Insolvency Cost

Insolvency CostThe Association is a non-profit legal entity.   For the purpose of providing the funds necessary to carry out the duties of the Association, the Board assesses its Member HMOs and then seeks reimbursement from the assets of the estate of the insolvent HMO.  There are two classes of assessments that may be made against Member HMOs.

CLASS A ASSESSMENT:  ADMINISTRATIVE

Class A assessments are made for the purpose of meeting general operating and administrative costs and expenses of the Association not directly attributable to a specific insolvency.  Class A assessments are determined by the Board and may be charged equally to all member HMOs.

CLASS B ASSESSMENT:  INSOLVENCY

Class B assessments are made against solvent Member HMOs to raise the revenues necessary to provide benefits to covered enrollees.  Member HMOs are billed for Class B assessments in the proportion that a Member HMO’s premiums bear to all such premiums received by all Member HMOs on covered policy certificates during the calendar year preceding the year of the assessment.

The total of all assessments (Class A and Class B) levied against a single Member HMO are not permitted, in any one calendar year, to exceed two percent of such Member’s assessable Illinois premium received during the calendar year preceding the year in which the assessments are levied.