101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
SB3732

 

Introduced 2/14/2020, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/355  from Ch. 73, par. 967
215 ILCS 125/4-12  from Ch. 111 1/2, par. 1409.5

    Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that all individual and small group accident and health policies written subject to certain federal standards must file rates with the Department of Insurance for approval. Provides that unreasonable rate increases or inadequate rates shall be disapproved. Requires the Department to provide a report to the General Assembly on or before January 1, 2022 regarding both on and off exchange individual and small group rates in the Illinois market. Requires that the Department approve or deny rate filings within 45 calendar days of submission unless the Director of Insurance extends the period by following specific procedures. Provides that a rate increase that is not approved or denied by the Department by the applicable deadline shall be automatically approved on the following calendar day. Provides that no less than 30 days after the federal Centers for Medicare and Medicaid Services has certified the plans described in this Section for the upcoming plan year, the Department shall publish on its website a report explaining the rates for that plan year's certified health care plans. Defines "inadequate rate" and "unreasonable rate increase". Effective immediately.


LRB101 19897 BMS 69418 b

 

 

A BILL FOR

 

SB3732LRB101 19897 BMS 69418 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 355 as follows:
 
6    (215 ILCS 5/355)  (from Ch. 73, par. 967)
7    Sec. 355. Accident and health policies; provisions.
8policies-Provisions.)
9    (a) As used in this Section:
10    "Inadequate rate" means a rate:
11        (1) that is insufficient to sustain projected losses
12    and expenses to which the rate applies; and
13        (2) the continued use of which endangers the solvency
14    of an insurer using that rate.
15    "Unreasonable rate increase" means a rate increase that the
16Director determines to be excessive, unjustified, or unfairly
17discriminatory in accordance with 45 CFR 154.205.
18    (b) No policy of insurance against loss or damage from the
19sickness, or from the bodily injury or death of the insured by
20accident shall be issued or delivered to any person in this
21State until a copy of the form thereof and of the
22classification of risks and the premium rates pertaining
23thereto have been filed with the Director; nor shall it be so

 

 

SB3732- 2 -LRB101 19897 BMS 69418 b

1issued or delivered until the Director shall have approved such
2policy pursuant to the provisions of Section 143. If the
3Director disapproves the policy form he shall make a written
4decision stating the respects in which such form does not
5comply with the requirements of law and shall deliver a copy
6thereof to the company and it shall be unlawful thereafter for
7any such company to issue any policy in such form.
8    (c) Rate increases for all individual and small group
9accident and health insurance policies subject to the standards
10of 45 CFR Part 154 must be filed with the Department for
11approval. Unreasonable rate increases or inadequate rates
12shall be disapproved. The Department shall provide a report to
13the General Assembly on or before January 1, 2022 regarding
14both on and off exchange individual and small group rates in
15the Illinois market.
16    (d) In all cases the Director shall approve or disapprove a
17rate filing under subsection (c) within 45 calendar days of
18submission unless the Director extends, by not more than an
19additional 30 days, the period within which he or she shall
20approve or disapprove any such filing by giving written notice
21to the insurer of such extension before expiration of the
22initial 45-day period. Rates not approved or disapproved by the
23applicable deadline shall be deemed approved on the following
24calendar day.
25    (e) No less than 30 days after the federal Centers for
26Medicare and Medicaid Services has certified the policies

 

 

SB3732- 3 -LRB101 19897 BMS 69418 b

1described in subsection (c) for the upcoming plan year, the
2Department shall publish on its website a report explaining the
3rates for that plan year's certified policies.
4(Source: P.A. 79-777.)
 
5    Section 10. The Health Maintenance Organization Act is
6amended by changing Section 4-12 as follows:
 
7    (215 ILCS 125/4-12)  (from Ch. 111 1/2, par. 1409.5)
8    Sec. 4-12. Changes in Rate Methodology and Benefits,
9Material Modifications. A health maintenance organization
10shall file with the Director, prior to use, a notice of any
11change in rate methodology, or benefits and of any material
12modification of any matter or document furnished pursuant to
13Section 2-1, together with such supporting documents as are
14necessary to fully explain the change or modification.
15    (a) Contract modifications described in subsections
16(c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all form
17agreements between the organization and enrollees, providers,
18administrators of services and insurers of health maintenance
19organizations.
20    (b) Material transactions or series of transactions other
21than those described in subsection (a) of this Section, the
22total annual value of which exceeds the greater of $100,000 or
235% of net earned subscription revenue for the most current
24twelve month period as determined from filed financial

 

 

SB3732- 4 -LRB101 19897 BMS 69418 b

1statements.
2    (c) Any agreement between the organization and an insurer
3shall be subject to the provisions of the laws of this State
4regarding reinsurance as provided in Article XI of the Illinois
5Insurance Code. All reinsurance agreements must be filed.
6Approval of the Director is required for all agreements except
7the following: individual stop loss, aggregate excess,
8hospitalization benefits or out-of-area of the participating
9providers unless 20% or more of the organization's total risk
10is reinsured, in which case all reinsurance agreements require
11approval.
12    (d) Rate increases for all individual and small group
13health care plans subject to the standards of 45 CFR Part 154
14must be filed with the Department for approval. Unreasonable
15rate increases in relation to benefits under the policy
16provided or inadequate rates shall be disapproved. The
17Department shall provide a report to the General Assembly on or
18before January 1, 2022 regarding both on and off exchange
19individual and small group rates in the Illinois market.
20    (e) In all cases the Director shall approve or disapprove a
21rate filing under subsection (d) within 45 calendar days of
22submission unless the Director extends, by not more than an
23additional 30 days, the period within which he or she shall
24approve or disapprove any such filing by giving written notice
25to the insurer of such extension before expiration of the
26initial 45-day period. Rates not approved or disapproved by the

 

 

SB3732- 5 -LRB101 19897 BMS 69418 b

1applicable deadline shall be deemed approved on the following
2calendar day.
3    (f) No less than 30 days after the federal Centers for
4Medicare and Medicaid Services has certified the health care
5plans described in subsection (d) for the upcoming plan year,
6the Department shall publish on its website a report explaining
7the rates for that plan year's certified health care plans.
8    (g) As used in this Section:
9    "Inadequate rate" means a rate:
10        (1) that is insufficient to sustain projected losses
11    and expenses to which the rate applies; and
12        (2) the continued use of which endangers the solvency
13    of an insurer using that rate.
14    "Unreasonable rate increase" means a rate increase that the
15Director determines to be excessive, unjustified, or unfairly
16discriminatory in accordance with 45 CFR 154.205.
17(Source: P.A. 86-620.)
 
18    Section 99. Effective date. This Act takes effect upon
19becoming law.