Public Act 097-0592
 
SB0673 EnrolledLRB097 04436 RPM 44475 b



    AN ACT concerning regulation.

 
    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 356z.16 and adding Section 356z.19 as follows:
 
    (215 ILCS 5/356z.16)
    Sec. 356z.16. Applicability of mandated benefits to 
supplemental policies. Unless specified otherwise, the 
following Sections of the Illinois Insurance Code do not apply 
to short-term travel, disability income, long-term care, 
accident only, or limited or specified disease policies: 356b, 
356c, 356d, 356g, 356k, 356m, 356n, 356p, 356q, 356r, 356t, 
356u, 356w, 356x, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 
356z.8, 356z.12, 356z.19, 367.2-5, and 367e.

(Source: P.A. 96-180, eff. 1-1-10; 96-1000, eff. 7-2-10; 
96-1034, eff. 1-1-11.)
 
    (215 ILCS 5/356z.19 new)
    Sec. 356z.19. Tobacco use cessation programs; coverage 
offer.
    (a) Tobacco use is the number one cause of preventable 
disease and death in Illinois, costing $4.1 billion annually in 
direct health care costs and an additional $4.35 billion in 
lost productivity. In Illinois, the smoking rates are highest 
among African Americans (25.8%). Smoking rates among lesbian, 
gay, and bisexual adults range from 25% to 44%. The U.S. Public 
Health Service Clinical Practice Guideline 2008 Update found 
that tobacco dependence treatments are both clinically 
effective and highly cost effective. A study in the Journal of 
Preventive Medicine concluded that comprehensive smoking 
cessation treatment is one of the 3 most important and cost 
effective preventive services that can be provided in medical 
practice. Greater efforts are needed to achieve more of this 
potential value by increasing current low
levels of 
performance.
    (b) In this Section, "tobacco use cessation program" means 
a program recommended by a physician that follows 
evidence-based treatment, such as is outlined in the United 
States Public Health Service guidelines for tobacco use 
cessation. "Tobacco use cessation program" includes education 
and medical treatment components designed to assist a person in 
ceasing the use of tobacco products.  "Tobacco use cessation 
program" includes education and counseling by physicians or 
associated medical personnel and all FDA approved medications 
for the treatment of tobacco dependence irrespective of whether 
they are available only over the counter, only by prescription, 
or both over the counter and by prescription. 
    (c) On or after the effective date of this amendatory Act 
of the 97th General Assembly, every
insurer that amends, 
delivers, issues, or renews group accident and health policies 
providing coverage for hospital or medical treatment or 
services on an expense-incurred basis shall offer, for an 
additional premium and subject to the insurer's standard of 
insurability, optional coverage or optional reimbursement of 
up to $500 annually for a tobacco use cessation program for a 
person enrolled in the plan who is 18 years of age or older. 
    (d) The coverage required by this Section shall be subject

to other general exclusions and limitations of the policy,

including coordination of benefits, participating provider

requirements, restrictions on services provided by family or 
household members, utilization review of health care services, 
including review of medical necessity, case management, 
experimental and investigational treatments, and other managed 
care provisions. 
    (e) For the coverage provided under this Section, an 
insurer may not penalize or reduce or limit the reimbursement 
of an attending provider or provide incentives, monetary or 
otherwise, to an attending provider to induce the provider to 
provide care to an insured in a manner inconsistent with the 
coverage under this Section.


 
    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, 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, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 
368c, 368d, 368e, 370c,
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.

    (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. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 
95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 
95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 
1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff. 
6-1-10; 96-1000, eff. 7-2-10.)
 
    Section 15. The Limited Health Service Organization Act is 
amended by changing Section 4003 as follows:
 



    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)



    Sec. 4003. Illinois Insurance Code provisions. Limited 
health service
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, 155.37, 355.2, 356v, 356z.10, 356z.19, 368a, 401, 
401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and 
Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and 
XXVI of the Illinois Insurance Code.  For purposes of the

Illinois Insurance Code, except for Sections 444 and 444.1 and 
Articles XIII
and XIII 1/2, limited health service 
organizations in the following categories
are deemed to be 
domestic companies:


        (1) a corporation under the laws of this State; or


        (2) a corporation organized under the laws of another 
    state, 30% of 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.

(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)

 
    Section 20. 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, 356g, 356g.5, 356g.5-1, 356r, 356t, 
356u, 356v,
356w, 356x, 356y, 356z.1, 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.18, 356z.19, 364.01, 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.

    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. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07; 
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005, 
eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10; 
96-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff. 
7-2-10.)