093_SB1509

 
                                     LRB093 05233 JLS 07620 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
 5    adding Section 356z.4 as follows:

 6        (215 ILCS 5/356z.4 new)
 7        Sec. 356z.4.  Coverage for protein intolerance disease.
 8        (a)  A  group or individual policy of accident and health
 9    insurance amended, delivered, issued, or  renewed  after  the
10    effective  date  of  this  amendatory Act of the 93rd General
11    Assembly must provide  coverage  for  reimbursement  for  low
12    protein   modified   food   products,   amino  acid  modified
13    preparations, and specialized formulas if prescribed for  the
14    therapeutic  treatment  of  protein  intolerance  disease and
15    administered under the direction of a physician.
16        (b)  As used in this Section:
17        "Low protein  modified  food  product"  means  a  product
18    formulated  to have less than one gram of protein per serving
19    and intended for the dietary treatment of protein intolerance
20    disease under the direction of a physician.
21        "Amino  acid  modified  preparation"  means   a   product
22    intended  for  the  dietary  treatment of protein intolerance
23    disease under the direction of a physician.
24        "Specialized formula" means  a  nutritional  formula  for
25    children  up  to  age  3  that  is  exempt  from  the general
26    requirements for nutritional labeling under the statutory and
27    regulatory  guidelines  of  the   federal   Food   and   Drug
28    Administration  and  is intended for use solely under medical
29    supervision in the dietary management of specific diseases.

30        Section 10.  The Health Maintenance Organization  Act  is
 
                            -2-      LRB093 05233 JLS 07620 b
 1    amended by changing Section 5-3 as follows:

 2        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 3        Sec. 5-3.  Insurance Code provisions.
 4        (a)  Health Maintenance Organizations shall be subject to
 5    the  provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
 6    141.3, 143, 143c, 147, 148, 149, 151, 152, 153,  154,  154.5,
 7    154.6,  154.7,  154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
 8    356y, 356z.2, 356z.4, 367i, 368a, 401, 401.1, 402, 403, 403A,
 9    408, 408.2, 409,  412,  444,  and  444.1,  paragraph  (c)  of
10    subsection  (2)  of  Section 367, and Articles IIA, VIII 1/2,
11    XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of  the  Illinois
12    Insurance Code.
13        (b)  For  purposes of the Illinois Insurance Code, except
14    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
15    Health  Maintenance Organizations in the following categories
16    are deemed to be "domestic companies":
17             (1)  a  corporation  authorized  under  the   Dental
18        Service  Plan  Act or the Voluntary Health Services Plans
19        Act;
20             (2)  a corporation organized under the laws of  this
21        State; or
22             (3)  a  corporation  organized  under  the  laws  of
23        another  state, 30% or more of the enrollees of which are
24        residents of this State, except a corporation subject  to
25        substantially  the  same  requirements  in  its  state of
26        organization as is a  "domestic  company"  under  Article
27        VIII 1/2 of the Illinois Insurance Code.
28        (c)  In  considering  the merger, consolidation, or other
29    acquisition of control of a Health  Maintenance  Organization
30    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
31             (1)  the  Director  shall give primary consideration
32        to the continuation of  benefits  to  enrollees  and  the
33        financial  conditions  of the acquired Health Maintenance
 
                            -3-      LRB093 05233 JLS 07620 b
 1        Organization after the merger,  consolidation,  or  other
 2        acquisition of control takes effect;
 3             (2)(i)  the  criteria specified in subsection (1)(b)
 4        of Section 131.8 of the Illinois Insurance Code shall not
 5        apply and (ii) the Director, in making his  determination
 6        with  respect  to  the  merger,  consolidation,  or other
 7        acquisition of control, need not take  into  account  the
 8        effect  on  competition  of the merger, consolidation, or
 9        other acquisition of control;
10             (3)  the Director shall have the  power  to  require
11        the following information:
12                  (A)  certification by an independent actuary of
13             the   adequacy   of   the  reserves  of  the  Health
14             Maintenance Organization sought to be acquired;
15                  (B)  pro forma financial statements  reflecting
16             the combined balance sheets of the acquiring company
17             and the Health Maintenance Organization sought to be
18             acquired  as of the end of the preceding year and as
19             of a date 90 days prior to the acquisition, as  well
20             as   pro   forma   financial  statements  reflecting
21             projected combined  operation  for  a  period  of  2
22             years;
23                  (C)  a  pro  forma  business  plan detailing an
24             acquiring  party's  plans  with   respect   to   the
25             operation  of  the  Health  Maintenance Organization
26             sought to be acquired for a period of not less  than
27             3 years; and
28                  (D)  such  other  information  as  the Director
29             shall require.
30        (d)  The provisions of Article VIII 1/2 of  the  Illinois
31    Insurance  Code  and this Section 5-3 shall apply to the sale
32    by any health maintenance organization of greater than 10% of
33    its enrollee population  (including  without  limitation  the
34    health  maintenance organization's right, title, and interest
 
                            -4-      LRB093 05233 JLS 07620 b
 1    in and to its health care certificates).
 2        (e)  In considering any management  contract  or  service
 3    agreement  subject to Section 141.1 of the Illinois Insurance
 4    Code, the Director (i) shall, in  addition  to  the  criteria
 5    specified  in  Section  141.2 of the Illinois Insurance Code,
 6    take into account the effect of the  management  contract  or
 7    service   agreement   on  the  continuation  of  benefits  to
 8    enrollees  and  the  financial  condition   of   the   health
 9    maintenance  organization to be managed or serviced, and (ii)
10    need not take into  account  the  effect  of  the  management
11    contract or service agreement on competition.
12        (f)  Except  for  small employer groups as defined in the
13    Small Employer Rating, Renewability  and  Portability  Health
14    Insurance  Act and except for medicare supplement policies as
15    defined in Section 363 of  the  Illinois  Insurance  Code,  a
16    Health  Maintenance Organization may by contract agree with a
17    group or other enrollment unit to effect  refunds  or  charge
18    additional premiums under the following terms and conditions:
19             (i)  the  amount  of, and other terms and conditions
20        with respect to, the refund or additional premium are set
21        forth in the group or enrollment unit contract agreed  in
22        advance of the period for which a refund is to be paid or
23        additional  premium  is to be charged (which period shall
24        not be less than one year); and
25             (ii)  the amount of the refund or additional premium
26        shall  not  exceed  20%   of   the   Health   Maintenance
27        Organization's profitable or unprofitable experience with
28        respect  to  the  group  or other enrollment unit for the
29        period (and, for  purposes  of  a  refund  or  additional
30        premium,  the profitable or unprofitable experience shall
31        be calculated taking into account a pro rata share of the
32        Health  Maintenance  Organization's  administrative   and
33        marketing  expenses,  but shall not include any refund to
34        be made or additional premium to be paid pursuant to this
 
                            -5-      LRB093 05233 JLS 07620 b
 1        subsection (f)).  The Health Maintenance Organization and
 2        the  group  or  enrollment  unit  may  agree   that   the
 3        profitable  or  unprofitable experience may be calculated
 4        taking into account the refund period and the immediately
 5        preceding 2 plan years.
 6        The  Health  Maintenance  Organization  shall  include  a
 7    statement in the evidence of coverage issued to each enrollee
 8    describing the possibility of a refund or additional premium,
 9    and upon request of any group or enrollment unit, provide  to
10    the group or enrollment unit a description of the method used
11    to   calculate  (1)  the  Health  Maintenance  Organization's
12    profitable experience with respect to the group or enrollment
13    unit and the resulting refund to the group or enrollment unit
14    or (2) the  Health  Maintenance  Organization's  unprofitable
15    experience  with  respect to the group or enrollment unit and
16    the resulting additional premium to be paid by the  group  or
17    enrollment unit.
18        In   no  event  shall  the  Illinois  Health  Maintenance
19    Organization  Guaranty  Association  be  liable  to  pay  any
20    contractual obligation of an insolvent  organization  to  pay
21    any refund authorized under this Section.
22    (Source: P.A.  91-357,  eff.  7-29-99;  91-406,  eff. 1-1-00;
23    91-549, eff. 8-14-99; 91-605,  eff.  12-14-99;  91-788,  eff.
24    6-9-00; 92-764, eff. 1-1-03.)

25        Section  15.  The  Voluntary Health Services Plans Act is
26    amended by changing Section 10 as follows:

27        (215 ILCS 165/10) (from Ch. 32, par. 604)
28        Sec.  10.  Application  of  Insurance  Code   provisions.
29    Health  services plan corporations and all persons interested
30    therein  or  dealing  therewith  shall  be  subject  to   the
31    provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
32    140,  143,  143c,  149, 155.37, 354, 355.2, 356r, 356t, 356u,
 
                            -6-      LRB093 05233 JLS 07620 b
 1    356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 367.2,  368a,
 2    401,  401.1,  402,  403,  403A,  408,  408.2,  and  412,  and
 3    paragraphs  (7)  and  (15)  of  Section  367  of the Illinois
 4    Insurance Code.
 5    (Source: P.A. 91-406,  eff.  1-1-00;  91-549,  eff.  8-14-99;
 6    91-605,  eff.  12-14-99;  91-788,  eff.  6-9-00; 92-130, eff.
 7    7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02;  92-764,
 8    eff. 1-1-03.)

 9        Section  99.  Effective date.  This Act takes effect upon
10    becoming law.