96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB4042


 
Introduced 2/27/2009, by Rep. Rosemary Mulligan
 
SYNOPSIS AS INTRODUCED:
 		








    




215 ILCS 5/356z.15 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 require coverage for an operation to implant cochlear implants and post-treatment services for children identified within one  year of birth as being deaf or hearing impaired.
















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A BILL FOR









 











HB4042

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1
    AN ACT concerning insurance.

 
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 adding 
5
Section 356z.15 as follows:
 
6
    (215 ILCS 5/356z.15 new)

7
    Sec. 356z.15. Cochlear implants. A group or individual 
8
policy of accident and health insurance or managed care plan 
9
amended, delivered, issued, or renewed after the effective date 
10
of this amendatory Act of the 96th General Assembly must 
11
provide coverage for an operation to implant cochlear implants 
12
and post-treatment services for children identified within one 
13
year of birth as being deaf or hearing impaired.
 
14
    Section 10. The Health Maintenance Organization Act is 
15
amended  by changing Section 5-3 as follows:
 


16
    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)


17
    (Text of Section before amendment by P.A. 95-958)

18
    Sec. 5-3. Insurance Code provisions. 

19
    (a) Health Maintenance Organizations
shall be subject to 
20
the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
21
141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
 


 






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1
154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
2
356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 
3
356z.13
356z.11, 356z.14, 356z.15,
 364.01, 367.2, 367.2-5, 
4
367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 401.1, 402, 403, 
5
403A,
408, 408.2, 409, 412, 444,
and
444.1,
paragraph (c) of 
6
subsection (2) of Section 367, and Articles IIA, VIII 1/2,
XII,

7
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois 
8
Insurance Code.

9
    (b) For purposes of the Illinois Insurance Code, except for 
10
Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health 
11
Maintenance Organizations in
the following categories are 
12
deemed to be "domestic companies":


13
        (1) a corporation authorized under the
Dental Service 
14
    Plan Act or the Voluntary Health Services Plans Act;


15
        (2) a corporation organized under the laws of this 
16
    State; or


17
        (3) a corporation organized under the laws of another 
18
    state, 30% or more
of the enrollees of which are residents 
19
    of this State, except a
corporation subject to 
20
    substantially the same requirements in its state of

21
    organization as is a "domestic company" under Article VIII 
22
    1/2 of the
Illinois Insurance Code.

23
    (c) In considering the merger, consolidation, or other 
24
acquisition of
control of a Health Maintenance Organization 
25
pursuant to Article VIII 1/2
of the Illinois Insurance Code,


26
        (1) the Director shall give primary consideration to 
 


 






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1
    the continuation of
benefits to enrollees and the financial 
2
    conditions of the acquired Health
Maintenance Organization 
3
    after the merger, consolidation, or other
acquisition of 
4
    control takes effect;


5
        (2)(i) the criteria specified in subsection (1)(b) of 
6
    Section 131.8 of
the Illinois Insurance Code shall not 
7
    apply and (ii) the Director, in making
his determination 
8
    with respect to the merger, consolidation, or other

9
    acquisition of control, need not take into account the 
10
    effect on
competition of the merger, consolidation, or 
11
    other acquisition of control;


12
        (3) the Director shall have the power to require the 
13
    following
information:


14
            (A) certification by an independent actuary of the 
15
        adequacy
of the reserves of the Health Maintenance 
16
        Organization sought to be acquired;


17
            (B) pro forma financial statements reflecting the 
18
        combined balance
sheets of the acquiring company and 
19
        the Health Maintenance Organization sought
to be 
20
        acquired as of the end of the preceding year and as of 
21
        a date 90 days
prior to the acquisition, as well as pro 
22
        forma financial statements
reflecting projected 
23
        combined operation for a period of 2 years;


24
            (C) a pro forma business plan detailing an 
25
        acquiring party's plans with
respect to the operation 
26
        of the Health Maintenance Organization sought to
be 
 


 






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1
        acquired for a period of not less than 3 years; and


2
            (D) such other information as the Director shall 
3
        require.

4
    (d) The provisions of Article VIII 1/2 of the Illinois 
5
Insurance Code
and this Section 5-3 shall apply to the sale by 
6
any health maintenance
organization of greater than 10% of its

7
enrollee population (including without limitation the health 
8
maintenance
organization's right, title, and interest in and to 
9
its health care
certificates).

10
    (e) In considering any management contract or service 
11
agreement subject
to Section 141.1 of the Illinois Insurance 
12
Code, the Director (i) shall, in
addition to the criteria 
13
specified in Section 141.2 of the Illinois
Insurance Code, take 
14
into account the effect of the management contract or
service 
15
agreement on the continuation of benefits to enrollees and the

16
financial condition of the health maintenance organization to 
17
be managed or
serviced, and (ii) need not take into account the 
18
effect of the management
contract or service agreement on 
19
competition.

20
    (f) Except for small employer groups as defined in the 
21
Small Employer
Rating, Renewability and Portability Health 
22
Insurance Act and except for
medicare supplement policies as 
23
defined in Section 363 of the Illinois
Insurance Code, a Health 
24
Maintenance Organization may by contract agree with a
group or 
25
other enrollment unit to effect refunds or charge additional 
26
premiums
under the following terms and conditions:


 


 






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1
        (i) the amount of, and other terms and conditions with 
2
    respect to, the
refund or additional premium are set forth 
3
    in the group or enrollment unit
contract agreed in advance 
4
    of the period for which a refund is to be paid or

5
    additional premium is to be charged (which period shall not 
6
    be less than one
year); and


7
        (ii) the amount of the refund or additional premium 
8
    shall not exceed 20%
of the Health Maintenance 
9
    Organization's profitable or unprofitable experience
with 
10
    respect to the group or other enrollment unit for the 
11
    period (and, for
purposes of a refund or additional 
12
    premium, the profitable or unprofitable
experience shall 
13
    be calculated taking into account a pro rata share of the

14
    Health Maintenance Organization's administrative and 
15
    marketing expenses, but
shall not include any refund to be 
16
    made or additional premium to be paid
pursuant to this 
17
    subsection (f)).  The Health Maintenance Organization and 
18
    the
group or enrollment unit may agree that the profitable 
19
    or unprofitable
experience may be calculated taking into 
20
    account the refund period and the
immediately preceding 2 
21
    plan years.

22
    The Health Maintenance Organization shall include a 
23
statement in the
evidence of coverage issued to each enrollee 
24
describing the possibility of a
refund or additional premium, 
25
and upon request of any group or enrollment unit,
provide to 
26
the group or enrollment unit a description of the method used 
 


 






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to
calculate (1) the Health Maintenance Organization's 
2
profitable experience with
respect to the group or enrollment 
3
unit and the resulting refund to the group
or enrollment unit 
4
or (2) the Health Maintenance Organization's unprofitable

5
experience with respect to the group or enrollment unit and the 
6
resulting
additional premium to be paid by the group or 
7
enrollment unit.

8
    In no event shall the Illinois Health Maintenance 
9
Organization
Guaranty Association be liable to pay any 
10
contractual obligation of an
insolvent organization to pay any 
11
refund authorized under this Section.

12
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06; 
13
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
14
8-21-08; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised 
15
12-15-08.)

 
16
    (Text of Section after amendment by P.A. 95-958)
17
    Sec. 5-3. Insurance Code provisions. 

18
    (a) Health Maintenance Organizations
shall be subject to 
19
the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
20
141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
21
154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
22
356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 
23
356z.11, 356z.12, 356z.13
356z.11, 356z.14, 356z.15, 364.01, 
24
367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 
25
401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444,
and
444.1,

 


 






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1
paragraph (c) of subsection (2) of Section 367, and Articles 
2
IIA, VIII 1/2,
XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of 
3
the Illinois Insurance Code.

4
    (b) For purposes of the Illinois Insurance Code, except for 
5
Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health 
6
Maintenance Organizations in
the following categories are 
7
deemed to be "domestic companies":


8
        (1) a corporation authorized under the
Dental Service 
9
    Plan Act or the Voluntary Health Services Plans Act;


10
        (2) a corporation organized under the laws of this 
11
    State; or


12
        (3) a corporation organized under the laws of another 
13
    state, 30% or more
of the enrollees of which are residents 
14
    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 VIII 
17
    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 to 
22
    the continuation of
benefits to enrollees and the financial 
23
    conditions of the acquired Health
Maintenance Organization 
24
    after the merger, consolidation, or other
acquisition of 
25
    control takes effect;


26
        (2)(i) the criteria specified in subsection (1)(b) of 
 


 






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1
    Section 131.8 of
the Illinois Insurance Code shall not 
2
    apply and (ii) the Director, in making
his determination 
3
    with respect to the merger, consolidation, or other

4
    acquisition of control, need not take into account the 
5
    effect on
competition of the merger, consolidation, or 
6
    other acquisition of control;


7
        (3) the Director shall have the power to require the 
8
    following
information:


9
            (A) certification by an independent actuary of the 
10
        adequacy
of the reserves of the Health Maintenance 
11
        Organization sought to be acquired;


12
            (B) pro forma financial statements reflecting the 
13
        combined balance
sheets of the acquiring company and 
14
        the Health Maintenance Organization sought
to be 
15
        acquired as of the end of the preceding year and as of 
16
        a date 90 days
prior to the acquisition, as well as pro 
17
        forma financial statements
reflecting projected 
18
        combined operation for a period of 2 years;


19
            (C) a pro forma business plan detailing an 
20
        acquiring party's plans with
respect to the operation 
21
        of the Health Maintenance Organization sought to
be 
22
        acquired for a period of not less than 3 years; and


23
            (D) such other information as the Director shall 
24
        require.

25
    (d) The provisions of Article VIII 1/2 of the Illinois 
26
Insurance Code
and this Section 5-3 shall apply to the sale by 
 


 






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1
any health maintenance
organization of greater than 10% of its

2
enrollee population (including without limitation the health 
3
maintenance
organization's right, title, and interest in and to 
4
its health care
certificates).

5
    (e) In considering any management contract or service 
6
agreement subject
to Section 141.1 of the Illinois Insurance 
7
Code, the Director (i) shall, in
addition to the criteria 
8
specified in Section 141.2 of the Illinois
Insurance Code, take 
9
into account the effect of the management contract or
service 
10
agreement on the continuation of benefits to enrollees and the

11
financial condition of the health maintenance organization to 
12
be managed or
serviced, and (ii) need not take into account the 
13
effect of the management
contract or service agreement on 
14
competition.

15
    (f) Except for small employer groups as defined in the 
16
Small Employer
Rating, Renewability and Portability Health 
17
Insurance Act and except for
medicare supplement policies as 
18
defined in Section 363 of the Illinois
Insurance Code, a Health 
19
Maintenance Organization may by contract agree with a
group or 
20
other enrollment unit to effect refunds or charge additional 
21
premiums
under the following terms and conditions:


22
        (i) the amount of, and other terms and conditions with 
23
    respect to, the
refund or additional premium are set forth 
24
    in the group or enrollment unit
contract agreed in advance 
25
    of the period for which a refund is to be paid or

26
    additional premium is to be charged (which period shall not 
 


 






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1
    be less than one
year); and


2
        (ii) the amount of the refund or additional premium 
3
    shall not exceed 20%
of the Health Maintenance 
4
    Organization's profitable or unprofitable experience
with 
5
    respect to the group or other enrollment unit for the 
6
    period (and, for
purposes of a refund or additional 
7
    premium, the profitable or unprofitable
experience shall 
8
    be calculated taking into account a pro rata share of the

9
    Health Maintenance Organization's administrative and 
10
    marketing expenses, but
shall not include any refund to be 
11
    made or additional premium to be paid
pursuant to this 
12
    subsection (f)).  The Health Maintenance Organization and 
13
    the
group or enrollment unit may agree that the profitable 
14
    or unprofitable
experience may be calculated taking into 
15
    account the refund period and the
immediately preceding 2 
16
    plan years.

17
    The Health Maintenance Organization shall include a 
18
statement in the
evidence of coverage issued to each enrollee 
19
describing the possibility of a
refund or additional premium, 
20
and upon request of any group or enrollment unit,
provide to 
21
the group or enrollment unit a description of the method used 
22
to
calculate (1) the Health Maintenance Organization's 
23
profitable experience with
respect to the group or enrollment 
24
unit and the resulting refund to the group
or enrollment unit 
25
or (2) the Health Maintenance Organization's unprofitable

26
experience with respect to the group or enrollment unit and the 
 


 






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1
resulting
additional premium to be paid by the group or 
2
enrollment unit.

3
    In no event shall the Illinois Health Maintenance 
4
Organization
Guaranty Association be liable to pay any 
5
contractual obligation of an
insolvent organization to pay any 
6
refund authorized under this Section.

7
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06; 
8
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
9
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005, 
10
eff. 12-12-08; revised 12-15-08.)
 
11
    Section 15. The Voluntary Health Services Plans Act is 
12
amended  by changing Section 10 as follows:
 


13
    (215 ILCS 165/10)  (from Ch. 32, par. 604)

14
    (Text of Section before amendment by P.A. 95-958)

15
    Sec. 10. Application of Insurance Code provisions. Health 
16
services
plan corporations and all persons interested therein 
17
or dealing therewith
shall be subject to the provisions of 
18
Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
19
149, 155.37, 354, 355.2, 356g.5, 356r, 356t, 356u, 356v,
356w, 
20
356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 
21
356z.9,
356z.10, 356z.13
356z.11, 356z.14, 356z.15,
 364.01, 
22
367.2, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, and 412, 
23
and paragraphs (7) and (15) of Section 367 of the Illinois

24
Insurance Code.

 


 






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1
(Source: P.A. 94-1076, eff. 12-29-06; 95-189, eff. 8-16-07; 
2
95-331, eff. 8-21-07; 95-422, eff. 8-24-07; 95-520, eff. 
3
8-28-07; 95-876, eff. 8-21-08; 95-978, eff. 1-1-09; 95-1005, 
4
eff. 12-12-08; revised 12-15-08.)

 
5
    (Text of Section after amendment by P.A. 95-958)
6
    Sec. 10. Application of Insurance Code provisions. Health 
7
services
plan corporations and all persons interested therein 
8
or dealing therewith
shall be subject to the provisions of 
9
Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
10
149, 155.37, 354, 355.2, 356g.5, 356r, 356t, 356u, 356v,
356w, 
11
356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 
12
356z.9,
356z.10, 356z.11, 356z.12, 356z.13
356z.11, 356z.14, 
13
356z.15, 364.01, 367.2, 368a, 401, 401.1,
402,
403, 403A, 408,

14
408.2, and 412, and paragraphs (7) and (15) of Section 367 of 
15
the Illinois
Insurance Code.

16
(Source: P.A. 94-1076, eff. 12-29-06; 95-189, eff. 8-16-07; 
17
95-331, eff. 8-21-07; 95-422, eff. 8-24-07; 95-520, eff. 
18
8-28-07; 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, 
19
eff. 1-1-09; 95-1005, eff. 12-12-08; revised 12-15-08.)

 
20
    Section 95. No acceleration or delay. Where this Act makes 
21
changes in a statute that is represented in this Act by text 
22
that is not yet or no longer in effect (for example, a Section 
23
represented by multiple versions), the use of that text does 
24
not accelerate or delay the taking effect of (i) the changes 
 


 






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1
made by this Act or (ii) provisions derived from any other 
2
Public Act.