Public Act 096-0894
 
SB3004 Enrolled LRB096 20066 RPM 35579 b

    AN ACT concerning insurance.
 
    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
changing Section 367e as follows:
 
    (215 ILCS 5/367e)  (from Ch. 73, par. 979e)
    Sec. 367e. Continuation of Group Hospital, Surgical and
Major Medical Coverage After Termination of Employment or
Membership. A group policy delivered, issued for delivery,
renewed or amended in this state which insures employees or
members for hospital, surgical or major medical insurance on an
expense incurred or service basis, other than for specific
diseases or for accidental injuries only, shall provide that
employees or members whose insurance under the group policy
would otherwise terminate because of termination of employment
or membership or because of a reduction in hours below the
minimum required by the group plan shall be entitled to
continue their hospital, surgical and major medical insurance
under that group policy, for themselves and their eligible
dependents, subject to all of the group policy's terms and
conditions applicable to those forms of insurance and to the
following conditions:
        1. Continuation shall only be available to an employee
    or member who has been continuously insured under the group
    policy (and for similar benefits under any group policy
    which it replaced) during the entire 3 months period ending
    with such termination or reduction in hours below the
    minimum required by the group plan. With respect to an
    employee or member who is involuntarily terminated between
    September 1, 2008 and the end of the period set forth in
    Section 3001(a)(3)(A) of Title III of Division B of the
    federal American Recovery and Reinvestment Act of 2009, as
    now or hereafter amended December 31, 2009, continuation
    shall be available if the employee or member was insured
    under the group policy on the day prior to the termination.
        2. Continuation shall not be available for any person
    who is covered by Medicare, except for those individuals
    who have been covered under a group Medicare supplement
    policy. Neither shall continuation be available for any
    person who is covered by any other insured or uninsured
    plan which provides hospital, surgical or medical coverage
    for individuals in a group and under which the person was
    not covered immediately prior to such termination or
    reduction in hours below the minimum required by the group
    plan or who exercises his conversion privilege under the
    group policy.
        3. Continuation need not include dental, vision care,
    prescription drug benefits, disability income, specified
    disease, or similar supplementary benefits which are
    provided under the group policy in addition to its
    hospital, surgical or major medical benefits.
        4. Within 10 days after the employee's or member's
    termination or reduction in hours below the minimum
    required by the group plan written notice of continuation
    shall be presented to the employee or member by the
    employer. If the employee or member is unavailable, written
    notice shall be mailed by the employer to the last known
    address of the employee or member within 10 days after the
    employee's or member's termination or reduction in hours
    below the minimum required by the group plan. The employer
    shall also send a copy of the notice to the insurer. An
    employee or member who wishes continuation of coverage must
    request such continuation in writing within the 30 day
    period following the later of: (i) the date of such
    termination or reduction in hours below the minimum
    required by the group plan, or (ii) the date the employee
    is presented or mailed written notice of the right of
    continuation by either the employer or the group
    policyholder. In no event, however, may the employee or
    member elect continuation more than 60 days after the date
    of such termination or reduction in hours below the minimum
    required by the group plan. Written notice of continuation
    presented to the employee or member by the policyholder, or
    mailed by the policyholder to the last known address of the
    employee, shall constitute the giving of notice for the
    purpose of this provision.
        The insurer shall not deny coverage to the employee or
    member due to the employer's failure to provide notice
    pursuant to this Section to the employee or member. Until
    the end of the period set forth in Section 3001(a)(3)(A) of
    Title III of Division B of the federal American Recovery
    and Reinvestment Act of 2009, as now or hereafter amended
    January 1, 2010, in the event the employee or member
    contacts the insurer regarding continuation rights and
    advises that notice has not been provided by the employer
    or group policyholder, the insurer shall provide a written
    explanation to the employee or member of the employee's or
    member's continuation rights pursuant to this Section.
        4a. Unless contrary to the provisions of, or any rules
    promulgated pursuant to, Section 3001(a)(7) of Title III of
    Division B of the federal American Recovery and
    Reinvestment Act of 2009, with respect to employees or
    members of health plans that are subject solely to State
    continuation coverage and who are terminated or whose
    reduction in hours below the minimum required by the group
    occurs between the effective date of this amendatory Act of
    the 96th General Assembly and the end of the period set
    forth in Section 3001(a)(3)(A) of Title III of Division B
    of the federal American Recovery and Reinvestment Act of
    2009, as now or hereafter amended December 31, 2009, the
    notice requirements of this Section are not satisfied
    unless notice is presented or mailed to the employee or
    member by the insurer informing the employee or member of
    the availability of premium reduction with respect to such
    coverage under the American Recovery and Reinvestment Act
    of 2009. Such written notice shall conform to all
    applicable requirements set forth in Section 3001(a)(7) of
    Title III of Division B of the federal American Recovery
    and Reinvestment Act of 2009. The Department shall publish
    models for the notification that shall be provided by
    insurers pursuant to this paragraph 4a.
        4b. Unless contrary to the provisions of, or any rules
    promulgated pursuant to, Section 3001(a)(7) of Title III of
    Division B of the federal American Recovery and
    Reinvestment Act of 2009, with respect to employees or
    members of health plans that are subject solely to State
    continuation coverage who were terminated or whose
    reduction in hours below the minimum required by the group
    occurred between September 1, 2008 and the effective date
    of this amendatory Act of the 96th General Assembly and who
    have an election of continuation of coverage pursuant to
    this Section in effect, notice shall be presented or mailed
    to the employee or member by the insurer informing the
    employee or member of the availability of premium reduction
    with respect to such coverage under the federal American
    Recovery and Reinvestment Act of 2009. Such written notice
    shall conform to all applicable requirements set forth in
    Section 3001(a)(7) of Title III of Division B of the
    federal American Recovery and Reinvestment Act of 2009 and
    shall be presented or mailed to the employee or member
    within 14 days of the effective date of this amendatory Act
    of the 96th General Assembly. The Department shall publish
    models for the notification that shall be provided by
    insurers pursuant to this paragraph 4b.
        5. An employee or member electing continuation must pay
    to the group policyholder or his employer, on a monthly
    basis in advance, the total amount of premium required by
    the insurer, including that portion of the premium
    contributed by the policyholder or employer, if any, but
    not more than the group rate for the insurance being
    continued with appropriate reduction in premium for any
    supplementary benefits which have been discontinued under
    paragraph (3) of this Section. The premium rate required by
    the insurer shall be the applicable premium required on the
    due date of each payment.
        6. Continuation of insurance under the group policy for
    any person shall terminate when he becomes eligible for
    Medicare or is covered by any other insured or uninsured
    plan which provides hospital, surgical or medical coverage
    for individuals in a group and under which the person was
    not covered immediately prior to such termination or
    reduction in hours below the minimum required by the group
    plan as provided in condition 2 above or, if earlier, at
    the first to occur of the following:
            (a) The date 12 months after the date the
        employee's or member's insurance under the policy
        would otherwise have terminated because of termination
        of employment or membership or reduction in hours below
        the minimum required by the group plan or, with respect
        to an employee or member who is an assistance eligible
        individual as defined in Section 3001(a)(3) of Title
        III of Division B of the federal American Recovery and
        Reinvestment Act of 2009, the date that the individual
        ceases to be eligible for premium assistance under
        Section 3001(a)(2)(A)(ii)(I) of Title III of Division
        B of the federal American Recovery and Reinvestment Act
        of 2009, as now or hereafter amended.
            (b) If the employee or member fails to make timely
        payment of a required contribution, the end of the
        period for which contributions were made.
            (c) The date on which the group policy is
        terminated or, in the case of an employee, the date his
        employer terminates participation under the group
        policy. However, if this (c) applies and the coverage
        ceasing by reason of such termination is replaced by
        similar coverage under another group policy, the
        following shall apply:
                (i) The employee or member shall have the right
            to become covered under that other group policy,
            for the balance of the period that he would have
            remained covered under the prior group policy in
            accordance with condition 6 had a termination
            described in this (c) not occurred.
                (ii) The prior group policy shall continue to
            provide benefits to the extent of its accrued
            liabilities and extensions of benefits as if the
            replacement had not occurred.
        7. A notification of the continuation privilege shall
    be included in each certificate of coverage.
        8. Continuation shall not be available for any employee
    who was discharged because of the commission of a felony in
    connection with his work, or because of theft in connection
    with his work, for which the employer was in no way
    responsible; provided the employee admitted his commission
    of the felony or theft or such act has resulted in a
    conviction or order of supervision by a court of competent
    jurisdiction.
        9. An employee or member without an election of
    continuation of coverage pursuant to this Section in effect
    on the effective date of this amendatory Act of the 96th
    General Assembly may elect continuation pursuant to this
    paragraph 9 if the employee or member: (i) would be an
    assistance eligible individual as defined in Section
    3001(a)(3) of Title III of Division B of the federal
    American Recovery and Reinvestment Act of 2009, if such an
    election were in effect and (ii) at the time of termination
    was eligible for continuation pursuant to paragraphs 1 and
    2 of this Section.
        Unless contrary to the provisions of, or any rules
    promulgated pursuant to, Section 3001(a)(7) of Title III of
    Division B of the federal American Recovery and
    Reinvestment Act of 2009, written notice of continuation
    pursuant to this paragraph 9 shall be presented to the
    employee or member by the insurer or mailed by the insurer
    to the last known address of the employee or member within
    30 days after the effective date of this amendatory Act of
    the 96th General Assembly. Such written notice shall
    conform to all applicable requirements set forth in Section
    3001(a)(7) of Title III of Division B of the federal
    American Recovery and Reinvestment Act of 2009. The
    Department shall publish models for the notification that
    shall be provided by insurers pursuant to this paragraph 9.
        An employee or member electing continuation of
    coverage under this paragraph 9 must request such
    continuation in writing within 60 days after the date the
    employee or member receives written notice of the right of
    continuation by the insurer.
        Continuation of coverage elected pursuant to this
    paragraph 9 shall commence with the first period of
    coverage beginning on or after February 17, 2009, the
    effective date of the federal American Recovery and
    Reinvestment Act of 2009, and shall not extend beyond the
    period of continuation that would have been required if the
    coverage had been elected pursuant to paragraph 4 of this
    Section.
        With respect to an employee or member who elects
    continuation of coverage under this paragraph 9, the period
    beginning on the date of the employee's or member's
    involuntary termination of employment and ending on the
    date of the first period of coverage on or after February
    17, 2009 shall be disregarded for purposes of determining
    the 63-day period referred to in Section 20 of the Illinois
    Health Insurance Portability and Accountability Act.
    The requirements of this amendatory Act of 1983 shall apply
to any group policy as defined in this Section, delivered or
issued for delivery on or after 180 days following the
effective date of this amendatory Act of 1983.
    The requirements of this amendatory Act of 1985 shall apply
to any group policy as defined in this Section, delivered,
issued for delivery, renewed or amended on or after 180 days
following the effective date of this amendatory Act of 1985.
(Source: P.A. 96-13, eff. 6-18-09.)
 
    Section 10. The Health Maintenance Organization Act is
amended by changing Section 4-9.2 as follows:
 
    (215 ILCS 125/4-9.2)  (from Ch. 111 1/2, par. 1409.2-2)
    Sec. 4-9.2. Continuation of group HMO coverage after
termination of employee or membership. A group contract
delivered, issued for delivery, renewed, or amended in this
State that covers employees or members for health care services
shall provide that employees or members whose coverage under
the group contract would otherwise terminate because of
termination of employment or membership or because of a
reduction in hours below the minimum required by the group
contract shall be entitled to continue their coverage under
that group contract, for themselves and their eligible
dependents, subject to all of the group contract's terms and
conditions applicable to those forms of coverage and to the
following conditions:
        (1) Continuation shall only be available to an employee
    or member who has been continuously covered under the group
    contract (and for similar benefits under any group contract
    that it replaced) during the entire 3 month period ending
    with the termination of employment or membership or
    reduction in hours below the minimum required by the group
    contract. With respect to an employee or member who is
    involuntarily terminated between September 1, 2008 and the
    end of the period set forth in Section 3001(a)(3)(A) of
    Title III of Division B of the federal American Recovery
    and Reinvestment Act of 2009, as now or hereafter amended
    December 31, 2009, continuation shall be available if the
    employee or member was covered under the group contract the
    day prior to such termination.
        (2) Continuation shall not be available for any
    enrollee who is covered by Medicare, except for those
    individuals who have been covered under a group Medicare
    supplement policy. Continuation shall not be available for
    any enrollee who is covered by any other insured or
    uninsured plan that provides hospital, surgical, or
    medical coverage for individuals in a group and under which
    the enrollee was not covered immediately before
    termination or reduction in hours below the minimum
    required by the group contract or who exercises his or her
    conversion privilege under the group policy.
        (3) Continuation need not include dental, vision care,
    prescription drug, or similar supplementary benefits that
    are provided under the group contract in addition to its
    basic health care services.
        (4) Within 10 days after the employee's or member's
    termination or reduction in hours below the minimum
    required by the group contract, written notice of
    continuation shall be presented to the employee or member
    by the employer. If the employee or member is unavailable,
    written notice shall be mailed by the employer to the last
    known address of the employee or member within 10 days
    after the employee's or member's termination or reduction
    in hours below the minimum required by the group plan. The
    employer shall also send a copy of the notice to the HMO.
    An employee or member who wishes continuation of coverage
    must request continuation in writing within the 30 day
    period following the later of (i) the date of termination
    or reduction in hours below the minimum required by the
    group contract or (ii) the date the employee is presented
    or mailed written notice of the right of continuation by
    either the employer or the group policyholder. In no event,
    however, shall the employee or member elect continuation
    more than 60 days after the date of termination or
    reduction in hours below the minimum required by the group
    contract. Written notice of continuation presented to the
    employee or member by the policyholder, or mailed by the
    policyholder to the last known address of the employee,
    shall constitute the giving of notice for the purpose of
    this paragraph.
        The HMO shall not deny coverage to the employee or
    member due to the employer's failure to provide notice
    pursuant to this Section to the employee or member. Until
    the end of the period set forth in Section 3001(a)(3)(A) of
    Title III of Division B of the federal American Recovery
    and Reinvestment Act of 2009, as now or hereafter amended
    January 1, 2010, in the event the employee or member
    contacts the HMO regarding continuation rights and advises
    that notice has not been provided by the employer or group
    policyholder, the HMO shall provide a written explanation
    to the employee or member of the employee's or member's
    continuation rights pursuant to this Section.
        (4a) Unless contrary to the provisions of, or any rules
    promulgated pursuant to, Section 3001(a)(7) of Title III of
    Division B of the federal American Recovery and
    Reinvestment Act of 2009, with respect to employees or
    members of health plans that are subject solely to State
    continuation coverage and who are terminated or whose
    reduction in hours below the minimum required by the group
    occurs between the effective date of this amendatory Act of
    the 96th General Assembly and the end of the period set
    forth in Section 3001(a)(3)(A) of Title III of Division B
    of the federal American Recovery and Reinvestment Act of
    2009, as now or hereafter amended December 31, 2009, the
    notice requirements of this Section are not satisfied
    unless notice is presented or mailed to the employee or
    member by the HMO informing the employee or member of the
    availability of premium reduction with respect to such
    coverage under the federal American Recovery and
    Reinvestment Act of 2009. Such written notice shall conform
    to all applicable requirements set forth in Section
    3001(a)(7) of Title III of Division B of the federal
    American Recovery and Reinvestment Act of 2009. The
    Department shall publish models for the notification that
    shall be provided by HMOs pursuant to this paragraph (4a).
        (4b) Unless contrary to the provisions of, or any rules
    promulgated pursuant to, Section 3001(a)(7) of Title III of
    Division B of the federal American Recovery and
    Reinvestment Act of 2009, with respect to employees or
    members of health plans that are subject solely to State
    continuation coverage who were terminated or whose
    reduction in hours below the minimum required by the group
    occurred between September 1, 2008, and the effective date
    of this amendatory Act of the 96th General Assembly and who
    have an election of continuation of coverage pursuant to
    this Section in effect, notice shall be presented or mailed
    to the employee or member by the HMO informing the employee
    or member of the availability of premium reduction with
    respect to such coverage under the federal American
    Recovery and Reinvestment Act of 2009. Such written notice
    shall conform to all applicable requirements set forth in
    Section 3001(a)(7) of Title III of Division B of the
    federal American Recovery and Reinvestment Act of 2009 and
    shall be presented or mailed to the employee or member
    within 14 days of the effective date of this amendatory Act
    of the 96th General Assembly. The Department shall publish
    models for the notification that shall be provided by HMOs
    pursuant to this paragraph (4b).
        (5) An employee or member electing continuation must
    pay to the group policyholder or his employer, on a monthly
    basis in advance, the total amount of premium required by
    the HMO, including that portion of the premium contributed
    by the policyholder or employer, if any, but not more than
    the group rate for the coverage being continued with
    appropriate reduction in premium for any supplementary
    benefits that have been discontinued under paragraph (3) of
    this Section. The premium rate required by the HMO shall be
    the applicable premium required on the due date of each
    payment.
        (6) Continuation of coverage under the group contract
    for any person shall terminate when the person becomes
    eligible for Medicare or is covered by any other insured or
    uninsured plan that provides hospital, surgical, or
    medical coverage for individuals in a group and under which
    the person was not covered immediately before termination
    or reduction in hours below the minimum required by the
    group contract as provided in paragraph (2) of this Section
    or, if earlier, at the first to occur of the following:
            (a) The expiration of 12 months after the
        employee's or member's coverage because of termination
        of employment or membership or reduction in hours below
        the minimum required by the group contract.
            (b) If the employee or member fails to make timely
        payment of a required contribution, the end of the
        period for which contributions were made or, with
        respect to an employee or member who is an assistance
        eligible individual as defined in Section 3001(a)(3)
        of Title III of Division B of the federal American
        Recovery and Reinvestment Act of 2009, the date that
        the individual ceases to be eligible for premium
        assistance under Section 3001(a)(2)(A)(ii)(I) of Title
        III of Division B of the federal American Recovery and
        Reinvestment Act of 2009, as now or hereafter amended.
            (c) The date on which the group contract is
        terminated or, in the case of an employee, the date his
        or her employer terminates participation under the
        group contract. If, however, this paragraph applies
        and the coverage ceasing by reason of termination is
        replaced by similar coverage under another group
        contract, then (i) the employee or member shall have
        the right to become covered under the replacement group
        contract for the balance of the period that he or she
        would have remained covered under the prior group
        contract in accordance with paragraph (6) had a
        termination described in this item (c) not occurred and
        (ii) the prior group contract shall continue to provide
        benefits to the extent of its accrued liabilities and
        extensions of benefits as if the replacement had not
        occurred.
        (7) A notification of the continuation privilege shall
    be included in each evidence of coverage.
        (8) Continuation shall not be available for any
    employee who was discharged because of the commission of a
    felony in connection with his or her work, or because of
    theft in connection with his or her work, for which the
    employer was in no way responsible if the employee (i)
    admitted to committing the felony or theft or (ii) was
    convicted or placed under supervision by a court of
    competent jurisdiction.
        (9) An employee or member without an election of
    continuation of coverage pursuant to this Section in effect
    on the effective date of this amendatory Act of the 96th
    General Assembly may elect continuation pursuant to this
    paragraph (9) if the employee or member: (i) would be an
    assistance eligible individual as defined in Section
    3001(a)(3) of Title III of Division B of the federal
    American Recovery and Reinvestment Act of 2009 if such an
    election were in effect and (ii) at the time of termination
    was eligible for continuation pursuant to paragraphs (1)
    and (2) of this Section.
        Unless contrary to the provisions of, or any rules
    promulgated pursuant to, Section 3001(a)(7) of Title III of
    Division B of the federal American Recovery and
    Reinvestment Act of 2009, written notice of continuation
    pursuant to this paragraph (9) shall be presented to the
    employee or member by the HMO or mailed by the HMO to the
    last known address of the employee or member within 30 days
    after the effective date of this amendatory Act of the 96th
    General Assembly. The written notice shall conform to all
    applicable requirements set forth in Section 3001(a)(7) of
    Title III of Division B of the federal American Recovery
    and Reinvestment Act of 2009. The Department shall publish
    models for the notification that shall be provided by HMOs
    pursuant to this paragraph (9).
        An employee or member electing continuation of
    coverage under this paragraph (9) must request such
    continuation in writing within 60 days after the date the
    employee or member receives written notice of the right of
    continuation by the HMO.
        Continuation of coverage elected pursuant to this
    paragraph (9) shall commence with the first period of
    coverage beginning on or after February 17, 2009, the
    effective date of the federal American Recovery and
    Reinvestment Act of 2009, and shall not extend beyond the
    period of continuation that would have been required if the
    coverage had been elected pursuant to paragraph (4) of this
    Section.
        With respect to an employee or member who elects
    continuation of coverage under this paragraph (9), the
    period beginning on the date of the employee or member's
    involuntary termination of employment and ending on the
    date of the first period of coverage on or after February
    17, 2009 shall be disregarded for purposes of determining
    the 63-day period referred to in Section 20 of the Illinois
    Health Insurance Portability and Accountability Act.
    The requirements of this amendatory Act of 1992 shall apply
to any group contract, as defined in this Section, delivered or
issued for delivery on or after 180 days following the
effective date of this amendatory Act of 1992.
(Source: P.A. 96-13, eff. 6-18-09.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.