SB2145 94TH GENERAL ASSEMBLY

LRB094 14912 LJB 49965 b

94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2145

Introduced 10/26/2005, by Sen. William R. Haine

SYNOPSIS AS INTRODUCED:

New Act

Creates the Illinois Consumer Choice of Benefits Health Insurance Plan Act. Provides that insurers may offer policies of accident and health insurance that do not provide state-mandated health benefits. Requires applications and policies to contain notice that the policy may not cover some or all of the state-mandated health benefits. Requires insurers to provide a disclaimer at the time the policy is issued that must be signed by the applicant or subscriber. Grants the Secretary of the Department of Financial and Professional Regulation the power to adopt rules necessary to implement the Act. Requires insurers to maintain a description of its rating practices and renewal underwriting practices. Provides for the applicability of certain Illinois Insurance Code provisions.

A BILL FOR

AN ACT concerning insurance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 1. Short title. This Act may be cited as the Illinois Consumer Choice of Benefits Health Insurance Plan Act.

Section 5. Purpose. The legislature recognizes the need for individuals in this State to have the opportunity to choose health insurance plans that are more affordable and flexible than existing market policies offering accident and health insurance coverage. The legislature, therefore, seeks to increase the availability of health insurance coverage by allowing insurers authorized to engage in the business of insurance in this state to issue accident and health policies that, in whole or in part, do not offer or provide state-mandated health benefits.

Section 10. Definitions. For purposes of this Act:

(a) "Consumer Choice of Benefits Health Insurance Plan" means individual health insurance coverage offered to individuals in the individual market, as those terms are defined in Section 5 of the Illinois Health Insurance Portability and Accountability Act, that, in whole or in part, does not offer and provide state-mandated health benefits, but that provides creditable coverage as defined by Section 20 of the Illinois Health Insurance Portability and Accountability Act.

(b) "Department" means the Department of Financial and Professional Regulation.

(c) "Secretary" means the Secretary of the Department of Financial and Professional Regulation.

(d) "Insurer" means an insurance company actively engaged in issuing approved policies of accident and health insurance in Illinois prior to the effective date of this Act.

Section 15. State-mandated health benefits.

(a) For purposes of this Act, "state-mandated health benefits" means coverage required under this Act or other laws of this State to be provided in an individual major medical or blanket policy for accident and health insurance or an individual contract for a health-related condition that:

(1) includes coverage for specific health care services or benefits; or

(2) includes coverage for a specific category of licensed health care practitioner from whom an insured is entitled to receive care.

(b) For purposes of this Act, "state-mandated health benefits" does not include benefits that are mandated by federal law or standard provisions or rights required under this Act or other laws of this State to be provided in an individual major medical or blanket policy for accident and health insurance that are unrelated to specific health illnesses, injuries, or conditions of an insured, including provisions related to:

(1) preexisting conditions under Part 2005 of Chapter 1 of Title 50 of the Illinois Administrative Code;

(2) coverage for children, including newborn or adopted children, under Sections 356b, 356c, and 356h of the Illinois Insurance Code;

(3) timely payment of claims under Section 368a of the Illinois Insurance Code;

(4) a consumer's right to an adequate and accessible network under Section 370i of the Illinois Insurance Code;

(5) coverage requirements for individual policies outlined in Section 2007.70 of Title 50 of the Illinois Administrative Code. These rights shall not be waived under a Consumer Choice of Benefits Health Insurance Plan product.

Section 20. Consumer choice of benefits health insurance plans authorized; minimum requirement. An insurer may offer one or more Consumer Choice of Benefits Health Insurance plans.

Section 25. Notice to policyholder and enrollees.

(a) Each written application for enrollment in a Consumer Choice of Benefits Health Insurance Plan must contain the following language at the beginning of the application in bold type:

"You have the option to choose this Consumer Choice of Benefits Health Insurance Plan that, either in whole or in part, does not provide state-mandated health insurance benefits normally required in accident and health insurance policies in Illinois. This Consumer Choice of Benefits Health Insurance Plan may provide a more affordable health insurance policy for you although, at the same time, it may provide you with fewer health insurance benefits than those normally included as state-mandated health insurance benefits in policies in Illinois. If you choose this Consumer Choice of Benefits Health Insurance Plan, please consult the insurance company to determine which state-mandated health benefits are not included in this policy."

(b) Each Consumer Choice of Benefits Health Insurance Plan must contain the following language at or near the beginning of the policy in bold type:

"This Consumer Choice of Benefits Health Insurance Plan, either in whole or in part, does not provide state-mandated health benefits normally required in accident and health insurance policies in Illinois. This Consumer Choice of Benefits Health Insurance Plan may provide a more affordable health insurance policy for you although, at the same time, it may provide you with fewer health benefits than those normally included as state-mandated health benefits in policies in Illinois. Please consult with the insurance company to discover which state-mandated health benefits are not included in this policy."

Section 30. Disclosure statement.

(a) When a Consumer Choice of Benefits Health Insurance Plan policy is issued, an insurer providing a Consumer Choice of Benefits Health Insurance Plan must provide an applicant or subscriber with a written disclosure statement that:

(1) acknowledges that the Consumer Choice of Benefits Health Insurance Plan being purchased does not provide some or all state-mandated health benefits;

(2) lists those state-mandated health benefits not included under the Consumer Choice of Benefits Health Insurance Plan;

(3) provides a notice that purchasing a plan may limit the policyholder's future coverage options in the event the policyholder's health changes and needed benefits are not available under the Consumer Choice of Benefits Health Insurance Plan; and

(4) includes a section that allows for a signature by the applicant or subscriber attesting to the fact that the applicant has read and understood the disclosure statement and attesting to the fact that the applicant or subscriber has in fact been given a choice between the Consumer Choice of Benefits Health Insurance Plan that they have chosen and a health insurance plan that includes all state-mandated health benefits.

(b) Each applicant and subscriber for initial coverage must sign the disclosure statement provided by the insurer under subsection (a) of this Section and return the statement to the insurer. Under an individual policy or contract, "applicant" means the individual purchasing the policy.

(c) An insurer must:

(1) retain the signed disclosure statement in the insurer's records; and

(2) provide the signed disclosure statement to the Department upon request from the Secretary.

Section 35. Rules. The Secretary shall adopt rules as necessary to implement this Act.

Section 40. Additional policies. An insurer that offers one or more Consumer Choice of Benefits Health Insurance Plans under this Act must also offer at least one accident and health insurance policy that has been filed and approved with the Department and includes coverage for all state-mandated health benefits.

Section 45. Rates; rating and underwriting records.

(a) An insurer offering a Consumer Choice of Benefits Health Insurance Plan under this Act shall maintain at its principal place of business a complete and detailed description of its rating practices and renewal underwriting practices, including information and documentation that demonstrates that its rating methods and practices are based upon commonly accepted actuarial assumptions and are in accordance with sound actuarial principles and that the rates for the Consumer Choice of Benefits Health Insurance Plan reflect the difference in its benefit package from a non-Consumer Choice of Benefits Health Insurance Plan.

(b) Upon request, an insurer shall provide to the Department an actuarial certification certifying that the insurer is in compliance with this Act, and that the rating methods of the insurer are actuarially sound. Such certification shall be in a form and manner, and shall contain such information, as specified by the Secretary. A copy of the certification shall be retained by the insurer at its principal place of business for a period of 3 years from the date of certification. This shall include any work papers prepared in support of the actuarial certification.

(c) Nothing in this Section shall be construed as granting the Secretary any power or authority to determine, fix, prescribe, or promulgate the rates to be charged for any individual or group accident and health insurance policy or policies issued under this Act.

Section 50. Applicability of Illinois Insurance Code provisions. All policies of accident and health insurance issued under this Act shall be subject to the provisions of Section 356c, subsection (a) of Sections 356g, 356n, 370, 370a, 370e, and 370o of the Illinois Insurance Code.