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1 | AN ACT concerning regulation.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Department of Insurance Law is amended by | ||||||
5 | adding Section 1405-50 as follows: | ||||||
6 | (20 ILCS 1405/1405-50 new) | ||||||
7 | Sec. 1405-50. Health insurance coverage, affordability, | ||||||
8 | and cost transparency annual report. | ||||||
9 | (a) On or before May 1, 2026, and each May 1 thereafter, | ||||||
10 | the Department of Insurance shall report to the Governor and | ||||||
11 | the General Assembly on health insurance coverage, | ||||||
12 | affordability, and cost trends, including: | ||||||
13 | (1) medical cost trends by major service category, | ||||||
14 | including prescription drugs; | ||||||
15 | (2) utilization patterns of services by major service | ||||||
16 | categories; | ||||||
17 | (3) impact of benefit changes, including essential | ||||||
18 | health benefits and non-essential health benefits; | ||||||
19 | (4) enrollment trends; | ||||||
20 | (5) demographic shifts; | ||||||
21 | (6) geographic factors and variations, including | ||||||
22 | changes in provider availability; | ||||||
23 | (7) health care quality improvement initiatives; |
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1 | (8)inflation and other factors impacting this State's | ||||||
2 | economic condition; | ||||||
3 | (9) the availability of financial assistance and tax | ||||||
4 | credits to pay for health insurance coverage for | ||||||
5 | individuals and small businesses; | ||||||
6 | (10) trends in out-of-pocket costs for consumers; and | ||||||
7 | (11) factors contributing to costs that are not | ||||||
8 | otherwise specified in paragraphs (1) through (10) of this | ||||||
9 | subsection. | ||||||
10 | (b) This report shall not attribute any information or | ||||||
11 | trend to a specific company and shall not disclose any | ||||||
12 | information otherwise considered confidential or proprietary. | ||||||
13 | Section 10. The Illinois Insurance Code is amended by | ||||||
14 | changing Section 355 as follows:
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15 | (215 ILCS 5/355) (from Ch. 73, par. 967)
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16 | Sec. 355. Accident
and health policies; provisions. | ||||||
17 | policies-Provisions.)
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18 | (a) As used in this Section: | ||||||
19 | "Inadequate rate" means a rate: | ||||||
20 | (1) that is insufficient to sustain projected losses | ||||||
21 | and expenses to which the rate applies; and | ||||||
22 | (2) the continued use of which endangers the solvency | ||||||
23 | of an insurer using that rate. | ||||||
24 | "Large employer" has the meaning provided in the Illinois |
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1 | Health Insurance Portability and Accountability Act. | ||||||
2 | "Plain language" has the meaning provided in the federal | ||||||
3 | Plain Writing Act of 2010 and subsequent guidance documents, | ||||||
4 | including the Federal Plain Language Guidelines. | ||||||
5 | "Unreasonable rate increase" means a rate increase that | ||||||
6 | the Director determines to be excessive, unjustified, or | ||||||
7 | unfairly discriminatory in accordance with 45 CFR 154.205. | ||||||
8 | (b) No policy of insurance against loss or damage from the | ||||||
9 | sickness, or from
the bodily injury or death of the insured by | ||||||
10 | accident shall be issued or
delivered to any person in this | ||||||
11 | State until a copy of the form thereof and
of the | ||||||
12 | classification of risks and the premium rates pertaining | ||||||
13 | thereto
have been filed with the Director; nor shall it be so | ||||||
14 | issued or delivered
until the Director shall have approved | ||||||
15 | such policy pursuant to the provisions
of Section 143. If the | ||||||
16 | Director
disapproves the policy form , he or she shall make a | ||||||
17 | written decision stating the
respects in which such form does | ||||||
18 | not comply with the requirements of law
and shall deliver a | ||||||
19 | copy thereof to the company and it shall be unlawful
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20 | thereafter for any such company to issue any policy in such | ||||||
21 | form. On and after January 1, 2025, any form filing submitted | ||||||
22 | for large employer group accident and health insurance shall | ||||||
23 | be automatically deemed approved within 90 days of the | ||||||
24 | submission date unless the Director extends by not more than | ||||||
25 | an additional 30 days the period within which the form shall be | ||||||
26 | approved or disapproved by giving written notice to the |
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1 | insurer of such extension before the expiration of the 90 | ||||||
2 | days. Any form in receipt of such an extension shall be | ||||||
3 | automatically deemed approved within 120 days of the | ||||||
4 | submission date. The Director may toll the filing due to a | ||||||
5 | conflict in legal interpretation of federal or State law as | ||||||
6 | long as the tolling is applied uniformly to all applicable | ||||||
7 | forms, written notification is provided to the insurer prior | ||||||
8 | to the tolling, the duration of the tolling is provided within | ||||||
9 | the notice to the insurer, and justification for the tolling | ||||||
10 | is posted to the Department's website. The Director may | ||||||
11 | disapprove the filing if the insurer fails to respond to an | ||||||
12 | objection or request for additional information within the | ||||||
13 | timeframe identified for response. As used in this subsection, | ||||||
14 | "large employer" has the meaning given in Section 5 of the | ||||||
15 | federal Health Insurance Portability and Accountability Act. | ||||||
16 | (c) For plan year 2026 and thereafter, premium rates for | ||||||
17 | all individual and small group accident and health insurance | ||||||
18 | policies must be filed with the Department for approval. | ||||||
19 | Unreasonable rate increases or inadequate rates shall be | ||||||
20 | modified or disapproved. For any plan year during which the | ||||||
21 | Illinois Health Benefits Exchange operates as a full | ||||||
22 | State-based exchange, the Department shall provide insurers at | ||||||
23 | least 30 days' notice of the deadline to submit rate filings.
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24 | (d) For plan year 2025 and thereafter, the Department | ||||||
25 | shall post all insurers' rate filings and summaries on the | ||||||
26 | Department's website 5 business days after the rate filing |
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1 | deadline set by the Department in annual guidance. The rate | ||||||
2 | filings and summaries posted to the Department's website shall | ||||||
3 | exclude information that is proprietary or trade secret | ||||||
4 | information protected under paragraph (g) of subsection (1) of | ||||||
5 | Section 7 of the Freedom of Information Act or confidential or | ||||||
6 | privileged under any applicable insurance law or rule. All | ||||||
7 | summaries shall include a brief justification of any rate | ||||||
8 | increase or decrease requested, including the number of | ||||||
9 | individual members, the medical loss ratio, medical trend, | ||||||
10 | administrative costs, and any other information required by | ||||||
11 | rule. The plain writing summary shall include notification of | ||||||
12 | the public comment period established in subsection (e). | ||||||
13 | (e) The Department shall open a 30-day public comment | ||||||
14 | period on the rate filings beginning on the date that all of | ||||||
15 | the rate filings are posted on the Department's website. The | ||||||
16 | Department shall post all of the comments received to the | ||||||
17 | Department's website within 5 business days after the comment | ||||||
18 | period ends. | ||||||
19 | (f) After the close of the public comment period described | ||||||
20 | in subsection (e), the Department, beginning for plan year | ||||||
21 | 2026, shall issue a decision to approve, disapprove, or modify | ||||||
22 | a rate filing within 60 days. Any rate filing or any rates | ||||||
23 | within a filing on which the Director does not issue a decision | ||||||
24 | within 60 days shall automatically be deemed approved. The | ||||||
25 | Director's decision shall take into account the actuarial | ||||||
26 | justifications and public comments. The Department shall |
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1 | notify the insurer of the decision, make the decision | ||||||
2 | available to the public by posting it on the Department's | ||||||
3 | website, and include an explanation of the findings, actuarial | ||||||
4 | justifications, and rationale that are the basis for the | ||||||
5 | decision. Any company whose rate has been modified or | ||||||
6 | disapproved shall be allowed to request a hearing within 10 | ||||||
7 | days after the action taken. The action of the Director in | ||||||
8 | disapproving a rate shall be subject to judicial review under | ||||||
9 | the Administrative Review Law. | ||||||
10 | (g) If, following the issuance of a decision but before | ||||||
11 | the effective date of the premium rates approved by the | ||||||
12 | decision, an event occurs that materially affects the | ||||||
13 | Director's decision to approve, deny, or modify the rates, the | ||||||
14 | Director may consider supplemental facts or data reasonably | ||||||
15 | related to the event. | ||||||
16 | (h) The Department shall adopt rules implementing the | ||||||
17 | procedures described in subsections (d) through (g) by March | ||||||
18 | 31, 2024. | ||||||
19 | (i) Subsection (a) and subsections (c) through (h) of this | ||||||
20 | Section do not apply to grandfathered health plans as defined | ||||||
21 | in 45 CFR 147.140; excepted benefits as defined in 42 U.S.C. | ||||||
22 | 300gg-91; student health insurance coverage as defined in 45 | ||||||
23 | CFR 147.145; the large group market as defined in Section 5 of | ||||||
24 | the Illinois Health Insurance Portability and Accountability | ||||||
25 | Act; or short-term, limited-duration health insurance coverage | ||||||
26 | as defined in Section 5 of the Short-Term, Limited-Duration |
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1 | Health Insurance Coverage Act. For a filing of premium rates | ||||||
2 | or classifications of risk for any of these types of coverage, | ||||||
3 | the Director's initial review period shall not exceed 60 days | ||||||
4 | to issue informal objections to the company that request | ||||||
5 | additional clarification, explanation, substantiating | ||||||
6 | documentation, or correction of concerns identified in the | ||||||
7 | filing before the company implements the premium rates, | ||||||
8 | classifications, or related rate-setting methodologies | ||||||
9 | described in the filing, except that the Director may extend | ||||||
10 | by not more than an additional 30 days the period of initial | ||||||
11 | review by giving written notice to the company of such | ||||||
12 | extension before the expiration of the initial 60-day period. | ||||||
13 | Nothing in this subsection shall confer authority upon the | ||||||
14 | Director to approve, modify, or disapprove rates where that | ||||||
15 | authority is not provided by other law. Nothing in this | ||||||
16 | subsection shall prohibit the Director from conducting any | ||||||
17 | investigation, examination, hearing, or other formal | ||||||
18 | administrative or enforcement proceeding with respect to a | ||||||
19 | company's rate filing or implementation thereof under | ||||||
20 | applicable law at any time, including after the period of | ||||||
21 | initial review. | ||||||
22 | (Source: P.A. 79-777.)
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23 | Section 15. The Health Maintenance Organization Act is | ||||||
24 | amended by changing Section 4-12 as follows:
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1 | (215 ILCS 125/4-12) (from Ch. 111 1/2, par. 1409.5)
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2 | Sec. 4-12. Changes in Rate Methodology and Benefits, | ||||||
3 | Material
Modifications. A health maintenance organization | ||||||
4 | shall file with the
Director, prior to use, a notice of any | ||||||
5 | change in rate methodology, or
benefits and of any material | ||||||
6 | modification of any matter or document
furnished pursuant to | ||||||
7 | Section 2-1, together with such supporting documents
as are | ||||||
8 | necessary to fully explain the change or modification.
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9 | (a) Contract modifications described in subsections | ||||||
10 | (c)(5), (c)(6) and
(c)(7) of Section 2-1 shall include all | ||||||
11 | form agreements between the
organization and enrollees, | ||||||
12 | providers, administrators of services and
insurers of health | ||||||
13 | maintenance organizations.
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14 | (b) Material transactions or series of transactions other | ||||||
15 | than those
described in subsection (a) of this Section, the | ||||||
16 | total annual value of
which exceeds the greater of $100,000 or | ||||||
17 | 5% of net earned subscription
revenue for the most current | ||||||
18 | 12-month twelve month period as determined from filed
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19 | financial statements.
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20 | (c) Any agreement between the organization and an insurer | ||||||
21 | shall be
subject to the provisions of the laws of this State | ||||||
22 | regarding reinsurance
as provided in Article XI of the | ||||||
23 | Illinois Insurance Code. All reinsurance
agreements must be | ||||||
24 | filed. Approval of the Director is required for all
agreements | ||||||
25 | except the following: individual stop loss, aggregate excess,
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26 | hospitalization benefits or out-of-area of the participating |
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1 | providers
unless 20% or more of the organization's total risk | ||||||
2 | is reinsured, in which
case all reinsurance agreements require | ||||||
3 | approval. | ||||||
4 | (d) In addition to any applicable provisions of this Act, | ||||||
5 | premium rate filings shall be subject to subsections (a) and | ||||||
6 | (c) through (i) of Section 355 of the Illinois Insurance Code.
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7 | (Source: P.A. 86-620.)
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8 | Section 20. The Limited Health Service Organization Act is | ||||||
9 | amended by changing Section 3006 as follows:
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10 | (215 ILCS 130/3006) (from Ch. 73, par. 1503-6)
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11 | Sec. 3006.
Changes in rate methodology and benefits; | ||||||
12 | material modifications;
addition of limited health services.
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13 | (a) A limited health service organization shall file with | ||||||
14 | the Director
prior to use, a notice of any change in rate | ||||||
15 | methodology, charges or
benefits and of any material | ||||||
16 | modification of any matter or document
furnished pursuant to | ||||||
17 | Section 2001, together with such supporting documents
as are | ||||||
18 | necessary to fully explain the change or modification.
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19 | (1) Contract modifications described in paragraphs (5) | ||||||
20 | and (6) of
subsection (c) of Section 2001 shall include | ||||||
21 | all agreements between the
organization and enrollees, | ||||||
22 | providers, administrators of services and
insurers of | ||||||
23 | limited health services; also other material transactions | ||||||
24 | or
series of transactions, the total annual value of which |
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1 | exceeds the greater
of $100,000 or 5% of net earned | ||||||
2 | subscription revenue for the most current
12 month period | ||||||
3 | as determined from filed financial statements.
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4 | (2) Contract modification for reinsurance. Any | ||||||
5 | agreement between the
organization and an insurer shall be | ||||||
6 | subject to the provisions of Article
XI of the Illinois | ||||||
7 | Insurance Code, as now or hereafter amended. All
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8 | reinsurance agreements must be filed with the Director. | ||||||
9 | Approval of the
Director in required agreements must be | ||||||
10 | filed. Approval of the director is
required for all | ||||||
11 | agreements except individual stop loss, aggregate excess,
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12 | hospitalization benefits or out-of-area of the | ||||||
13 | participating providers,
unless 20% or more of the | ||||||
14 | organization's total risk is reinsured, in which
case all | ||||||
15 | reinsurance agreements shall require approval.
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16 | (b) If a limited health service organization desires to | ||||||
17 | add one or more
additional limited health services, it shall | ||||||
18 | file a notice with the Director
and, at the same time, submit | ||||||
19 | the information required by Section
2001 if different from | ||||||
20 | that filed with the prepaid limited health service
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21 | organization's application. Issuance of such an amended | ||||||
22 | certificate of
authority shall be subject to the conditions of | ||||||
23 | Section 2002 of this Act. | ||||||
24 | (c) In addition to any applicable provisions of this Act, | ||||||
25 | premium rate filings shall be subject to subsection (i) of | ||||||
26 | Section 355 of the Illinois Insurance Code.
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1 | (Source: P.A. 86-600.)
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