SB3675 103RD GENERAL ASSEMBLY

LRB103 38256 RPS 68391 b

103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB3675

Introduced 2/9/2024, by Sen. Napoleon Harris, III

SYNOPSIS AS INTRODUCED:

See Index

Amends the Illinois Insurance Code. Provides that any failure to make a disclosure or obtain a signed confirmation required under specified provisions of the Short-Term, Limited-Duration Health Insurance Coverage Act is an unfair method of competition and an unfair and deceptive act or practice in the business of insurance. Provides that the Director of Insurance shall have the power to examine and investigate into the affairs of every person subject to specified provisions of the Short-Term, Limited-Duration Health Insurance Coverage Act. Provides that the Director may place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license or may levy a civil penalty or take any combination of actions for any failure to make a disclosure or obtain a signed confirmation required or any unlawful practice described under specified provisions of the Short-Term, Limited-Duration Health Insurance Coverage Act. Amends the Short-Term, Limited-Duration Health Insurance Coverage Act. Sets forth provisions concerning the purpose and scope of the Act. Provides that the Act applies to health insurance issuers that offer short-term, limited-duration health insurance coverage to groups and individuals (rather than only individuals) in the State. Sets forth provisions concerning duration of coverage; cancellation; and disclosure, filing, and coverage requirements of short term, limited-duration health insurance coverage. Sets forth provisions concerning unfair or deceptive practices relating to the sale of supplemental or short-term, limited-duration health insurance coverage. Defines terms. Makes other changes. Effective January 1, 2026.

A BILL FOR

AN ACT concerning regulation.

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 121-2.05, 356z.18, 367.3, 367a, 368f, 424, 425, and 500-70 as follows:

(215 ILCS 5/121-2.05) (from Ch. 73, par. 733-2.05)

Sec. 121-2.05. Group insurance policies issued and delivered in other State-Transactions in this State. With the exception of insurance transactions authorized under Sections 230.2 or 367.3 of this Code and transactions subject to the requirements of the Short-Term, Limited-Duration Health Insurance Coverage Act, transactions in this State involving group legal, group life and group accident and health or blanket accident and health insurance or group annuities where the master policy of such groups was lawfully issued and delivered in, and under the laws of, a State in which the insurer was authorized to do an insurance business, to a group properly established pursuant to law or regulation, and where the policyholder is domiciled or otherwise has a bona fide situs.

(Source: P.A. 86-753.)

(215 ILCS 5/356z.18)

(Text of Section before amendment by P.A. 103-512)

Sec. 356z.18. Prosthetic and customized orthotic devices.

(a) For the purposes of this Section:

"Customized orthotic device" means a supportive device for the body or a part of the body, the head, neck, or extremities, and includes the replacement or repair of the device based on the patient's physical condition as medically necessary, excluding foot orthotics defined as an in-shoe device designed to support the structural components of the foot during weight-bearing activities.

"Licensed provider" means a prosthetist, orthotist, or pedorthist licensed to practice in this State.

"Prosthetic device" means an artificial device to replace, in whole or in part, an arm or leg and includes accessories essential to the effective use of the device and the replacement or repair of the device based on the patient's physical condition as medically necessary.

(b) This amendatory Act of the 96th General Assembly shall provide benefits to any person covered thereunder for expenses incurred in obtaining a prosthetic or custom orthotic device from any Illinois licensed prosthetist, licensed orthotist, or licensed pedorthist as required under the Orthotics, Prosthetics, and Pedorthics Practice Act.

(c) A group or individual major medical policy of accident or health insurance or managed care plan or medical, health, or hospital service corporation contract that provides coverage for prosthetic or custom orthotic care and is amended, delivered, issued, or renewed 6 months after the effective date of this amendatory Act of the 96th General Assembly must provide coverage for prosthetic and orthotic devices in accordance with this subsection (c). The coverage required under this Section shall be subject to the other general exclusions, limitations, and financial requirements of the policy, including coordination of benefits, participating provider requirements, utilization review of health care services, including review of medical necessity, case management, and experimental and investigational treatments, and other managed care provisions under terms and conditions that are no less favorable than the terms and conditions that apply to substantially all medical and surgical benefits provided under the plan or coverage.

(d) The policy or plan or contract may require prior authorization for the prosthetic or orthotic devices in the same manner that prior authorization is required for any other covered benefit.

(e) Repairs and replacements of prosthetic and orthotic devices are also covered, subject to the co-payments and deductibles, unless necessitated by misuse or loss.

(f) A policy or plan or contract may require that, if coverage is provided through a managed care plan, the benefits mandated pursuant to this Section shall be covered benefits only if the prosthetic or orthotic devices are provided by a licensed provider employed by a provider service who contracts with or is designated by the carrier, to the extent that the carrier provides in-network and out-of-network service, the coverage for the prosthetic or orthotic device shall be offered no less extensively.

(g) The policy or plan or contract shall also meet adequacy requirements as established by the Health Care Reimbursement Reform Act of 1985 of the Illinois Insurance Code.

(h) This Section shall not apply to accident only, specified disease, short-term travel hospital or medical, hospital confinement indemnity or other fixed indemnity, credit, dental, vision, Medicare supplement, long-term care, basic hospital and medical-surgical expense coverage, disability income insurance coverage, coverage issued as a supplement to liability insurance, workers' compensation insurance, or automobile medical payment insurance.

(Source: P.A. 96-833, eff. 6-1-10.)

(Text of Section after amendment by P.A. 103-512)

Sec. 356z.18. Prosthetic and customized orthotic devices.

(a) For the purposes of this Section:

"Customized orthotic device" means a supportive device for the body or a part of the body, the head, neck, or extremities, and includes the replacement or repair of the device based on the patient's physical condition as medically necessary, excluding foot orthotics defined as an in-shoe device designed to support the structural components of the foot during weight-bearing activities.

"Licensed provider" means a prosthetist, orthotist, or pedorthist licensed to practice in this State.

"Prosthetic device" means an artificial device to replace, in whole or in part, an arm or leg and includes accessories essential to the effective use of the device and the replacement or repair of the device based on the patient's physical condition as medically necessary.

(b) This amendatory Act of the 96th General Assembly shall provide benefits to any person covered thereunder for expenses incurred in obtaining a prosthetic or custom orthotic device from any Illinois licensed prosthetist, licensed orthotist, or licensed pedorthist as required under the Orthotics, Prosthetics, and Pedorthics Practice Act.

(c) A group or individual major medical policy of accident or health insurance or managed care plan or medical, health, or hospital service corporation contract that provides coverage for prosthetic or custom orthotic care and is amended, delivered, issued, or renewed 6 months after the effective date of this amendatory Act of the 96th General Assembly must provide coverage for prosthetic and orthotic devices in accordance with this subsection (c). The coverage required under this Section shall be subject to the other general exclusions, limitations, and financial requirements of the policy, including coordination of benefits, participating provider requirements, utilization review of health care services, including review of medical necessity, case management, and experimental and investigational treatments, and other managed care provisions under terms and conditions that are no less favorable than the terms and conditions that apply to substantially all medical and surgical benefits provided under the plan or coverage.

(d) With respect to an enrollee at any age, in addition to coverage of a prosthetic or custom orthotic device required by this Section, benefits shall be provided for a prosthetic or custom orthotic device determined by the enrollee's provider to be the most appropriate model that is medically necessary for the enrollee to perform physical activities, as applicable, such as running, biking, swimming, and lifting weights, and to maximize the enrollee's whole body health and strengthen the lower and upper limb function.

(e) The requirements of this Section do not constitute an addition to this State's essential health benefits that requires defrayal of costs by this State pursuant to 42 U.S.C. 18031(d)(3)(B).

(f) The policy or plan or contract may require prior authorization for the prosthetic or orthotic devices in the same manner that prior authorization is required for any other covered benefit.

(g) Repairs and replacements of prosthetic and orthotic devices are also covered, subject to the co-payments and deductibles, unless necessitated by misuse or loss.

(h) A policy or plan or contract may require that, if coverage is provided through a managed care plan, the benefits mandated pursuant to this Section shall be covered benefits only if the prosthetic or orthotic devices are provided by a licensed provider employed by a provider service who contracts with or is designated by the carrier, to the extent that the carrier provides in-network and out-of-network service, the coverage for the prosthetic or orthotic device shall be offered no less extensively.

(i) The policy or plan or contract shall also meet adequacy requirements as established by the Health Care Reimbursement Reform Act of 1985 of the Illinois Insurance Code.

(j) This Section shall not apply to accident only, specified disease, short-term travel hospital or medical, hospital confinement indemnity or other fixed indemnity, credit, dental, vision, Medicare supplement, long-term care, basic hospital and medical-surgical expense coverage, disability income insurance coverage, coverage issued as a supplement to liability insurance, workers' compensation insurance, or automobile medical payment insurance.

(Source: P.A. 103-512, eff. 1-1-25.)

(215 ILCS 5/367.3) (from Ch. 73, par. 979.3)

Sec. 367.3. Group accident and health insurance; discretionary groups.

(a) No group health insurance offered to a resident of this State under a policy issued to a group, other than one specifically described in Section 367(1), shall be delivered or issued for delivery in this State unless the Director determines that:

(1) the issuance of the policy is not contrary to the public interest;

(2) the issuance of the policy will result in economies of acquisition and administration; and

(3) the benefits under the policy are reasonable in relation to the premium charged.

(b) No such group health insurance may be offered in this State under a policy issued in another state unless this State or the state in which the group policy is issued has made a determination that the requirements of subsection (a) have been met.

Where insurance is to be offered in this State under a policy described in this subsection, the insurer shall file for informational review purposes:

(1) a copy of the group master contract;

(2) a copy of the statute authorizing the issuance of the group policy in the state of situs, which statute has the same or similar requirements as this State, or in the absence of such statute, a certification by an officer of the company that the policy meets the Illinois minimum standards required for individual accident and health policies under authority of Section 401 of this Code, as now or hereafter amended, as promulgated by rule at 50 Illinois Administrative Code, Ch. I, Sec. 2007, et seq., as now or hereafter amended, or under the Short-Term, Limited-Duration Health Insurance Coverage Act and rules thereunder, as applicable, or by a successor rule;

(3) evidence of approval by the state of situs of the group master policy; and

(4) copies of all supportive material furnished to the state of situs to satisfy the criteria for approval.

(c) The Director may, at any time after receipt of the information required under subsection (b) and after finding that the standards of subsection (a) have not been met, order the insurer to cease the issuance or marketing of that coverage in this State.

(d) Notwithstanding subsections (a) and (b), group Group accident and health insurance subject to the provisions of this Section is also subject to the provisions of Section 367i of this Code or the Short-Term, Limited-Duration Health Insurance Coverage Act, as applicable, and rules thereunder that pertain to group accident and health insurance.

(Source: P.A. 90-655, eff. 7-30-98.)

(215 ILCS 5/367a) (from Ch. 73, par. 979a)

Sec. 367a. Blanket accident and health insurance.

(1) Blanket accident and health insurance is that form of accident and health insurance covering special groups of persons as enumerated in one of the following paragraphs (a) to (g), inclusive:

(a) Under a policy or contract issued to any carrier for hire, which shall be deemed the policyholder, covering a group defined as all persons who may become passengers on such carrier.

(b) Under a policy or contract issued to an employer, who shall be deemed the policyholder, covering all employees or any group of employees defined by reference to exceptional hazards incident to such employment.

(c) Under a policy or contract issued to a college, school, or other institution of learning or to the head or principal thereof, who or which shall be deemed the policyholder, covering students or teachers. However, except where inconsistent with 45 CFR 147.145, student health insurance coverage other than excepted benefits or short-term, limited-duration health insurance coverage that is provided pursuant to a written agreement with an institution of higher education for the benefit of its enrolled students and their dependents shall remain subject to the standards and requirements for individual health insurance coverage.

(d) Under a policy or contract issued in the name of any volunteer fire department, first aid, or other such volunteer group, which shall be deemed the policyholder, covering all of the members of such department or group.

(e) Under a policy or contract issued to a creditor, who shall be deemed the policyholder, to insure debtors of the creditors; Provided, however, that in the case of a loan which is subject to the Small Loans Act, no insurance premium or other cost shall be directly or indirectly charged or assessed against, or collected or received from the borrower.

(f) Under a policy or contract issued to a sports team or to a camp, which team or camp sponsor shall be deemed the policyholder, covering members or campers.

(g) Under a policy or contract issued to any other substantially similar group which, in the discretion of the Director, may be subject to the issuance of a blanket accident and health policy or contract.

(2) Any insurance company authorized to write accident and health insurance in this state shall have the power to issue blanket accident and health insurance. No such blanket policy may be issued or delivered in this State unless a copy of the form thereof shall have been filed in accordance with Section 355, and it contains in substance such of those provisions contained in Sections 357.1 through 357.30 as may be applicable to blanket accident and health insurance and the following provisions:

(a) A provision that the policy and the application shall constitute the entire contract between the parties, and that all statements made by the policyholder shall, in absence of fraud, be deemed representations and not warranties, and that no such statements shall be used in defense to a claim under the policy, unless it is contained in a written application.

(b) A provision that to the group or class thereof originally insured shall be added from time to time all new persons or individuals eligible for coverage.

(3) An individual application shall not be required from a person covered under a blanket accident or health policy or contract, nor shall it be necessary for the insurer to furnish each person a certificate.

(4) All benefits under any blanket accident and health policy shall be payable to the person insured, or to his designated beneficiary or beneficiaries, or to his or her estate, except that if the person insured be a minor or person under legal disability, such benefits may be made payable to his or her parent, guardian, or other person actually supporting him or her. Provided further, however, that the policy may provide that all or any portion of any indemnities provided by any such policy on account of hospital, nursing, medical or surgical services may, at the insurer's option, be paid directly to the hospital or person rendering such services; but the policy may not require that the service be rendered by a particular hospital or person. Payment so made shall discharge the insurer's obligation with respect to the amount of insurance so paid.

(5) Nothing contained in this section shall be deemed to affect the legal liability of policyholders for the death of or injury to, any such member of such group.

(Source: P.A. 83-1362.)

(215 ILCS 5/368f)

Sec. 368f. Military service member insurance reinstatement.

(a) No Illinois resident activated for military service and no spouse or dependent of the resident who becomes eligible for a federal government-sponsored health insurance program, including the TriCare program providing coverage for civilian dependents of military personnel, as a result of the activation shall be denied reinstatement into the same individual health insurance coverage with the health insurer that the resident lapsed as a result of activation or becoming covered by the federal government-sponsored health insurance program. The resident shall have the right to reinstatement in the same individual health insurance coverage without medical underwriting, subject to payment of the current premium charged to other persons of the same age and gender that are covered under the same individual health coverage. Except in the case of birth or adoption that occurs during the period of activation, reinstatement must be into the same coverage type as the resident held prior to lapsing the individual health insurance coverage and at the same or, at the option of the resident, higher deductible level. The reinstatement rights provided under this subsection (a) are not available to a resident or dependents if the activated person is discharged from the military under other than honorable conditions.

(b) The health insurer with which the reinstatement is being requested must receive a request for reinstatement no later than 63 days following the later of (i) deactivation or (ii) loss of coverage under the federal government-sponsored health insurance program. The health insurer may request proof of loss of coverage and the timing of the loss of coverage of the government-sponsored coverage in order to determine eligibility for reinstatement into the individual coverage. The effective date of the reinstatement of individual health coverage shall be the first of the month following receipt of the notice requesting reinstatement.

(c) All insurers must provide written notice to the policyholder of individual health coverage of the rights described in subsection (a) of this Section. In lieu of the inclusion of the notice in the individual health insurance policy, an insurance company may satisfy the notification requirement by providing a single written notice:

(1) in conjunction with the enrollment process for a policyholder initially enrolling in the individual coverage on or after the effective date of this amendatory Act of the 94th General Assembly; or

(2) by mailing written notice to policyholders whose coverage was effective prior to the effective date of this amendatory Act of the 94th General Assembly no later than 90 days following the effective date of this amendatory Act of the 94th General Assembly.

(d) The provisions of subsection (a) of this Section do not apply to any policy or certificate providing coverage for any specified disease, specified accident or accident-only coverage, credit, dental, disability income, hospital indemnity or other fixed indemnity, long-term care, Medicare supplement, vision care, or short-term travel nonrenewable health policy or other limited-benefit supplemental insurance, or any coverage issued as a supplement to any liability insurance, workers' compensation or similar insurance, or any insurance under which benefits are payable with or without regard to fault, whether written on a group, blanket, or individual basis.

(e) Nothing in this Section shall require an insurer to reinstate the resident if the insurer requires residency in an enrollment area and those residency requirements are not met after deactivation or loss of coverage under the government-sponsored health insurance program.

(f) All terms, conditions, and limitations of the individual coverage into which reinstatement is made apply equally to all insureds enrolled in the coverage.

(g) The Secretary may adopt rules as may be necessary to carry out the provisions of this Section.

(Source: P.A. 94-1037, eff. 7-20-06.)

(215 ILCS 5/424) (from Ch. 73, par. 1031)

Sec. 424. Unfair methods of competition and unfair or deceptive acts or practices defined. The following are hereby defined as unfair methods of competition and unfair and deceptive acts or practices in the business of insurance:

(1) The commission by any person of any one or more of the acts defined or prohibited by Sections 134, 143.24c, 147, 148, 149, 151, 155.22, 155.22a, 155.42, 236, 237, 364, 469, and 513b1 of this Code.

(2) Entering into any agreement to commit, or by any concerted action committing, any act of boycott, coercion or intimidation resulting in or tending to result in unreasonable restraint of, or monopoly in, the business of insurance.

(3) Making or permitting, in the case of insurance of the types enumerated in Classes 1, 2, and 3 of Section 4, any unfair discrimination between individuals or risks of the same class or of essentially the same hazard and expense element because of the race, color, religion, or national origin of such insurance risks or applicants. The application of this Article to the types of insurance enumerated in Class 1 of Section 4 shall in no way limit, reduce, or impair the protections and remedies already provided for by Sections 236 and 364 of this Code or any other provision of this Code.

(4) Engaging in any of the acts or practices defined in or prohibited by Sections 154.5 through 154.8 of this Code.

(5) Making or charging any rate for insurance against losses arising from the use or ownership of a motor vehicle which requires a higher premium of any person by reason of his physical disability, race, color, religion, or national origin.

(6) Failing to meet any requirement of the Unclaimed Life Insurance Benefits Act with such frequency as to constitute a general business practice.

(7) Failing to make a disclosure or obtain a signed confirmation required under Section 15 of the Short-Term, Limited-Duration Health Insurance Coverage Act or any unlawful practice described in Section 30 of the Short-Term, Limited-Duration Health Insurance Coverage Act.

(Source: P.A. 102-778, eff. 7-1-22.)

(215 ILCS 5/425) (from Ch. 73, par. 1032)

Sec. 425. Power of Director.

The Director shall have power to examine and investigate into the affairs of every person engaged in the business of insurance in this State, or otherwise subject to the provisions of Section 30 of the Short-Term, Limited-Duration Health Insurance Coverage Act, and to examine and investigate into the affairs of any person domiciled in or resident of this State engaged in the business of insurance in any other State, Territory, Province, Possession, Country or District in which he is not licensed or otherwise authorized to transact business in order to determine whether such person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or practice prohibited by Section 424.

(Source: Laws 1967, p. 990.)

(215 ILCS 5/500-70)

(Section scheduled to be repealed on January 1, 2027)

Sec. 500-70. License denial, nonrenewal, or revocation.

(a) The Director may place on probation, suspend, revoke, or refuse to issue or renew an insurance producer's license or may levy a civil penalty in accordance with this Section or take any combination of actions, for any one or more of the following causes:

(1) providing incorrect, misleading, incomplete, or materially untrue information in the license application;

(2) violating any insurance laws, or violating any rule, subpoena, or order of the Director or of another state's insurance commissioner;

(3) obtaining or attempting to obtain a license through misrepresentation or fraud;

(4) improperly withholding, misappropriating or converting any moneys or properties received in the course of doing insurance business;

(5) intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance;

(6) having been convicted of a felony, unless the individual demonstrates to the Director sufficient rehabilitation to warrant the public trust; consideration of such conviction of an applicant shall be in accordance with Section 500-76;

(7) having admitted or been found to have committed any insurance unfair trade practice or fraud;

(8) using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in this State or elsewhere;

(9) having an insurance producer license, or its equivalent, denied, suspended, or revoked in any other state, province, district or territory;

(10) forging a name to an application for insurance or to a document related to an insurance transaction;

(11) improperly using notes or any other reference material to complete an examination for an insurance license;

(12) knowingly accepting insurance business from an individual who is not licensed;

(13) failing to comply with an administrative or court order imposing a child support obligation;

(14) failing to pay state income tax or penalty or interest or comply with any administrative or court order directing payment of state income tax or failed to file a return or to pay any final assessment of any tax due to the Department of Revenue;

(15) (blank); or

(16) failing to comply with any provision of the Viatical Settlements Act of 2009; or .

(17) failing to make a disclosure or obtain a signed confirmation required under Section 15 of the Short-Term, Limited-Duration Health Insurance Coverage Act or any unlawful practice described in Section 30 of the Short-Term, Limited-Duration Health Insurance Coverage Act.

(b) If the action by the Director is to nonrenew, suspend, or revoke a license or to deny an application for a license, the Director shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the suspension, revocation, denial or nonrenewal of the applicant's or licensee's license. The applicant or licensee may make written demand upon the Director within 30 days after the date of mailing for a hearing before the Director to determine the reasonableness of the Director's action. The hearing must be held within not fewer than 20 days nor more than 30 days after the mailing of the notice of hearing and shall be held pursuant to 50 Ill. Adm. Code 2402.

(c) The license of a business entity may be suspended, revoked, or refused if the Director finds, after hearing, that an individual licensee's violation was known or should have been known by one or more of the partners, officers, or managers acting on behalf of the partnership, corporation, limited liability company, or limited liability partnership and the violation was neither reported to the Director nor corrective action taken.

(d) In addition to or instead of any applicable denial, suspension, or revocation of a license, a person may, after hearing, be subject to a civil penalty of up to $10,000 for each cause for denial, suspension, or revocation, however, the civil penalty may total no more than $100,000.

(e) The Director has the authority to enforce the provisions of and impose any penalty or remedy authorized by this Article against any person who is under investigation for or charged with a violation of this Code or rules even if the person's license or registration has been surrendered or has lapsed by operation of law.

(f) Upon the suspension, denial, or revocation of a license, the licensee or other person having possession or custody of the license shall promptly deliver it to the Director in person or by mail. The Director shall publish all suspensions, denials, or revocations after the suspensions, denials, or revocations become final in a manner designed to notify interested insurance companies and other persons.

(g) A person whose license is revoked or whose application is denied pursuant to this Section is ineligible to apply for any license for 3 years after the revocation or denial. A person whose license as an insurance producer has been revoked, suspended, or denied may not be employed, contracted, or engaged in any insurance related capacity during the time the revocation, suspension, or denial is in effect.

(Source: P.A. 100-286, eff. 1-1-18; 100-872, eff. 8-14-18.)

Section 10. The Short-Term, Limited-Duration Health Insurance Coverage Act is amended by changing Sections 5, 10, 15, and 20 and by adding Sections 2, 25, 30, and 35 as follows:

(215 ILCS 190/2 new)

Sec. 2. Purpose and scope. This Act is intended to regulate the sale, solicitation, and marketing of short-term, limited-duration health insurance coverage to insurance consumers, and the referral of insurance consumers to short-term, limited-duration health insurance coverage, and to protect consumers from confusing or deceptive marketing practices. This Act applies to health insurance issuers and insurance producers. Additionally, except as provided therein, Section 30 applies to any other person whose business transactions include advertising, referring, or directing prospective insurance purchasers or enrollees to health insurance coverage even when such persons are not otherwise required to obtain a license, certificate, or registration from the Department.

(215 ILCS 190/5)

Sec. 5. Definitions. In this Act:

"Department" means the Department of Insurance.

"Excepted benefits" has the meaning given to that term in 42 U.S.C. 300gg-91(c) and regulations thereunder.

"Health insurance coverage" has the meaning given to that term in Section 5 of the Illinois Health Insurance Portability and Accountability Act.

"Health insurance issuer" has the meaning given to that term in Section 5 of the Illinois Health Insurance Portability and Accountability Act.

"Health insurance issuer doing direct sales" means a health insurance issuer that provides a means to accept a completed application or enrollment form for a policy or certificate of health insurance coverage directly from an individual or group without any prior live interaction or written correspondence between that individual or group and an insurance producer. A "health insurance issuer doing direct sales" includes a health insurance issuer that accepts an application for health insurance coverage through its own website. A "health insurance issuer doing direct sales" does not include the enrollment of individuals under a group policy by a non-producer representative of the group or the group's own website.

"Fraud" means an intentional misrepresentation of a material fact in connection with the coverage.

"Person" means any natural or legal person, organization, body, association, corporation, company, partnership, society, order, aggregation of individuals, or other entity described under any State or federal law.

"Short-term, limited-duration health insurance coverage" means health insurance coverage, other than excepted benefits, provided pursuant to a policy or certificate with an issuer, regardless of the situs of the delivery of the policy, that has an expiration date of is less than 365 days after the effective date of the policy or certificate.

(Source: P.A. 100-1118, eff. 11-27-18.)

(215 ILCS 190/10)

Sec. 10. Application; scope; duration of coverage.

(a) This Act applies to health insurance issuers that offer short-term, limited-duration health insurance coverage to groups and individuals in this State and to short-term, limited-duration health insurance coverage that is delivered or issued for delivery in this State, including group coverage issued outside of this State that covers individuals in this State.

(b) A short-term, limited-duration health insurance coverage policy or certificate may not be issued or delivered to any natural or legal person residing in this State unless the policy or certificate, when delivered or issued for delivery in this State, complies with the provisions of this Act.

(b-5) In addition to the entities recognized under Section 230.1 or 367 of the Illinois Insurance Code or under the Health Maintenance Organization Act as eligible for group coverage, a group policy of short-term, limited-duration health insurance coverage may be issued to an institution of higher education for the benefit of its enrolled students and their dependents for purposes of this Act.

(c) Any short-term, limited-duration health insurance coverage policy or certificate that is delivered or issued for delivery in this State must have an expiration date in the policy that is less than the lesser of 181 days after the effective date or any applicable time limitation provided in federal law or regulation and shall not be renewable or extendable within a period of 365 days after the individual's coverage under the policy ends, either at the option of the issuer or the individual. Renewal of a short-term, limited-duration health insurance coverage policy or certificate includes the issuance of a new or different short-term, limited-duration health insurance policy or certificate by an issuer to a policyholder within 60 days after the expiration of a policy or certificate previously issued by the issuer to the policyholder.

(d) An issuer may not rescind any Any short-term, limited-duration health insurance coverage policy or certificate that is delivered or issued for delivery in this State may not be rescinded before the expiration date in the policy, except as provided in Section 154 of the Illinois Insurance Code. An issuer may not cancel any such policy or certificate except for nonpayment of premiums or for fraud in the making of a claim or an application for the policy or certificate. Notwithstanding Section 357.22 of the Illinois Insurance Code, cancellations for nonpayment of premiums shall not be valid except upon 10 days' notice but may be effectuated retroactively back to the last date of coverage for which premiums were paid in cases of nonpayment of premiums, fraud, or as provided in subsection (e).

(e) Any short-term, limited-duration health insurance coverage policy or certificate that is delivered or issued for delivery in this State shall contain an option for an individual to cancel coverage after any 30-day interval during the term of the plan, counting such intervals from the effective date of coverage.

(Source: P.A. 100-1118, eff. 11-27-18.)

(215 ILCS 190/15)

Sec. 15. Disclosure requirements.

(a) A health insurance issuer that offers short-term, limited-duration health insurance coverage to be delivered or issued for delivery in this State shall, in addition to all other documents required, including, but not limited to, the policy, the certificate, the membership booklet, the completed and signed application or enrollment form, all signed confirmations required by this Section, and a description of appeal and external review rights, deliver an outline of coverage to an applicant for or an enrollee in short-term, limited-duration health insurance coverage delivered or issued for delivery in this State.

(b) Any short-term, limited-duration health insurance coverage policy that is delivered or issued for delivery in the State shall display prominently in the policy, any application, sales, and marketing materials provided in connection with enrollment in such coverage, and the outline of coverage for such coverage, in at least 14-point, bold type, the following: "NOTICE: THE SHORT-TERM, LIMITED-DURATION INSURANCE BENEFITS UNDER THIS COVERAGE DO NOT MEET ALL FEDERAL REQUIREMENTS TO QUALIFY AS "MINIMUM ESSENTIAL COVERAGE" FOR HEALTH INSURANCE UNDER THE AFFORDABLE CARE ACT. THIS PLAN OF COVERAGE DOES NOT INCLUDE ALL ESSENTIAL HEALTH BENEFITS AS REQUIRED BY THE AFFORDABLE CARE ACT. PREEXISTING CONDITIONS ARE NOT COVERED UNDER THIS PLAN OF COVERAGE. BE SURE TO CHECK YOUR POLICY CAREFULLY TO MAKE SURE YOU UNDERSTAND WHAT THE POLICY DOES AND DOES NOT COVER. IF THIS COVERAGE EXPIRES OR YOU LOSE ELIGIBILITY FOR THIS COVERAGE, YOU MIGHT HAVE TO WAIT UNTIL THE NEXT OPEN ENROLLMENT PERIOD TO GET OTHER HEALTH INSURANCE COVERAGE. YOU MAY BE ABLE TO GET LONGER TERM INSURANCE THAT QUALIFIES AS "MINIMUM ESSENTIAL COVERAGE" FOR HEALTH INSURANCE UNDER THE AFFORDABLE CARE ACT NOW AND HELP TO PAY FOR IT AT WWW.HEALTHCARE.GOV.".

(c)(1) Before enrolling any individual or accepting any application for group or individual short-term, limited-duration health insurance coverage to be delivered or issued for delivery in this State, an insurance producer or a health insurance issuer doing direct sales shall provide a disclosure to the prospective purchaser or enrollee to reflect each essential health benefit in the State of Illinois, identify whether the policy or certificate covers that benefit, and obtain the prospective purchaser or enrollee's signed confirmation of receipt of this disclosure. The signed confirmation document must be in at least 12-point type and must include the complete list of essential health benefits and an indication for each benefit as to whether the policy or certificate covers it to the extent provided in the Illinois Essential Health Benefits Benchmark Plan. The confirmation document may be included within the application. An insurance producer or other representative of an issuer or its administrator may not sign on the prospective purchaser or enrollee's behalf.

(2) For coverage offered to an individual in this State under a group policy by a representative of the group policyholder or its administrator, if the issuer does not receive the signed confirmation within or with the individual's completed and signed application or enrollment form, the issuer must provide this disclosure to the individual and obtain the individual's signed confirmation before enrolling the individual under the coverage.

(d)(1) Before enrolling any individual or accepting any individual application for short-term, limited-duration health insurance coverage, an insurance producer or a health insurance issuer doing direct sales must provide a disclosure of the complete list of qualifying events for special enrollment with the prospective purchaser or enrollee, prompt the applicant or enrollee to identify any qualifying event for special enrollment that applies to the applicant or enrollee on the date the short-term, limited-duration health insurance coverage is submitted, and obtain the prospective purchaser or enrollee's signed confirmation as to whether the individual has experienced a qualifying event within the time frames provided under the Patient Protection and Affordable Care Act. The signed confirmation must be in at least 12-point type and must include the complete list of qualifying events, the relevant time frames for each, and an indication for each qualifying event as to whether it applies to the individual. This signed confirmation may be included within the application. An insurance producer or other representative of the issuer or its administrator may not sign the confirmation on the individual's behalf.

(2) If the individual qualifies for special enrollment, or during an open enrollment period described in 42 U.S.C. 300gg-1, the issuer or producer, before accepting the application or enrollment, must inform the individual in writing or via face-to-face interaction, telephone call, or voicemail about the availability of qualified health plans on the healthcare.gov website. If the issuer or producer also offers policies in the individual market, the issuer or producer may also inform the individual of the availability of such plans.

(3) For coverage offered to an individual in this State under a group policy by a representative of the group policyholder or its administrator, if the issuer does not receive the signed confirmation regarding qualifying events within or with the individual's completed and signed application or enrollment form, the issuer must provide this disclosure to the individual and obtain the individual's signed confirmation regarding qualifying events before enrolling the individual under the coverage. If the individual indicates that a qualifying event has occurred within the relevant time frame, the issuer must comply with paragraph (2).

(e) A health insurance issuer shall provide a website where prospective purchasers or enrollees can review the sample policy or certificate and the outline of coverage before submitting their application or enrollment form. The availability of this website shall be disclosed on the application or enrollment form and in any sales or marketing materials for the coverage.

(f) The policy or certificate and any application or enrollment form must contain a provision stating that, during a period of 10 days from the date the policy or certificate is delivered, the group or individual may submit a written request for retroactive cancellation of coverage and that in such event the issuer will refund any premium paid for the policy or certificate, including any contract fees or other charges.

(g) In addition to the written disclosures, any insurance producer (c) Any individual selling a short-term, limited-duration health insurance coverage policy in this State in face-to-face or telephonic sales interactions must read out loud the disclosures disclosure in subsections subsection (b), (c), (d), (e), and (f) to a prospective purchaser or enrollee. An issuer entity selling a short-term, limited-duration health insurance coverage policy or certificate in Illinois must display the disclosures disclosure in subsections subsection (b), (c), (d), (e), and (f) on the webpage where a prospective purchaser or enrollee would purchase or enroll in coverage. For sales conducted by an insurance producer in face-to-face or telephonic interactions, the application or enrollment form shall contain an attestation to be initialed by the applicant that the producer read each disclosure out loud, that the applicant understood each disclosure, and that the applicant was given opportunities to ask the producer questions about each disclosure and to review the policy or certificate and the outline of coverage.

(h) (d) Nothing in this Section precludes an issuer insurer from providing disclosures in addition to those required in subsections (b), and (c), (d), (e), and (f). Nothing in this Section precludes an insurer from providing disclosures intended to clarify those required in subsections (b), and (c), (d), (e), and (f) if approved by the Department. Nothing in this Section precludes an issuer from including the written disclosures required in subsections (c) and (d) on the application or enrollment form.

(i) No policy or certificate of short-term, limited-duration health insurance coverage shall be delivered or issued for delivery in this State unless the prospective purchaser or enrollee reviews and signs the completed written application or enrollment form. Any application or enrollment form submitted by an insurance producer to a health insurance issuer shall contain an attestation clause signed by the producer stating that the producer received the signed form from the applicant, that no alterations have been made to any of the applicant's personal information appearing on the signed form at the time the producer received it, and that the applicant received and signed all disclosures described in this Section.

(j) Nothing in this Act shall preclude a prospective purchaser or enrollee from designating an authorized representative to act on his or her behalf in relation to the purchase or enrollment. However, no designation of an insurance producer, a health insurance issuer, or an agent or employee of either shall be valid with respect to the disclosures, applications, enrollment forms, and signed confirmations under this Section.

(Source: P.A. 100-1118, eff. 11-27-18.)

(215 ILCS 190/20)

Sec. 20. Filing and approval.

(a) Coverage subject to this Act may not be delivered or issued for delivery in this State unless the health insurance issuer has complied with the policy form and rate filing requirements of Sections 143 and 355 of the Illinois Insurance Code or Sections 4-12 and 4-13 of the Health Maintenance Organization Act, as applicable, including the rules adopted thereunder policy evidencing such coverage has been filed with and been approved by the Department.

(b) A health insurance issuer that who intends to deliver or issue for delivery a short-term, limited-duration health insurance coverage policy or certificate in this State shall file with the Department: (1) all paperwork required for individual health insurance coverage pursuant to 50 Ill. Adm. Code 916; and (2) all sales and marketing materials provided in connection with enrollment in such coverage for informational purposes.

(c) (Blank). The Department shall adopt any rules necessary to carry out the provisions of this Act.

(Source: P.A. 100-1118, eff. 11-27-18.)

(215 ILCS 190/25 new)

Sec. 25. Coverage requirements; other laws.

(a) Except where inconsistent with this Act, a health insurance issuer that offers any policy or certificate of short-term, limited-duration health insurance coverage shall be subject to all Illinois insurance laws or rules not specifically referenced in this Act that apply to major medical accident and health insurance or health maintenance organization health care plans, as applicable to the certificate of authority under which the short-term, limited-duration health insurance coverage is offered or issued, and that do not:

(1) require the policy or certificate to cover essential health benefits or other specified health care services or to maintain parity between certain types of benefits;

(2) require the prohibition of underwriting;

(3) prescribe standards for continuation coverage or conversion privileges;

(4) prohibit or prescribe standards for allowable cost-sharing amounts; or

(5) require an issuer to satisfy standards for the adequacy and transparency of any provider network through which the insured or enrollee is required or incentivized to obtain covered health care services.

(b) Notwithstanding subsection (a), no State law or rule shall apply to the extent that it would require a policy or certificate of short-term, limited-duration health insurance coverage to provide coverage for at least 3 calendar months or to renew, extend, or reinstate coverage within 365 days of the date that coverage terminates.

(c) Nothing in this Act shall exempt a health maintenance organization offering short-term, limited-duration health insurance coverage from the requirements for coverage of basic health care services or other requirements to maintain and restrictions on a certificate of authority under Sections 2-1 through 2-3 of the Health Maintenance Organization Act.

(215 ILCS 190/30 new)

Sec. 30. Unfair or deceptive practices relating to the sale of supplemental or short-term, limited-duration health insurance coverage.

(a) It is an unlawful method, act, or practice within the meaning of this Act for any person who solicits, negotiates, sells, offers, offers to enroll, issues, or delivers short-term, limited-duration health insurance coverage or excepted benefits within this State, or advertisers for such persons, or persons whose business transactions include referring or directing prospective purchasers or enrollees of health insurance coverage that reside or are domiciled in this State to health insurance issuers or insurance producers transacting business in this State, to do any of the following:

(1) represent or warrant to any prospective purchaser or enrollee, or use language or imagery in speech or published content that is suggestive, that a policy or certificate of excepted benefits or short-term, limited-duration health insurance coverage, or any combination of such policies or certificates, constitutes minimum essential coverage;

(2) represent or warrant to any prospective purchaser or enrollee, or use language or imagery in speech or published content that is suggestive, that a policy or certificate of excepted benefits or short-term, limited-duration health insurance coverage, or any combination of such policies or certificates, is similar to, is almost as beneficial as, can be used for similar purposes as, or may be better for the prospective purchaser or enrollee than minimum essential coverage, major medical coverage that complies with all Illinois requirements, a health maintenance organization health care plan that complies with all Illinois requirements, a voluntary health services plan, comprehensive health insurance coverage, a qualified health plan, or any other description of coverage indicating such policies or certificates; or

(3) use any logo, brand, trademark, service mark, mark, device, name, tagline, slogan, descriptor, or website domain that is deceptively similar to those used for Get Covered Illinois or the healthcare.gov website, including those that do not expressly mention Illinois or its political subdivisions. This paragraph expressly includes circumstances that would not violate the Counterfeit Trademark Act.

(b) This Section does not apply to Internet search engines, Internet service providers, website domain registrars, Internet network hardware providers, or other natural or legal persons insofar as they do not propose, approve, or submit the content published by an insurance producer, health insurance issuer, or their advertisers, or propose, approve, or submit the content published by persons whose business transactions include referring prospective purchasers or enrollees resident or domiciled in this State to health insurance issuers or insurance producers transacting business in this State.

(215 ILCS 190/35 new)

Sec. 35. Department administration and enforcement. The Department may adopt any rules necessary to carry out the provisions of this Act. The Department shall have all enforcement powers granted to it by law with respect to accident and health insurance and health maintenance organization health care plans and all persons otherwise under the Director's jurisdiction.

Section 95. No acceleration or delay. Where this Act makes changes in a statute that is represented in this Act by text that is not yet or no longer in effect (for example, a Section represented by multiple versions), the use of that text does not accelerate or delay the taking effect of (i) the changes made by this Act or (ii) provisions derived from any other Public Act.

Section 99. Effective date. This Act takes effect January 1, 2026.