Bill
HB 5260
Allows PPACA rule incorporation by reference without dates; expands insurer licensing, dep. parent coverage, supplier diversity reporting, record confidentiality, and repeals Healt
HB5260 Summary — Illinois 104th General Assembly (Introduced 2026)
Overview
- Bill number: HB5260
- Session: 104th General Assembly
- Sponsor: Rep. Bob Morgan (co-sponsor also listed)
- Jurisdiction: Illinois
Purpose and intent
- The bill makes targeted amendments across several Illinois statutes to:
- Allow certain federal or regulatory rules to be incorporated by reference in rulemaking without identifying the incorporated material by date and without a statement that later amendments are excluded (within the Illinois Administrative Procedure Act and specifically for rules implementing the federal Patient Protection and Affordable Care Act).
- Clarify and adjust various Insurance Code provisions related to policy assignments, supplier diversity reporting, dependent parent coverage, record confidentiality, licensing fees, and the Network Adequacy and Transparency Act.
- Repeal the Health Care Purchasing Group Act.
- Update effective provisions to align with existing or proposed regulatory processes.
Key provisions and changes
1) Administrative Procedure Act – Incorporation by reference
- Amends 5 ILCS 100/5-75.
- For laws implementing the federal PPACA, the Department of Insurance may adopt rules that incorporate federal rules/regulations by reference without dating or noting that later amendments are not included.
- Department may adopt such incorporations for PPACA-related rules only if the issuing body makes copies readily available to the public.
- Other nuances:
- The Joint Committee on Administrative Rules will review these incorporations during the rulemaking process.
- The agency must maintain copies of incorporated materials and make them available to the public at principal offices, at no more than cost.
- Requests for copies of incorporated materials shall not automatically be Freedom of Information Act requests unless labeled as such.
- Emergency or peremptory rulemaking may not be used solely to designate locations where materials are maintained.
2) Insurance Code – Assignment/Transfer of policies
- Amends 215 ILCS 5/143.11b.
- An assignment/transfer of a policy within an insurance holding company system or resulting from mergers/acquisitions/restructuring is generally not considered a renewal/nonrenewal for notification purposes.
- If renewal premiums increase by 30% or more or there are material changes to deductibles or coverage, the notice requirements under Section 143.17a/b apply.
- Notice requirements: at least 60 days’ notice to named insured prior to renewal; an exact copy must also be sent to the insured’s producer/agent of record if known.
- Requires a signed agency contract with the recipient insurer for assignments/transfers; if no signed contract, then applicable notice procedures under Sections 143.17 and 143.17a apply.
- electronic notice option for the insured’s producer/agent of record.
3) Insurance Code – Supplier diversity report
- Amends 215 ILCS 5/155.49.
- Large insurers (assets at least $50 million) must submit a 2-page supplier diversity report detailing:
- Contact person for the supplier diversity program.
- Certifications recognized for minority-owned, women-owned, LGBT-owned, veteran-owned statuses.
- Narrative about results and strategies to meet goals.
- Voluntary diversity goals for the calendar year, broken down by budget and procurement areas.
- Reports due annually by April 1; the Department must publish results on its website for 5 years but does not collect these reports or review content.
- Department must hold an annual supplier diversity workshop each July.
- Department to create a one-page template for the reports and may adopt implementing rules.
4) Insurance Code – Dependent parents coverage
- Amends 215 ILCS 5/356z.73.
- Beginning January 1, 2026, group or individual accident and health policies providing dependent coverage must offer dependent coverage to the insured’s parent or stepparent who is a qualifying relative under 26 U.S.C. 152(d) and who lives in the policy’s service area.
- Exclusions: does not apply to specialized health plans, excepted benefits, or certain public aid/children’s programs. Applies to stand-alone dental plans in the Illinois Health Benefits Exchange, Medicare supplement insurance, hospital-only, accident-only, or specified disease policies (with hospital, medical, or surgical reimbursements).
5) Technical/records and confidentiality
- Amends 215 ILCS 5/404 (Office of Director; destruction or disposal of records).
- Maintains confidentiality for certain records or information, especially confidential materials from NAIC or other regulatory bodies.
- Sets out destruction/disposal timelines for various records and requires certificates describing destroyed records, with optional microfilming/photography.
6) License provisions and authority
- The section scheduling repeal (215 ILCS 5/500-35) indicates the license provisions for insurance producers are being repealed effective January 1, 2027, but HB5260 introduces many related licensing requirements and processes (education, renewal, penalty provisions, active involvement provisions, etc.) prior to that date.
- Key licensing elements:
- 2-year license for insurance producers, with lines of authority (life, variable life/annuities, accident/health, property, casualty, personal lines, or other permitted lines).
- Continuing education: at least 24 hours prior to renewal, including at least 3 hours ethics; portions may be self-study or combined formats with specific rules on credit and examinations.
- Licensing penalties if renewal requirements are not met; ability to waive certain fees for government-provided pre-licensing/continuing education.
- Military service accommodations and other license management requirements (change of address, etc.).
- Department may contract with a non-governmental entity (including NAIC) to perform ministerial licensing functions.
7) Repeal of Health Care Purchasing Group Act
- Section 15 repeals the Health Care Purchasing Group Act.
8) Network Adequacy and Transparency Act
- Amends 215 ILCS 124/3 to clarify applicability:
- Act applies to individual/group health policies with network plans issued or renewed after Jan 1, 2019.
- Excludes certain coverage types (excepted benefits, short-term limited-duration coverage with network plan, stand-alone dental plans).
- If federal law imposes network adequacy standards for stand-alone dental plans, enforcement of those federal requirements applies.
Effective date
- The act states that it takes effect immediately upon becoming law.
Who is affected
- Department of Insurance (DOI) and its rulemaking process, including incorporation by reference rules for PPACA-related matters.
- Insurance companies and producers in Illinois, particularly:
- Policies and assignments/transfers within holding company systems or following mergers/restructuring.
- Those with supplier diversity programs (assets ≥ $50 million).
- Insurers offering dependent coverage to qualifying relatives.
- Insurance producers and training providers (education and licensing processes, fees, and government waivers).
- Individuals covered under health policies in the Network Adequacy and Transparency Act, and stand-alone dental plans in the Exchange, as well as other specified health product categories.
Effective timeline and notable dates
- Immediate effect upon enactment.
- Supplier diversity reports: annual due date April 1 (starting 2024 and each year thereafter).
- Dependent parent coverage: effective for policies issued/renewed on or after January 1, 2026.
- Repeal of Health Care Purchasing Group Act: effective as part of the act (no separate date specified beyond immediate effectiveness).
- Licensing, continuing education, and related DOI processes updated to reflect the new standards (with an eventual repealing reference to Section 500-35 scheduled for repeal in 2027, indicating broader future regulatory shifts).
Note
- This summary reflects the introduced text and outlines the substantive provisions and potential impacts. If enacted, further amendments or implementing rules could modify these provisions.
Compiled from official sources — confirm details with the bill’s official record.
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