96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB4924

 

Introduced 1/15/2010, by Rep. Rosemary Mulligan

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/356z.19 new
215 ILCS 125/5-3   from Ch. 111 1/2, par. 1411.2
215 ILCS 165/10   from Ch. 32, par. 604

    Amends the Illinois Insurance Code, the Health Maintenance Organization Act, and the Voluntary Health Services Plans Act. Provides that group and individual policies of accident and health insurance and managed care plans must provide coverage for (1) operations to implant cochlear implants and post-treatment services for children identified within one year of birth as being deaf or hearing impaired and (2) audiological services and hearing aids for children up to 18 years of age. Contains a nonacceleration clause. Makes other changes.


LRB096 16233 RPM 31489 b

 

 

A BILL FOR

 

HB4924 LRB096 16233 RPM 31489 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.19 as follows:
 
6     (215 ILCS 5/356z.19 new)
7     Sec. 356z.19. Cochlear implants; audiological services.
8     (a) A group or individual policy of accident and health
9 insurance or managed care plan amended, delivered, issued, or
10 renewed after the effective date of this amendatory Act of the
11 96th General Assembly must provide coverage for an operation to
12 implant cochlear implants and post-treatment services for
13 children identified within one year of birth as being deaf or
14 hearing impaired.
15     (b) A group or individual policy of accident and health
16 insurance or managed care plan amended, delivered, issued, or
17 renewed after the effective date of this amendatory Act of the
18 96th General Assembly must provide coverage for audiological
19 services and hearing aids for children up to 18 years of age.
20 This coverage shall only apply to hearing aids that are
21 prescribed, filled, and dispensed by a licensed audiologist. A
22 policy or plan may limit the hearing aid benefit payable for
23 each hearing-impaired ear to every 38 months. A policy or plan

 

 

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1 may provide for up to 4 additional ear molds per year for
2 children up to 2 years of age.
 
3     Section 10. The Health Maintenance Organization Act is
4 amended by changing Section 5-3 as follows:
 
5     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
6     (Text of Section before amendment by P.A. 96-833)
7     Sec. 5-3. Insurance Code provisions.
8     (a) Health Maintenance Organizations shall be subject to
9 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
10 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
11 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
12 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
13 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15 356z.14,
14 356z.17 356z.15, 356z.19, 364.01, 367.2, 367.2-5, 367i, 368a,
15 368b, 368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408,
16 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection
17 (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2,
18 XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
19     (b) For purposes of the Illinois Insurance Code, except for
20 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
21 Maintenance Organizations in the following categories are
22 deemed to be "domestic companies":
23         (1) a corporation authorized under the Dental Service
24     Plan Act or the Voluntary Health Services Plans Act;

 

 

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

 

 

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

 

 

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

 

 

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1     marketing expenses, but shall not include any refund to be
2     made or additional premium to be paid pursuant to this
3     subsection (f)). The Health Maintenance Organization and
4     the group or enrollment unit may agree that the profitable
5     or unprofitable experience may be calculated taking into
6     account the refund period and the immediately preceding 2
7     plan years.
8     The Health Maintenance Organization shall include a
9 statement in the evidence of coverage issued to each enrollee
10 describing the possibility of a refund or additional premium,
11 and upon request of any group or enrollment unit, provide to
12 the group or enrollment unit a description of the method used
13 to calculate (1) the Health Maintenance Organization's
14 profitable experience with respect to the group or enrollment
15 unit and the resulting refund to the group or enrollment unit
16 or (2) the Health Maintenance Organization's unprofitable
17 experience with respect to the group or enrollment unit and the
18 resulting additional premium to be paid by the group or
19 enrollment unit.
20     In no event shall the Illinois Health Maintenance
21 Organization Guaranty Association be liable to pay any
22 contractual obligation of an insolvent organization to pay any
23 refund authorized under this Section.
24     (g) Rulemaking authority to implement Public Act 95-1045
25 this amendatory Act of the 95th General Assembly, if any, is
26 conditioned on the rules being adopted in accordance with all

 

 

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1 provisions of the Illinois Administrative Procedure Act and all
2 rules and procedures of the Joint Committee on Administrative
3 Rules; any purported rule not so adopted, for whatever reason,
4 is unauthorized.
5 (Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
6 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
7 95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
8 1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; revised
9 10-23-09.)
 
10     (Text of Section after amendment by P.A. 96-833)
11     Sec. 5-3. Insurance Code provisions.
12     (a) Health Maintenance Organizations shall be subject to
13 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
14 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
15 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
16 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
17 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
18 356z.18, 356z.19, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
19 368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
20 409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
21 Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
22 XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
23     (b) For purposes of the Illinois Insurance Code, except for
24 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
25 Maintenance Organizations in the following categories are

 

 

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

 

 

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

 

 

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1 Code, the Director (i) shall, in addition to the criteria
2 specified in Section 141.2 of the Illinois Insurance Code, take
3 into account the effect of the management contract or service
4 agreement on the continuation of benefits to enrollees and the
5 financial condition of the health maintenance organization to
6 be managed or serviced, and (ii) need not take into account the
7 effect of the management contract or service agreement on
8 competition.
9     (f) Except for small employer groups as defined in the
10 Small Employer Rating, Renewability and Portability Health
11 Insurance Act and except for medicare supplement policies as
12 defined in Section 363 of the Illinois Insurance Code, a Health
13 Maintenance Organization may by contract agree with a group or
14 other enrollment unit to effect refunds or charge additional
15 premiums under the following terms and conditions:
16         (i) the amount of, and other terms and conditions with
17     respect to, the refund or additional premium are set forth
18     in the group or enrollment unit contract agreed in advance
19     of the period for which a refund is to be paid or
20     additional premium is to be charged (which period shall not
21     be less than one year); and
22         (ii) the amount of the refund or additional premium
23     shall not exceed 20% of the Health Maintenance
24     Organization's profitable or unprofitable experience with
25     respect to the group or other enrollment unit for the
26     period (and, for purposes of a refund or additional

 

 

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1     premium, the profitable or unprofitable experience shall
2     be calculated taking into account a pro rata share of the
3     Health Maintenance Organization's administrative and
4     marketing expenses, but shall not include any refund to be
5     made or additional premium to be paid pursuant to this
6     subsection (f)). The Health Maintenance Organization and
7     the group or enrollment unit may agree that the profitable
8     or unprofitable experience may be calculated taking into
9     account the refund period and the immediately preceding 2
10     plan years.
11     The Health Maintenance Organization shall include a
12 statement in the evidence of coverage issued to each enrollee
13 describing the possibility of a refund or additional premium,
14 and upon request of any group or enrollment unit, provide to
15 the group or enrollment unit a description of the method used
16 to calculate (1) the Health Maintenance Organization's
17 profitable experience with respect to the group or enrollment
18 unit and the resulting refund to the group or enrollment unit
19 or (2) the Health Maintenance Organization's unprofitable
20 experience with respect to the group or enrollment unit and the
21 resulting additional premium to be paid by the group or
22 enrollment unit.
23     In no event shall the Illinois Health Maintenance
24 Organization Guaranty Association be liable to pay any
25 contractual obligation of an insolvent organization to pay any
26 refund authorized under this Section.

 

 

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1     (g) Rulemaking authority to implement Public Act 95-1045,
2 if any, is conditioned on the rules being adopted in accordance
3 with all provisions of the Illinois Administrative Procedure
4 Act and all rules and procedures of the Joint Committee on
5 Administrative Rules; any purported rule not so adopted, for
6 whatever reason, is unauthorized.
7 (Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
8 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
9 95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
10 1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
11 6-1-10.)
 
12     Section 15. The Voluntary Health Services Plans Act is
13 amended by changing Section 10 as follows:
 
14     (215 ILCS 165/10)  (from Ch. 32, par. 604)
15     (Text of Section before amendment by P.A. 96-833)
16     Sec. 10. Application of Insurance Code provisions. Health
17 services plan corporations and all persons interested therein
18 or dealing therewith shall be subject to the provisions of
19 Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
20 149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1, 356r, 356t,
21 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5,
22 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13,
23 356z.14, 356z.15 356z.14, 356z.19, 364.01, 367.2, 368a, 401,
24 401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)

 

 

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1 and (15) of Section 367 of the Illinois Insurance Code.
2     Rulemaking authority to implement Public Act 95-1045 this
3 amendatory Act of the 95th General Assembly, if any, is
4 conditioned on the rules being adopted in accordance with all
5 provisions of the Illinois Administrative Procedure Act and all
6 rules and procedures of the Joint Committee on Administrative
7 Rules; any purported rule not so adopted, for whatever reason,
8 is unauthorized.
9 (Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
10 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
11 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
12 eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
13 96-328, eff. 8-11-09; revised 9-25-09.)
 
14     (Text of Section after amendment by P.A. 96-833)
15     Sec. 10. Application of Insurance Code provisions. Health
16 services plan corporations and all persons interested therein
17 or dealing therewith shall be subject to the provisions of
18 Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
19 149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1, 356r, 356t,
20 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5,
21 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13,
22 356z.14, 356z.15, 356z.18, 356z.19, 364.01, 367.2, 368a, 401,
23 401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)
24 and (15) of Section 367 of the Illinois Insurance Code.
25     Rulemaking authority to implement Public Act 95-1045, if

 

 

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1 any, is conditioned on the rules being adopted in accordance
2 with all provisions of the Illinois Administrative Procedure
3 Act and all rules and procedures of the Joint Committee on
4 Administrative Rules; any purported rule not so adopted, for
5 whatever reason, is unauthorized.
6 (Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
7 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
8 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
9 eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
10 96-328, eff. 8-11-09; 96-833, eff. 6-1-10.)
 
11     Section 95. No acceleration or delay. Where this Act makes
12 changes in a statute that is represented in this Act by text
13 that is not yet or no longer in effect (for example, a Section
14 represented by multiple versions), the use of that text does
15 not accelerate or delay the taking effect of (i) the changes
16 made by this Act or (ii) provisions derived from any other
17 Public Act.