96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB0927

 

Introduced 2/10/2009, by Rep. Frank J. Mautino

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.11
215 ILCS 5/356z.15 new
215 ILCS 125/5-3   from Ch. 111 1/2, par. 1411.2

    Amends the State Employees Group Insurance Act of 1971, the Illinois Insurance Code, and the Health Maintenance Organization Act. Provides that a policy or plan that provides coverage for hospital or medical treatment on an expense incurred basis, may offer wellness coverage that allows for a reward, a health spending account contribution, a reduction in premiums or reduced medical, prescription drug or equipment copayments, coinsurance, or deductibles, or a combination of these incentives. Provides that "wellness coverage" means health care coverage with the primary purpose to engage and motivate the insured or enrollee through: incentives; provision of health education, counseling, and self-management skills; identification of modifiable health risks; and other activities to influence health behavior changes. Provides that the insured or enrollee may be required to provide evidence of participation in a program, or demonstrative compliance with treatment recommendations as determined by the health insurer or managed care plan. Sets forth requirements concerning (1) opportunities for participants to qualify for incentives, (2) alternatives for participants to satisfy applicable wellness program standards where it is unreasonably difficult due to the participant's medical condition, and (3) the ratio of the total incentive monetary amount to the cost of employee-only coverage. Imposes conditions on any rulemaking authority. Makes other changes. Effective January 1, 2010.


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A BILL FOR

 

HB0927 LRB096 04473 RPM 14525 b

1     AN ACT concerning regulation.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The State Employees Group Insurance Act of 1971
5 is amended by changing Section 6.11 as follows:
 
6     (5 ILCS 375/6.11)
7     (Text of Section before amendment by P.A. 95-958)
8     Sec. 6.11. Required health benefits; Illinois Insurance
9 Code requirements. The program of health benefits shall provide
10 the post-mastectomy care benefits required to be covered by a
11 policy of accident and health insurance under Section 356t of
12 the Illinois Insurance Code. The program of health benefits
13 shall provide the coverage required under Sections 356g.5,
14 356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10,
15 356z.13 356z.11, and 356z.14, and 356z.15 of the Illinois
16 Insurance Code. The program of health benefits must comply with
17 Section 155.37 of the Illinois Insurance Code.
18 (Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
19 95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-978, eff.
20 1-1-09; 95-1005, eff. 12-12-08; revised 12-15-08.)
 
21     (Text of Section after amendment by P.A. 95-958)
22     Sec. 6.11. Required health benefits; Illinois Insurance

 

 

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1 Code requirements. The program of health benefits shall provide
2 the post-mastectomy care benefits required to be covered by a
3 policy of accident and health insurance under Section 356t of
4 the Illinois Insurance Code. The program of health benefits
5 shall provide the coverage required under Sections 356g.5,
6 356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10,
7 356z.11, and 356z.12, 356z.13 356z.11, and 356z.14, and 356z.15
8 of the Illinois Insurance Code. The program of health benefits
9 must comply with Section 155.37 of the Illinois Insurance Code.
10 (Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
11 95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff.
12 6-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised
13 12-15-08.)
 
14     Section 10. The Illinois Insurance Code is amended by
15 adding Section 356z.15 as follows:
 
16     (215 ILCS 5/356z.15 new)
17     Sec. 356z.15. Wellness coverage.
18     (a) A group or individual policy of accident and health
19 insurance or managed care plan amended, delivered, issued, or
20 renewed after the effective date of this amendatory Act of the
21 96th General Assembly that provides coverage for hospital or
22 medical treatment on an expense incurred basis may offer a
23 reasonably designed program for wellness coverage that allows
24 for a reward, a health spending account contribution, a

 

 

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1 reduction in premiums or reduced medical, prescription drug, or
2 equipment copayments, coinsurance, or deductibles, or a
3 combination of these incentives, for participation in any
4 health behavior wellness, maintenance, or improvement program
5 approved or offered by the insurer or managed care plan. The
6 insured or enrollee may be required to provide evidence of
7 participation in a program, or demonstrative compliance with
8 treatment recommendations as determined by the health insurer
9 or managed care plan.
10     (b) For purposes of this Section, "wellness coverage" means
11 health care coverage with the primary purpose to engage and
12 motivate the insured or enrollee through: incentives;
13 provision of health education, counseling, and self-management
14 skills; identification of modifiable health risks; and other
15 activities to influence health behavior changes.
16     (c) Incentives as outlined in this Section are specific and
17 unique to the offering of wellness coverage and have no
18 application to any other required or optional health care
19 benefit.
20     (d) Such wellness coverage must satisfy the requirements
21 for an exception from the general prohibition against
22 discrimination based on a health factor under the federal
23 Health Insurance Portability and Accountability Act of 1996
24 (P.L. 104-191; 110 Stat. 1936), including any federal
25 regulations that are adopted pursuant to that Act.
26     (e) A plan offering wellness coverage must do the

 

 

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1 following:
2         (i) give participants the opportunity to qualify for
3     offered incentives at least once a year;
4         (ii) allow a reasonable alternative to any individual
5     for whom it is unreasonably difficult, due to a medical
6     condition, to satisfy otherwise applicable wellness
7     program standards. Plans may seek physician verification
8     that health factors make it unreasonably difficult or
9     medically inadvisable for the participant to satisfy the
10     standards; and
11         (iii) not provide a total incentive that exceeds 20% of
12     the cost of employee-only coverage. The cost of
13     employee-only coverage includes both employer and employee
14     contributions. For plans offering family coverage, the 20%
15     limitation applies to cost of family coverage and applies
16     to the entire family.
17     (f) A reward, health spending account contribution, or
18 reduction established under this Section does not violate
19 Section 151 of this Code.
20     (g) Rulemaking authority to implement this amendatory Act
21 of the 96th General Assembly, if any, is conditioned on the
22 rules being adopted in accordance with all provisions of the
23 Illinois Administrative Procedure Act and all rules and
24 procedures of the Joint Committee on Administrative Rules; any
25 purported rule not so adopted, for whatever reason, is
26 unauthorized.
 

 

 

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1     Section 15. The Health Maintenance Organization Act is
2 amended by changing Section 5-3 as follows:
 
3     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
4     (Text of Section before amendment by P.A. 95-958)
5     Sec. 5-3. Insurance Code provisions.
6     (a) Health Maintenance Organizations shall be subject to
7 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
8 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
9 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
10 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10,
11 356z.13 356z.11, 356z.14, 356z.15, 364.01, 367.2, 367.2-5,
12 367i, 368a, 368b, 368c, 368d, 368e, 370c, 401, 401.1, 402, 403,
13 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
14 subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII,
15 XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
16 Insurance Code.
17     (b) For purposes of the Illinois Insurance Code, except for
18 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
19 Maintenance Organizations in the following categories are
20 deemed to be "domestic companies":
21         (1) a corporation authorized under the Dental Service
22     Plan Act or the Voluntary Health Services Plans Act;
23         (2) a corporation organized under the laws of this
24     State; or

 

 

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1         (3) a corporation organized under the laws of another
2     state, 30% or more of the enrollees of which are residents
3     of this State, except a corporation subject to
4     substantially the same requirements in its state of
5     organization as is a "domestic company" under Article VIII
6     1/2 of the Illinois Insurance Code.
7     (c) In considering the merger, consolidation, or other
8 acquisition of control of a Health Maintenance Organization
9 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
10         (1) the Director shall give primary consideration to
11     the continuation of benefits to enrollees and the financial
12     conditions of the acquired Health Maintenance Organization
13     after the merger, consolidation, or other acquisition of
14     control takes effect;
15         (2)(i) the criteria specified in subsection (1)(b) of
16     Section 131.8 of the Illinois Insurance Code shall not
17     apply and (ii) the Director, in making his determination
18     with respect to the merger, consolidation, or other
19     acquisition of control, need not take into account the
20     effect on competition of the merger, consolidation, or
21     other acquisition of control;
22         (3) the Director shall have the power to require the
23     following information:
24             (A) certification by an independent actuary of the
25         adequacy of the reserves of the Health Maintenance
26         Organization sought to be acquired;

 

 

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

 

 

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1 be managed or serviced, and (ii) need not take into account the
2 effect of the management contract or service agreement on
3 competition.
4     (f) Except for small employer groups as defined in the
5 Small Employer Rating, Renewability and Portability Health
6 Insurance Act and except for medicare supplement policies as
7 defined in Section 363 of the Illinois Insurance Code, a Health
8 Maintenance Organization may by contract agree with a group or
9 other enrollment unit to effect refunds or charge additional
10 premiums under the following terms and conditions:
11         (i) the amount of, and other terms and conditions with
12     respect to, the refund or additional premium are set forth
13     in the group or enrollment unit contract agreed in advance
14     of the period for which a refund is to be paid or
15     additional premium is to be charged (which period shall not
16     be less than one year); and
17         (ii) the amount of the refund or additional premium
18     shall not exceed 20% of the Health Maintenance
19     Organization's profitable or unprofitable experience with
20     respect to the group or other enrollment unit for the
21     period (and, for purposes of a refund or additional
22     premium, the profitable or unprofitable experience shall
23     be calculated taking into account a pro rata share of the
24     Health Maintenance Organization's administrative and
25     marketing expenses, but shall not include any refund to be
26     made or additional premium to be paid pursuant to this

 

 

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1     subsection (f)). The Health Maintenance Organization and
2     the group or enrollment unit may agree that the profitable
3     or unprofitable experience may be calculated taking into
4     account the refund period and the immediately preceding 2
5     plan years.
6     The Health Maintenance Organization shall include a
7 statement in the evidence of coverage issued to each enrollee
8 describing the possibility of a refund or additional premium,
9 and upon request of any group or enrollment unit, provide to
10 the group or enrollment unit a description of the method used
11 to calculate (1) the Health Maintenance Organization's
12 profitable experience with respect to the group or enrollment
13 unit and the resulting refund to the group or enrollment unit
14 or (2) the Health Maintenance Organization's unprofitable
15 experience with respect to the group or enrollment unit and the
16 resulting additional premium to be paid by the group or
17 enrollment unit.
18     In no event shall the Illinois Health Maintenance
19 Organization Guaranty Association be liable to pay any
20 contractual obligation of an insolvent organization to pay any
21 refund authorized under this Section.
22 (Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
23 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
24 8-21-08; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised
25 12-15-08.)
 

 

 

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1     (Text of Section after amendment by P.A. 95-958)
2     Sec. 5-3. Insurance Code provisions.
3     (a) Health Maintenance Organizations shall be subject to
4 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
5 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
6 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
7 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10,
8 356z.11, 356z.12, 356z.13 356z.11, 356z.14, 356z.15, 364.01,
9 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c, 401,
10 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1,
11 paragraph (c) of subsection (2) of Section 367, and Articles
12 IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
13 the Illinois Insurance Code.
14     (b) For purposes of the Illinois Insurance Code, except for
15 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
16 Maintenance Organizations in the following categories are
17 deemed to be "domestic companies":
18         (1) a corporation authorized under the Dental Service
19     Plan Act or the Voluntary Health Services Plans Act;
20         (2) a corporation organized under the laws of this
21     State; or
22         (3) a corporation organized under the laws of another
23     state, 30% or more of the enrollees of which are residents
24     of this State, except a corporation subject to
25     substantially the same requirements in its state of
26     organization as is a "domestic company" under Article VIII

 

 

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1     1/2 of the Illinois Insurance Code.
2     (c) In considering the merger, consolidation, or other
3 acquisition of control of a Health Maintenance Organization
4 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
5         (1) the Director shall give primary consideration to
6     the continuation of benefits to enrollees and the financial
7     conditions of the acquired Health Maintenance Organization
8     after the merger, consolidation, or other acquisition of
9     control takes effect;
10         (2)(i) the criteria specified in subsection (1)(b) of
11     Section 131.8 of the Illinois Insurance Code shall not
12     apply and (ii) the Director, in making his determination
13     with respect to the merger, consolidation, or other
14     acquisition of control, need not take into account the
15     effect on competition of the merger, consolidation, or
16     other acquisition of control;
17         (3) the Director shall have the power to require the
18     following information:
19             (A) certification by an independent actuary of the
20         adequacy of the reserves of the Health Maintenance
21         Organization sought to be acquired;
22             (B) pro forma financial statements reflecting the
23         combined balance sheets of the acquiring company and
24         the Health Maintenance Organization sought to be
25         acquired as of the end of the preceding year and as of
26         a date 90 days prior to the acquisition, as well as pro

 

 

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1         forma financial statements reflecting projected
2         combined operation for a period of 2 years;
3             (C) a pro forma business plan detailing an
4         acquiring party's plans with respect to the operation
5         of the Health Maintenance Organization sought to be
6         acquired for a period of not less than 3 years; and
7             (D) such other information as the Director shall
8         require.
9     (d) The provisions of Article VIII 1/2 of the Illinois
10 Insurance Code and this Section 5-3 shall apply to the sale by
11 any health maintenance organization of greater than 10% of its
12 enrollee population (including without limitation the health
13 maintenance organization's right, title, and interest in and to
14 its health care certificates).
15     (e) In considering any management contract or service
16 agreement subject to Section 141.1 of the Illinois Insurance
17 Code, the Director (i) shall, in addition to the criteria
18 specified in Section 141.2 of the Illinois Insurance Code, take
19 into account the effect of the management contract or service
20 agreement on the continuation of benefits to enrollees and the
21 financial condition of the health maintenance organization to
22 be managed or serviced, and (ii) need not take into account the
23 effect of the management contract or service agreement on
24 competition.
25     (f) Except for small employer groups as defined in the
26 Small Employer Rating, Renewability and Portability Health

 

 

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1 Insurance Act and except for medicare supplement policies as
2 defined in Section 363 of the Illinois Insurance Code, a Health
3 Maintenance Organization may by contract agree with a group or
4 other enrollment unit to effect refunds or charge additional
5 premiums under the following terms and conditions:
6         (i) the amount of, and other terms and conditions with
7     respect to, the refund or additional premium are set forth
8     in the group or enrollment unit contract agreed in advance
9     of the period for which a refund is to be paid or
10     additional premium is to be charged (which period shall not
11     be less than one year); and
12         (ii) the amount of the refund or additional premium
13     shall not exceed 20% of the Health Maintenance
14     Organization's profitable or unprofitable experience with
15     respect to the group or other enrollment unit for the
16     period (and, for purposes of a refund or additional
17     premium, the profitable or unprofitable experience shall
18     be calculated taking into account a pro rata share of the
19     Health Maintenance Organization's administrative and
20     marketing expenses, but shall not include any refund to be
21     made or additional premium to be paid pursuant to this
22     subsection (f)). The Health Maintenance Organization and
23     the group or enrollment unit may agree that the profitable
24     or unprofitable experience may be calculated taking into
25     account the refund period and the immediately preceding 2
26     plan years.

 

 

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1     The Health Maintenance Organization shall include a
2 statement in the evidence of coverage issued to each enrollee
3 describing the possibility of a refund or additional premium,
4 and upon request of any group or enrollment unit, provide to
5 the group or enrollment unit a description of the method used
6 to calculate (1) the Health Maintenance Organization's
7 profitable experience with respect to the group or enrollment
8 unit and the resulting refund to the group or enrollment unit
9 or (2) the Health Maintenance Organization's unprofitable
10 experience with respect to the group or enrollment unit and the
11 resulting additional premium to be paid by the group or
12 enrollment unit.
13     In no event shall the Illinois Health Maintenance
14 Organization Guaranty Association be liable to pay any
15 contractual obligation of an insolvent organization to pay any
16 refund authorized under this Section.
17 (Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
18 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
19 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
20 eff. 12-12-08; revised 12-15-08.)
 
21     Section 95. No acceleration or delay. Where this Act makes
22 changes in a statute that is represented in this Act by text
23 that is not yet or no longer in effect (for example, a Section
24 represented by multiple versions), the use of that text does
25 not accelerate or delay the taking effect of (i) the changes

 

 

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1 made by this Act or (ii) provisions derived from any other
2 Public Act.
 
3     Section 99. Effective date. This Act takes effect January
4 1, 2010.