94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB1937

 

Introduced 2/25/2005, by Sen. Richard J. Winkel, Jr.

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/356z.7 new
215 ILCS 125/5-3   from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003   from Ch. 73, par. 1504-3
215 ILCS 165/10   from Ch. 32, par. 604

    Amends the Illinois Insurance Code, the Health Maintenance Organization Act, the Limited Health Service Organization Act, and the Voluntary Health Services Plans Act. Requires individual and group accident and health insurance policies to include coverage for prescription enteral formulas and reduced-protein foods that are necessary for the treatment or management of certain gastrointestinal conditions or inherited diseases involving amino acids.


LRB094 11441 LJB 42358 b

 

 

A BILL FOR

 

SB1937 LRB094 11441 LJB 42358 b

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.7 as follows:
 
6     (215 ILCS 5/356z.7 new)
7     Sec. 356z.7. Treatment of certain metabolic diseases.
8     (a) An individual or group policy of accident and health
9 insurance that is issued, delivered, amended, or renewed in
10 this State on or after the effective date of this amendatory
11 Act of the 94th General Assembly shall include the following:
12         (1) Coverage for prescription enteral and oral
13     formulas for home use, for which a physician has issued a
14     written order and that are medically necessary for the
15     treatment or management of inherited diseases involving
16     amino acids or organic acids (including, but not limited
17     to, phenylketonuria).
18         (2) Coverage for up to $2,500 per year worth of food
19     products modified to be low in protein, for which a
20     physician has issued a written order and that are medically
21     necessary for the management of phenylketonuria or other
22     inherited diseases involving amino acids or other organic
23     acids.
24     (b) The coverage required under subsection (a) of this
25 Section shall also be provided by health maintenance
26 organizations, limited health service organizations, and
27 voluntary health services plans.
 
28     Section 10. The Health Maintenance Organization Act is
29 amended by changing Section 5-3 as follows:
 
30     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)

 

 

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1     Sec. 5-3. Insurance Code provisions.
2     (a) Health Maintenance Organizations shall be subject to
3 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
4 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
5 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
6 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.7, 364.01, 367.2,
7 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1, 402,
8 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c)
9 of subsection (2) of Section 367, and Articles IIA, VIII 1/2,
10 XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
11 Insurance Code.
12     (b) For purposes of the Illinois Insurance Code, except for
13 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
14 Maintenance Organizations in the following categories are
15 deemed to be "domestic companies":
16         (1) a corporation authorized under the Dental Service
17     Plan Act or the Voluntary Health Services Plans Act;
18         (2) a corporation organized under the laws of this
19     State; or
20         (3) a corporation organized under the laws of another
21     state, 30% or more of the enrollees of which are residents
22     of this State, except a corporation subject to
23     substantially the same requirements in its state of
24     organization as is a "domestic company" under Article VIII
25     1/2 of the Illinois Insurance Code.
26     (c) In considering the merger, consolidation, or other
27 acquisition of control of a Health Maintenance Organization
28 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
29         (1) the Director shall give primary consideration to
30     the continuation of benefits to enrollees and the financial
31     conditions of the acquired Health Maintenance Organization
32     after the merger, consolidation, or other acquisition of
33     control takes effect;
34         (2)(i) the criteria specified in subsection (1)(b) of
35     Section 131.8 of the Illinois Insurance Code shall not
36     apply and (ii) the Director, in making his determination

 

 

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1     with respect to the merger, consolidation, or other
2     acquisition of control, need not take into account the
3     effect on competition of the merger, consolidation, or
4     other acquisition of control;
5         (3) the Director shall have the power to require the
6     following information:
7             (A) certification by an independent actuary of the
8         adequacy of the reserves of the Health Maintenance
9         Organization sought to be acquired;
10             (B) pro forma financial statements reflecting the
11         combined balance sheets of the acquiring company and
12         the Health Maintenance Organization sought to be
13         acquired as of the end of the preceding year and as of
14         a date 90 days prior to the acquisition, as well as pro
15         forma financial statements reflecting projected
16         combined operation for a period of 2 years;
17             (C) a pro forma business plan detailing an
18         acquiring party's plans with respect to the operation
19         of the Health Maintenance Organization sought to be
20         acquired for a period of not less than 3 years; and
21             (D) such other information as the Director shall
22         require.
23     (d) The provisions of Article VIII 1/2 of the Illinois
24 Insurance Code and this Section 5-3 shall apply to the sale by
25 any health maintenance organization of greater than 10% of its
26 enrollee population (including without limitation the health
27 maintenance organization's right, title, and interest in and to
28 its health care certificates).
29     (e) In considering any management contract or service
30 agreement subject to Section 141.1 of the Illinois Insurance
31 Code, the Director (i) shall, in addition to the criteria
32 specified in Section 141.2 of the Illinois Insurance Code, take
33 into account the effect of the management contract or service
34 agreement on the continuation of benefits to enrollees and the
35 financial condition of the health maintenance organization to
36 be managed or serviced, and (ii) need not take into account the

 

 

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1 effect of the management contract or service agreement on
2 competition.
3     (f) Except for small employer groups as defined in the
4 Small Employer Rating, Renewability and Portability Health
5 Insurance Act and except for medicare supplement policies as
6 defined in Section 363 of the Illinois Insurance Code, a Health
7 Maintenance Organization may by contract agree with a group or
8 other enrollment unit to effect refunds or charge additional
9 premiums under the following terms and conditions:
10         (i) the amount of, and other terms and conditions with
11     respect to, the refund or additional premium are set forth
12     in the group or enrollment unit contract agreed in advance
13     of the period for which a refund is to be paid or
14     additional premium is to be charged (which period shall not
15     be less than one year); and
16         (ii) the amount of the refund or additional premium
17     shall not exceed 20% of the Health Maintenance
18     Organization's profitable or unprofitable experience with
19     respect to the group or other enrollment unit for the
20     period (and, for purposes of a refund or additional
21     premium, the profitable or unprofitable experience shall
22     be calculated taking into account a pro rata share of the
23     Health Maintenance Organization's administrative and
24     marketing expenses, but shall not include any refund to be
25     made or additional premium to be paid pursuant to this
26     subsection (f)). The Health Maintenance Organization and
27     the group or enrollment unit may agree that the profitable
28     or unprofitable experience may be calculated taking into
29     account the refund period and the immediately preceding 2
30     plan years.
31     The Health Maintenance Organization shall include a
32 statement in the evidence of coverage issued to each enrollee
33 describing the possibility of a refund or additional premium,
34 and upon request of any group or enrollment unit, provide to
35 the group or enrollment unit a description of the method used
36 to calculate (1) the Health Maintenance Organization's

 

 

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1 profitable experience with respect to the group or enrollment
2 unit and the resulting refund to the group or enrollment unit
3 or (2) the Health Maintenance Organization's unprofitable
4 experience with respect to the group or enrollment unit and the
5 resulting additional premium to be paid by the group or
6 enrollment unit.
7     In no event shall the Illinois Health Maintenance
8 Organization Guaranty Association be liable to pay any
9 contractual obligation of an insolvent organization to pay any
10 refund authorized under this Section.
11 (Source: P.A. 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-261,
12 eff. 1-1-04; 93-477, eff. 8-8-03; 93-529, eff. 8-14-03; 93-853,
13 eff. 1-1-05; 93-1000, eff. 1-1-05; revised 10-14-04.)
 
14     Section 15. The Limited Health Service Organization Act is
15 amended by changing Section 4003 as follows:
 
16     (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
17     Sec. 4003. Illinois Insurance Code provisions. Limited
18 health service organizations shall be subject to the provisions
19 of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c,
20 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8,
21 155.04, 155.37, 355.2, 356v, 356z.7, 368a, 401, 401.1, 402,
22 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles
23 IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
24 the Illinois Insurance Code. For purposes of the Illinois
25 Insurance Code, except for Sections 444 and 444.1 and Articles
26 XIII and XIII 1/2, limited health service organizations in the
27 following categories are deemed to be domestic companies:
28         (1) a corporation under the laws of this State; or
29         (2) a corporation organized under the laws of another
30     state, 30% of more of the enrollees of which are residents
31     of this State, except a corporation subject to
32     substantially the same requirements in its state of
33     organization as is a domestic company under Article VIII
34     1/2 of the Illinois Insurance Code.

 

 

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1 (Source: P.A. 91-549, eff. 8-14-99; 91-605, eff. 12-14-99;
2 91-788, eff. 6-9-00; 92-440, eff. 8-17-01.)
 
3     Section 20. The Voluntary Health Services Plans Act is
4 amended by changing Section 10 as follows:
 
5     (215 ILCS 165/10)  (from Ch. 32, par. 604)
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, 356r, 356t, 356u, 356v, 356w, 356x,
11 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.7, 364.01,
12 367.2, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412,
13 and paragraphs (7) and (15) of Section 367 of the Illinois
14 Insurance Code.
15 (Source: P.A. 92-130, eff. 7-20-01; 92-440, eff. 8-17-01;
16 92-651, eff. 7-11-02; 92-764, eff. 1-1-03; 93-102, eff. 1-1-04;
17 93-529, eff. 8-14-03; 93-853, eff. 1-1-05; 93-1000, eff.
18 1-1-05; revised 10-14-04.)