Illinois Compiled Statutes
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215 ILCS 125/5-3
(215 ILCS 125/5-3)
(from Ch. 111 1/2, par. 1411.2)
Insurance Code provisions.
(a) Health Maintenance Organizations
shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
141.2, 141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 154.6,
154.7, 154.8, 155.04, 155.22a, 355.2, 355.3, 355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21, 356z.22, 356z.25, 364, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,
370c.1, 401, 401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444,
paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
(b) For purposes of the Illinois Insurance Code, except for Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in
the following categories are deemed to be "domestic companies":
(1) a corporation authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act;
(2) a corporation organized under the laws of this
(3) a corporation organized under the laws of another
state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a "domestic company" under Article VIII 1/2 of the Illinois Insurance Code.
(c) In considering the merger, consolidation, or other acquisition of
control of a Health Maintenance Organization pursuant to Article VIII 1/2
of the Illinois Insurance Code,
(1) the Director shall give primary consideration to
the continuation of benefits to enrollees and the financial conditions of the acquired Health Maintenance Organization after the merger, consolidation, or other acquisition of control takes effect;
(2)(i) the criteria specified in subsection (1)(b) of
Section 131.8 of the Illinois Insurance Code shall not apply and (ii) the Director, in making his determination with respect to the merger, consolidation, or other acquisition of control, need not take into account the effect on competition of the merger, consolidation, or other acquisition of control;
(3) the Director shall have the power to require the
(A) certification by an independent actuary of
the adequacy of the reserves of the Health Maintenance Organization sought to be acquired;
(B) pro forma financial statements reflecting the
combined balance sheets of the acquiring company and the Health Maintenance Organization sought to be acquired as of the end of the preceding year and as of a date 90 days prior to the acquisition, as well as pro forma financial statements reflecting projected combined operation for a period of 2 years;
(C) a pro forma business plan detailing an
acquiring party's plans with respect to the operation of the Health Maintenance Organization sought to be acquired for a period of not less than 3 years; and
(D) such other information as the Director shall
(d) The provisions of Article VIII 1/2 of the Illinois Insurance Code
and this Section 5-3 shall apply to the sale by any health maintenance
organization of greater than 10% of its
enrollee population (including without limitation the health maintenance
organization's right, title, and interest in and to its health care
(e) In considering any management contract or service agreement subject
to Section 141.1 of the Illinois Insurance Code, the Director (i) shall, in
addition to the criteria specified in Section 141.2 of the Illinois
Insurance Code, take into account the effect of the management contract or
service agreement on the continuation of benefits to enrollees and the
financial condition of the health maintenance organization to be managed or
serviced, and (ii) need not take into account the effect of the management
contract or service agreement on competition.
(f) Except for small employer groups as defined in the Small Employer
Rating, Renewability and Portability Health Insurance Act and except for
medicare supplement policies as defined in Section 363 of the Illinois
Insurance Code, a Health Maintenance Organization may by contract agree with a
group or other enrollment unit to effect refunds or charge additional premiums
under the following terms and conditions:
(i) the amount of, and other terms and conditions
with respect to, the refund or additional premium are set forth in the group or enrollment unit contract agreed in advance of the period for which a refund is to be paid or additional premium is to be charged (which period shall not be less than one year); and
(ii) the amount of the refund or additional premium
shall not exceed 20% of the Health Maintenance Organization's profitable or unprofitable experience with respect to the group or other enrollment unit for the period (and, for purposes of a refund or additional premium, the profitable or unprofitable experience shall be calculated taking into account a pro rata share of the Health Maintenance Organization's administrative and marketing expenses, but shall not include any refund to be made or additional premium to be paid pursuant to this subsection (f)). The Health Maintenance Organization and the group or enrollment unit may agree that the profitable or unprofitable experience may be calculated taking into account the refund period and the immediately preceding 2 plan years.
The Health Maintenance Organization shall include a statement in the
evidence of coverage issued to each enrollee describing the possibility of a
refund or additional premium, and upon request of any group or enrollment unit,
provide to the group or enrollment unit a description of the method used to
calculate (1) the Health Maintenance Organization's profitable experience with
respect to the group or enrollment unit and the resulting refund to the group
or enrollment unit or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and the resulting
additional premium to be paid by the group or enrollment unit.
In no event shall the Illinois Health Maintenance Organization
Guaranty Association be liable to pay any contractual obligation of an
insolvent organization to pay any refund authorized under this Section.
(g) Rulemaking authority to implement Public Act 95-1045, if any, is conditioned on the rules being adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so adopted, for whatever reason, is unauthorized.
(Source: P.A. 99-761, eff. 1-1-18; 100-24, eff. 7-18-17; 100-138, eff. 8-18-17