There Is a Newer Version of the Illinois Compiled Statutes

2005 Illinois Code - Chapter 820 Employment 820 ILCS 153/ Medical Care Savings Account Act of 2000.

(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(Section scheduled to be repealed on January 1, 2010)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.)

(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(Section scheduled to be repealed on January 1, 2010)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.)

(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(Section scheduled to be repealed on January 1, 2010)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

state chartered savings and loan association, a federal or state chartered savings bank, or a federal or state chartered credit union.

(2) A trust company authorized to act as a fiduciary.

(3) An insurance company authorized to do business

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.

(4) A dealer, salesperson, or investment adviser

registered under the Illinois Securities Law of 1953.

(5) An administrator as defined in Section 511.101

of the Illinois Insurance Code who is licensed under Article XXXI 1/4 of that Code.

(6) A certified public accountant registered under

the Illinois Public Accounting Act.

(7) An attorney licensed to practice in this State.

(8) An employer, if the employer has a self‑insured

health plan under the federal Employee Retirement Income Security Act of 1974 (ERISA).

(9) An employer that participates in the medical

care savings account program.

"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

and enrolled as a full‑time student at an accredited college or university.

(2) Legally entitled to the provision of proper or

 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.

(3) Mentally or physically incapacitated to the

extent that he or she is not self‑sufficient.

"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

higher deductible health plan for the benefit of an employee and his or her dependents.

(2) The contribution on behalf of an employee into

 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.

(3) An account administrator to administer the

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.

"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.)

(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.)

(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.)

(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

purposes of the Illinois Income Tax Act in the taxable year of the withdrawal, as provided in that Act.

(2) The administrator shall withhold and on behalf

of the employee shall pay a penalty to the Department of Revenue equal to 10% of the amount of the withdrawal.

(3) Interest earned on the account during the

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.

(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.)

(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.)

(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.)

(820 ILCS 153/90)

Sec. 90.

(Amendatory provisions; text omitted).

(Source: P.A. 91‑845, eff. 6‑22‑00; text omitted.)

(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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