Public Act 93-0529
SB467 Enrolled LRB093 10601 JLS 10855 b
AN ACT concerning insurance coverage.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by
adding Section 356z.4 as follows:
(215 ILCS 5/356z.4 new)
Sec. 356z.4. Prescription inhalants. A group or
individual policy of accident and health insurance or managed
care plan amended, delivered, issued, or renewed after the
effective date of this amendatory Act of the 93rd General
Assembly that provides coverage for prescription drugs may
not deny or limit coverage for prescription inhalants to
enable persons to breathe when suffering from asthma or other
life-threatening bronchial ailments based upon any
restriction on the number of days before an inhaler refill
may be obtained if, contrary to those restrictions, the
inhalants have been ordered or prescribed by the treating
physician and are medically appropriate.
Section 10. The Health Maintenance Organization Act is
amended by changing Section 5-3 as follows:
(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
Sec. 5-3. Insurance Code provisions.
(a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 137, 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, 355.2, 356m, 356v, 356w, 356x,
356y, 356z.2, 356z.4, 367i, 368a, 401, 401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
subsection (2) of Section 367, and Articles IIA, VIII 1/2,
XII, 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
State; or
(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 following information:
(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 require.
(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 certificates).
(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.
(Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00;
91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff.
6-9-00; 92-764, eff. 1-1-03.)
Section 15. The Voluntary Health Services Plans Act is
amended by changing Section 10 as follows:
(215 ILCS 165/10) (from Ch. 32, par. 604)
Sec. 10. Application of Insurance Code provisions.
Health services plan corporations and all persons interested
therein or dealing therewith shall be subject to the
provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
140, 143, 143c, 149, 155.37, 354, 355.2, 356r, 356t, 356u,
356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 367.2, 368a,
401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
paragraphs (7) and (15) of Section 367 of the Illinois
Insurance Code.
(Source: P.A. 91-406, eff. 1-1-00; 91-549, eff. 8-14-99;
91-605, eff. 12-14-99; 91-788, eff. 6-9-00; 92-130, eff.
7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02; 92-764,
eff. 1-1-03.)
Section 99. Effective date. This Act takes effect upon
becoming law.