(820 ILCS 153/1)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 1. Short title. This Act may
be cited as the Medical Care Savings Account Act of 2000.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/3)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 3. Programs under prior Act.
Programs established under the Medical Care Savings Account
Act are subject to and shall be governed by this Act.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/5)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 5. Definitions. In this Act:
"Account administrator" means
any of the following:
(1) A national
or state chartered bank, a federal or
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state chartered savings and loan association,
a federal or state chartered savings bank,
or a federal or state chartered credit union.
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(2)
A trust company authorized to act as a fiduciary.
(3) An
insurance company authorized to do business
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in this State under the Illinois Insurance
Code or a health maintenance organization authorized
to do business in this State under the Health
Maintenance Organization Act.
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(4)
A dealer, salesperson, or investment adviser
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registered under the Illinois Securities
Law of 1953.
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(5)
An administrator as defined in Section 511.101
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of the Illinois Insurance Code who is
licensed under Article XXXI 1/4 of that Code.
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(6)
A certified public accountant registered under
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the Illinois Public
Accounting Act.
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(7)
An attorney licensed to practice in this State.
(8) An
employer, if the employer has a self-insured
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health plan under the federal Employee
Retirement Income Security Act of 1974 (ERISA).
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(9)
An employer that participates in the medical
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care savings account program.
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"Deductible" means
the total deductible for an employee and all the dependents
of that employee for a calendar year.
"Dependent" means the
spouse of the employee or a child of the employee if the child
is any of the following:
(1) Under
19 years of age, or under 23 years of age
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and enrolled as a full-time student
at an accredited college or university.
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(2)
Legally entitled to the provision of proper or
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necessary subsistence, education, medical
care, or other care necessary for his or her
health, guidance, or well-being and not
otherwise emancipated, self-supporting,
married, or a member of the armed forces of
the United States.
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(3)
Mentally or physically incapacitated to the
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extent that he or she is not self-sufficient.
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"Domicile" means
a place where an individual has his or her true, fixed,
and permanent home and principal establishment, to
which, whenever absent, he or she intends to return.
Domicile continues until another permanent home or
principal establishment is established.
"Eligible medical expense" means
an expense paid by the taxpayer for medical care described in Section
213(d) of the Internal Revenue Code.
"Employee" means the
individual for whose benefit or for the benefit of whose dependents
a medical care savings account is established. Employee includes
a self-employed individual.
"Higher deductible" means
a deductible subject to a minimum and maximum established for 1999
by the Department of Revenue under the Medical Care Savings Account
Act. The minimum and maximum shall be adjusted for 2000 and annually
thereafter by the Department of Revenue to reflect increases in
the consumer price index for the United States as defined and officially
reported by the United States Department of Labor.
"Medical care savings account" or "account" means
an account established in this State pursuant to a medical care
savings account program to pay the eligible medical expenses of
an employee and his or her dependents.
"Medical care savings account
program" or "program" means a program that includes
all of the following:
(1) The
purchase by an employer of a qualified
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higher deductible health plan for the
benefit of an employee and his or her dependents.
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(2)
The contribution on behalf of an employee into
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a medical care savings account by his
or her employer of all or part of the premium
differential realized by the employer based
on the purchase of a qualified higher deductible
health plan for the benefit of the employee.
An employer that did not previously provide
a health coverage policy, certificate, or contract
for his or her employees may contribute all
or part of the deductible of the plan purchased
pursuant to paragraph (1). A contribution under
this paragraph may not exceed the maximum amounts
established for 1999 by the Department of Revenue
for 2 taxpayers filing a joint return, if each
taxpayer has a medical care savings account
but neither is covered by the other's health
coverage, and for all other cases. The maximum
amounts shall be adjusted for 2000 and annually
thereafter by the Department of Revenue to
reflect increases in the consumer price index
for the United States as defined and officially
reported by the United States Department of
Labor.
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(3)
An account administrator to administer the
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medical care savings account from which
payment of claims is made. Not more than 30
days after an account administrator begins
to administer an account, the administrator
shall notify in writing each employee on whose
behalf the administrator administers an account
of the date of the last business day of the
administrator's business year.
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"Qualified
higher deductible health plan" means a health
coverage policy, certificate, or contract that provides
for payments for covered benefits that exceed the higher
deductible and that is purchased by an employer for
the benefit of an employee for whom the employer makes
deposits into a medical care savings account.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/10)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 10. Program offer; tax treatment.
(a) For tax years ending on or
after December 31, 2000, an employer, except as otherwise provided
by statute, contract, or a collective bargaining agreement, may
offer a medical care savings account program to the employer's
employees.
(b) Before making any contribution
to an account, an employer that offers a medical care savings
account program shall inform all its employees in writing of
the federal tax status of contributions made pursuant to this
Act.
(c) Except as provided in Section
20, principal contributed to and interest earned on a medical
care savings account and money reimbursed to an employee for
eligible medical expenses are exempt from taxation under the
Illinois Income Tax Act as provided in that Act.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/15)
(Section scheduled to be repealed
on January 1, 2010)
Sec. 15. Use of account moneys.
(a) The account administrator shall
utilize the moneys held in a medical care savings account solely
for the purpose of paying the medical expenses of the employee
or his or her dependents or to purchase a health coverage policy,
certificate, or contract if the employee does not otherwise have
health insurance coverage. Moneys held in a medical care savings
account may not be used to cover medical expenses of the employee
or his or her dependents that are otherwise covered, including
but not limited to medical expenses covered pursuant to an automobile
insurance policy, workers' compensation insurance policy or self-insured
plan, or another health coverage policy, certificate, or contract.
(b) The employee may submit documentation
of medical expenses paid by the employee in the tax year to the
account administrator, and the account administrator shall reimburse
the employee from the employee's account for eligible medical
expenses.
(c) If an employer makes contributions
to a medical care savings account program on a periodic installment
basis, the employer may advance to an employee, interest free,
an amount necessary to cover medical expenses incurred that exceed
the amount in the employee's medical care savings account when
the expense is incurred if the employee agrees to repay the advance
from future installments or when he or she ceases to be an employee
of the employer.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/20)
(Section scheduled to be repealed
on January 1, 2010)
Sec. 20. Withdrawals from account.
(a) Notwithstanding subsection
(b) and subject to subsection (c), an employee may withdraw money
from his or her medical care savings account for any purpose
other than a purpose described in subsection (a) of Section 15
only on the last business day of the account administrator's
business year. Money withdrawn pursuant to this subsection is
income for purposes of the Illinois Income Tax Act in the taxable
year of the withdrawal, as provided in that Act.
(b) Subject to subsection (c),
if the employee withdraws money for any purpose other than a
purpose described in subsection (a) of Section 15 at any other
time, all of the following apply:
(1) The
amount of the withdrawal is income for
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purposes of the Illinois Income Tax
Act in the taxable year of the withdrawal,
as provided in that Act.
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(2)
The administrator shall withhold and on behalf
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of the employee shall pay a penalty
to the Department of Revenue equal to 10% of
the amount of the withdrawal.
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(3)
Interest earned on the account during the
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taxable year in which a withdrawal under
this subsection is made is income for purposes
of the Illinois Income Tax Act, as provided
in that Act.
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(c) The amount
of a disbursement of any assets of a medical care savings
account pursuant to a filing for protection under Title
11 of the United States Code, 11 U.S.C. 101 to 1330,
by an employee or person for whose benefit the account
was established is not considered a withdrawal for
purposes of this Section. The amount of a disbursement
is not subject to taxation under the Illinois Income
Tax Act, and subsection (b) does not apply.
(d) Upon the death of the employee,
the account administrator shall distribute the principal and accumulated
interest of the medical care savings account to the estate of the
employee.
(e) If (i) an employee is no longer
employed by an employer that participates in a medical care savings
account program, (ii) the employee, not more than 60 days after
his or her final day of employment, transfers the account to a
new account administrator or requests in writing to the former
employer's account administrator that the account remain with that
administrator, and (iii) that account administrator agrees to retain
the account, then the money in the medical care savings account
may be utilized for the benefit of the employee or his or her dependents
subject to this Act and remains exempt from taxation pursuant to
this Act. Not more than 30 days after the expiration of the 60
days, if an account administrator has not accepted the former employee's
account, the employer shall mail a check to the former employee,
at the employee's last known address, for an amount equal to the
amount in the account on that day, and that amount is subject to
taxation pursuant to subsection (a) of this Section but is not
subject to the penalty under paragraph (2) of subsection (b) of
this Section. If an employee becomes employed with a different
employer that participates in a medical care savings account program,
the employee may transfer his or her medical care savings account
to that new employer's account administrator.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/30)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 30. Administrator; fiduciary
duty. An account administrator shall discharge his or her duties
as a fiduciary in a manner consistent with the fiduciary standards
required by 29 U.S.C 1104 and shall not engage in any self-dealing
transactions in the investment of account assets.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/85)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 85. Repealer. This Act is
repealed on January
1, 2010.
(Source: P.A. 91-845, eff. 6-22-00.)
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(820 ILCS 153/90)
Sec. 90. (Amendatory provisions;
text omitted).
(Source: P.A. 91-845, eff. 6-22-00; text
omitted.)
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(820 ILCS 153/99)
(Section scheduled to be repealed
on January
1, 2010)
Sec. 99. Effective date. This Act
takes effect upon becoming law.
(Source: P.A. 91-845, eff. 6-22-00.)
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