96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB4043


 
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. Provides that group and individual policies of accident and health insurance and managed care plans must provide coverage for (1) operations to implant cochlear implants and post-treatment services for children identified within one  year of birth as being deaf or hearing impaired and (2) audiological services and hearing aids for
children up to 18 years of age. Makes other changes.
















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A BILL FOR









 











HB4043

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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; audiological services.
8
    (a) A group or individual policy of accident and health 
9
insurance or managed care plan amended, delivered, issued, or 
10
renewed after the effective date of this amendatory Act of the 
11
96th General Assembly must provide coverage for an operation to 
12
implant cochlear implants and post-treatment services for 
13
children identified within one year of birth as being deaf or 
14
hearing impaired.
15
    (b) A group or individual
policy of accident and health 
16
insurance or managed care plan
amended, delivered, issued, or 
17
renewed after the effective date
of this amendatory Act of the 
18
96th General Assembly must
provide coverage for audiological 
19
services and hearing aids for
children up to 18 years of age. 
20
This coverage shall only apply
to hearing aids that are 
21
prescribed, filled, and dispensed by a
licensed audiologist. A 
22
policy or plan may limit the hearing
aid benefit payable for 
23
each hearing-impaired ear to every 38
months. A policy or plan 
 


 






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1
may provide for up to 4 additional ear
molds per year for 
2
children up to 2 years of age. 
 
3
    Section 10. The Health Maintenance Organization Act is 
4
amended  by changing Section 5-3 as follows:
 


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


6
    (Text of Section before amendment by P.A. 95-958)

7
    Sec. 5-3. Insurance Code provisions. 

8
    (a) Health Maintenance Organizations
shall be subject to 
9
the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
10
141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
11
154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
12
356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 
13
356z.13
356z.11, 356z.14, 356z.15,
 364.01, 367.2, 367.2-5, 
14
367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 401.1, 402, 403, 
15
403A,
408, 408.2, 409, 412, 444,
and
444.1,
paragraph (c) of 
16
subsection (2) of Section 367, and Articles IIA, VIII 1/2,
XII,

17
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois 
18
Insurance Code.

19
    (b) For purposes of the Illinois Insurance Code, except for 
20
Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health 
21
Maintenance Organizations in
the following categories are 
22
deemed to be "domestic companies":


23
        (1) a corporation authorized under the
Dental Service 
24
    Plan Act or the Voluntary Health Services Plans Act;


 


 






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


3
        (3) a corporation organized under the laws of another 
4
    state, 30% or more
of the enrollees of which are residents 
5
    of this State, except a
corporation subject to 
6
    substantially the same requirements in its state of

7
    organization as is a "domestic company" under Article VIII 
8
    1/2 of the
Illinois Insurance Code.

9
    (c) In considering the merger, consolidation, or other 
10
acquisition of
control of a Health Maintenance Organization 
11
pursuant to Article VIII 1/2
of the Illinois Insurance Code,


12
        (1) the Director shall give primary consideration to 
13
    the continuation of
benefits to enrollees and the financial 
14
    conditions of the acquired Health
Maintenance Organization 
15
    after the merger, consolidation, or other
acquisition of 
16
    control takes effect;


17
        (2)(i) the criteria specified in subsection (1)(b) of 
18
    Section 131.8 of
the Illinois Insurance Code shall not 
19
    apply and (ii) the Director, in making
his determination 
20
    with respect to the merger, consolidation, or other

21
    acquisition of control, need not take into account the 
22
    effect on
competition of the merger, consolidation, or 
23
    other acquisition of control;


24
        (3) the Director shall have the power to require the 
25
    following
information:


26
            (A) certification by an independent actuary of the 
 


 






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        adequacy
of the reserves of the Health Maintenance 
2
        Organization sought to be acquired;


3
            (B) pro forma financial statements reflecting the 
4
        combined balance
sheets of the acquiring company and 
5
        the Health Maintenance Organization sought
to be 
6
        acquired as of the end of the preceding year and as of 
7
        a date 90 days
prior to the acquisition, as well as pro 
8
        forma financial statements
reflecting projected 
9
        combined operation for a period of 2 years;


10
            (C) a pro forma business plan detailing an 
11
        acquiring party's plans with
respect to the operation 
12
        of the Health Maintenance Organization sought to
be 
13
        acquired for a period of not less than 3 years; and


14
            (D) such other information as the Director shall 
15
        require.

16
    (d) The provisions of Article VIII 1/2 of the Illinois 
17
Insurance Code
and this Section 5-3 shall apply to the sale by 
18
any health maintenance
organization of greater than 10% of its

19
enrollee population (including without limitation the health 
20
maintenance
organization's right, title, and interest in and to 
21
its health care
certificates).

22
    (e) In considering any management contract or service 
23
agreement subject
to Section 141.1 of the Illinois Insurance 
24
Code, the Director (i) shall, in
addition to the criteria 
25
specified in Section 141.2 of the Illinois
Insurance Code, take 
26
into account the effect of the management contract or
service 
 


 






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agreement on the continuation of benefits to enrollees and the

2
financial condition of the health maintenance organization to 
3
be managed or
serviced, and (ii) need not take into account the 
4
effect of the management
contract or service agreement on 
5
competition.

6
    (f) Except for small employer groups as defined in the 
7
Small Employer
Rating, Renewability and Portability Health 
8
Insurance Act and except for
medicare supplement policies as 
9
defined in Section 363 of the Illinois
Insurance Code, a Health 
10
Maintenance Organization may by contract agree with a
group or 
11
other enrollment unit to effect refunds or charge additional 
12
premiums
under the following terms and conditions:


13
        (i) the amount of, and other terms and conditions with 
14
    respect to, the
refund or additional premium are set forth 
15
    in the group or enrollment unit
contract agreed in advance 
16
    of the period for which a refund is to be paid or

17
    additional premium is to be charged (which period shall not 
18
    be less than one
year); and


19
        (ii) the amount of the refund or additional premium 
20
    shall not exceed 20%
of the Health Maintenance 
21
    Organization's profitable or unprofitable experience
with 
22
    respect to the group or other enrollment unit for the 
23
    period (and, for
purposes of a refund or additional 
24
    premium, the profitable or unprofitable
experience shall 
25
    be calculated taking into account a pro rata share of the

26
    Health Maintenance Organization's administrative and 
 


 






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    marketing expenses, but
shall not include any refund to be 
2
    made or additional premium to be paid
pursuant to this 
3
    subsection (f)).  The Health Maintenance Organization and 
4
    the
group or enrollment unit may agree that the profitable 
5
    or unprofitable
experience may be calculated taking into 
6
    account the refund period and the
immediately preceding 2 
7
    plan years.

8
    The Health Maintenance Organization shall include a 
9
statement in the
evidence of coverage issued to each enrollee 
10
describing the possibility of a
refund or additional premium, 
11
and upon request of any group or enrollment unit,
provide to 
12
the group or enrollment unit a description of the method used 
13
to
calculate (1) the Health Maintenance Organization's 
14
profitable experience with
respect to the group or enrollment 
15
unit and the resulting refund to the group
or enrollment unit 
16
or (2) the Health Maintenance Organization's unprofitable

17
experience with respect to the group or enrollment unit and the 
18
resulting
additional premium to be paid by the group or 
19
enrollment unit.

20
    In no event shall the Illinois Health Maintenance 
21
Organization
Guaranty Association be liable to pay any 
22
contractual obligation of an
insolvent organization to pay any 
23
refund authorized under this Section.

24
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06; 
25
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
26
8-21-08; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised 
 


 






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12-15-08.)

 
2
    (Text of Section after amendment by P.A. 95-958)
3
    Sec. 5-3. Insurance Code provisions. 

4
    (a) Health Maintenance Organizations
shall be subject to 
5
the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
6
141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
7
154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
8
356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 
9
356z.11, 356z.12, 356z.13
356z.11, 356z.14, 356z.15, 364.01, 
10
367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 
11
401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444,
and
444.1,

12
paragraph (c) of subsection (2) of Section 367, and Articles 
13
IIA, VIII 1/2,
XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of 
14
the Illinois Insurance Code.

15
    (b) For purposes of the Illinois Insurance Code, except for 
16
Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health 
17
Maintenance Organizations in
the following categories are 
18
deemed to be "domestic companies":


19
        (1) a corporation authorized under the
Dental Service 
20
    Plan Act or the Voluntary Health Services Plans Act;


21
        (2) a corporation organized under the laws of this 
22
    State; or


23
        (3) a corporation organized under the laws of another 
24
    state, 30% or more
of the enrollees of which are residents 
25
    of this State, except a
corporation subject to 
 


 






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    substantially the same requirements in its state of

2
    organization as is a "domestic company" under Article VIII 
3
    1/2 of the
Illinois Insurance Code.

4
    (c) In considering the merger, consolidation, or other 
5
acquisition of
control of a Health Maintenance Organization 
6
pursuant to Article VIII 1/2
of the Illinois Insurance Code,


7
        (1) the Director shall give primary consideration to 
8
    the continuation of
benefits to enrollees and the financial 
9
    conditions of the acquired Health
Maintenance Organization 
10
    after the merger, consolidation, or other
acquisition of 
11
    control takes effect;


12
        (2)(i) the criteria specified in subsection (1)(b) of 
13
    Section 131.8 of
the Illinois Insurance Code shall not 
14
    apply and (ii) the Director, in making
his determination 
15
    with respect to the merger, consolidation, or other

16
    acquisition of control, need not take into account the 
17
    effect on
competition of the merger, consolidation, or 
18
    other acquisition of control;


19
        (3) the Director shall have the power to require the 
20
    following
information:


21
            (A) certification by an independent actuary of the 
22
        adequacy
of the reserves of the Health Maintenance 
23
        Organization sought to be acquired;


24
            (B) pro forma financial statements reflecting the 
25
        combined balance
sheets of the acquiring company and 
26
        the Health Maintenance Organization sought
to be 
 


 






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        acquired as of the end of the preceding year and as of 
2
        a date 90 days
prior to the acquisition, as well as pro 
3
        forma financial statements
reflecting projected 
4
        combined operation for a period of 2 years;


5
            (C) a pro forma business plan detailing an 
6
        acquiring party's plans with
respect to the operation 
7
        of the Health Maintenance Organization sought to
be 
8
        acquired for a period of not less than 3 years; and


9
            (D) such other information as the Director shall 
10
        require.

11
    (d) The provisions of Article VIII 1/2 of the Illinois 
12
Insurance Code
and this Section 5-3 shall apply to the sale by 
13
any health maintenance
organization of greater than 10% of its

14
enrollee population (including without limitation the health 
15
maintenance
organization's right, title, and interest in and to 
16
its health care
certificates).

17
    (e) In considering any management contract or service 
18
agreement subject
to Section 141.1 of the Illinois Insurance 
19
Code, the Director (i) shall, in
addition to the criteria 
20
specified in Section 141.2 of the Illinois
Insurance Code, take 
21
into account the effect of the management contract or
service 
22
agreement on the continuation of benefits to enrollees and the

23
financial condition of the health maintenance organization to 
24
be managed or
serviced, and (ii) need not take into account the 
25
effect of the management
contract or service agreement on 
26
competition.

 


 






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    (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 Health 
5
Maintenance Organization may by contract agree with a
group or 
6
other enrollment unit to effect refunds or charge additional 
7
premiums
under the following terms and conditions:


8
        (i) the amount of, and other terms and conditions with 
9
    respect to, the
refund or additional premium are set forth 
10
    in the group or enrollment unit
contract agreed in advance 
11
    of the period for which a refund is to be paid or

12
    additional premium is to be charged (which period shall not 
13
    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 be 
23
    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 profitable 
26
    or unprofitable
experience may be calculated taking into 
 


 






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1
    account the refund period and the
immediately preceding 2 
2
    plan years.

3
    The Health Maintenance Organization shall include a 
4
statement in the
evidence of coverage issued to each enrollee 
5
describing the possibility of a
refund or additional premium, 
6
and upon request of any group or enrollment unit,
provide to 
7
the group or enrollment unit a description of the method used 
8
to
calculate (1) the Health Maintenance Organization's 
9
profitable experience with
respect to the group or enrollment 
10
unit and the resulting refund to the group
or enrollment unit 
11
or (2) the Health Maintenance Organization's unprofitable

12
experience with respect to the group or enrollment unit and the 
13
resulting
additional premium to be paid by the group or 
14
enrollment unit.

15
    In no event shall the Illinois Health Maintenance 
16
Organization
Guaranty Association be liable to pay any 
17
contractual obligation of an
insolvent organization to pay any 
18
refund authorized under this Section.

19
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06; 
20
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
21
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005, 
22
eff. 12-12-08; revised 12-15-08.)
 
23
    Section 15. The Voluntary Health Services Plans Act is 
24
amended  by changing Section 10 as follows:
 


 


 






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1
    (215 ILCS 165/10)  (from Ch. 32, par. 604)

2
    (Text of Section before amendment by P.A. 95-958)

3
    Sec. 10. Application of Insurance Code provisions. Health 
4
services
plan corporations and all persons interested therein 
5
or dealing therewith
shall be subject to the provisions of 
6
Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
7
149, 155.37, 354, 355.2, 356g.5, 356r, 356t, 356u, 356v,
356w, 
8
356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 
9
356z.9,
356z.10, 356z.13
356z.11, 356z.14, 356z.15,
 364.01, 
10
367.2, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, and 412, 
11
and paragraphs (7) and (15) of Section 367 of the Illinois

12
Insurance Code.

13
(Source: P.A. 94-1076, eff. 12-29-06; 95-189, eff. 8-16-07; 
14
95-331, eff. 8-21-07; 95-422, eff. 8-24-07; 95-520, eff. 
15
8-28-07; 95-876, eff. 8-21-08; 95-978, eff. 1-1-09; 95-1005, 
16
eff. 12-12-08; revised 12-15-08.)

 
17
    (Text of Section after amendment by P.A. 95-958)
18
    Sec. 10. Application of Insurance Code provisions. Health 
19
services
plan corporations and all persons interested therein 
20
or dealing therewith
shall be subject to the provisions of 
21
Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
22
149, 155.37, 354, 355.2, 356g.5, 356r, 356t, 356u, 356v,
356w, 
23
356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 
24
356z.9,
356z.10, 356z.11, 356z.12, 356z.13
356z.11, 356z.14, 
25
356z.15, 364.01, 367.2, 368a, 401, 401.1,
402,
403, 403A, 408,

 


 






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408.2, and 412, and paragraphs (7) and (15) of Section 367 of 
2
the Illinois
Insurance Code.

3
(Source: P.A. 94-1076, eff. 12-29-06; 95-189, eff. 8-16-07; 
4
95-331, eff. 8-21-07; 95-422, eff. 8-24-07; 95-520, eff. 
5
8-28-07; 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, 
6
eff. 1-1-09; 95-1005, eff. 12-12-08; revised 12-15-08.)

 
7
    Section 95. No acceleration or delay. Where this Act makes 
8
changes in a statute that is represented in this Act by text 
9
that is not yet or no longer in effect (for example, a Section 
10
represented by multiple versions), the use of that text does 
11
not accelerate or delay the taking effect of (i) the changes 
12
made by this Act or (ii) provisions derived from any other 
13
Public Act.