Illinois General Assembly - Full Text of SB1590
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Full Text of SB1590  102nd General Assembly

SB1590 102ND GENERAL ASSEMBLY

  
  

 


 
102ND GENERAL ASSEMBLY
State of Illinois
2021 and 2022
SB1590

 

Introduced 2/26/2021, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/355  from Ch. 73, par. 967
215 ILCS 125/4-12  from Ch. 111 1/2, par. 1409.5

    Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that all individual and small group accident and health policies written subject to certain federal standards must file rates with the Department of Insurance for approval. Provides that unreasonable rate increases or inadequate rates shall be disapproved. Requires the Department to provide a report to the General Assembly on or before January 1, 2023 regarding both on and off exchange individual and small group rates in the Illinois market. Requires that the Department approve or deny rate filings within 45 calendar days of submission unless the Director of Insurance extends the period by following specific procedures. Provides that a rate increase that is not approved or denied by the Department by the applicable deadline shall be automatically approved on the following calendar day. Provides that no less than 30 days after the federal Centers for Medicare and Medicaid Services has certified the plans described in this Section for the upcoming plan year, the Department shall publish on its website a report explaining the rates for that plan year's certified health care plans. Defines "inadequate rate" and "unreasonable rate increase". Effective immediately.


LRB102 13166 BMS 18509 b

 

 

A BILL FOR

 

SB1590LRB102 13166 BMS 18509 b

1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 355 as follows:
 
6    (215 ILCS 5/355)  (from Ch. 73, par. 967)
7    Sec. 355. Accident and health policies; provisions.
8policies-Provisions.)
9    (a) As used in this Section:
10    "Inadequate rate" means a rate:
11        (1) that is insufficient to sustain projected losses
12    and expenses to which the rate applies; and
13        (2) the continued use of which endangers the solvency
14    of an insurer using that rate.
15    "Unreasonable rate increase" means a rate increase that
16the Director determines to be excessive, unjustified, or
17unfairly discriminatory in accordance with 45 CFR 154.205.
18    (b) No policy of insurance against loss or damage from the
19sickness, or from the bodily injury or death of the insured by
20accident shall be issued or delivered to any person in this
21State until a copy of the form thereof and of the
22classification of risks and the premium rates pertaining
23thereto have been filed with the Director; nor shall it be so

 

 

SB1590- 2 -LRB102 13166 BMS 18509 b

1issued or delivered until the Director shall have approved
2such policy pursuant to the provisions of Section 143. If the
3Director disapproves the policy form he shall make a written
4decision stating the respects in which such form does not
5comply with the requirements of law and shall deliver a copy
6thereof to the company and it shall be unlawful thereafter for
7any such company to issue any policy in such form.
8    (c) Rate increases for all individual and small group
9accident and health insurance policies subject to the
10standards of 45 CFR Part 154 must be filed with the Department
11for approval. Unreasonable rate increases or inadequate rates
12shall be disapproved. The Department shall provide a report to
13the General Assembly on or before January 1, 2023 regarding
14both on and off exchange individual and small group rates in
15the Illinois market.
16    (d) In all cases the Director shall approve or disapprove
17a rate filing under subsection (c) within 45 calendar days of
18submission unless the Director extends, by not more than an
19additional 30 days, the period within which he or she shall
20approve or disapprove any such filing by giving written notice
21to the insurer of such extension before expiration of the
22initial 45-day period. Rates not approved or disapproved by
23the applicable deadline shall be deemed approved on the
24following calendar day.
25    (e) No less than 30 days after the federal Centers for
26Medicare and Medicaid Services has certified the policies

 

 

SB1590- 3 -LRB102 13166 BMS 18509 b

1described in subsection (c) for the upcoming plan year, the
2Department shall publish on its website a report explaining
3the rates for that plan year's certified policies.
4(Source: P.A. 79-777.)
 
5    Section 10. The Health Maintenance Organization Act is
6amended by changing Section 4-12 as follows:
 
7    (215 ILCS 125/4-12)  (from Ch. 111 1/2, par. 1409.5)
8    Sec. 4-12. Changes in Rate Methodology and Benefits,
9Material Modifications. A health maintenance organization
10shall file with the Director, prior to use, a notice of any
11change in rate methodology, or benefits and of any material
12modification of any matter or document furnished pursuant to
13Section 2-1, together with such supporting documents as are
14necessary to fully explain the change or modification.
15    (a) Contract modifications described in subsections
16(c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all
17form agreements between the organization and enrollees,
18providers, administrators of services and insurers of health
19maintenance organizations.
20    (b) Material transactions or series of transactions other
21than those described in subsection (a) of this Section, the
22total annual value of which exceeds the greater of $100,000 or
235% of net earned subscription revenue for the most current
24twelve month period as determined from filed financial

 

 

SB1590- 4 -LRB102 13166 BMS 18509 b

1statements.
2    (c) Any agreement between the organization and an insurer
3shall be subject to the provisions of the laws of this State
4regarding reinsurance as provided in Article XI of the
5Illinois Insurance Code. All reinsurance agreements must be
6filed. Approval of the Director is required for all agreements
7except the following: individual stop loss, aggregate excess,
8hospitalization benefits or out-of-area of the participating
9providers unless 20% or more of the organization's total risk
10is reinsured, in which case all reinsurance agreements require
11approval.
12    (d) Rate increases for all individual and small group
13health care plans subject to the standards of 45 CFR Part 154
14must be filed with the Department for approval. Unreasonable
15rate increases in relation to benefits under the policy
16provided or inadequate rates shall be disapproved. The
17Department shall provide a report to the General Assembly on
18or before January 1, 2023 regarding both on and off exchange
19individual and small group rates in the Illinois market.
20    (e) In all cases the Director shall approve or disapprove
21a rate filing under subsection (d) within 45 calendar days of
22submission unless the Director extends, by not more than an
23additional 30 days, the period within which he or she shall
24approve or disapprove any such filing by giving written notice
25to the insurer of such extension before expiration of the
26initial 45-day period. Rates not approved or disapproved by

 

 

SB1590- 5 -LRB102 13166 BMS 18509 b

1the applicable deadline shall be deemed approved on the
2following calendar day.
3    (f) No less than 30 days after the federal Centers for
4Medicare and Medicaid Services has certified the health care
5plans described in subsection (d) for the upcoming plan year,
6the Department shall publish on its website a report
7explaining the rates for that plan year's certified health
8care plans.
9    (g) As used in this Section:
10    "Inadequate rate" means a rate:
11        (1) that is insufficient to sustain projected losses
12    and expenses to which the rate applies; and
13        (2) the continued use of which endangers the solvency
14    of an insurer using that rate.
15    "Unreasonable rate increase" means a rate increase that
16the Director determines to be excessive, unjustified, or
17unfairly discriminatory in accordance with 45 CFR 154.205.
18(Source: P.A. 86-620.)
 
19    Section 99. Effective date. This Act takes effect upon
20becoming law.