Illinois Law Banning Reporting of Medical Debt Under Review

On May 16, 2024, the Illinois legislature approved Senate Bill 2933. The bill is an amendment to the Illinois Consumer Fraud and Deceptive Business Practices Act, which protects consumers from businesses attempting to conceal essential facts and engage in deceptive, misleading, or fraudulent commercial acts.

The proposed amendment followed a 2022 announcement that the three largest consumer reporting agencies would stop reporting paid medical debt and outstanding medical debt under $500. If signed into law, Illinois will join other states, such as California, Colorado, New York, and Minnesota, in removing medical bills from consumer reports.

What does SB2933 include?

The proposed amendment would make it illegal for consumer reporting agencies to include adverse information related to "medical debt" in consumer reports in Illinois. The legislation defines "medical debt" as "debt arising from the receipt of health care services, products, or devices." The definition excludes any debt transferred to a credit card or any extension of credit provided by a financial institution to a consumer, except in cases where the credit is exclusively for purchasing health care services.

The new bill expands on the Illinois Consumer Fraud and Deceptive Business Practices Act by making it unlawful for a consumer reporting agency to furnish a consumer report that:

• Contains any adverse information relating to medical debt incurred by the consumer or
• Contains information about collection actions against consumers to collect medical debt

The bill also prohibits consumer reporting agencies from maintaining files on consumers that contain information about medical debt.

You can read the full text of SB2933 here to learn more and get the full details of the law.

Next steps for SB2933

The legislation was passed in the House on May 16, 2024, and is currently awaiting Governor Pritzker's signature as of June 27, 2024. 

To track progress on the status of SB2933, take a closer look at the bill's timeline here.

Restrictions on medical debt go beyond Illinois

Restricting files and access to medical debt will affect available information on employee credit reports, potentially influencing hiring decisions, particularly for positions where financial responsibility is part of the role.

Illinois is not the only state to propose a bill banning information related to medical debt in consumer reports; it is part of a growing trend across multiple states to exclude medical information from consumer reports. Additionally, as of September 2023, the Consumer Financial Protection Bureau is working on a rulemaking process to remove medical bills from credit reports. HR professionals should consult their legal counsel before making decisions based on this new law. Verified Credentials will attempt to provide updates on the development of SB2933 and similar laws as they become available.