HB0415 95TH GENERAL ASSEMBLY

LRB095 04041 KBJ 24078 b

95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB0415

Introduced 01/26/07, by Rep. Deborah L. Graham

SYNOPSIS AS INTRODUCED:

215 ILCS 5/356a	from Ch. 73, par. 968a
215 ILCS 5/367.2-5

Amends the Illinois Insurance Code. Raises the maximum age of a dependent child that a policy of accident and health insurance may insure, originally or by subsequent amendment, upon the application of an adult member of a family who shall be deemed the policyholder, from 19 to 24. Provides that if the limiting age under the policy is less than 25 years of age, then the insurer shall, upon application of the dependent child, provide coverage after that specific age, until the dependent child is 25 years of age.

A BILL FOR

AN ACT concerning insurance.

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 356a and 367.2-5 as follows:

(215 ILCS 5/356a) (from Ch. 73, par. 968a)

Sec. 356a. Form of policy.

(1) No policy of accident and health insurance shall be delivered or issued for delivery to any person in this state unless:

(a) the entire money and other considerations therefor are expressed therein; and

(b) the time at which the insurance takes effect and terminates is expressed therein; and

(c) it purports to insure only one person, except that a policy may insure, originally or by subsequent amendment, upon the application of an adult member of a family who shall be deemed the policyholder, any two or more eligible members of that family, including husband, wife, dependent children or any children under a specified age which shall not exceed 24 19 years and any other person dependent upon the policyholder; and

(d) the style, arrangement and over-all appearance of the policy give no undue prominence to any portion of the text, and unless every printed portion of the text of the policy and of any endorsements or attached papers is plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than ten-point with a lower-case unspaced alphabet length not less than one hundred and twenty-point (the "text" shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description if any, and captions and subcaptions); and

(e) the exceptions and reductions of indemnity are set forth in the policy and, except those which are set forth in Sections 357.1 through 357.30 of this act, are printed, at the insurer's option, either included with the benefit provision to which they apply, or under an appropriate caption such as "EXCEPTIONS", or "EXCEPTIONS AND REDUCTIONS", provided that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies; and

(f) each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof; and

(g) it contains no provision purporting to make any portion of the charter, rules, constitution, or by-laws of the insurer a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the Director.

(2) If any policy is issued by an insurer domiciled in this state for delivery to a person residing in another state, and if the official having responsibility for the administration of the insurance laws of such other state shall have advised the Director that any such policy is not subject to approval or disapproval by such official, the Director may by ruling require that such policy meet the standards set forth in subsection (1) of this section and in Sections 357.1 through 357.30.

(Source: P.A. 76-860.)

(215 ILCS 5/367.2-5)

Sec. 367.2-5. Dependent child continuation privilege; group contracts.

(a) No policy of group accident or health insurance, nor any certificate thereunder shall be amended, renewed, delivered, or issued for delivery in this State after July 1, 2004, unless the policy provides for a continuation of the existing insurance benefits for an employee's dependent child who is insured under the provisions of that group policy or certificate in the event of the death of the employee and the child is not eligible for coverage as a dependent under the provisions of Section 367.2 or the dependent child has attained the limiting age under the policy. If the limiting age under the policy is less than 25 years of age, then the insurer shall, upon application of the dependent child as set forth in subsection (c) of this Section, provide coverage after that specific age, until the dependent child is 25 years of age.

(b) In the event of the death of the employee, if continuation coverage is desired, the dependent child or a responsible adult acting on behalf of the dependent child shall give the employer or the insurer written notice of the death of employee within 30 days of the date the coverage terminates. The employer, within 15 days of receipt of the notice, shall give written notice to the insurance company issuing the policy of the death of the employee and the dependent child's residence. The employer shall immediately send a copy of the notice to the dependent child or responsible adult at the dependent child's residence.

(c) In the event of the dependent child attaining the limiting age under the policy, if continuation coverage is desired, the dependent child shall give the employer or the insurer written notice of the attainment of the limiting age within 30 days of the date the coverage terminates. The employer, within 15 days of receipt of the notice, shall give written notice to the insurance company issuing the policy of the attainment of the limiting age by the dependent child and of the dependent child's residence.

(d) Within 30 days after the date of receipt of a notice from the employer, dependent child, or responsible adult acting on behalf of the dependent child, or of the initiation of a new group policy, the insurance company, by certified mail, return receipt requested, shall notify the dependent child or responsible adult at the dependent child's residence that the policy may be continued for the dependent child. The notice shall include:

(1) a form for election to continue the insurance coverage;

(2) the amount of periodic premiums to be charged for continuation coverage and the method and place of payment; and

(3) instructions for returning the election form within 30 days after the date it is received from the insurance company.

Failure of the dependent child or the responsible adult acting on behalf of the dependent child to exercise the election to continue insurance coverage by notifying the insurance company in writing within such 30 day period shall terminate the continuation of benefits and the right to continuation.

If the insurance company fails to notify the dependent child or responsible adult acting on behalf of the dependent child as provided for in this subsection (d), all premiums shall be waived from the date the notice was required until notice was sent, and the benefits shall continue under the terms and provisions of the policy, from the date the notice was required until the notice was sent, notwithstanding any other provision hereof, except where the benefits in existence at the time the company's notice was to be sent pursuant to this subsection (d) are terminated as to all employees.

(e) The monthly premium for continuation shall be computed as follows:

(1) an amount, if any, that would be charged an employee if the dependent child were a current employee of the employer, plus;

(2) an amount, if any, that the employer would contribute toward the premium if the dependent child were a current employee.

Failure to pay the initial monthly premium within 30 days after the date of receipt of notice required in subsection (d) of this Section terminates the continuation benefits and the right to continuation benefits.

Continuation coverage provided under this Act shall terminate upon the earliest to happen of the following:

(1) the failure to pay premiums when due, including any grace period allowed by the policy;

(2) when coverage would terminate under the terms of the existing policy if the dependent child was still an eligible dependent of the employee;

(3) the date on which the dependent child first becomes, after the date of election, an insured employee under any other group health plan; or

(4) the expiration of 2 years from the date continuation coverage began.

Upon the termination of continuation coverage, the dependent child shall be entitled to convert the coverage to an individual policy.

(f) The renewal, amendment, or extension of any group policy affected by this Section shall be deemed to be delivery or issuance for delivery of a new policy or contract of insurance in this State.

(g) If (1) the policy is cancelled, and (2) another insurance company contracts to provide group health and accident insurance to the employer, and (3) continuation coverage is in effect for the dependent child at the time of cancellation, and (4) the employee is or would have been included under the new group policy, then the new insurer must also offer continuation coverage to the dependent child under the same terms and conditions as contained in this Section.

(h) This Section shall not limit the right of any dependent child to exercise the privilege to convert to an individual policy as contained in this Code.

(i) No person who obtains coverage under this Section shall be required to pay a rate greater than that applicable to any employee or member covered under that group.

(Source: P.A. 93-477, eff. 1-1-04.)