HB4679eng 96TH GENERAL ASSEMBLY

HB4679 Engrossed LRB096 14875 MJR 29741 b

AN ACT concerning insurance.

WHEREAS, It is a fundamental right not to be discriminated against because of health status or disabilities; therefore

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

Section 5. The Illinois Insurance Code is amended by changing Sections 351B-4 and 364 as follows:

(215 ILCS 5/351B-4) (from Ch. 73, par. 963B-4)

Sec. 351B-4. Small employer group accident and health insurance policy requirements.

(a) Any insurance company authorized to write accident and health insurance in this State shall have power to issue small employer group accident and health policies. No policy of small employer group accident and health insurance may be issued or delivered in this State unless a copy of the form thereof has been filed with the Department and approved by it in accordance with Section 355, unless it contains in substance those provisions contained in Sections 357.1 through 357.30 as may be applicable to small employer group accident and health insurance and unless it contains the provisions set forth in this Section.

(b) The policy must provide that the policy, the application of the employer or the executive officer or trustee of any association and the individual applications, if any, of the employees, members, or employees of members insured shall constitute the entire contract between the parties, and that all statements made by the employer or executive officer or trustee, or by the individual employees, members, or employees of members shall (in the absence of fraud) be deemed representations and not warranties, and that none of those statements may be used in defense to a claim under the policy unless it is contained in a written application.

(c) The policy must provide that the insurer will issue to the employer or to the executive officer or trustee of the association, for delivery to the employee, member, or employee of a member who is insured under the policy, an individual certificate setting forth a statement as to the insurance protection to which he is entitled and to whom payable.

(d) The policy must provide that all new employees of the employer, new members of the association, or new employees of members eligible and applying for insurance in the group or class shall be added periodically to the group or class originally insured.

(e) Anything in this Code to the contrary notwithstanding, any small employer group accident and health insurance policy may provide that all or any portion of any indemnities provided by the policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering the services; but the policy may not require that the service be rendered by a particular hospital or person. Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid. Nothing in this subsection shall prohibit an insurer from providing incentives for insureds to utilize the services of a particular hospital or person.

(f) Whenever the Department of Public Health finds that it has paid all or part of any hospital or medical expenses that an insurance carrier is obligated to pay under this Article, the Department of Public Health shall be entitled to receive reimbursement for its payments from the insurance carrier, provided that the Department of Public Health has notified the insurance carrier of its claim before the carrier has paid the benefits to its insureds or the insureds' assignees.

(g) No group hospital, medical, or surgical expense policy under this Article shall contain any provision whereby benefits otherwise payable thereunder are subject to reduction solely on account of the existence of similar benefits provided under other group or group type accident and sickness insurance policies where the reduction would operate to reduce total benefits payable under the policies below an amount equal to 100% of total allowable expenses provided under the policies.

(h) When dependents of insureds are covered under 2 policies, both of which contain coordination of benefits provisions, benefits of the policy of the insured whose birthday falls earlier in the year are determined before those of the policy of the insured whose birthday falls later in the year. "Birthday", as used herein, refers only to the month and day in a calendar year, not the year in which the person was born. The Department shall promulgate rules defining the order of benefit determination under this subsection.

(i) Discrimination between individuals of the same class of risk in the issuance of policies, in the amount of premiums or rates charged for any insurance covered by this Article, in benefits payable thereon, in any of the terms or conditions of the policy, or in any other manner whatsoever is prohibited. Nothing in this subsection shall prohibit an insurer from providing incentives for insureds to utilize the services of a particular hospital or person.

(j) No company shall make or permit any distinction or discrimination against individuals solely because of handicaps or disabilities in (i) the amount of payment of premiums or rates charged for policies of insurance, (ii) the amount of any dividends or other benefits payable thereon, or (iii) any other terms and conditions of the contract it makes, except where the distinction or discrimination is based on sound actuarial principles or is related to actual or reasonably anticipated experience.

(k) No company shall refuse to insure or refuse to continue to insure, limit the amount or extent or kind of coverage available to an individual, or charge an individual a different rate for the same coverage solely because of health status or disability blindness or partial blindness. With respect to all other conditions, including the underlying cause of the blindness or partial blindness, persons who are blind or partially blind shall be subject to the same standards of sound actuarial principles or actual or reasonably anticipated experience as are sighted persons. Refusal to insure includes denial by an insurer of disability insurance coverage on the grounds that the policy defines "disability" as being presumed in the event that the insured loses his or her eyesight. However, an insurer may exclude from coverage disability consisting solely of blindness or partial blindness when the condition existed at the time the policy was issued.

(Source: P.A. 86-1407.)

(215 ILCS 5/364) (from Ch. 73, par. 976)

Sec. 364. Discrimination prohibited. Discrimination between individuals of the same class of risk in the issuance of its policies or in the amount of premiums or rates charged for any insurance covered by this article, or in the benefits payable thereon, or in any of the terms or conditions of such policy, or in any other manner whatsoever is prohibited. Nothing in this provision shall prohibit an insurer from providing incentives for insureds to utilize the services of a particular hospital or person. It is hereby expressly provided that whenever the terms "physician" or "doctor" appear or are used in any way in any policy of accident or health insurance issued in this state, said terms shall include within their meaning persons licensed to practice dentistry under the Illinois Dental Practice Act with regard to benefits payable for services performed by a person so licensed, which such services are within the coverage provided by the particular policy or contract of insurance and are within the professional services authorized to be performed by such person under and in accordance with the said Act.

No company, in any policy of accident or health insurance issued in this State, shall make or permit any distinction or discrimination against individuals solely because of handicaps or disabilities in the amount of payment of premiums or rates charged for policies of insurance, in the amount of any dividends or other benefits payable thereon, or in any other terms and conditions of the contract it makes, except where the distinction or discrimination is based on sound actuarial principles or is related to actual or reasonably anticipated experience.

No company shall refuse to insure, or refuse to continue to insure, or limit the amount or extent or kind of coverage available to an individual, or charge an individual a different rate for the same coverage solely because of health status or disability blindness or partial blindness. With respect to all other conditions, including the underlying cause of the blindness or partial blindness, persons who are blind or partially blind shall be subject to the same standards of sound actuarial principles or actual or reasonably anticipated experience as are sighted persons. Refusal to insure includes denial by an insurer of disability insurance coverage on the grounds that the policy defines "disability" as being presumed in the event that the insured loses his or her eyesight.

(Source: P.A. 91-549, eff. 8-14-99.)