95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB1879


 
Introduced 2/23/2007, by Rep. Elizabeth Coulson
 
SYNOPSIS AS INTRODUCED:
 		



















215 ILCS 5/356z.9 new





215 ILCS 125/5-3
  from Ch. 111 1/2, par. 1411.2
215 ILCS 165/10
  from Ch. 32, par. 604





    Amends the Illinois Insurance Code, the Health Maintenance Organization Act, and the Voluntary Health Services Plans Act to provide coverage for group, individual, and family wellness programs. Provides that wellness coverage may provide for an appropriate rebate or reduction in premiums or for reduced copayments, coinsurance, or deductibles or a combination of these incentives for participation in a health behavior wellness, maintenance, or improvement program. Provides that an insurer providing a group or individual policy of accident and health insurance or a managed care plan is not required to continue any health behavior wellness, maintenance, or improvement program or to continue any incentive associated with a health behavior wellness, maintenance, or improvement program.
















LRB095 11258 KBJ 31763 b

















 


 


A BILL FOR









 











HB1879

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    AN ACT concerning insurance.

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


 
4
    Section 5. The Illinois Insurance Code is amended  by adding 
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Section 356z.9 as follows:
 
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    (215 ILCS 5/356z.9  new)
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    Sec. 356z.9. Wellness coverage.
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    (a) A group or individual policy of accident and health 
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insurance or managed care plan amended, delivered, issued, or 
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renewed after the effective date of this amendatory Act of the 
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95th General Assembly must provide coverage for individual, 
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family, or group wellness programs. Wellness coverage may 
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provide for an appropriate rebate or reduction in premiums or 
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for reduced copayments, coinsurance, or deductibles or a 
15
combination of these incentives for participation in any health 
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behavior wellness, maintenance, or improvement program offered 
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by the employer. The insured or enrollee shall provide evidence 
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of demonstrative maintenance or improvement of the insureds' or 
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enrollees' health behaviors, as determined by assessments of 
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agreed-upon health status indicators between the employer and 
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the insurer. Any rebate of premium provided by the insurer is 
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presumed to be appropriate unless credible data demonstrates 
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otherwise. Each insurer must make available to employers all 
 


 






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wellness coverage plans that the insurer markets to employers 
2
in this State.
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    (b) An insurer providing a group or individual policy of 
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accident and health insurance or a managed care plan is not 
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required to continue any health behavior wellness, 
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maintenance, or improvement program or to continue any 
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incentive associated with a health behavior wellness, 
8
maintenance, or improvement program.


 
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    Section 10. The Health Maintenance Organization Act is 
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amended  by changing Section 5-3 as follows:
 



11
    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)


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    Sec. 5-3. Insurance Code provisions. 

13
    (a) Health Maintenance Organizations
shall be subject to 
14
the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
15
141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
16
154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
17
356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 364.01, 
18
367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 
19
401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444,
and
444.1,

20
paragraph (c) of subsection (2) of Section 367, and Articles 
21
IIA, VIII 1/2,
XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of 
22
the Illinois Insurance Code.

23
    (b) For purposes of the Illinois Insurance Code, except for 
24
Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health 
 


 






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Maintenance Organizations in
the following categories are 
2
deemed to be "domestic companies":


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        (1) a corporation authorized under the
Dental Service 
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    Plan Act or the Voluntary Health Services Plans Act;


5
        (2) a corporation organized under the laws of this 
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    State; or


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        (3) a corporation organized under the laws of another 
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    state, 30% or more
of the enrollees of which are residents 
9
    of this State, except a
corporation subject to 
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    substantially the same requirements in its state of

11
    organization as is a "domestic company" under Article VIII 
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    1/2 of the
Illinois Insurance Code.

13
    (c) In considering the merger, consolidation, or other 
14
acquisition of
control of a Health Maintenance Organization 
15
pursuant to Article VIII 1/2
of the Illinois Insurance Code,


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        (1) the Director shall give primary consideration to 
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    the continuation of
benefits to enrollees and the financial 
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    conditions of the acquired Health
Maintenance Organization 
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    after the merger, consolidation, or other
acquisition of 
20
    control takes effect;


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        (2)(i) the criteria specified in subsection (1)(b) of 
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    Section 131.8 of
the Illinois Insurance Code shall not 
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    apply and (ii) the Director, in making
his determination 
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    with respect to the merger, consolidation, or other

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    acquisition of control, need not take into account the 
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    effect on
competition of the merger, consolidation, or 
 


 






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    other acquisition of control;


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        (3) the Director shall have the power to require the 
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    following
information:


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            (A) certification by an independent actuary of the 
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        adequacy
of the reserves of the Health Maintenance 
6
        Organization sought to be acquired;


7
            (B) pro forma financial statements reflecting the 
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        combined balance
sheets of the acquiring company and 
9
        the Health Maintenance Organization sought
to be 
10
        acquired as of the end of the preceding year and as of 
11
        a date 90 days
prior to the acquisition, as well as pro 
12
        forma financial statements
reflecting projected 
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        combined operation for a period of 2 years;


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            (C) a pro forma business plan detailing an 
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        acquiring party's plans with
respect to the operation 
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        of the Health Maintenance Organization sought to
be 
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        acquired for a period of not less than 3 years; and


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            (D) such other information as the Director shall 
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        require.

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    (d) The provisions of Article VIII 1/2 of the Illinois 
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Insurance Code
and this Section 5-3 shall apply to the sale by 
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any health maintenance
organization of greater than 10% of its

23
enrollee population (including without limitation the health 
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maintenance
organization's right, title, and interest in and to 
25
its health care
certificates).

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    (e) In considering any management contract or service 
 


 






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agreement subject
to Section 141.1 of the Illinois Insurance 
2
Code, the Director (i) shall, in
addition to the criteria 
3
specified in Section 141.2 of the Illinois
Insurance Code, take 
4
into account the effect of the management contract or
service 
5
agreement on the continuation of benefits to enrollees and the

6
financial condition of the health maintenance organization to 
7
be managed or
serviced, and (ii) need not take into account the 
8
effect of the management
contract or service agreement on 
9
competition.

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    (f) Except for small employer groups as defined in the 
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Small Employer
Rating, Renewability and Portability Health 
12
Insurance Act and except for
medicare supplement policies as 
13
defined in Section 363 of the Illinois
Insurance Code, a Health 
14
Maintenance Organization may by contract agree with a
group or 
15
other enrollment unit to effect refunds or charge additional 
16
premiums
under the following terms and conditions:


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        (i) the amount of, and other terms and conditions with 
18
    respect to, the
refund or additional premium are set forth 
19
    in the group or enrollment unit
contract agreed in advance 
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    of the period for which a refund is to be paid or

21
    additional premium is to be charged (which period shall not 
22
    be less than one
year); and


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        (ii) the amount of the refund or additional premium 
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    shall not exceed 20%
of the Health Maintenance 
25
    Organization's profitable or unprofitable experience
with 
26
    respect to the group or other enrollment unit for the 
 


 






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    period (and, for
purposes of a refund or additional 
2
    premium, the profitable or unprofitable
experience shall 
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    be calculated taking into account a pro rata share of the

4
    Health Maintenance Organization's administrative and 
5
    marketing expenses, but
shall not include any refund to be 
6
    made or additional premium to be paid
pursuant to this 
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    subsection (f)).  The Health Maintenance Organization and 
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    the
group or enrollment unit may agree that the profitable 
9
    or unprofitable
experience may be calculated taking into 
10
    account the refund period and the
immediately preceding 2 
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    plan years.

12
    The Health Maintenance Organization shall include a 
13
statement in the
evidence of coverage issued to each enrollee 
14
describing the possibility of a
refund or additional premium, 
15
and upon request of any group or enrollment unit,
provide to 
16
the group or enrollment unit a description of the method used 
17
to
calculate (1) the Health Maintenance Organization's 
18
profitable experience with
respect to the group or enrollment 
19
unit and the resulting refund to the group
or enrollment unit 
20
or (2) the Health Maintenance Organization's unprofitable

21
experience with respect to the group or enrollment unit and the 
22
resulting
additional premium to be paid by the group or 
23
enrollment unit.

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    In no event shall the Illinois Health Maintenance 
25
Organization
Guaranty Association be liable to pay any 
26
contractual obligation of an
insolvent organization to pay any 
 


 






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refund authorized under this Section.

2
(Source: P.A. 93-102, eff. 1-1-04; 93-261, eff. 1-1-04; 93-477, 
3
eff. 8-8-03; 93-529, eff. 8-14-03; 93-853, eff. 1-1-05; 
4
93-1000, eff. 1-1-05; 94-906, eff. 1-1-07; 94-1076, eff. 
5
12-29-06; revised 1-5-07.)

 
6
    Section 15. The Voluntary Health Services Plans Act is 
7
amended  by changing Section 10 as follows:
 



8
    (215 ILCS 165/10)  (from Ch. 32, par. 604)


9
    Sec. 10. Application of Insurance Code provisions. Health 
10
services
plan corporations and all persons interested therein 
11
or dealing therewith
shall be subject to the provisions of 
12
Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
13
149, 155.37, 354, 355.2, 356r, 356t, 356u, 356v,
356w, 356x, 
14
356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,

15
364.01, 367.2, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, 
16
and 412, and paragraphs (7) and (15) of Section 367 of the 
17
Illinois
Insurance Code.

18
(Source: P.A. 93-102, eff. 1-1-04; 93-529, eff. 8-14-03; 
19
93-853, eff. 1-1-05; 93-1000, eff. 1-1-05; 94-1076, eff. 
20
12-29-06.)