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1 | AN ACT concerning insurance.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Illinois Insurance Code is amended by | ||||||||||||||||||||||||
5 | changing Section 367e as follows:
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6 | (215 ILCS 5/367e) (from Ch. 73, par. 979e)
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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
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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:
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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.
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6 | 2. Continuation shall not be available for any person | ||||||
7 | who is covered by
Medicare, except for those individuals | ||||||
8 | who have been covered under a
group Medicare supplement | ||||||
9 | policy. Neither shall continuation be
available for any | ||||||
10 | person who is
covered by any other insured or uninsured | ||||||
11 | plan
which provides hospital, surgical or medical coverage | ||||||
12 | for individuals in
a group and under which the person was | ||||||
13 | not
covered immediately prior to such termination
or | ||||||
14 | reduction in hours below the minimum required by the group | ||||||
15 | plan
or who exercises his conversion
privilege under the | ||||||
16 | group policy.
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17 | 3. Continuation need not include dental, vision care, | ||||||
18 | prescription drug
benefits, disability income, specified | ||||||
19 | disease, or similar supplementary
benefits which are | ||||||
20 | provided under the group policy in addition to its | ||||||
21 | hospital,
surgical or major medical benefits.
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22 | 4. Upon termination
or reduction in hours below the | ||||||
23 | minimum required by the group plan
written notice of | ||||||
24 | continuation shall be presented
to the employee or member | ||||||
25 | by the employer or mailed by the employer to the
last known | ||||||
26 | address of the employee. This written notice must be given |
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1 | directly to the employee or sent via certified mail within | ||||||
2 | 10 days after the employee's termination or reduction in | ||||||
3 | hours below the minimum required by the group plan. An | ||||||
4 | employee or member who wishes
continuation
of coverage must | ||||||
5 | request such continuation in writing within the 30 | ||||||
6 | day ten-day
period following the later of: (i) the date of | ||||||
7 | such termination
or reduction in hours below the minimum | ||||||
8 | required by the group plan, or (ii)
the date the employee | ||||||
9 | is given written notice of the right of continuation
by | ||||||
10 | either the employer or the
group policyholder. In no event, | ||||||
11 | however, may the employee or member elect
continuation more | ||||||
12 | than 60 days after the date of such termination
or | ||||||
13 | reduction in hours below the minimum required by the group | ||||||
14 | plan. The written notice provided to an employee must | ||||||
15 | include an explanation that his or her option for | ||||||
16 | continuation coverage will expire within the 30 day period | ||||||
17 | following the later of (i) the date of such termination of | ||||||
18 | employment or reduction in hours below the minimum required | ||||||
19 | by the group plan, or (ii) the date the employee is given | ||||||
20 | written notice of the right of continuation by either the | ||||||
21 | employer or group policyholder.
Written notice of | ||||||
22 | continuation presented to the employee or member by the
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23 | policyholder, or mailed by the policyholder to the last | ||||||
24 | known address of
the employee, shall constitute the giving | ||||||
25 | of notice for the purpose of this
provision.
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26 | Any employer who fails to provide the notice required in |
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1 | this subsection 4. is guilty of a petty offense and shall be | ||||||
2 | fined $500.
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3 | 5. An employee or member electing continuation must pay | ||||||
4 | to the group
policyholder
or his employer, on a monthly | ||||||
5 | basis in advance, the total amount of premium
required by | ||||||
6 | the insurer, including that portion of the premium | ||||||
7 | contributed
by the policyholder or employer, if any, but | ||||||
8 | not more than the group rate
for the insurance being | ||||||
9 | continued with appropriate reduction in premium
for any | ||||||
10 | supplementary benefits which have been discontinued under | ||||||
11 | paragraph
(3) of this Section. The premium rate required by | ||||||
12 | the insurer shall be
the applicable premium required on the | ||||||
13 | due date of each payment.
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14 | 6. Continuation of insurance under the group policy for
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15 | any person shall terminate when he becomes eligible for | ||||||
16 | Medicare or is covered
by any other insured or uninsured | ||||||
17 | plan which provides hospital, surgical
or medical coverage | ||||||
18 | for individuals in a group and under which
the person was | ||||||
19 | not covered immediately prior to such termination
or | ||||||
20 | reduction in hours below the minimum required by the group | ||||||
21 | plan
as provided
in condition
2 above or, if earlier, at | ||||||
22 | the first to occur of the following:
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23 | (a) The date 12 9 months after the date the | ||||||
24 | employee's or member's
insurance
under the policy | ||||||
25 | would otherwise have terminated because of termination
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26 | of employment or membership
or reduction in hours below |
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1 | the minimum required by the group plan.
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2 | (b) If the employee or member fails to make timely | ||||||
3 | payment of a required
contribution, the end of the | ||||||
4 | period for which contributions were made.
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5 | (c) The date on which the group policy is | ||||||
6 | terminated or, in the case of
an employee, the date his | ||||||
7 | employer terminates participation under the group
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8 | policy. However, if this (c) applies and the coverage | ||||||
9 | ceasing by reason of
such
termination is replaced by | ||||||
10 | similar coverage under another group policy,
the | ||||||
11 | following shall apply:
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12 | (i) The employee or member shall have the right | ||||||
13 | to become covered
under
that other group policy, | ||||||
14 | for the balance of the period that he would have
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15 | remained covered under the prior group policy in | ||||||
16 | accordance with condition
6 had a termination | ||||||
17 | described in this (c) not occurred.
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18 | (ii) The prior group policy shall continue to | ||||||
19 | provide benefits to the
extent of its accrued | ||||||
20 | liabilities and extensions of benefits as if the
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21 | replacement
had not occurred.
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22 | 7. A notification of the continuation privilege shall | ||||||
23 | be included in each
certificate of coverage.
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24 | 8. Continuation shall not be available for any employee | ||||||
25 | who was
discharged because of the commission of a felony in | ||||||
26 | connection with his
work, or because of theft in connection |
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1 | with his work, for which the
employer was in no way | ||||||
2 | responsible; provided the employee admitted his
commission | ||||||
3 | of the felony or theft or such act has resulted in a | ||||||
4 | conviction
or order of supervision by a court of competent | ||||||
5 | jurisdiction.
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6 | The requirements of this amendatory Act of 1983 shall apply | ||||||
7 | to any group
policy as defined in this Section, delivered or | ||||||
8 | issued for delivery on or after
180 days following the | ||||||
9 | effective date of this amendatory Act of 1983.
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10 | The requirements of this amendatory Act of 1985 shall apply | ||||||
11 | to any
group policy as defined in this Section, delivered, | ||||||
12 | issued for delivery,
renewed or amended on or after 180 days | ||||||
13 | following the effective date of
this amendatory Act of 1985.
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14 | (Source: P.A. 93-477, eff. 1-1-04.)
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15 | Section 99. Effective date. This Act takes effect upon | ||||||
16 | becoming law.
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