093_HB3661ham001
LRB093 09245 JLS 14018 a
1 AMENDMENT TO HOUSE BILL 3661
2 AMENDMENT NO. . Amend House Bill 3661 on page 1,
3 line 5, by changing "Section 367.2-5" to "Sections 367.2-5
4 and 367e.1"; and
5 on page 1, line 8, by changing "Continuation" to "Spousal
6 continuation"; and
7 on page 13 by replacing line 34 with the following:
8 Group Accident and Health Insurance Conversion Privilege.
9 (A) A group policy which provides hospital, medical, or
10 major medical expense insurance, or any combination of these
11 coverages, on an expense-incurred basis, but not including a
12 policy which provides benefits for specific diseases or for
13 accidental injuries only, shall provide that an employee or
14 member (i) whose insurance under the group policy has been
15 terminated for any reason other than discontinuance of the
16 group policy in its entirety where there is a succeeding
17 carrier, or failure of the employee or member to pay any
18 required contribution; and (ii) who has been continuously
19 insured under the group policy (and under any group policy
20 providing similar benefits which it replaces) for at least
21 three months immediately prior to termination, shall be
22 entitled to have issued to him by the insurer a policy of
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1 health insurance (hereafter referred to as the converted
2 policy), subject to the following conditions:
3 (1) Written application for the converted policy
4 shall be made and the first premium paid to the insurer
5 not later than the latter of (i) thirty-one days after
6 such termination or (ii) 15 days after the employee or
7 member has been given written notice of the existence of
8 the conversion privilege, but in no event later than 60
9 days after such termination.
10 Written notice presented to the employee or member by
11 the policyholder, or mailed by the policyholder to the
12 last known address of the employee or member, shall
13 constitute the giving of notice for the purpose of this
14 provision.
15 (2) The converted policy shall be issued without
16 evidence of insurability.
17 (3) The initial premium for the converted policy
18 shall be determined in accordance with the insurer's
19 table of premium rates applicable to the age and class of
20 risk of each person to be covered under the converted
21 policy and to the type and amount of the insurance
22 provided. Conditions pertaining to health shall not be an
23 acceptable basis of classification for the purposes of
24 this subsection. The frequency of premium payment shall
25 be the frequency customarily required by the insurer for
26 the policy form and plan selected, provided that the
27 insurer shall not require premium payments less
28 frequently than quarterly without the consent of the
29 insured.
30 (4) The effective date of the converted policy
31 shall be the day following the termination of insurance
32 under the group policy.
33 (5) The converted policy shall cover the employee
34 or member and his dependents who were covered by the
-3- LRB093 09245 JLS 14018 a
1 group policy on the date of termination of insurance. At
2 the option of the insurer, a separate converted policy
3 may be issued to cover any dependent.
4 (6) The insurer shall not be required to issue a
5 converted policy covering any person if such person is or
6 could be covered by Medicare (Title XVIII of the United
7 States Social Security Act as added by the Social
8 Security Amendments of 1965 or as later amended or
9 superseded). Furthermore, the insurer shall not be
10 required to issue a converted policy covering any person
11 if (i) such person is covered for similar benefits by
12 another hospital, surgical, medical, or major medical
13 expense insurance policy or hospital or medical service
14 subscriber contract or medical practice or other
15 prepayment plan or by any other plan or program; or (ii)
16 such person is eligible for similar benefits (whether or
17 not covered therefor) under any arrangement of coverage
18 for individuals in a group, whether on an insured or
19 uninsured basis; or (iii) similar benefits are provided
20 for or available to such person, pursuant to or in
21 accordance with the requirements of any statute, and the
22 benefits provided or available under the sources referred
23 to in (i), (ii), (iii) above for such person together
24 with the converted policy would result in overinsurance
25 according to the insurer's standards.
26 (7) In the event that coverage would be continued
27 under the group policy on an employee following his
28 retirement prior to the time he is or could be covered by
29 Medicare, he may elect, in lieu of such continuation of
30 such group insurance, to have the same conversion rights
31 as would apply had his insurance terminated at retirement
32 by reason of termination of employment or membership.
33 (8) Subject to the conditions set forth above, the
34 conversion privilege shall also be available (i) to the
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1 surviving spouse, if any, at the death of the employee or
2 member, with respect to the spouse and such children
3 whose coverage under the group policy terminates by
4 reason of such death, otherwise to each surviving child
5 whose coverage under the group policy terminates by
6 reason of such death, or, if the group policy provides
7 for continuation of dependents' coverage following the
8 employee's or member's death, at the end of such
9 continuation; (ii) to the spouse of the employee or
10 member upon termination of coverage of the spouse, while
11 the employee or member remains insured under the group
12 policy, by reason of ceasing to be a qualified family
13 member under the group policy, with respect to the spouse
14 and such children whose coverage under the group policy
15 terminates at the same time; or (iii) to a child solely
16 with respect to himself upon termination of his coverage
17 by reason of ceasing to be a qualified family member
18 under the group policy, if a conversion privilege is not
19 otherwise provided above with respect to such
20 termination.
21 (9) A notification of the conversion privilege
22 shall be included in each certificate.
23 (10) The insurer may elect to provide group
24 insurance coverage in lieu of the issuance of a converted
25 policy.
26 (B) A converted policy issued upon the exercise of the
27 conversion privilege required by subsection (A) of this
28 Section shall conform to the following minimum standards:
29 (1) If the group policy provided hospital,
30 surgical, or medical expense insurance, or a combination
31 thereof, the converted policy shall provide benefits on
32 an expense-incurred basis equal to the lesser of (i) the
33 hospital room and board, miscellaneous hospital, surgical
34 and medical benefits provided under the group policy; and
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1 (ii) the corresponding benefits described below:
2 (a) Hospital room and board benefits in an
3 amount per day elected by the group policyholder,
4 but in no event less than 60% of the then average
5 semi-private hospital room and board charge in the
6 State, such benefits to be payable for a maximum of
7 not less than 70 days for any period of hospital
8 confinement, as defined in the converted policy.
9 (b) Miscellaneous hospital benefits for any
10 one period of hospital confinement in an amount up
11 to twenty times the hospital room and board daily
12 benefit provided under the converted policy.
13 (c) Surgical benefits according to a surgical
14 schedule providing a benefit amount elected by the
15 group policy holder, but in no event less than 60%
16 of the then average surgical charge in the State and
17 with a maximum amount appropriate thereto. The
18 maximum surgical benefit shall be applicable to all
19 surgical operations of an individual resulting from
20 or contributed to by the same and all related causes
21 occurring in one period of disability. Two or more
22 surgical procedures performed in the course of a
23 single operation through the same incision, or in
24 the same natural body orifice, may be treated as one
25 surgical procedure with the payment determined by
26 the scheduled benefit for the most expensive
27 procedure performed. The surgical schedule shall be
28 consistent with the schedule of operations
29 customarily offered by the insurer under group or
30 individual health insurance policies.
31 (d) Non-surgical medical attendance benefits
32 for in-hospital services in an amount elected by the
33 group policyholder, but in no event less than 60% of
34 the then average in-hospital physician's visit
-6- LRB093 09245 JLS 14018 a
1 charge in the State, such benefits may be limited to
2 one visit per day of hospitalization and a maximum
3 number of visits numbering not less than seventy for
4 any period of hospital confinement as defined in the
5 converted policy.
6 (2) If the group policy provided major medical
7 insurance, the insurer may offer the insurance described
8 in (1) above only, major medical insurance only, or a
9 combination of the insurance described in (1) above and
10 major medical insurance. If the insurer elects to
11 provide major medical insurance, the converted policy
12 shall provide:
13 (a) A maximum benefit at least equal to (i) or
14 (ii) below:
15 (i) A maximum payment of twenty-five
16 thousand dollars for all covered medical
17 expenses incurred during the covered person's
18 lifetime with an annual restoration of the
19 lesser of, while coverage is in force, one
20 thousand dollars and the amount counted against
21 the maximum benefit which was not previously
22 restored; or
23 (ii) A maximum payment of twenty-five
24 thousand dollars for each unrelated injury or
25 illness.
26 (b) Payment of benefits for covered medical
27 expenses, in excess of the deductible, at a rate not
28 less than 80% except as otherwise permitted below.
29 (c) A deductible for each benefit period
30 which, at the option of the insurer, shall be (i)
31 the greater of $500 and the benefits deductible;
32 (ii) the sum of the benefits deductible and $100; or
33 (iii) the corresponding deductible in the group
34 policy. The term "benefit period," as used herein,
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1 means, when the maximum payment is determined by (a)
2 (i) above, either a calendar year or a period of
3 twelve consecutive months; and, when the maximum
4 payment is determined by (a) (ii) above, a period of
5 twenty-four consecutive months. The term "benefits
6 deductible," as used herein, means the value of any
7 benefits provided on an expense-incurred basis which
8 are provided with respect to covered medical
9 expenses by any other hospital, surgical, or medical
10 insurance policy or hospital or medical service
11 subscriber contract of medical practice or other
12 prepayment plan, or any other plans or program
13 whether on an insured or uninsured basis, or of any
14 similar benefits which are provided or made
15 available pursuant to or in accordance with the
16 requirements of any statute and, if, pursuant to the
17 provisions of this subsection, the converted policy
18 provides both the coverage described in (1) above
19 and major medical insurance, the value of the
20 coverage described in (1) above. The insurer may
21 require that the deductible be satisfied during a
22 period of not less than three months. If the maximum
23 payment is determined by (a) (i) above, and if no
24 benefits become payable during the preceding benefit
25 period due to the cash deductible not being
26 satisfied; credit shall be given, in the succeeding
27 benefit period, to any expense applied toward the
28 cash deductible of the preceding benefit period and
29 incurred during the last three months of such
30 preceding benefit period, subject to any requirement
31 that the deductible be satisfied during a specified
32 period of time.
33 (d) The term "covered medical expenses," as
34 used above, may be limited (i) in the case of
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1 hospital room and board benefits, maximum surgical
2 schedule, and non-surgical medical attendance
3 benefits to amounts not less than the amounts
4 provided in (1) (a), (1) (c) and (1) (d) above; and
5 (ii) in the case of mental and nervous condition
6 treatments while the patient is not a hospital
7 in-patient, to co-insurance of 50%, a maximum
8 benefit of $500 per calendar year or twelve
9 consecutive month periods subject to the inclusion
10 by the insurer of reasonable limits on the number of
11 visits and the maximum permissible expense per
12 visit.
13 (3) The converted policy may contain any exclusion,
14 reduction, or limitation contained in the group policy
15 and any exclusion, reduction, or limitation customarily
16 used in individual accident and health policies delivered
17 or issued for delivery in this state. It is not required
18 that the converted policy contain all of the covered
19 medical expenses or the same level of benefits as
20 provided in the group policy.
21 (4) The insurer may, at its option, also offer
22 alternative plans for group accident and health
23 conversion.
24 (5) The converted policy may only exclude a
25 pre-existing condition excluded by the group policy.
26 Any hospital, surgical, medical or major medical benefits
27 payable under the converted policy may be reduced by the
28 amount of any such benefits payable under the group
29 policy after the termination of the individual's
30 insurance thereunder and, during the first policy year of
31 such converted policy, the benefits payable under the
32 converted policy may be so reduced so that they are not
33 in excess of the benefits that would have been payable
34 had the individual's insurance under the group policy
-9- LRB093 09245 JLS 14018 a
1 remained in force and effect.
2 (6) The converted policy may provide for the
3 termination of coverage thereunder of any person when he
4 is or could be covered by Medicare (Title XVIII of the
5 United States Social Security Act as added by the Social
6 Security Amendments of 1965 or as later amended or
7 superseded).
8 (7) The converted policy may provide that the
9 insurer may request information from the converted
10 policyholder, in advance of any premium due date of the
11 converted policy, to determine whether any person covered
12 thereunder (i) is covered for similar benefits by another
13 hospital, surgical, medical, or major medical expense
14 insurance policy or hospital or medical service
15 subscriber contract or medical practice or other
16 prepayment plan or by any other plan or program; or (ii)
17 is eligible for similar benefits (whether or not covered
18 therefor) under any arrangement of coverage for
19 individuals in a group, whether on an insured or
20 uninsured basis; or (iii) has similar benefits provided
21 for or available to such person, pursuant to or in
22 accordance with the requirements of any statute. The
23 converted policy may also provide that the insurer need
24 not renew the converted policy or the coverage of any
25 person insured thereunder if either the benefits provided
26 or available under the sources referred to in (i), (ii),
27 (iii) above for such person, together with the converted
28 policy, would result in overinsurance according to the
29 insurer's standards, or if the converted policyholder
30 refuses to provide the requested information.
31 (8) The converted policy shall not contain any
32 provision allowing the insurer to non-renew due to a
33 change in the health of an insured.
34 (9) The converted policy may contain any provisions
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1 permitted herein and may also include any other
2 provisions not expressly prohibited by law. Any
3 provisions required or permitted herein may be made a
4 part of the converted policy by means of an endorsement
5 or rider.
6 (10) In the conversion of group health insurance in
7 accordance with the provisions of subsection (A) above,
8 the insurer may, at its option, accomplish the conversion
9 by issuing one or more converted policies.
10 (11) With respect to any person who was covered by
11 the group policy, the period specified in the Time Limit
12 on Certain Defenses provisions of the converted policy
13 shall commence with the date the person's insurance
14 became effective under the group policy.
15 (12) If the insurer elects to provide group
16 insurance coverage in lieu of a converted policy, the
17 benefit levels required for a converted policy must be
18 applicable to such group insurance coverage.
19 (C) The requirements of this Section shall apply to any
20 group policy of accident and health insurance delivered,
21 issued for delivery, renewed or amended on or after 180 days
22 following the effective date of this Section."; and
23 by deleting all of pages 14 through 22; and
24 on page 23 by deleting lines 1 and 2; and
25 on page 23 by inserting immediately below line 3 the
26 following:
27 "(215 ILCS 5/367e.1 new)
28 Sec. 367e.1. Group Accident and Health Insurance
29 Conversion Privilege.
30 (A) A group policy which provides hospital, medical, or
31 major medical expense insurance, or any combination of these
32 coverages, on an expense-incurred basis, but not including a
-11- LRB093 09245 JLS 14018 a
1 policy which provides benefits for specific diseases or for
2 accidental injuries only, shall provide that an employee or
3 member (i) whose insurance under the group policy has been
4 terminated for any reason other than discontinuance of the
5 group policy in its entirety where there is a succeeding
6 carrier, or failure of the employee or member to pay any
7 required contribution; and (ii) who has been continuously
8 insured under the group policy (and under any group policy
9 providing similar benefits which it replaces) for at least
10 three months immediately prior to termination, shall be
11 entitled to have issued to him by the insurer a policy of
12 health insurance (hereafter referred to as the converted
13 policy), subject to the following conditions:
14 (1) Written application for the converted policy
15 shall be made and the first premium paid to the insurer
16 not later than the latter of (i) 31 days after such
17 termination or (ii) 15 days after the employee or member
18 has been given written notice of the existence of the
19 conversion privilege, but in no event later than 60 days
20 after such termination.
21 Written notice presented to the employee or member by the
22 policyholder, or mailed by the policyholder to the last
23 known address of the employee or member, shall constitute
24 the giving of notice for the purpose of this provision.
25 (2) The converted policy shall be issued without
26 evidence of insurability.
27 (3) The initial premium for the converted policy
28 shall be determined in accordance with the insurer's
29 table of premium rates applicable to the age and class of
30 risk of each person to be covered under the converted
31 policy and to the type and amount of the insurance
32 provided. Conditions pertaining to health shall not be an
33 acceptable basis of classification for the purposes of
34 this subsection. The frequency of premium payment shall
-12- LRB093 09245 JLS 14018 a
1 be the frequency customarily required by the insurer for
2 the policy form and plan selected, provided that the
3 insurer shall not require premium payments less
4 frequently than quarterly without the consent of the
5 insured.
6 (4) The effective date of the converted policy
7 shall be the day following the termination of insurance
8 under the group policy.
9 (5) The converted policy shall cover the employee
10 or member and his dependents who were covered by the
11 group policy on the date of termination of insurance. At
12 the option of the insurer, a separate converted policy
13 may be issued to cover any dependent.
14 (6) The insurer shall not be required to issue a
15 converted policy covering any person if such person is or
16 could be covered by Medicare (Title XVIII of the United
17 States Social Security Act as added by the Social
18 Security Amendments of 1965 or as later amended or
19 superseded). Furthermore, the insurer shall not be
20 required to issue a converted policy covering any person
21 if (i) such person is covered for similar benefits by
22 another hospital, surgical, medical, or major medical
23 expense insurance policy or hospital or medical service
24 subscriber contract or medical practice or other
25 prepayment plan or by any other plan or program; or (ii)
26 such person is eligible for similar benefits (whether or
27 not covered therefor) under any arrangement of coverage
28 for individuals in a group, whether on an insured or
29 uninsured basis; or (iii) similar benefits are provided
30 for or available to such person, pursuant to or in
31 accordance with the requirements of any statute, and the
32 benefits provided or available under the sources referred
33 to in (i), (ii), (iii) above for such person together
34 with the converted policy would result in overinsurance
-13- LRB093 09245 JLS 14018 a
1 according to the insurer's standards.
2 (7) In the event that coverage would be continued
3 under the group policy on an employee following his
4 retirement prior to the time he is or could be covered by
5 Medicare, he may elect, in lieu of such continuation of
6 such group insurance, to have the same conversion rights
7 as would apply had his insurance terminated at retirement
8 by reason of termination of employment or membership.
9 (8) Subject to the conditions set forth above, the
10 conversion privilege shall also be available (i) to the
11 surviving spouse, if any, at the death of the employee or
12 member, with respect to the spouse and such children
13 whose coverage under the group policy terminates by
14 reason of such death, otherwise to each surviving child
15 whose coverage under the group policy terminates by
16 reason of such death, or, if the group policy provides
17 for continuation of dependents' coverage following the
18 employee's or member's death, at the end of such
19 continuation; (ii) to the spouse of the employee or
20 member upon termination of coverage of the spouse, while
21 the employee or member remains insured under the group
22 policy, by reason of ceasing to be a qualified family
23 member under the group policy, with respect to the spouse
24 and such children whose coverage under the group policy
25 terminates at the same time; or (iii) to a child solely
26 with respect to himself upon termination of his coverage
27 by reason of ceasing to be a qualified family member
28 under the group policy, if a conversion privilege is not
29 otherwise provided above with respect to such
30 termination.
31 (9) A notification of the conversion privilege
32 shall be included in each certificate.
33 (10) The insurer may elect to provide group
34 insurance coverage in lieu of the issuance of a converted
-14- LRB093 09245 JLS 14018 a
1 policy.
2 (B) A converted policy issued upon the exercise of the
3 conversion privilege required by subsection (A) of this
4 Section shall conform to the following minimum standards:
5 (1) If the group policy provided hospital,
6 surgical, or medical expense insurance, or a combination
7 thereof, the converted policy shall provide benefits on
8 an expense-incurred basis equal to the lesser of (i) the
9 hospital room and board, miscellaneous hospital, surgical
10 and medical benefits provided under the group policy; and
11 (ii) the corresponding benefits described below:
12 (a) Hospital room and board benefits in an
13 amount per day elected by the group policyholder,
14 but in no event less than 60% of the then average
15 semi-private hospital room and board charge in the
16 State, such benefits to be payable for a maximum of
17 not less than 70 days for any period of hospital
18 confinement, as defined in the converted policy.
19 (b) Miscellaneous hospital benefits for any
20 one period of hospital confinement in an amount up
21 to twenty times the hospital room and board daily
22 benefit provided under the converted policy.
23 (c) Surgical benefits according to a surgical
24 schedule providing a benefit amount elected by the
25 group policy holder, but in no event less than 60%
26 of the then average surgical charge in the State and
27 with a maximum amount appropriate thereto. The
28 maximum surgical benefit shall be applicable to all
29 surgical operations of an individual resulting from
30 or contributed to by the same and all related causes
31 occurring in one period of disability. Two or more
32 surgical procedures performed in the course of a
33 single operation through the same incision, or in
34 the same natural body orifice, may be treated as one
-15- LRB093 09245 JLS 14018 a
1 surgical procedure with the payment determined by
2 the scheduled benefit for the most expensive
3 procedure performed. The surgical schedule shall be
4 consistent with the schedule of operations
5 customarily offered by the insurer under group or
6 individual health insurance policies.
7 (d) Non-surgical medical attendance benefits
8 for in-hospital services in an amount elected by the
9 group policyholder, but in no event less than 60% of
10 the then average in-hospital physician's visit
11 charge in the State, such benefits may be limited to
12 one visit per day of hospitalization and a maximum
13 number of visits numbering not less than seventy for
14 any period of hospital confinement as defined in the
15 converted policy.
16 (2) If the group policy provided major medical
17 insurance, the insurer may offer the insurance described
18 in (1) above only, major medical insurance only, or a
19 combination of the insurance described in (1) above and
20 major medical insurance. If the insurer elects to
21 provide major medical insurance, the converted policy
22 shall provide:
23 (a) A maximum benefit at least equal to (i) or
24 (ii) below:
25 (i) A maximum payment of twenty-five
26 thousand dollars for all covered medical
27 expenses incurred during the covered person's
28 lifetime with an annual restoration of the
29 lesser of, while coverage is in force, one
30 thousand dollars and the amount counted against
31 the maximum benefit which was not previously
32 restored; or
33 (ii) A maximum payment of twenty-five
34 thousand dollars for each unrelated injury or
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1 illness.
2 (b) Payment of benefits for covered medical
3 expenses, in excess of the deductible, at a rate not
4 less than 80% except as otherwise permitted below.
5 (c) A deductible for each benefit period
6 which, at the option of the insurer, shall be (i)
7 the greater of $500 and the benefits deductible;
8 (ii) the sum of the benefits deductible and $100; or
9 (iii) the corresponding deductible in the group
10 policy. The term "benefit period," as used herein,
11 means, when the maximum payment is determined by (a)
12 (i) above, either a calendar year or a period of
13 twelve consecutive months; and, when the maximum
14 payment is determined by (a) (ii) above, a period of
15 twenty-four consecutive months. The term "benefits
16 deductible," as used herein, means the value of any
17 benefits provided on an expense-incurred basis which
18 are provided with respect to covered medical
19 expenses by any other hospital, surgical, or medical
20 insurance policy or hospital or medical service
21 subscriber contract of medical practice or other
22 prepayment plan, or any other plans or program
23 whether on an insured or uninsured basis, or of any
24 similar benefits which are provided or made
25 available pursuant to or in accordance with the
26 requirements of any statute and, if, pursuant to the
27 provisions of this subsection, the converted policy
28 provides both the coverage described in (1) above
29 and major medical insurance, the value of the
30 coverage described in (1) above. The insurer may
31 require that the deductible be satisfied during a
32 period of not less than three months. If the maximum
33 payment is determined by (a) (i) above, and if no
34 benefits become payable during the preceding benefit
-17- LRB093 09245 JLS 14018 a
1 period due to the cash deductible not being
2 satisfied; credit shall be given, in the succeeding
3 benefit period, to any expense applied toward the
4 cash deductible of the preceding benefit period and
5 incurred during the last three months of such
6 preceding benefit period, subject to any requirement
7 that the deductible be satisfied during a specified
8 period of time.
9 (d) The term "covered medical expenses," as
10 used above, may be limited (i) in the case of
11 hospital room and board benefits, maximum surgical
12 schedule, and non-surgical medical attendance
13 benefits to amounts not less than the amounts
14 provided in (1) (a), (1) (c) and (1) (d) above; and
15 (ii) in the case of mental and nervous condition
16 treatments while the patient is not a hospital
17 in-patient, to co-insurance of 50%, a maximum
18 benefit of $500 per calendar year or twelve
19 consecutive month periods subject to the inclusion
20 by the insurer of reasonable limits on the number of
21 visits and the maximum permissible expense per
22 visit.
23 (3) The converted policy may contain any exclusion,
24 reduction, or limitation contained in the group policy
25 and any exclusion, reduction, or limitation customarily
26 used in individual accident and health policies delivered
27 or issued for delivery in this state. It is not required
28 that the converted policy contain all of the covered
29 medical expenses or the same level of benefits as
30 provided in the group policy.
31 (4) The insurer may, at its option, also offer
32 alternative plans for group accident and health
33 conversion.
34 (5) The converted policy may only exclude a
-18- LRB093 09245 JLS 14018 a
1 pre-existing condition excluded by the group policy.
2 Any hospital, surgical, medical or major medical benefits
3 payable under the converted policy may be reduced by the
4 amount of any such benefits payable under the group
5 policy after the termination of the individual's
6 insurance thereunder and, during the first policy year of
7 such converted policy, the benefits payable under the
8 converted policy may be so reduced so that they are not
9 in excess of the benefits that would have been payable
10 had the individual's insurance under the group policy
11 remained in force and effect.
12 (6) The converted policy may provide for the
13 termination of coverage thereunder of any person when he
14 is or could be covered by Medicare (Title XVIII of the
15 United States Social Security Act as added by the Social
16 Security Amendments of 1965 or as later amended or
17 superseded).
18 (7) The converted policy may provide that the
19 insurer may request information from the converted
20 policyholder, in advance of any premium due date of the
21 converted policy, to determine whether any person covered
22 thereunder (i) is covered for similar benefits by another
23 hospital, surgical, medical, or major medical expense
24 insurance policy or hospital or medical service
25 subscriber contract or medical practice or other
26 prepayment plan or by any other plan or program; or (ii)
27 is eligible for similar benefits (whether or not covered
28 therefor) under any arrangement of coverage for
29 individuals in a group, whether on an insured or
30 uninsured basis; or (iii) has similar benefits provided
31 for or available to such person, pursuant to or in
32 accordance with the requirements of any statute. The
33 converted policy may also provide that the insurer need
34 not renew the converted policy or the coverage of any
-19- LRB093 09245 JLS 14018 a
1 person insured thereunder if either the benefits provided
2 or available under the sources referred to in (i), (ii),
3 (iii) above for such person, together with the converted
4 policy, would result in overinsurance according to the
5 insurer's standards, or if the converted policyholder
6 refuses to provide the requested information.
7 (8) The converted policy shall not contain any
8 provision allowing the insurer to non-renew due to a
9 change in the health of an insured.
10 (9) The converted policy may contain any provisions
11 permitted herein and may also include any other
12 provisions not expressly prohibited by law. Any
13 provisions required or permitted herein may be made a
14 part of the converted policy by means of an endorsement
15 or rider.
16 (10) In the conversion of group health insurance in
17 accordance with the provisions of subsection (A) above,
18 the insurer may, at its option, accomplish the conversion
19 by issuing one or more converted policies.
20 (11) With respect to any person who was covered by
21 the group policy, the period specified in the Time Limit
22 on Certain Defenses provisions of the converted policy
23 shall commence with the date the person's insurance
24 became effective under the group policy.
25 (12) If the insurer elects to provide group
26 insurance coverage in lieu of a converted policy, the
27 benefit levels required for a converted policy must be
28 applicable to such group insurance coverage.
29 (C) The requirements of this Section shall apply to any
30 group policy of accident and health insurance delivered,
31 issued for delivery, renewed or amended on or after 180 days
32 following the effective date of this Section."; and
33 on page 23 by replacing line 5 with the following:
34 "amended by changing Sections 4-9.2 and 5-3 as follows:
-20- LRB093 09245 JLS 14018 a
1 (215 ILCS 125/4-9.2) (from Ch. 111 1/2, par. 1409.2-2)
2 Sec. 4-9.2. Continuation of group HMO coverage after
3 termination of employee or membership. A group contract
4 delivered, issued for delivery, renewed, or amended in this
5 State that covers employees or members for health care
6 services shall provide that employees or members whose
7 coverage under the group contract would otherwise terminate
8 because of termination of employment or membership or because
9 of a reduction in hours below the minimum required by the
10 group contract shall be entitled to continue their coverage
11 under that group contract, for themselves and their eligible
12 dependents, subject to all of the group contract's terms and
13 conditions applicable to those forms of coverage and to the
14 following conditions:
15 (1) Continuation shall only be available to an
16 employee or member who has been continuously covered
17 under the group contract (and for similar benefits under
18 any group contract that it replaced) during the entire 3
19 month period ending with the termination of employment or
20 membership or reduction in hours below the minimum
21 required by the group contract.
22 (2) Continuation shall not be available for any
23 enrollee who is covered by Medicare, except for those
24 individuals who have been covered under a group Medicare
25 supplement policy. Continuation shall not be available
26 for any enrollee who is covered by any other insured or
27 uninsured plan that provides hospital, surgical, or
28 medical coverage for individuals in a group and under
29 which the enrollee was not covered immediately before
30 termination or reduction in hours below the minimum
31 required by the group contract or who exercises his or
32 her conversion privilege under the group policy.
33 (3) Continuation need not include dental, vision
34 care, prescription drug, or similar supplementary
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1 benefits that are provided under the group contract in
2 addition to its basic health care services.
3 (4) Upon termination or reduction in hours below
4 the minimum required by the group contract, written
5 notice of continuation shall be presented to the employee
6 or member by the employer or mailed by the employer to
7 the last known address of the employee. An employee or
8 member who wishes continuation of coverage must request
9 continuation in writing within the 10 day period
10 following the later of (i) the date of termination or
11 reduction in hours below the minimum required by the
12 group contract or (ii) the date the employee is given
13 written notice of the right of continuation by either the
14 employer or the group policyholder. In no event, however,
15 shall the employee or member elect continuation more than
16 60 days after the date of termination or reduction in
17 hours below the minimum required by the group contract.
18 Written notice of continuation presented to the employee
19 or member by the policyholder, or mailed by the
20 policyholder to the last known address of the employee,
21 shall constitute the giving of notice for the purpose of
22 this paragraph.
23 (5) An employee or member electing continuation
24 must pay to the group policyholder or his employer, on a
25 monthly basis in advance, the total amount of premium
26 required by the HMO, including that portion of the
27 premium contributed by the policyholder or employer, if
28 any, but not more than the group rate for the coverage
29 being continued with appropriate reduction in premium for
30 any supplementary benefits that have been discontinued
31 under paragraph (3) of this Section. The premium rate
32 required by the HMO shall be the applicable premium
33 required on the due date of each payment.
34 (6) Continuation of coverage under the group
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1 contract for any person shall terminate when the person
2 becomes eligible for Medicare or is covered by any other
3 insured or uninsured plan that provides hospital,
4 surgical, or medical coverage for individuals in a group
5 and under which the person was not covered immediately
6 before termination or reduction in hours below the
7 minimum required by the group contract as provided in
8 paragraph (2) of this Section or, if earlier, at the
9 first to occur of the following:
10 (a) The expiration of 9 months after the
11 employee's or member's coverage because of
12 termination of employment or membership or reduction
13 in hours below the minimum required by the group
14 contract.
15 (b) If the employee or member fails to make
16 timely payment of a required contribution, the end
17 of the period for which contributions were made.
18 (c) The date on which the group contract is
19 terminated or, in the case of an employee, the date
20 his or her employer terminates participation under
21 the group contract. If, however, this paragraph
22 applies and the coverage ceasing by reason of
23 termination is replaced by similar coverage under
24 another group contract, then (i) the employee or
25 member shall have the right to become covered under
26 the replacement group contract for the balance of
27 the period that he or she would have remained
28 covered under the prior group contract in accordance
29 with paragraph (6) had a termination described in
30 this item (c) not occurred and (ii) the prior group
31 contract shall continue to provide benefits to the
32 extent of its accrued liabilities and extensions of
33 benefits as if the replacement had not occurred.
34 (7) A notification of the continuation privilege
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1 shall be included in each evidence of coverage.
2 (8) Continuation shall not be available for any
3 employee who was discharged because of the commission of
4 a felony in connection with his or her work, or because
5 of theft in connection with his or her work, for which
6 the employer was in no way responsible if the employee
7 (i) admitted to committing the felony or theft or (ii)
8 was convicted or placed under supervision by a court of
9 competent jurisdiction.
10 The requirements of this amendatory Act of 1992
11 shall apply to any group contract, as defined in this
12 Section, delivered or issued for delivery on or after 180
13 days following the effective date of this amendatory Act
14 of 1992.
15 (Source: P.A. 87-1090.)".