HB0905 94TH GENERAL ASSEMBLY

LRB094 06539 LJB 36628 b

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.

FISCAL NOTE ACT MAY APPLY

A BILL FOR

AN ACT concerning insurance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Health Benefit Purchasing Cooperatives Act.

Section 5. Definitions. For the purposes of this Section:

(a) "Secretary" means the Secretary of Financial and Professional Regulation.

(b) "Eligible employee" includes any individual permitted to work by a small business employer, as defined in this Act, in an occupation, but does not include any individual permitted to work:

(1) For an employer employing fewer than 4 employees exclusive of the employer's parent, spouse, or child or other members of the employer's immediate family.

(2) As an employee employed in agriculture or aquaculture:

(A) if the employee is employed by an employer who did not, during any calendar quarter during the preceding calendar year, use more than 500 man days of agricultural or aquacultural labor;

(B) if the employee is the parent, spouse, or child or other member of the employer's immediate family;

(C) if the employee (i) is employed as a hand harvest laborer and is paid on a piece rate basis in an operation which has been, and is customarily and generally recognized as having been, paid on a piece rate basis in the region of employment, (ii) commutes daily from his or her permanent residence to the farm on which he or she is so employed, and (iii) has been employed in agriculture less than 13 weeks during the preceding calendar year; or

(D) if the employee (other than an employee described in subparagraph (C)) (i) is 16 years of age or under and is employed as a hand harvest laborer, is paid on a piece rate basis in an operation which has been, and is customarily and generally recognized as having been, paid on a piece rate basis in the region of employment, (ii) is employed on the same farm as his or her parent or person standing in the place of his or her parent, and (iii) is paid at the same piece rate as employees over 16 are paid on the same farm.

(3) In domestic service in or about a private home.

(4) As an outside salesman.

(5) As a member of a religious corporation or organization.

(6) At an accredited Illinois college or university employed by the college or university at which he or she is a student who is covered under the provisions of the Fair Labor Standards Act of 1938.

(7) For a motor carrier and with respect to whom the U.S. Secretary of Transportation has the power to establish qualifications and maximum hours of service under the provisions of Title 49 U.S.C. and the Department of Transportation of the State of Illinois has the authority to adopt rules under Section 18b-105 of the Illinois Vehicle Code. The above exclusions from the term "employee" may be further defined by of the Director of Labor.

(c) "Farmer" has the meaning ascribed to that term in the Illinois Family Farmer Support Act.

(d) "Person" means any corporation, limited liability company, partnership, cooperative, association, trade or labor organization, city, village, town, county, active farmer, small business, or self-employed individual.

(e) "Self-employed" means people who work in their own business, profession, or on their own farm and rely on their self-owned business for their primary source of income. This definition includes those who work in their own business, profession, or on their own farm and excludes those who operate their own incorporated business or farm.

(f) "Small business" means a business situated in Illinois having 50 or fewer employees.

Section 10. Organization and purpose.

(a) One health benefit purchasing cooperative may be organized under this Act in each of the geographic areas designated under Section 35. Each health benefit purchasing cooperative may be formed 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 Section 25 through a contract with an insurer authorized to do business in this State in one or more lines of insurance that includes health insurance.

(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 purchase their health care benefits and prescription drug coverage from the same insurer; (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 pooled; and (5) the members actively participate in health improvement decisions for their community.

Section 15. Temporary board of directors. The articles of a health benefit purchasing cooperative shall set forth the name and address of at least one incorporator who shall act as the temporary board of directors.

Section 20. Cooperative membership.

(a) Each health benefit purchasing cooperative shall be organized on a membership basis with no capital stock.

(b) Subject to subsection (c), 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 cooperative.

(c) A health benefit cooperative may limit membership through its membership criteria, but the criteria must be applied in the same manner to any person applying for membership. Each health benefit purchasing cooperative shall file its membership criteria, as well as any amendments to the criteria, with the Secretary.

Section 25. Health care benefits.

(a) The health care benefits offered by a health benefit purchasing cooperative shall be negotiated between the health benefit purchasing cooperative and the insurer. The insurer must offer coverage to all of the following:

(1) An individual who is a member, officer, or eligible employee of a member of the health benefit purchasing cooperative.

(2) A self-employed individual, farmer, or small business that is a member of the health benefit purchasing cooperative.

(3) A dependent of an individual who receives coverage under paragraphs (1) or (2).

(b) The contract between the members of a health benefit purchasing cooperative and the insurer shall be for a term of 3 years. Upon enrollment in the insurer's health benefit plan, each member shall pay to the health benefit purchasing cooperative an amount determined by the health benefit purchasing cooperative that is not less than the member's applicable premium for the 36th month of coverage under the contract. If a member withdraws from the health benefit purchasing cooperative before the end of the contract term, the health benefit purchasing cooperative may retain, as a penalty, the premium that the member paid for the 36th month of coverage.

Section 30. Additional required benefits. Each health benefit purchasing cooperative shall submit to the Secretary all of the following:

(a) Annually, no later than September 30, a report on the progress of the health benefit purchasing arrangement described in this Act and, to the extent possible, any significant findings in the criteria under paragraphs (1) through (3) of subsection (b).

(b) Within one year after the end of the term of the contract under subsection (b) of Section 25, a final report that details significant findings from the project and that includes, at a minimum and to the extent available, information on all of the following:

(1) the extent to which the health benefit purchasing arrangement had an impact on the number of uninsured in the geographic area in which it operated;

(2) the effect on health care coverage premiums for groups in the geographic area in which the health benefit purchasing arrangement operated, including groups other than the health benefit purchasing cooperative; and

(3) the degree to which health care consumers were involved in the development and implementation of the health benefit purchasing arrangement.

Section 35. Designation of geographic areas. The Secretary shall designate, by rule, the geographic areas of the State in which health benefit purchasing cooperatives may be organized. A geographic area may overlap with one or more other geographic areas.

Section 40. The Co-operative Act. The Co-operative Act shall not apply to this Act.