SPRINGFIELD — A Sangamon County judge will rule later on the state's motion to dismiss one portion of Health Alliance Medical Plan's lawsuit challenging this year's health insurance contracts for state employees and retirees.

A hearing before Judge Brian Otwell on Friday afternoon revolved on the constitutional authority of the Legislature's Commission on Government Forecasting and Accountability over the insurance contracts.

Health Alliance, which covers nearly 100,000 state employees and retirees in an HMO, filed a lawsuit after its bid for new group insurance contracts was rejected by the Illinois Department of Healthcare and Family Services in favor of an expansion of self-insured open access plans operated by two other companies — PersonalCare and HealthLink — to serve large numbers of employees downstate.

Due to the pending litigation, employees are currently being covered under temporary group health plan contracts.

Otwell is being asked to consider language in the state's group insurance act giving COGFA authority to provide "advice and consent" over the selection of state insurance contracts, and, basically, issues pertaining to legislative-versus-executive authority.

Chicago attorney Scott Schutte, representing PersonalCare, argued the Legislature has given itself permission to "go sit inside the executive branch" through COGFA's ability to veto decisions made by a state department director.

It's not constitutional to put a subset of the Legislature over the executive branch, he said.

Schutte also argued COGFA hasn't been given any standards to provide advice and consent and has been like a "tree in the wind" on its decisions concerning self-insurance.

Health Alliance's attorney R. Mark Mifflin said the question is to what extent the state can self-insure, not whether the state can offer self-insurance.

Mifflin also said Healthcare and Family Services Director Julie Hamos had a duty to submit her insurance plan choices to COGFA's authority, and she failed to do that.

Lawmakers want authority to decide on an expansion of self-insurance because — unlike in fully insured plans — the state pays the claims in self-insured plans and assumes more financial risk. Legislators considered this year's insurance proposals a significant expansion of self-insurance.

"The state just needs to follow the law. That's why we're here," Mifflin said.

Regardless of how Otwell rules on the COGFA authority part of the lawsuit, the lawsuit is expected to continue on another track challenging issues in the state's insurance procurement process.

Otwell scheduled the next hearing in the lawsuit for 1:30 p.m. Oct. 4.