97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1129

 

Introduced 02/07/11, by Rep. JoAnn D. Osmond

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 110/25  from Ch. 32, par. 690.25
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
215 ILCS 110/36 rep.
215 ILCS 110/37 rep.
215 ILCS 125/2-7 rep.
215 ILCS 130/2007 rep.
215 ILCS 165/21 rep.
215 ILCS 165/22 rep.

    Repeals provisions in the Dental Service Plan Act, Health Maintenance Organization Act, Limited Health Service Organization Act, and Voluntary Health Services Plans Act concerning annual statements and amends each Act to comply with the provisions of the Illinois Insurance Code concerning annual statements and penalties for late or false annual statements.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Dental Service Plan Act is amended by
5changing Section 25 as follows:
 
6    (215 ILCS 110/25)  (from Ch. 32, par. 690.25)
7    Sec. 25. Application of Insurance Code provisions. Dental
8service plan corporations and all persons interested therein or
9dealing therewith shall be subject to the provisions of
10Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
11143, 143c, 149, 355.2, 367.2, 401, 401.1, 402, 403, 403A, 408,
12408.2, and 412, and subsection (15) of Section 367 of the
13Illinois Insurance Code.
14(Source: P.A. 91-549, eff. 8-14-99.)
 
15    Section 10. The Health Maintenance Organization Act is
16amended by changing Section 5-3 as follows:
 
17    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
18    Sec. 5-3. Insurance Code provisions.
19    (a) Health Maintenance Organizations shall be subject to
20the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
21141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,

 

 

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1154.5, 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m,
2356v, 356w, 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8,
3356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15,
4356z.17, 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
5368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
6409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
7Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
8XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
9    (b) For purposes of the Illinois Insurance Code, except for
10Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
11Maintenance Organizations in the following categories are
12deemed to be "domestic companies":
13        (1) a corporation authorized under the Dental Service
14    Plan Act or the Voluntary Health Services Plans Act;
15        (2) a corporation organized under the laws of this
16    State; or
17        (3) a corporation organized under the laws of another
18    state, 30% or more of the enrollees of which are residents
19    of this State, except a corporation subject to
20    substantially the same requirements in its state of
21    organization as is a "domestic company" under Article VIII
22    1/2 of the Illinois Insurance Code.
23    (c) In considering the merger, consolidation, or other
24acquisition of control of a Health Maintenance Organization
25pursuant to Article VIII 1/2 of the Illinois Insurance Code,
26        (1) the Director shall give primary consideration to

 

 

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

 

 

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1        acquired for a period of not less than 3 years; and
2            (D) such other information as the Director shall
3        require.
4    (d) The provisions of Article VIII 1/2 of the Illinois
5Insurance Code and this Section 5-3 shall apply to the sale by
6any health maintenance organization of greater than 10% of its
7enrollee population (including without limitation the health
8maintenance organization's right, title, and interest in and to
9its health care certificates).
10    (e) In considering any management contract or service
11agreement subject to Section 141.1 of the Illinois Insurance
12Code, the Director (i) shall, in addition to the criteria
13specified in Section 141.2 of the Illinois Insurance Code, take
14into account the effect of the management contract or service
15agreement on the continuation of benefits to enrollees and the
16financial condition of the health maintenance organization to
17be managed or serviced, and (ii) need not take into account the
18effect of the management contract or service agreement on
19competition.
20    (f) Except for small employer groups as defined in the
21Small Employer Rating, Renewability and Portability Health
22Insurance Act and except for medicare supplement policies as
23defined in Section 363 of the Illinois Insurance Code, a Health
24Maintenance Organization may by contract agree with a group or
25other enrollment unit to effect refunds or charge additional
26premiums under the following terms and conditions:

 

 

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1        (i) the amount of, and other terms and conditions with
2    respect to, the refund or additional premium are set forth
3    in the group or enrollment unit contract agreed in advance
4    of the period for which a refund is to be paid or
5    additional premium is to be charged (which period shall not
6    be less than one year); and
7        (ii) the amount of the refund or additional premium
8    shall not exceed 20% of the Health Maintenance
9    Organization's profitable or unprofitable experience with
10    respect to the group or other enrollment unit for the
11    period (and, for purposes of a refund or additional
12    premium, the profitable or unprofitable experience shall
13    be calculated taking into account a pro rata share of the
14    Health Maintenance Organization's administrative and
15    marketing expenses, but shall not include any refund to be
16    made or additional premium to be paid pursuant to this
17    subsection (f)). The Health Maintenance Organization and
18    the group or enrollment unit may agree that the profitable
19    or unprofitable experience may be calculated taking into
20    account the refund period and the immediately preceding 2
21    plan years.
22    The Health Maintenance Organization shall include a
23statement in the evidence of coverage issued to each enrollee
24describing the possibility of a refund or additional premium,
25and upon request of any group or enrollment unit, provide to
26the group or enrollment unit a description of the method used

 

 

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1to calculate (1) the Health Maintenance Organization's
2profitable experience with respect to the group or enrollment
3unit and the resulting refund to the group or enrollment unit
4or (2) the Health Maintenance Organization's unprofitable
5experience with respect to the group or enrollment unit and the
6resulting additional premium to be paid by the group or
7enrollment unit.
8    In no event shall the Illinois Health Maintenance
9Organization Guaranty Association be liable to pay any
10contractual obligation of an insolvent organization to pay any
11refund authorized under this Section.
12    (g) Rulemaking authority to implement Public Act 95-1045,
13if any, is conditioned on the rules being adopted in accordance
14with all provisions of the Illinois Administrative Procedure
15Act and all rules and procedures of the Joint Committee on
16Administrative Rules; any purported rule not so adopted, for
17whatever reason, is unauthorized.
18(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
1995-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
2095-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
211-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
226-1-10; 96-1000, eff. 7-2-10.)
 
23    Section 15. The Limited Health Service Organization Act is
24amended by changing Section 4003 as follows:
 

 

 

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1    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
2    Sec. 4003. Illinois Insurance Code provisions. Limited
3health service organizations shall be subject to the provisions
4of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3,
5143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6,
6154.7, 154.8, 155.04, 155.37, 355.2, 356v, 356z.10, 368a, 401,
7401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
8Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
9XXVI of the Illinois Insurance Code. For purposes of the
10Illinois Insurance Code, except for Sections 444 and 444.1 and
11Articles XIII and XIII 1/2, limited health service
12organizations in the following categories are deemed to be
13domestic companies:
14        (1) a corporation under the laws of this State; or
15        (2) a corporation organized under the laws of another
16    state, 30% of more of the enrollees of which are residents
17    of this State, except a corporation subject to
18    substantially the same requirements in its state of
19    organization as is a domestic company under Article VIII
20    1/2 of the Illinois Insurance Code.
21(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)
 
22    Section 20. The Voluntary Health Services Plans Act is
23amended by changing Section 10 as follows:
 
24    (215 ILCS 165/10)  (from Ch. 32, par. 604)

 

 

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1    Sec. 10. Application of Insurance Code provisions. Health
2services plan corporations and all persons interested therein
3or dealing therewith shall be subject to the provisions of
4Articles IIA and XII 1/2 and Sections 3.1, 133, 136, 139, 140,
5143, 143c, 149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1,
6356r, 356t, 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2,
7356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11,
8356z.12, 356z.13, 356z.14, 356z.15, 356z.18, 364.01, 367.2,
9368a, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
10paragraphs (7) and (15) of Section 367 of the Illinois
11Insurance Code.
12    Rulemaking authority to implement Public Act 95-1045, if
13any, is conditioned on the rules being adopted in accordance
14with all provisions of the Illinois Administrative Procedure
15Act and all rules and procedures of the Joint Committee on
16Administrative Rules; any purported rule not so adopted, for
17whatever reason, is unauthorized.
18(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
1995-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
208-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
21eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
2296-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
237-2-10.)
 
24    (215 ILCS 110/36 rep.)
25    (215 ILCS 110/37 rep.)

 

 

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1    Section 25. The Dental Service Plan Act is amended by
2repealing Sections 36 and 37.
 
3    (215 ILCS 125/2-7 rep.)
4    Section 30. The Health Maintenance Organization Act is
5amended by repealing Section 2-7.
 
6    (215 ILCS 130/2007 rep.)
7    Section 35. The Limited Health Service Organization Act is
8amended by repealing Section 2007.
 
9    (215 ILCS 165/21 rep.)
10    (215 ILCS 165/22 rep.)
11    Section 40. The Voluntary Health Services Plans Act is
12amended by repealing Sections 21 and 22.