093_SB0467enr SB467 Enrolled LRB093 10601 JLS 10855 b 1 AN ACT concerning insurance coverage. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Illinois Insurance Code is amended by 5 adding Section 356z.4 as follows: 6 (215 ILCS 5/356z.4 new) 7 Sec. 356z.4. Prescription inhalants. A group or 8 individual policy of accident and health insurance or managed 9 care plan amended, delivered, issued, or renewed after the 10 effective date of this amendatory Act of the 93rd General 11 Assembly that provides coverage for prescription drugs may 12 not deny or limit coverage for prescription inhalants to 13 enable persons to breathe when suffering from asthma or other 14 life-threatening bronchial ailments based upon any 15 restriction on the number of days before an inhaler refill 16 may be obtained if, contrary to those restrictions, the 17 inhalants have been ordered or prescribed by the treating 18 physician and are medically appropriate. 19 Section 10. The Health Maintenance Organization Act is 20 amended by changing Section 5-3 as follows: 21 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2) 22 Sec. 5-3. Insurance Code provisions. 23 (a) Health Maintenance Organizations shall be subject to 24 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2, 25 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 26 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 27 356y, 356z.2, 356z.4, 367i, 368a, 401, 401.1, 402, 403, 403A, 28 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of 29 subsection (2) of Section 367, and Articles IIA, VIII 1/2, SB467 Enrolled -2- LRB093 10601 JLS 10855 b 1 XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois 2 Insurance Code. 3 (b) For purposes of the Illinois Insurance Code, except 4 for Sections 444 and 444.1 and Articles XIII and XIII 1/2, 5 Health Maintenance Organizations in the following categories 6 are deemed to be "domestic companies": 7 (1) a corporation authorized under the Dental 8 Service Plan Act or the Voluntary Health Services Plans 9 Act; 10 (2) a corporation organized under the laws of this 11 State; or 12 (3) a corporation organized under the laws of 13 another state, 30% or more of the enrollees of which are 14 residents of this State, except a corporation subject to 15 substantially the same requirements in its state of 16 organization as is a "domestic company" under Article 17 VIII 1/2 of the Illinois Insurance Code. 18 (c) In considering the merger, consolidation, or other 19 acquisition of control of a Health Maintenance Organization 20 pursuant to Article VIII 1/2 of the Illinois Insurance Code, 21 (1) the Director shall give primary consideration 22 to the continuation of benefits to enrollees and the 23 financial conditions of the acquired Health Maintenance 24 Organization after the merger, consolidation, or other 25 acquisition of control takes effect; 26 (2)(i) the criteria specified in subsection (1)(b) 27 of Section 131.8 of the Illinois Insurance Code shall not 28 apply and (ii) the Director, in making his determination 29 with respect to the merger, consolidation, or other 30 acquisition of control, need not take into account the 31 effect on competition of the merger, consolidation, or 32 other acquisition of control; 33 (3) the Director shall have the power to require 34 the following information: SB467 Enrolled -3- LRB093 10601 JLS 10855 b 1 (A) certification by an independent actuary of 2 the adequacy of the reserves of the Health 3 Maintenance Organization sought to be acquired; 4 (B) pro forma financial statements reflecting 5 the combined balance sheets of the acquiring company 6 and the Health Maintenance Organization sought to be 7 acquired as of the end of the preceding year and as 8 of a date 90 days prior to the acquisition, as well 9 as pro forma financial statements reflecting 10 projected combined operation for a period of 2 11 years; 12 (C) a pro forma business plan detailing an 13 acquiring party's plans with respect to the 14 operation of the Health Maintenance Organization 15 sought to be acquired for a period of not less than 16 3 years; and 17 (D) such other information as the Director 18 shall require. 19 (d) The provisions of Article VIII 1/2 of the Illinois 20 Insurance Code and this Section 5-3 shall apply to the sale 21 by any health maintenance organization of greater than 10% of 22 its enrollee population (including without limitation the 23 health maintenance organization's right, title, and interest 24 in and to its health care certificates). 25 (e) In considering any management contract or service 26 agreement subject to Section 141.1 of the Illinois Insurance 27 Code, the Director (i) shall, in addition to the criteria 28 specified in Section 141.2 of the Illinois Insurance Code, 29 take into account the effect of the management contract or 30 service agreement on the continuation of benefits to 31 enrollees and the financial condition of the health 32 maintenance organization to be managed or serviced, and (ii) 33 need not take into account the effect of the management 34 contract or service agreement on competition. SB467 Enrolled -4- LRB093 10601 JLS 10855 b 1 (f) Except for small employer groups as defined in the 2 Small Employer Rating, Renewability and Portability Health 3 Insurance Act and except for medicare supplement policies as 4 defined in Section 363 of the Illinois Insurance Code, a 5 Health Maintenance Organization may by contract agree with a 6 group or other enrollment unit to effect refunds or charge 7 additional premiums under the following terms and conditions: 8 (i) the amount of, and other terms and conditions 9 with respect to, the refund or additional premium are set 10 forth in the group or enrollment unit contract agreed in 11 advance of the period for which a refund is to be paid or 12 additional premium is to be charged (which period shall 13 not be less than one year); and 14 (ii) the amount of the refund or additional premium 15 shall not exceed 20% of the Health Maintenance 16 Organization's profitable or unprofitable experience with 17 respect to the group or other enrollment unit for the 18 period (and, for purposes of a refund or additional 19 premium, the profitable or unprofitable experience shall 20 be calculated taking into account a pro rata share of the 21 Health Maintenance Organization's administrative and 22 marketing expenses, but shall not include any refund to 23 be made or additional premium to be paid pursuant to this 24 subsection (f)). The Health Maintenance Organization and 25 the group or enrollment unit may agree that the 26 profitable or unprofitable experience may be calculated 27 taking into account the refund period and the immediately 28 preceding 2 plan years. 29 The Health Maintenance Organization shall include a 30 statement in the evidence of coverage issued to each enrollee 31 describing the possibility of a refund or additional premium, 32 and upon request of any group or enrollment unit, provide to 33 the group or enrollment unit a description of the method used 34 to calculate (1) the Health Maintenance Organization's SB467 Enrolled -5- LRB093 10601 JLS 10855 b 1 profitable experience with respect to the group or enrollment 2 unit and the resulting refund to the group or enrollment unit 3 or (2) the Health Maintenance Organization's unprofitable 4 experience with respect to the group or enrollment unit and 5 the resulting additional premium to be paid by the group or 6 enrollment unit. 7 In no event shall the Illinois Health Maintenance 8 Organization Guaranty Association be liable to pay any 9 contractual obligation of an insolvent organization to pay 10 any refund authorized under this Section. 11 (Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00; 12 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff. 13 6-9-00; 92-764, eff. 1-1-03.) 14 Section 15. The Voluntary Health Services Plans Act is 15 amended by changing Section 10 as follows: 16 (215 ILCS 165/10) (from Ch. 32, par. 604) 17 Sec. 10. Application of Insurance Code provisions. 18 Health services plan corporations and all persons interested 19 therein or dealing therewith shall be subject to the 20 provisions of Articles IIA and XII 1/2 and Sections 3.1, 133, 21 140, 143, 143c, 149, 155.37, 354, 355.2, 356r, 356t, 356u, 22 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 367.2, 368a, 23 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and 24 paragraphs (7) and (15) of Section 367 of the Illinois 25 Insurance Code. 26 (Source: P.A. 91-406, eff. 1-1-00; 91-549, eff. 8-14-99; 27 91-605, eff. 12-14-99; 91-788, eff. 6-9-00; 92-130, eff. 28 7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02; 92-764, 29 eff. 1-1-03.) 30 Section 99. Effective date. This Act takes effect upon 31 becoming law.