Bill Text: IL HB2944 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Creates the State Employee Health Savings Account Act. Provides that "eligible individual" has the same meaning as "employee" as that term is defined in the State Employees Group Insurance Act of 1971. Provides that, beginning in taxable year 2011, each employer shall make available to each eligible individual a health savings account program. Provides that an employer shall deposit $2,750 annually into an eligible individual's health savings account. Unused funds in a health savings account shall become the property of the account holder at the end of a taxable year. Provides that a trustee or custodian must use the funds held in a health savings account solely (i) for the purpose of paying the qualified medical expenses of the eligible individual or his or her dependents, (ii) to purchase a health coverage policy, certificate, or contract or (iii) to pay for health insurance other than a Medicare supplemental policy for those who are Medicare eligible. Makes other changes.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB2944 Detail]

Download: Illinois-2011-HB2944-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB2944 Introduced , by Rep. Jim Watson SYNOPSIS AS INTRODUCED:
New Act
Creates the State Employee Health Savings Account Act. Provides that "eligible individual" has the same meaning as "employee" as that term is defined in the State Employees Group Insurance Act of 1971. Provides that, beginning in taxable year 2011, each employer shall make available to each eligible individual a health savings account program. Provides that an employer shall deposit $2,750 annually into an eligible individual's health savings account. Unused funds in a health savings account shall become the property of the account holder at the end of a taxable year. Provides that a trustee or custodian must use the funds held in a health savings account solely (i) for the purpose of paying the qualified medical expenses of the eligible individual or his or her dependents, (ii) to purchase a health coverage policy, certificate, or contract or (iii) to pay for health insurance other than a Medicare supplemental policy for those who are Medicare eligible. Makes other changes.
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FISCAL NOTE ACT MAY APPLY
A BILL FOR
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AN ACT concerning health savings accounts.
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 State
Employee Health Savings Account Act.
Section 5. Definitions. As used in this Act:
(a) "Deductible" means the total deductible of a high
deductible health plan for an eligible individual and all the
dependents of that eligible individual for a calendar year.
(b) "Dependent" means an eligible individual's spouse or
child, as defined in Section 152 of the Internal Revenue Code
of 1986.
(c) "Eligible individual" means an employee, as defined in
Section 3 of the State Employees Group Insurance Act of 1971,
who contributes to health savings accounts on the employees'
behalf, who:
(1) is covered by a high deductible health plan
individually or with dependents; and
(2) is not covered under any health plan that is not a
high deductible health plan, except for:
(i) coverage for accidents;
(ii) workers' compensation insurance;
(iii) insurance for a specified disease or

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illness;
(iv) insurance paying a fixed amount per day per
hospitalization; and
(v) tort liabilities; and
(3) establishes a health savings account or on whose
behalf the health savings account is established.
(d) "Employer" means a State agency, department, or other
entity that employs an eligible individual.
(e) "Health savings account" or "account" means a trust or
custodial account established under a State program
exclusively to pay the qualified medical expenses of an
eligible individual, or his or her dependents, that meets the
all of the following requirements:
(1) Except in the case of a rollover contribution, no
contribution may be accepted:
(A) unless it is in cash; or
(B) to the extent that the contribution, when added
to the previous contributions to the Account for the
calendar year, exceeds the lesser of (i) 100% of the
eligible individual's deductible or (ii) $2,600 for an
individual or $5,150 per family.
(2) The trustee or custodian is a bank, an insurance
company, or another person approved by the Director of
Insurance.
(3) No part of the trust assets shall be invested in
life insurance contracts.

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(4) The assets of the account shall not be commingled
with other property except as allowed for under Individual
Retirement Accounts.
(5) Eligible individual's interest in the account is
nonforfeitable.
(f) "Health savings account program" or "program" means a
program that includes all of the following:
(1) The purchase by an eligible individual or by an
employer of a high deductible health plan.
(2) The contribution into a health savings account by
an eligible individual or on behalf of an employee or by
his or her employer. The total annual contribution may not
exceed the amount of the deductible or the amounts listed
in sub-item (B) of item (1) of subsection (f) of this
Section.
(g) "High deductible" means:
(1) In the case of self-only coverage, an annual
deductible that is not less than $1,000 and that, when
added to the other annual out-of-pocket expenses required
to be paid under the plan for covered benefits, does not
exceed $5,000; and
(2) In the case of family coverage, an annual
deductible of not less that $2,000 and that, when added to
the other annual out-of-pocket expenses required to be paid
under the plan for covered benefits, does not exceed
$10,000.

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A plan shall not fail to be treated as a high deductible
plan by reason of a failure to have a deductible for preventive
care or, in the case of network plans, for having out-of-pocket
expenses that exceed these limits on an annual deductible for
services that are provided outside the network.
(h) "High deductible health plan" means a health coverage
policy, certificate, or contract that provides for payments for
covered benefits that exceed the high deductible.
(i) "Qualified medical expense" means an expense paid by
the eligible individual for medical care described in Section
213(d) of the Internal Revenue Code of 1986.
Section 10. Application; authorized contributions.
(a) Beginning in taxable year 2011, each employer shall
make available to each eligible individual a health savings
account program. An employer shall deposit $2,750 annually into
an eligible individual's health savings account. Unused funds
in a health savings account shall become the property of the
account holder at the end of a taxable year.
(b) Beginning in taxable year 2011, an eligible individual
may deposit contributions into a health savings account. The
amount of deposit may not exceed the amount of the deductible
for the policy.
Section 15. Use of funds.
(a) The trustee or custodian must use the funds held in a

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health savings account solely (i) for the purpose of paying the
qualified medical expenses of the eligible individual or his or
her dependents, (ii) to purchase a health coverage policy,
certificate, or contract, or (iii) to pay for health insurance
other than a Medicare supplemental policy for those who are
Medicare eligible.
(b) Funds held in a health savings account may not be used
to cover expenses of the eligible individual or his or her
dependents that are otherwise covered, including, but not
limited to, medical expense covered under an automobile
insurance policy, worker's compensation insurance policy or
self-insured plan, or another employer-funded health coverage
policy, certificate, or contract.