Illinois General Assembly - Full Text of HB4256
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Full Text of HB4256  103rd General Assembly



State of Illinois
2023 and 2024


Introduced 1/16/2024, by Rep. Michael J. Kelly


New Act
30 ILCS 105/5.1012 new
30 ILCS 105/5.1013 new
30 ILCS 105/5.1014 new

    Creates the Health Care Funding Act. Establishes the Health Care Funding Association for the primary purpose of equitably determining and collecting assessments for the cost of immunizations and health care information lines in the State that are not covered by other federal or State funding. Requires assessed entities, which include, but are not limited to, writers of individual, group, or stop-loss insurance, health maintenance organizations, third-party administrators, fraternal benefit societies, and certain other entities, to pay a specified quarterly assessment to the Association. Sets forth provisions concerning membership of the Association; powers and duties of the Association; methodology for calculating the assessment amount; reports and audits; immunities; tax-exempt status of the Association; an administrative allowance to the Department of Public Health; and other matters. Amends the State Finance Act to make conforming changes. Effective immediately.

LRB103 35563 RPS 65635 b






HB4256LRB103 35563 RPS 65635 b

1    AN ACT concerning health.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 1. Short title. This Act may be cited as the Health
5Care Funding Act.
6    Section 5. Definitions. In this Act:
7    "Adults" means (i) all State residents who are over age 18
8and under age 65 and (ii) all other persons over age 18 and
9under age 65 who receive health care services in the State.
10    "Assessed entity" means any health carrier or other entity
11that contracts or offers to insure, provide, deliver, arrange,
12pay for, administer any claims for, or reimburse or facilitate
13the sharing of the costs of health care services for any person
14residing in or receiving health care services in the State,
15including, without limitation, the following:
16        (1) any writer of individual, group, or stop-loss
17    insurance;
18        (2) any health maintenance organization;
19        (3) any third-party administrator;
20        (4) any preferred provider agreement;
21        (5) any fraternal benefit society;
22        (6) any administrative services organization and any
23    other organization managing claims on behalf of a



HB4256- 2 -LRB103 35563 RPS 65635 b

1    self-insured entity;
2        (7) any self-insurer or other entity that provides an
3    employee or group benefit plan and does not utilize an
4    external claims management service;
5        (8) any governmental entity that provides an employee
6    or group benefit plan and does not utilize an external
7    claims management service;
8        (9) any entity, administrator, or sponsor of a health
9    care cost-sharing program; or
10        (10) any managed care organization.
11    "Assessment" means the association member's liability with
12respect to costs determined in accordance with this Act.
13    "Association" means the Health Care Funding Association
14created by this Act.
15    "Board" means the board of directors of the association.
16    "Children" means (i) all State residents who are under age
1719 and (ii) all other persons under age 19 who receive health
18care services in the State.
19    "Covered lives" means all individuals who reside or
20receive health care in the State and who are:
21        (1) covered under an individual health insurance
22    policy issued or delivered in the State;
23        (2) covered under a group health insurance policy that
24    is issued or delivered in the State;
25        (3) covered under a group health insurance policy
26    evidenced by a certificate of insurance that is issued or



HB4256- 3 -LRB103 35563 RPS 65635 b

1    delivered to an individual who resides in the State;
2        (4) protected, in part, by a group excess loss
3    insurance policy where the policy or certificate of
4    coverage has been issued or delivered in the State;
5        (5) protected, in part, by an employee benefit plan of
6    a self-insured entity or a government plan for any
7    employer or government entity that (i) has an office or
8    other work site located in the State or (ii) has 50 or more
9    employees in the State; or
10        (6) participants or beneficiaries of a health
11    cost-sharing program or a managed care organization.
12    "Director" means a director of the association.
13    "Executive director" means the executive director of the
15    "Health carrier" means an entity subject to the insurance
16laws and rules of the State or subject to the jurisdiction of
17the Director of Insurance that contracts or offers to contract
18to provide, deliver, arrange for, pay for, or reimburse any of
19the costs of health care services, including an insurance
20company, a health maintenance organization, a health service
21corporation, or any other entity providing a plan of health
22insurance, health benefits, or health services.
23    "Health care information line" means any information line
24or referral service, including, but not limited to, Illinois
25DocAssist, that is available to providers in the State and is
26funded pursuant to the association's plan of operation.



HB4256- 4 -LRB103 35563 RPS 65635 b

1    "Health cost-sharing program" means any cost-sharing or
2similar program that seeks to share or coordinate the sharing
3of the costs of health care services and that in the preceding
412 months either has (1) coordinated payment for or reimbursed
5over $10,000 of costs for health services delivered in the
6State or (2) communicated by mail or electronic media to
7residents of the State concerning their potential
9    "Immunization" means any preparation of killed
10microorganisms, living attenuated organisms, living fully
11virulent organisms, RNA, or other medical material that is
12approved by the federal Food and Drug Administration and
13recommended by the national Advisory Committee on Immunization
14Practices of the Centers for Disease Control and Prevention
15and has been authorized for purchase by the Director of Public
16Health for the purposes of producing or artificially
17increasing immunity to particular diseases or facilitating
18recovery from particular diseases.
19    "Member" means any organization subject to assessments
20under this Act.
21    "Provider" means a person licensed by the State to provide
22health care services or a partnership or corporation or other
23entity made up of those persons.
24    "Seniors" means (i) all State residents who are over age
2564 and (ii) all other persons over age 64 who receive health
26care services in the State.



HB4256- 5 -LRB103 35563 RPS 65635 b

1    Section 10. Health Care Funding Association created.
2    (a) There is hereby created the Health Care Funding
3Association for the primary purpose of equitably determining
4and collecting assessments for the cost of immunizations and
5health care information lines in the State that are not
6covered by other federal or State funding.
7    (b) The association shall be comprised of all assessed
9    (c) The Health Care Information Line Fund and the
10Immunization Program Fund are created as special funds in the
11State treasury. Immunization purchase funds shall be deposited
12into the Immunization Program Fund, and health care
13information line funds shall be deposited into the Health Care
14Information Line Fund. Receipts from public and private
15sources for these funds may be deposited into the respective
16funds in the manner and method specified in the association's
17plan of operation. Expenditures from the funds must be used
18exclusively for the costs of operating any programs funded by
19the association, at no cost to providers. Only the Director of
20Public Health or the Director's designee may authorize
21expenditures from the funds.
22    Section 15. Powers and duties.
23    (a) The association shall be a not-for-profit corporation
24and shall possess all general powers as derive from that



HB4256- 6 -LRB103 35563 RPS 65635 b

1status under State law and such additional powers and duties
2as are specified in this Section.
3    (b) The directors' terms and method of appointments shall
4be specified in the plan of operation. The board of directors
5shall include:
6        (1) The Director of Public Health or the Director's
7    designee.
8        (2) The Director of Insurance or the Director's
9    designee.
10        (3) Three health carrier representatives.
11        (4) Two provider representatives, one of whom serves
12    primarily children and one of whom serves primarily
13    adults.
14        (5) One representative from a third-party
15    administrator that is not a health carrier.
16    The board of directors may include up to 3 additional
17members as specified in the association's plan of operation.
18    The initial appointments of the members under paragraph
19(3), (4), and (5) shall be made by the Director of Public
20Health, after consultation with the Director of Insurance,
21within 90 days after the effective date of this Act and before
22adoption of the plan of operation.
23    (c) A director may designate a personal representative to
24act for the director at a meeting or on a committee. The
25personal representative shall notify the meeting's presiding
26officer of the designation. A director may revoke the



HB4256- 7 -LRB103 35563 RPS 65635 b

1designation at any time.
2    (d) The board shall have the following duties:
3        (1) Prepare and adopt articles of association and
4    bylaws.
5        (2) Prepare and adopt a plan of operation.
6        (3) Submit the plan of operation to the Director of
7    Public Health for approval after the Director of Insurance
8    has the opportunity to comment.
9        (4) Conduct all activities in accordance with the
10    approved plan of operation.
11        (5) Undertake reasonable steps to minimize duplicate
12    counting of covered lives or duplicate assessments.
13        (6) Pay the association's operating costs.
14        (7) Remit collected assessments, after costs, refunds,
15    and reserves, to the State treasurer for credit to the
16    respective fund.
17        (8) Submit to the Director of Public Health, no later
18    than 120 days after the close of the association's fiscal
19    year, a financial report in a form acceptable to the
20    Director of Public Health.
21        (9) Submit a periodic noncompliance report to the
22    Director of Public Health and the Director of Insurance
23    listing any assessed entities that failed to either (i)
24    remit assessments in accordance with the plan of operation
25    or (ii) after notice from the association, comply with any
26    reporting or auditing requirement of this Act or the plan



HB4256- 8 -LRB103 35563 RPS 65635 b

1    of operation.
2    (e) The board shall have the following powers:
3        (1) Enter into contracts, including one or more
4    contracts for an executive director and administrative
5    services to administer the association.
6        (2) Sue or be sued, including taking any legal action
7    for the recovery of an assessment, interest, or other cost
8    reimbursement due to the association. Reasonable legal
9    fees and costs for any amounts determined to be due to the
10    association shall also be awarded to the association.
11        (3) Appoint, from among its directors, committees to
12    provide technical assistance and to supplement those
13    committees with non-board members.
14        (4) Engage professionals, including auditors,
15    attorneys, and independent consultants.
16        (5) Borrow and repay working capital, reserve, or
17    other funds and grant security interests in assets and
18    future assessments as may be helpful or necessary for
19    those purposes.
20        (6) Maintain one or more bank accounts for collecting
21    assessments, refunding overpayments, and paying the
22    association's costs of operation.
23        (7) Invest reserves as the board determines to be
24    appropriate.
25        (8) Provide member and public information about its
26    operations.



HB4256- 9 -LRB103 35563 RPS 65635 b

1        (9) Enter into one or more agreements with other State
2    or federal authorities, including similar funding
3    associations in other states, to assure equitable
4    allocation of funding responsibility with respect to
5    individuals who may reside in one state but receive health
6    care services in another. Amounts owed under an agreement
7    shall be included in the estimated costs for assessment
8    rate setting purposes.
9        (10) Enter into one or more agreements with assessed
10    entities for one or more alternative payment methodologies
11    for the respective assessed entity's covered lives.
12        (11) Assist the Director of Public Health in
13    qualifying for grant and other resources from the federal
14    government and adjust its procedures as may be needed from
15    time to time so that appropriate adjustments are made to
16    any assessment liability with respect to any person who is
17    eligible for federally funded services.
18        (12) Perform any other functions the board determines
19    to be helpful or necessary to carry out the plan of
20    operation or the purposes of this Act.
21    Section 20. Assessments.
22    (a) The association shall maintain separate records for
23each of the funds it maintains and allocate its operating
24income and expenses, as the board may determine among each of
25the funds it maintains. Assessment rates shall be separately



HB4256- 10 -LRB103 35563 RPS 65635 b

1determined in the following manner for each funded program:
2        (1) The Director of Public Health shall provide
3    estimated program operation costs, not covered by any
4    other State or federal funds, for the succeeding year no
5    later than 120 days prior to the commencement of each
6    year. The Director of Public Health shall provide this
7    estimate and shall update that estimate at times
8    reasonably requested by the association.
9        (2) Add estimates to cover the association's allocated
10    operating costs, including for the upcoming year, any
11    interest payable and estimated administrative allowance
12    payable to the Department of Health.
13        (3) Add a reserve of up to 10% of the sum of paragraphs
14    (1) and (2) for unanticipated costs.
15        (4) Add a working capital reserve in such amount as
16    may be reasonably determined by the board.
17        (5) Subtract the amount of any unexpended fund
18    balance, including any net investment income earned, as of
19    the end of the preceding year.
20        (6) Calculate a per child covered life per month, a
21    per adult covered life per month, and a per senior covered
22    life per month amount to be self-reported and paid by all
23    assessed entities by dividing the annual amount determined
24    under paragraphs (1) through (5) by the number of covered
25    lives in each age band, respectively, projected to be
26    covered by the assessed entities during the succeeding



HB4256- 11 -LRB103 35563 RPS 65635 b

1    program year, divided by 12. At the option of the
2    association, the assessment may, instead, be calculated
3    (i) as a single per covered life assessment, not
4    segregated for child, adult, and senior covered lives, or
5    (ii) as separate child and adult covered lives assessment
6    with the senior covered lives included with the adult
7    covered lives.
8    (b) Within 45 days after the close of each calendar
9quarter, each assessed entity must report its covered lives
10and pay its assessment. Unless otherwise determined by the
11board, the assessed entity that would have been responsible
12for payment or coordination of payment or reimbursement of any
13primary care provider health care services for any individual
14shall be the entity responsible for reporting the respective
15covered lives and for payment of the corresponding assessment.
16    (c) At any time after one full year of operation under
17subsections (a) and (b), the association, upon two-thirds vote
18of its board and the approval of the Director of Public Health,
20        (1) make changes to the assessment collection
21    mechanism specified in those subsections; or
22        (2) add any health care information line or other
23    services to those services funded by this Act for which
24    the board determines funding pursuant to this Act is
25    desirable. Any changes made under this paragraph shall be
26    reflected in an updated plan of operation approved by the



HB4256- 12 -LRB103 35563 RPS 65635 b

1    Director of Public Health and made available to the
2    public.
3    (d) If an assessed entity has not paid in accordance with
4this Section, interest accrues at 1% per month, compounded
5monthly on or after the due date.
6    (e) The board may determine an interim assessment for new
7programs covered or to cover any funding shortfall. The board
8shall calculate a supplemental interim assessment using the
9methodology for regular assessments, but payable over the
10remaining fiscal year, and the interim assessment shall be
11payable together with the regular assessment commencing the
12calendar quarter that begins no less than 30 days following
13the establishment of the interim assessment. The board may not
14impose more than one interim assessment per fund per year,
15except in the case of a public health emergency declared in
16accordance with State or federal law.
17    (f) For purposes of rate setting, medical loss ratio
18calculations, and reimbursement by plan sponsors, all
19association assessments are considered medical benefit costs
20and not regulatory or administrative costs.
21    (g) If there are any insolvency or similar proceedings
22affecting any payer, assessments shall be included in the
23highest priority of obligations to be paid by or on behalf of
24the payer.
25    (h) The State treasurer shall supply funds as needed for
26funded program operations throughout the State's fiscal year.



HB4256- 13 -LRB103 35563 RPS 65635 b

1No later than 45 days following the close of the State's fiscal
2year, the State treasurer shall provide an accounting for each
3program's operating costs not covered by any other State or
4federal program and advise the association of the final amount
5needed to cover the prior fiscal year. The association shall
6reimburse these costs within 45 days of receiving the
7accounting, except that, with respect to all or any part of any
8amount due that exceeds 105% of the amount that had been
9projected by the Director of Public Health to be needed for the
10fiscal year, the association may defer the payment and the
11State treasurer shall include the deferral in the subsequent
12year's accounting. If there is a deferral, any remaining
13unreimbursed amount shall be included in the assessment
14calculation by the association for the funds to be raised by
15the association in the subsequent year.
16    (i) If the association discontinues program funding for
17any reason, then any unexpended assessments, including
18unexpended funds from prior assessments in the respective
19fund, after the association's expenses, shall be refunded to
20payees in proportion to the respective assessment payments by
21payees over the most recent 8 quarters prior to
22discontinuation of association operations.
23    Section 25. Reports and audits.
24    (a) Each assessed entity is required to report its
25respective numbers of covered lives in a timely fashion as



HB4256- 14 -LRB103 35563 RPS 65635 b

1prescribed in this Act or the plan of operation and respond to
2any audit requests by the association related to covered lives
3or assessments due to the association. Upon failure of any
4assessed entity to respond to an audit request within 10 days
5after the receipt of notification of an audit request by the
6association, the assessed entity shall be responsible for
7prompt payment of the fees of any outside auditor engaged by
8the association to determine such information and shall make
9all books and records requested by the auditors available for
10inspection and copying at a location within the State as may be
11specified by the auditor.
12    (b) Failure to cure noncompliance with any reporting,
13auditing, or assessment obligation to the association within
1430 days from the postmarked date of written notice of
15noncompliance shall subject the assessed entity to all the
16fines and penalties, including suspension or loss of license,
17allowable under any provision of any other State statute. Any
18monetary fine or penalty shall be remitted to the respective
19fund and, thereby, reduce future obligations of the
20association for funding. The assessed entity also shall pay
21for reasonable attorney's fees and any other costs of
22enforcement under this Section.
23    Section 30. Immunity. Except for liabilities of assessed
24entities expressly provided in this Act or the plan of
25operation, there shall be no liability on the part of and no



HB4256- 15 -LRB103 35563 RPS 65635 b

1cause of action of any nature shall arise against (i) any
2association member or a member's agents, independent
3contractors, or employees; (ii) the association or its agents,
4contractors, or employees; (iii) members of the board of
5directors; (iv) the Director of Public Health or the
6representatives of the Director of Public Health; or (v) the
7Director of Insurance or the representatives of the Director
8of Insurance, for any action or omission by any of those
9persons related to activities under this Act.
10    Section 35. Tax-exempt status. The association is exempt
11from all taxes levied either by the State or any governmental
12entity located in the State.
13    Section 40. Rulemaking. The Department of Public Health
14and the Department of Insurance may adopt rules to implement
15and administer this Act.
16    Section 45. Administrative allowance to the Department of
17Public Health. Within 45 days following the close of each
18calendar quarter, the association shall transfer from
19assessments raised a sum equal to 5% of the costs funded by the
20association to the Health Care Funding Act Administration
21Fund, a special fund that is created in the State treasury, to
22be used by the Department of Public Health to enable
23association members to meet their obligations for funding



HB4256- 16 -LRB103 35563 RPS 65635 b

1health care services at a lower cost.
2    Section 50. Prepayments; initial assessments. To generate
3sufficient start-up funding, the association may accept
4prepayments from one or more assessed entities, subject to an
5offset of future amounts otherwise owing or other repayment
6method as determined by the board.
7    No assessment under this Act shall be due before January
81, 2025.
9    Section 900. The State Finance Act is amended by adding
10Sections 5.1012, 5.1013, and 5.1014 as follows:
11    (30 ILCS 105/5.1012 new)
12    Sec. 5.1012. The Health Care Information Line Fund.
13    (30 ILCS 105/5.1013 new)
14    Sec. 5.1013. The Immunization Program Fund.
15    (30 ILCS 105/5.1014 new)
16    Sec. 5.1014. The Health Care Funding Act Administration
18    Section 997. Severability. The provisions of this Act are
19severable under Section 1.31 of the Statute on Statutes.
20    Section 999. Effective date. This Act takes effect upon



HB4256- 17 -LRB103 35563 RPS 65635 b

1becoming law.