Frequently Asked Questions


1. What is the Illinois Health Maintenance Organization Guaranty Association?

The Association is a non-profit organization established to provide protection in the event that your health maintenance organization (HMO) becomes insolvent.

The purpose of the Association is to provide specified protection to enrollees of HMO health care plans who reside in Illinois, and certain others residing elsewhere, against loss due to the impairment or insolvency of their HMO licensed in Illinois.

2. What happens when my HMO fails? How does the Association help?
Among other options, the Association may adopt one or more of the following approaches to address the impaired or insolvent HMO’s obligations:
(a) The Association may directly arrange for the provision of care to the covered persons, just as the HMO had been empowered to do.
(b) The Association could arrange to transfer the responsibility for ongoing care to another HMO; and/or
(c) Alternatively, or in addition, the Association may directly pay benefits to providers that provide services to the HMO’s enrollees.
3. Who is covered by the Association?
To qualify for coverage by the Association, an individual must:
(a) be an enrollee of the insolvent HMO; and,
(b) reside in illinois at the time the HMO is declared impaired by the Director of Insurance or insolvent by a Court of competent jurisdiction.
4. Is my HMO a member of the Association?
All HMOs licensed in Illinois are members of the Association.  View our member organization page for a list.
5. Are residents of other states protected by the Association?
There are some narrow and specific provisions which allow coverage for a non-resident enrollee.  Protection is afforded to non-residents only if::
(a) the enrollees reside in states which have associations similar to this Association;
(b) the enrollees are not eligible for coverage by such other associations;
(c) the insolvent HMO never held a license or certificate of authority in such states; and,
(d) the insolvent HMO was domiciled in Illinois.
6. What type of business is protected?
The Association protects only business issued under HMO certificates by HMOs licensed in Illinois. The Association does not protect:
(a) any business of Illinois HMOs not transacted under its HMO license;
(b) health insurance, including the indemnity portion of PPO business (which may be protected by the Illinois Life and Health Insurance Guaranty Association); and,
(c) employer self-funded plans.
7. Do Association payments fulfill the enrollees' liability to the provider?
In the case of an HMO insolvency, the enrollee remains responsible for:
– applicable co-payments or deductibles for covered services;
– fees for services not covered by the HMO or Association; and,
– fees which exceed statutory limits.
8. How is policy coverage determined following an insolvency?
Coverage is determined by Illinois law and contract language at the time the member organization is found to be insolvent and ordered liquidated by a court.

At this time, the Association is activated to provide protection.In light of changes in the law and the dramatic variations in contract language, the Association cannot make statements regarding coverage of a specific contract unless it is a contract with an organization which has been ordered liquidated by the court and for which the Association has been activated to provide protection.

9. Where does the Association get the money to provide this protection?
Illinois law requires that a portion of the assets of the insolvent HMO be used to help the Association provide the required protection to covered enrollees.  In addition, the law authorizes the Association to assess all HMO’s licensed to do business in Illinois for additional funds necessary to provide such protection.  No tax dollars are used to provide this protection.
10. Are there limits that apply to the Association's obligations?
Yes.  The obligations of the Association can be no greater than the contractual obligations the insolvent HMO had to its covered enrollees.  Additionally, the aggregate statutory liability of the Association cannot exceed $500,000 with respect to any one person.  Further limitations of the Association obligations are detailed in the Act.
11. Does the Association protect providers in addition to enrollees?
No. The purpose of the Association is to protect enrollees.  If the enrollee is not liable to a provider, the Association has no liability.
12. Why don't agents or the HMO disclose more about the Association?
HMOs and agents are prohibited by state law from using the existence of the Association to solicit enrollees in health care plans.
13. How will I know if my HMO is insolvent?
You will receive a notification from the Receiver (the state insurance department overseeing the company) if your HMO is found to be insolvent and ordered liquidated.


The intent of this FAQ section is to explain briefly, in non-technical language, how the Association provides protection to enrollees in the event their HMO becomes insolvent. This FAQ does not attempt to describe every aspect of the Association’s coverage, and some exceptions and limitations may not be described. For a definitive statement of the laws governing the Association, interested parties must refer to the Association Act. The Act can be found in the “Annual Reports & Statute” section of this website. If there is any inconsistency between this FAQ and any applicable law, then such law controls.