SB1590 102ND GENERAL ASSEMBLY

LRB102 13166 BMS 18509 b

102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1590

Introduced 2/26/2021, by Sen. Laura Fine

SYNOPSIS AS INTRODUCED:

215 ILCS 5/355	from Ch. 73, par. 967
215 ILCS 125/4-12	from Ch. 111 1/2, par. 1409.5

Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that all individual and small group accident and health policies written subject to certain federal standards must file rates with the Department of Insurance for approval. Provides that unreasonable rate increases or inadequate rates shall be disapproved. Requires the Department to provide a report to the General Assembly on or before January 1, 2023 regarding both on and off exchange individual and small group rates in the Illinois market. Requires that the Department approve or deny rate filings within 45 calendar days of submission unless the Director of Insurance extends the period by following specific procedures. Provides that a rate increase that is not approved or denied by the Department by the applicable deadline shall be automatically approved on the following calendar day. Provides that no less than 30 days after the federal Centers for Medicare and Medicaid Services has certified the plans described in this Section for the upcoming plan year, the Department shall publish on its website a report explaining the rates for that plan year's certified health care plans. Defines "inadequate rate" and "unreasonable rate increase". Effective immediately.

A BILL FOR

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 355 as follows:

(215 ILCS 5/355) (from Ch. 73, par. 967)

Sec. 355. Accident and health policies; provisions. policies-Provisions.)

(a) As used in this Section:

"Inadequate rate" means a rate:

(1) that is insufficient to sustain projected losses and expenses to which the rate applies; and

(2) the continued use of which endangers the solvency of an insurer using that rate.

"Unreasonable rate increase" means a rate increase that the Director determines to be excessive, unjustified, or unfairly discriminatory in accordance with 45 CFR 154.205.

(b) No policy of insurance against loss or damage from the sickness, or from the bodily injury or death of the insured by accident shall be issued or delivered to any person in this State until a copy of the form thereof and of the classification of risks and the premium rates pertaining thereto have been filed with the Director; nor shall it be so issued or delivered until the Director shall have approved such policy pursuant to the provisions of Section 143. If the Director disapproves the policy form he shall make a written decision stating the respects in which such form does not comply with the requirements of law and shall deliver a copy thereof to the company and it shall be unlawful thereafter for any such company to issue any policy in such form.

(c) Rate increases for all individual and small group accident and health insurance policies subject to the standards of 45 CFR Part 154 must be filed with the Department for approval. Unreasonable rate increases or inadequate rates shall be disapproved. The Department shall provide a report to the General Assembly on or before January 1, 2023 regarding both on and off exchange individual and small group rates in the Illinois market.

(d) In all cases the Director shall approve or disapprove a rate filing under subsection (c) within 45 calendar days of submission unless the Director extends, by not more than an additional 30 days, the period within which he or she shall approve or disapprove any such filing by giving written notice to the insurer of such extension before expiration of the initial 45-day period. Rates not approved or disapproved by the applicable deadline shall be deemed approved on the following calendar day.

(e) No less than 30 days after the federal Centers for Medicare and Medicaid Services has certified the policies described in subsection (c) for the upcoming plan year, the Department shall publish on its website a report explaining the rates for that plan year's certified policies.

(Source: P.A. 79-777.)

Section 10. The Health Maintenance Organization Act is amended by changing Section 4-12 as follows:

(215 ILCS 125/4-12) (from Ch. 111 1/2, par. 1409.5)

Sec. 4-12. Changes in Rate Methodology and Benefits, Material Modifications. A health maintenance organization shall file with the Director, prior to use, a notice of any change in rate methodology, or benefits and of any material modification of any matter or document furnished pursuant to Section 2-1, together with such supporting documents as are necessary to fully explain the change or modification.

(a) Contract modifications described in subsections (c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all form agreements between the organization and enrollees, providers, administrators of services and insurers of health maintenance organizations.

(b) Material transactions or series of transactions other than those described in subsection (a) of this Section, the total annual value of which exceeds the greater of $100,000 or 5% of net earned subscription revenue for the most current twelve month period as determined from filed financial statements.

(c) Any agreement between the organization and an insurer shall be subject to the provisions of the laws of this State regarding reinsurance as provided in Article XI of the Illinois Insurance Code. All reinsurance agreements must be filed. Approval of the Director is required for all agreements except the following: individual stop loss, aggregate excess, hospitalization benefits or out-of-area of the participating providers unless 20% or more of the organization's total risk is reinsured, in which case all reinsurance agreements require approval.

(d) Rate increases for all individual and small group health care plans subject to the standards of 45 CFR Part 154 must be filed with the Department for approval. Unreasonable rate increases in relation to benefits under the policy provided or inadequate rates shall be disapproved. The Department shall provide a report to the General Assembly on or before January 1, 2023 regarding both on and off exchange individual and small group rates in the Illinois market.

(e) In all cases the Director shall approve or disapprove a rate filing under subsection (d) within 45 calendar days of submission unless the Director extends, by not more than an additional 30 days, the period within which he or she shall approve or disapprove any such filing by giving written notice to the insurer of such extension before expiration of the initial 45-day period. Rates not approved or disapproved by the applicable deadline shall be deemed approved on the following calendar day.

(f) No less than 30 days after the federal Centers for Medicare and Medicaid Services has certified the health care plans described in subsection (d) for the upcoming plan year, the Department shall publish on its website a report explaining the rates for that plan year's certified health care plans.

(g) As used in this Section:

"Inadequate rate" means a rate:

(1) that is insufficient to sustain projected losses and expenses to which the rate applies; and

(2) the continued use of which endangers the solvency of an insurer using that rate.

"Unreasonable rate increase" means a rate increase that the Director determines to be excessive, unjustified, or unfairly discriminatory in accordance with 45 CFR 154.205.

(Source: P.A. 86-620.)

Section 99. Effective date. This Act takes effect upon becoming law.