HB3976 97TH GENERAL ASSEMBLY

LRB097 16441 RPM 61604 b

97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB3976

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

AN ACT concerning insurance.

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

Section 5. The Illinois Insurance Code is amended by adding Section 44.1 as follows:

(215 ILCS 5/44.1 new)

Sec. 44.1. 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 this Code.

(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 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 subdivision.

(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.

(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.

Section 10. 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)

Sec. 22. No corporation or association hereafter organized or doing 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 organized under the Business Corporation Act of 1983 for the purpose of ownership or administration of residential property on a cooperative basis, or (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 Insurance Code. Any corporation or association violating the provision of this Section may be enjoined from doing business under such name at the instance of any shareholder of any association or corporation organized under this Act.

(Source: P.A. 95-368, eff. 8-23-07.)

(805 ILCS 310/30 new)

Sec. 30. 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 pooled.

(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 cooperative.

(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 members include:

(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 who is a member of the health benefit purchasing cooperative.

(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 of Insurance.

Section 99. Effective date. This Act takes effect upon becoming law.