15. Health care purchasing groups; membership; formation.

(a) An HPG may be an organization formed by 2 or more employers with no more than 2,500 covered employees each, an HPG sponsor or a risk-bearer for purposes of contracting for health insurance under this Act to cover employees and dependents of HPG members. An HPG shall not be prevented from supplementing health insurance coverage purchased under this Act by contracting for services from entities licensed and authorized in Illinois to provide those services under the Dental Service Plan Act, the Limited Health Service Organization Act, or Voluntary Health Services Plans Act. An HPG may be a separate legal entity or simply a group of 2 or more employers with no more than 2,500 covered employees each aggregated under this Act by an HPG sponsor or risk-bearer for insurance purposes. There shall be no limit as to the number of HPGs that may operate in any geographic area of the State. No insurance risk may be borne or retained by the HPG. All health insurance contracts issued to the HPG must be delivered or issued for delivery in Illinois.

(b) Members of an HPG must be Illinois domiciled employers, except that an employer domiciled elsewhere may become a member of an Illinois HPG for the sole purpose of insuring its employees whose place of employment is located within this State. HPG membership may include employers having no more than 2,500 covered employees each.

(c) If an HPG is formed by any 2 or more employers with no more than 2,500 covered employees each, it shall utilize a licensed insurance producer to negotiate, solicit, market, obtain proposals for, and enter into group or master health insurance contracts on behalf of its members and their employees and employee dependents so long as it meets all of the following requirements:

(1) The HPG must be an organization having the legal capacity to contract and having its legal situs in Illinois.

(2) The principal persons responsible for the conduct of the HPG must perform their HPG related functions in Illinois.

(3) No HPG may collect premium in its name or hold or manage premium or claim fund accounts unless duly licensed and qualified as a managing general agent pursuant to Section 141a of the Illinois Insurance Code or a third party administrator pursuant to Section 511.105 of the Illinois Insurance Code.

(4) If the HPG gives an offer, application, notice, or proposal of insurance to an employer, it must disclose to that employer the total cost of the insurance. Dues, fees, or charges to be paid to the HPG, HPG sponsor, or any other entity as a condition to purchasing the insurance must be itemized. The HPG shall also disclose to its members the amount of any dividends, experience refunds, or other such payments it receives from the risk-bearer.

(5) An HPG must register with the Director before entering into a group or master health insurance contract on behalf of its members and must renew the registration annually on forms and at times prescribed by the Director in rules specifying, at minimum, (i) the identity of the officers and directors, trustees, or attorney-in-fact of the HPG; (ii) a certification that those persons have not been convicted of any felony offense involving a breach of fiduciary duty or improper manipulation of accounts; and (iii) the number of employer members then enrolled in the HPG, together with any other information that may be needed to carry out the purposes of this Act.

(6) At the time of initial registration and each renewal thereof an HPG shall pay a fee of $100 to the Director.

(d) If an HPG is formed by an HPG sponsor or risk-bearer and the HPG performs no marketing, negotiation, solicitation, or proposing of insurance to HPG members, exclusive of ministerial acts performed by individual employers to service their own employees, then a group or master health insurance contract may be issued in the name of the HPG and held by an HPG sponsor, risk-bearer, or designated employer member within the State. In these cases the HPG requirements specified in subsection (c) shall not be applicable, however:

(1) the group or master health insurance contract must contain a provision permitting the contract to be enforced through legal action initiated by any employer member or by an employee of an HPG member who has paid premium for the coverage provided;

(2) the group or master health insurance contract must be available for inspection and copying by any HPG member, employee, or insured dependent at a designated location within the State at all normal business hours; and

(3) any information concerning HPG membership required by rule under item (5) of subsection (c) must be provided by the HPG sponsor in its registration and renewal forms or by the risk-bearer in its annual reports.

(Source: P.A. 97-715, eff. 1-1-13.)

(215 ILCS 123/20)

Sec. 20. HPG sponsors. Except as provided by Sections 15 and 25 of this Act, only a corporation authorized by the Secretary of State to transact business in Illinois may sponsor one or more HPGs with no more than 100,000 covered individuals by negotiating, soliciting, or servicing health insurance contracts for HPGs and their members. Such a corporation may assert and maintain authority to act as an HPG sponsor by complying with all of the following requirements:

(1) The principal officers and directors responsible for the conduct of the HPG sponsor must perform their HPG sponsor related functions in Illinois.

(2) No insurance risk may be borne or retained by the HPG sponsor; all health insurance contracts issued to HPGs through the HPG sponsor must be delivered in Illinois.

(3) No HPG sponsor may collect premium in its name or hold or manage premium or claim fund accounts unless duly qualified and licensed as a managing general agent pursuant to Section 141a of the Illinois Insurance Code or as a third party administrator pursuant to Section 511.105 of the Illinois Insurance Code.

(4) If the HPG gives an offer, application, notice, or proposal of insurance to an employer, it must disclose the total cost of the insurance. Dues, fees, or charges to be paid to the HPG, HPG sponsor, or any other entity as a condition to purchasing the insurance must be itemized. The HPG shall also disclose to its members the amount of any dividends, experience refunds, or other such payments it receives from the risk-bearer.

(5) An HPG sponsor must register with the Director before negotiating or soliciting any group or master health insurance contract for any HPG and must renew the registration annually on forms and at times prescribed by the Director in rules specifying, at minimum, (i) the identity of the officers and directors of the HPG sponsor corporation; (ii) a certification that those persons have not been convicted of any felony offense involving a breach of fiduciary duty or improper manipulation of accounts; (iii) the number of employer members then enrolled in each HPG sponsored; (iv) the date on which each HPG was issued a group or master health insurance contract, if any; and (v) the date on which each such contract, if any, was terminated.

(6) At the time of initial registration and each renewal thereof an HPG sponsor shall pay a fee of $200 to the Director.

(Source: P.A. 93-32, eff. 7-1-03.)

(215 ILCS 123/25)

Sec. 25. Risk-bearer.

(a) A risk-bearer may issue for delivery in this State any health insurance contracts as provided by this Act. A risk-bearer may also be a sponsor of an HPG.

(b) A risk-bearer must also file an annual report in the form and at the time prescribed by the Director in rules that shall require, at minimum, (i) the number of employer members then enrolled in each HPG; (ii) the date on which each HPG was issued a group or master health insurance contract, if any; and (iii) the date on which each such contract, if any, was terminated, together with any other information that may be necessary to carry out the purposes of this Act. A fee of $25 shall be paid to the Director at the time the annual report is filed.

(Source: P.A. 90-337, eff. 1-1-98.)

(215 ILCS 123/30)

Sec. 30. Insurance policy requirements.

(a) No health insurance contract may be issued or delivered pursuant to this Act unless a copy of the form of the contract has been filed with the Director and approved in accordance with Section 355 of the Illinois Insurance Code. It must also contain, in substance, those provisions contained in Sections 357.1 through 357.30 of the Illinois Insurance Code as may be applicable and contain all other provisions applicable to group accident and health insurance policies as provided in Article XX of the Illinois Insurance Code, except as provided in Section 50 of this Act. This subsection (a) does not apply to health maintenance organizations.

(b) No health maintenance organization contract may be issued or delivered under this Act unless a copy of the form of the contract has been filed with the Director and approved in accordance with Section 4-13 of the Health Maintenance Organization Act. It must also provide or arrange for and pay for or reimburse the cost of basic health care services as defined in Section 1-2 of the Health Maintenance Organization Act and provide the benefits specified in the Health Maintenance Organization Act for group contracts.

(c) In the event that the enrollee has moved outside of the service area of the health maintenance organization, the HMO must make available conversion coverage through a contract with a licensed insurance carrier. The conversion coverage must be similar to that which is provided through the HMO. Coverage shall be considered "similar" if it provides a comprehensive medical benefit plan for at least 18 months and is provided without imposing any preexisting condition limitation or exclusion, other than those remaining unexpired under the contract from which conversion is exercised.

(d) Nothing in this Act shall preclude a risk-bearer and an HPG or employer from entering into a contract that contains provisions whereby each party agrees to continue the contract in force for a prescribed period of time.

(e) Nothing in this Act shall preclude a risk-bearer from offering health insurance contracts that contain benefits in addition to those required in subsection (a).

(f) No HPG may purchase insurance providing for a deductible or an aggregate limit unless the deductible or aggregate limit applies separately to each individual insured person of the purchasing group.

(Source: P.A. 90-337, eff. 1-1-98.)

(215 ILCS 123/35)

Sec. 35. Underwriting provisions. All health insurance contracts issued under this Act shall be subject to the portability and preexisting condition provisions of the Illinois Health Insurance Portability and Accountability Act.

(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)

(215 ILCS 123/40)

Sec. 40. Renewability. All health insurance contracts issued under this Act are subject to the renewability provisions of the Illinois Health Insurance Portability and Accountability Act.

(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)

(215 ILCS 123/45)

Sec. 45. Disclosure requirements. In connection with the offering for sale of any health insurance contract or certificate under the contract to an HPG sponsor, HPG, employer, and employee, a risk-bearer shall make a reasonable disclosure, as part of its solicitation and sales materials of all of the following:

(1) the provisions of the health insurance contracts concerning the risk-bearer's right to change premium rates and the factors, other than claim experience, that affect changes in premium rates;

(2) the provisions relating to renewability of policies and contracts;

(3) the provisions relating to any preexisting condition provision; and

(4) the provisions relating to portability provisions.

(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)

(215 ILCS 123/50)

Sec. 50. (Repealed).

(Source: P.A. 90-337, eff. 1-1-98. Repealed by P.A. 90-567, eff. 1-23-98.)

(215 ILCS 123/60)

Sec. 60. Administrative and procedural authority regarding HPGs and HPG sponsors. The Director is authorized to make use of any of the powers established under the Illinois Insurance Code to enforce the laws of this State. This includes but is not limited to, the Director's administrative authority to investigate, issue subpoenas, conduct depositions and hearings, issue orders (including without limitation orders pursuant to Article XII 1/2 and Section 401.1 of the Illinois Insurance Code), and impose penalties. With regard to any investigation, administrative proceedings, or litigation, the Director shall rely on the procedural law and regulations of this State.

(Source: P.A. 90-337, eff. 1-1-98.)

(215 ILCS 123/65)

Sec. 65. Fees.

(a) The Director shall charge, collect, and give proper acquittance for the payment all fees provided for by this Act, except that any Illinois corporations licensed by the Department of Insurance pursuant to the provisions of the Illinois Insurance Code, the Dental Service Plan Act, the Health Maintenance Organization Act, the Limited Health Service Organization Act, the Vision Service Plan Act and the Voluntary Health Services Plans Act or licensed as a third party administrator or as a managing general agent is exempt from the registration fee imposed under this Act.

(b) Any funds collected under provisions of this Act shall be deposited in the Insurance Producer Administration Fund.

(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)

(215 ILCS 123/70)

Sec. 70. Rules. The Director shall promulgate rules as may be necessary or desirable to carry out the provisions of this Act.

(Source: P.A. 90-337, eff. 1-1-98.)

(215 ILCS 123/75)

Sec. 75. Severability. The provisions of this Act are severable under Section 1.31 of the Statute on Statutes.

(Source: P.A. 90-337, eff. 1-1-98.)