HB2325 Enrolled LRB096 09782 RPM 19945 b

1     AN ACT concerning insurance.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Insurance Code is amended by
5 changing Section 367e as follows:
 
6     (215 ILCS 5/367e)  (from Ch. 73, par. 979e)
7     Sec. 367e. Continuation of Group Hospital, Surgical and
8 Major Medical Coverage After Termination of Employment or
9 Membership. A group policy delivered, issued for delivery,
10 renewed or amended in this state which insures employees or
11 members for hospital, surgical or major medical insurance on an
12 expense incurred or service basis, other than for specific
13 diseases or for accidental injuries only, shall provide that
14 employees or members whose insurance under the group policy
15 would otherwise terminate because of termination of employment
16 or membership or because of a reduction in hours below the
17 minimum required by the group plan shall be entitled to
18 continue their hospital, surgical and major medical insurance
19 under that group policy, for themselves and their eligible
20 dependents, subject to all of the group policy's terms and
21 conditions applicable to those forms of insurance and to the
22 following conditions:
23         1. Continuation shall only be available to an employee

 

 

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1     or member who has been continuously insured under the group
2     policy (and for similar benefits under any group policy
3     which it replaced) during the entire 3 months period ending
4     with such termination or reduction in hours below the
5     minimum required by the group plan. With respect to an
6     employee or member who is involuntarily terminated between
7     September 1, 2008 and December 31, 2009, continuation shall
8     be available if the employee or member was insured under
9     the group policy on the day prior to the termination.
10         2. Continuation shall not be available for any person
11     who is covered by Medicare, except for those individuals
12     who have been covered under a group Medicare supplement
13     policy. Neither shall continuation be available for any
14     person who is covered by any other insured or uninsured
15     plan which provides hospital, surgical or medical coverage
16     for individuals in a group and under which the person was
17     not covered immediately prior to such termination or
18     reduction in hours below the minimum required by the group
19     plan or who exercises his conversion privilege under the
20     group policy.
21         3. Continuation need not include dental, vision care,
22     prescription drug benefits, disability income, specified
23     disease, or similar supplementary benefits which are
24     provided under the group policy in addition to its
25     hospital, surgical or major medical benefits.
26         4. Within 10 days after the employee's or member's Upon

 

 

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1     termination or reduction in hours below the minimum
2     required by the group plan written notice of continuation
3     shall be presented to the employee or member by the
4     employer. If the employee or member is unavailable, written
5     notice shall be or mailed by the employer to the last known
6     address of the employee or member within 10 days after the
7     employee's or member's termination or reduction in hours
8     below the minimum required by the group plan. The employer
9     shall also send a copy of the notice to the insurer. An
10     employee or member who wishes continuation of coverage must
11     request such continuation in writing within the 30 day
12     ten-day period following the later of: (i) the date of such
13     termination or reduction in hours below the minimum
14     required by the group plan, or (ii) the date the employee
15     is presented or mailed given written notice of the right of
16     continuation by either the employer or the group
17     policyholder. In no event, however, may the employee or
18     member elect continuation more than 60 days after the date
19     of such termination or reduction in hours below the minimum
20     required by the group plan. Written notice of continuation
21     presented to the employee or member by the policyholder, or
22     mailed by the policyholder to the last known address of the
23     employee, shall constitute the giving of notice for the
24     purpose of this provision.
25         The insurer shall not deny coverage to the employee or
26     member due to the employer's failure to provide notice

 

 

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1     pursuant to this Section to the employee or member. Until
2     January 1, 2010, in the event the employee or member
3     contacts the insurer regarding continuation rights and
4     advises that notice has not been provided by the employer
5     or group policyholder, the insurer shall provide a written
6     explanation to the employee or member of the employee's or
7     member's continuation rights pursuant to this Section.
8         4a. Unless contrary to the provisions of, or any rules
9     promulgated pursuant to, Section 3001(a)(7) of Title III of
10     Division B of the federal American Recovery and
11     Reinvestment Act of 2009, with respect to employees or
12     members of health plans that are subject solely to State
13     continuation coverage and who are terminated or whose
14     reduction in hours below the minimum required by the group
15     occurs between the effective date of this amendatory Act of
16     the 96th General Assembly and December 31, 2009, the notice
17     requirements of this Section are not satisfied unless
18     notice is presented or mailed to the employee or member by
19     the insurer informing the employee or member of the
20     availability of premium reduction with respect to such
21     coverage under the American Recovery and Reinvestment Act
22     of 2009. Such written notice shall conform to all
23     applicable requirements set forth in Section 3001(a)(7) of
24     Title III of Division B of the federal American Recovery
25     and Reinvestment Act of 2009. The Department shall publish
26     models for the notification that shall be provided by

 

 

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1     insurers pursuant to this paragraph 4a.
2         4b. Unless contrary to the provisions of, or any rules
3     promulgated pursuant to, Section 3001(a)(7) of Title III of
4     Division B of the federal American Recovery and
5     Reinvestment Act of 2009, with respect to employees or
6     members of health plans that are subject solely to State
7     continuation coverage who were terminated or whose
8     reduction in hours below the minimum required by the group
9     occurred between September 1, 2008 and the effective date
10     of this amendatory Act of the 96th General Assembly and who
11     have an election of continuation of coverage pursuant to
12     this Section in effect, notice shall be presented or mailed
13     to the employee or member by the insurer informing the
14     employee or member of the availability of premium reduction
15     with respect to such coverage under the federal American
16     Recovery and Reinvestment Act of 2009. Such written notice
17     shall conform to all applicable requirements set forth in
18     Section 3001(a)(7) of Title III of Division B of the
19     federal American Recovery and Reinvestment Act of 2009 and
20     shall be presented or mailed to the employee or member
21     within 14 days of the effective date of this amendatory Act
22     of the 96th General Assembly. The Department shall publish
23     models for the notification that shall be provided by
24     insurers pursuant to this paragraph 4b.
25         5. An employee or member electing continuation must pay
26     to the group policyholder or his employer, on a monthly

 

 

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1     basis in advance, the total amount of premium required by
2     the insurer, including that portion of the premium
3     contributed by the policyholder or employer, if any, but
4     not more than the group rate for the insurance being
5     continued with appropriate reduction in premium for any
6     supplementary benefits which have been discontinued under
7     paragraph (3) of this Section. The premium rate required by
8     the insurer shall be the applicable premium required on the
9     due date of each payment.
10         6. Continuation of insurance under the group policy for
11     any person shall terminate when he becomes eligible for
12     Medicare or is covered by any other insured or uninsured
13     plan which provides hospital, surgical or medical coverage
14     for individuals in a group and under which the person was
15     not covered immediately prior to such termination or
16     reduction in hours below the minimum required by the group
17     plan as provided in condition 2 above or, if earlier, at
18     the first to occur of the following:
19             (a) The date 12 9 months after the date the
20         employee's or member's insurance under the policy
21         would otherwise have terminated because of termination
22         of employment or membership or reduction in hours below
23         the minimum required by the group plan.
24             (b) If the employee or member fails to make timely
25         payment of a required contribution, the end of the
26         period for which contributions were made.

 

 

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1             (c) The date on which the group policy is
2         terminated or, in the case of an employee, the date his
3         employer terminates participation under the group
4         policy. However, if this (c) applies and the coverage
5         ceasing by reason of such termination is replaced by
6         similar coverage under another group policy, the
7         following shall apply:
8                 (i) The employee or member shall have the right
9             to become covered under that other group policy,
10             for the balance of the period that he would have
11             remained covered under the prior group policy in
12             accordance with condition 6 had a termination
13             described in this (c) not occurred.
14                 (ii) The prior group policy shall continue to
15             provide benefits to the extent of its accrued
16             liabilities and extensions of benefits as if the
17             replacement had not occurred.
18         7. A notification of the continuation privilege shall
19     be included in each certificate of coverage.
20         8. Continuation shall not be available for any employee
21     who was discharged because of the commission of a felony in
22     connection with his work, or because of theft in connection
23     with his work, for which the employer was in no way
24     responsible; provided the employee admitted his commission
25     of the felony or theft or such act has resulted in a
26     conviction or order of supervision by a court of competent

 

 

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1     jurisdiction.
2         9. An employee or member without an election of
3     continuation of coverage pursuant to this Section in effect
4     on the effective date of this amendatory Act of the 96th
5     General Assembly may elect continuation pursuant to this
6     paragraph 9 if the employee or member: (i) would be an
7     assistance eligible individual as defined in Section
8     3001(a)(3) of Title III of Division B of the federal
9     American Recovery and Reinvestment Act of 2009, if such an
10     election were in effect and (ii) at the time of termination
11     was eligible for continuation pursuant to paragraphs 1 and
12     2 of this Section.
13         Unless contrary to the provisions of, or any rules
14     promulgated pursuant to, Section 3001(a)(7) of Title III of
15     Division B of the federal American Recovery and
16     Reinvestment Act of 2009, written notice of continuation
17     pursuant to this paragraph 9 shall be presented to the
18     employee or member by the insurer or mailed by the insurer
19     to the last known address of the employee or member within
20     30 days after the effective date of this amendatory Act of
21     the 96th General Assembly. Such written notice shall
22     conform to all applicable requirements set forth in Section
23     3001(a)(7) of Title III of Division B of the federal
24     American Recovery and Reinvestment Act of 2009. The
25     Department shall publish models for the notification that
26     shall be provided by insurers pursuant to this paragraph 9.

 

 

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1         An employee or member electing continuation of
2     coverage under this paragraph 9 must request such
3     continuation in writing within 60 days after the date the
4     employee or member receives written notice of the right of
5     continuation by the insurer.
6         Continuation of coverage elected pursuant to this
7     paragraph 9 shall commence with the first period of
8     coverage beginning on or after February 17, 2009, the
9     effective date of the federal American Recovery and
10     Reinvestment Act of 2009, and shall not extend beyond the
11     period of continuation that would have been required if the
12     coverage had been elected pursuant to paragraph 4 of this
13     Section.
14         With respect to an employee or member who elects
15     continuation of coverage under this paragraph 9, the period
16     beginning on the date of the employee's or member's
17     involuntary termination of employment and ending on the
18     date of the first period of coverage on or after February
19     17, 2009 shall be disregarded for purposes of determining
20     the 63-day period referred to in Section 20 of the Illinois
21     Health Insurance Portability and Accountability Act.
22     The requirements of this amendatory Act of 1983 shall apply
23 to any group policy as defined in this Section, delivered or
24 issued for delivery on or after 180 days following the
25 effective date of this amendatory Act of 1983.
26     The requirements of this amendatory Act of 1985 shall apply

 

 

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1 to any group policy as defined in this Section, delivered,
2 issued for delivery, renewed or amended on or after 180 days
3 following the effective date of this amendatory Act of 1985.
4 (Source: P.A. 93-477, eff. 1-1-04.)
 
5     Section 10. The Health Maintenance Organization Act is
6 amended by changing Section 4-9.2 as follows:
 
7     (215 ILCS 125/4-9.2)  (from Ch. 111 1/2, par. 1409.2-2)
8     Sec. 4-9.2. Continuation of group HMO coverage after
9 termination of employee or membership. A group contract
10 delivered, issued for delivery, renewed, or amended in this
11 State that covers employees or members for health care services
12 shall provide that employees or members whose coverage under
13 the group contract would otherwise terminate because of
14 termination of employment or membership or because of a
15 reduction in hours below the minimum required by the group
16 contract shall be entitled to continue their coverage under
17 that group contract, for themselves and their eligible
18 dependents, subject to all of the group contract's terms and
19 conditions applicable to those forms of coverage and to the
20 following conditions:
21         (1) Continuation shall only be available to an employee
22     or member who has been continuously covered under the group
23     contract (and for similar benefits under any group contract
24     that it replaced) during the entire 3 month period ending

 

 

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1     with the termination of employment or membership or
2     reduction in hours below the minimum required by the group
3     contract. With respect to an employee or member who is
4     involuntarily terminated between September 1, 2008 and
5     December 31, 2009, continuation shall be available if the
6     employee or member was covered under the group contract the
7     day prior to such termination.
8         (2) Continuation shall not be available for any
9     enrollee who is covered by Medicare, except for those
10     individuals who have been covered under a group Medicare
11     supplement policy. Continuation shall not be available for
12     any enrollee who is covered by any other insured or
13     uninsured plan that provides hospital, surgical, or
14     medical coverage for individuals in a group and under which
15     the enrollee was not covered immediately before
16     termination or reduction in hours below the minimum
17     required by the group contract or who exercises his or her
18     conversion privilege under the group policy.
19         (3) Continuation need not include dental, vision care,
20     prescription drug, or similar supplementary benefits that
21     are provided under the group contract in addition to its
22     basic health care services.
23         (4) Within 10 days after the employee's or member's
24     Upon termination or reduction in hours below the minimum
25     required by the group contract, written notice of
26     continuation shall be presented to the employee or member

 

 

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1     by the employer. If the employee or member is unavailable,
2     written notice shall be or mailed by the employer to the
3     last known address of the employee or member within 10 days
4     after the employee's or member's termination or reduction
5     in hours below the minimum required by the group plan. The
6     employer shall also send a copy of the notice to the HMO.
7     An employee or member who wishes continuation of coverage
8     must request continuation in writing within the 30 10 day
9     period following the later of (i) the date of termination
10     or reduction in hours below the minimum required by the
11     group contract or (ii) the date the employee is presented
12     or mailed given written notice of the right of continuation
13     by either the employer or the group policyholder. In no
14     event, however, shall the employee or member elect
15     continuation more than 60 days after the date of
16     termination or reduction in hours below the minimum
17     required by the group contract. Written notice of
18     continuation presented to the employee or member by the
19     policyholder, or mailed by the policyholder to the last
20     known address of the employee, shall constitute the giving
21     of notice for the purpose of this paragraph.
22         The HMO shall not deny coverage to the employee or
23     member due to the employer's failure to provide notice
24     pursuant to this Section to the employee or member. Until
25     January 1, 2010, in the event the employee or member
26     contacts the HMO regarding continuation rights and advises

 

 

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1     that notice has not been provided by the employer or group
2     policyholder, the HMO shall provide a written explanation
3     to the employee or member of the employee's or member's
4     continuation rights pursuant to this Section.
5         (4a) Unless contrary to the provisions of, or any rules
6     promulgated pursuant to, Section 3001(a)(7) of Title III of
7     Division B of the federal American Recovery and
8     Reinvestment Act of 2009, with respect to employees or
9     members of health plans that are subject solely to State
10     continuation coverage and who are terminated or whose
11     reduction in hours below the minimum required by the group
12     occurs between the effective date of this amendatory Act of
13     the 96th General Assembly and December 31, 2009, the notice
14     requirements of this Section are not satisfied unless
15     notice is presented or mailed to the employee or member by
16     the HMO informing the employee or member of the
17     availability of premium reduction with respect to such
18     coverage under the federal American Recovery and
19     Reinvestment Act of 2009. Such written notice shall conform
20     to all applicable requirements set forth in Section
21     3001(a)(7) of Title III of Division B of the federal
22     American Recovery and Reinvestment Act of 2009. The
23     Department shall publish models for the notification that
24     shall be provided by HMOs pursuant to this paragraph (4a).
25         (4b) Unless contrary to the provisions of, or any rules
26     promulgated pursuant to, Section 3001(a)(7) of Title III of

 

 

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1     Division B of the federal American Recovery and
2     Reinvestment Act of 2009, with respect to employees or
3     members of health plans that are subject solely to State
4     continuation coverage who were terminated or whose
5     reduction in hours below the minimum required by the group
6     occurred between September 1, 2008, and the effective date
7     of this amendatory Act of the 96th General Assembly and who
8     have an election of continuation of coverage pursuant to
9     this Section in effect, notice shall be presented or mailed
10     to the employee or member by the HMO informing the employee
11     or member of the availability of premium reduction with
12     respect to such coverage under the federal American
13     Recovery and Reinvestment Act of 2009. Such written notice
14     shall conform to all applicable requirements set forth in
15     Section 3001(a)(7) of Title III of Division B of the
16     federal American Recovery and Reinvestment Act of 2009 and
17     shall be presented or mailed to the employee or member
18     within 14 days of the effective date of this amendatory Act
19     of the 96th General Assembly. The Department shall publish
20     models for the notification that shall be provided by HMOs
21     pursuant to this paragraph (4b).
22         (5) An employee or member electing continuation must
23     pay to the group policyholder or his employer, on a monthly
24     basis in advance, the total amount of premium required by
25     the HMO, including that portion of the premium contributed
26     by the policyholder or employer, if any, but not more than

 

 

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1     the group rate for the coverage being continued with
2     appropriate reduction in premium for any supplementary
3     benefits that have been discontinued under paragraph (3) of
4     this Section. The premium rate required by the HMO shall be
5     the applicable premium required on the due date of each
6     payment.
7         (6) Continuation of coverage under the group contract
8     for any person shall terminate when the person becomes
9     eligible for Medicare or is covered by any other insured or
10     uninsured plan that provides hospital, surgical, or
11     medical coverage for individuals in a group and under which
12     the person was not covered immediately before termination
13     or reduction in hours below the minimum required by the
14     group contract as provided in paragraph (2) of this Section
15     or, if earlier, at the first to occur of the following:
16             (a) The expiration of 12 9 months after the
17         employee's or member's coverage because of termination
18         of employment or membership or reduction in hours below
19         the minimum required by the group contract.
20             (b) If the employee or member fails to make timely
21         payment of a required contribution, the end of the
22         period for which contributions were made.
23             (c) The date on which the group contract is
24         terminated or, in the case of an employee, the date his
25         or her employer terminates participation under the
26         group contract. If, however, this paragraph applies

 

 

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1         and the coverage ceasing by reason of termination is
2         replaced by similar coverage under another group
3         contract, then (i) the employee or member shall have
4         the right to become covered under the replacement group
5         contract for the balance of the period that he or she
6         would have remained covered under the prior group
7         contract in accordance with paragraph (6) had a
8         termination described in this item (c) not occurred and
9         (ii) the prior group contract shall continue to provide
10         benefits to the extent of its accrued liabilities and
11         extensions of benefits as if the replacement had not
12         occurred.
13         (7) A notification of the continuation privilege shall
14     be included in each evidence of coverage.
15         (8) Continuation shall not be available for any
16     employee who was discharged because of the commission of a
17     felony in connection with his or her work, or because of
18     theft in connection with his or her work, for which the
19     employer was in no way responsible if the employee (i)
20     admitted to committing the felony or theft or (ii) was
21     convicted or placed under supervision by a court of
22     competent jurisdiction.
23         (9) An employee or member without an election of
24     continuation of coverage pursuant to this Section in effect
25     on the effective date of this amendatory Act of the 96th
26     General Assembly may elect continuation pursuant to this

 

 

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1     paragraph (9) if the employee or member: (i) would be an
2     assistance eligible individual as defined in Section
3     3001(a)(3) of Title III of Division B of the federal
4     American Recovery and Reinvestment Act of 2009 if such an
5     election were in effect and (ii) at the time of termination
6     was eligible for continuation pursuant to paragraphs (1)
7     and (2) of this Section.
8         Unless contrary to the provisions of, or any rules
9     promulgated pursuant to, Section 3001(a)(7) of Title III of
10     Division B of the federal American Recovery and
11     Reinvestment Act of 2009, written notice of continuation
12     pursuant to this paragraph (9) shall be presented to the
13     employee or member by the HMO or mailed by the HMO to the
14     last known address of the employee or member within 30 days
15     after the effective date of this amendatory Act of the 96th
16     General Assembly. The written notice shall conform to all
17     applicable requirements set forth in Section 3001(a)(7) of
18     Title III of Division B of the federal American Recovery
19     and Reinvestment Act of 2009. The Department shall publish
20     models for the notification that shall be provided by HMOs
21     pursuant to this paragraph (9).
22         An employee or member electing continuation of
23     coverage under this paragraph (9) must request such
24     continuation in writing within 60 days after the date the
25     employee or member receives written notice of the right of
26     continuation by the HMO.

 

 

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1         Continuation of coverage elected pursuant to this
2     paragraph (9) shall commence with the first period of
3     coverage beginning on or after February 17, 2009, the
4     effective date of the federal American Recovery and
5     Reinvestment Act of 2009, and shall not extend beyond the
6     period of continuation that would have been required if the
7     coverage had been elected pursuant to paragraph (4) of this
8     Section.
9         With respect to an employee or member who elects
10     continuation of coverage under this paragraph (9), the
11     period beginning on the date of the employee or member's
12     involuntary termination of employment and ending on the
13     date of the first period of coverage on or after February
14     17, 2009 shall be disregarded for purposes of determining
15     the 63-day period referred to in Section 20 of the Illinois
16     Health Insurance Portability and Accountability Act.
17     The requirements of this amendatory Act of 1992 shall apply
18 to any group contract, as defined in this Section, delivered or
19 issued for delivery on or after 180 days following the
20 effective date of this amendatory Act of 1992.
21 (Source: P.A. 93-477, eff. 1-1-04.)
 
22     Section 99. Effective date. This Act takes effect upon
23 becoming law.