Illinois General Assembly - Full Text of HB4667
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Full Text of HB4667  94th General Assembly



State of Illinois
2005 and 2006


Introduced 1/12/2006, by Rep. Frank J. Mautino


215 ILCS 125/1-2   from Ch. 111 1/2, par. 1402
215 ILCS 125/4-14   from Ch. 111 1/2, par. 1409.7
215 ILCS 125/4-20 new
215 ILCS 125/5-7   from Ch. 111 1/2, par. 1415

    Amends the Health Maintenance Organization Act. Requires evidences of coverage to contain a clear and complete statement of deductibles. Provides that HMOs may establish annual deductibles not to exceed certain amounts. Provides that co-payments may not exceed 50% of the usual and customary fee charged to the HMO for the service and provides that deductibles are not subject to this limitation. Makes other changes. Effective immediately.

LRB094 17959 LJB 53262 b





HB4667 LRB094 17959 LJB 53262 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 Health Maintenance Organization Act is
5 amended by changing Sections 1-2, 4-14, and 5-7 and by adding
6 Section 4-20 as follows:
7     (215 ILCS 125/1-2)  (from Ch. 111 1/2, par. 1402)
8     Sec. 1-2. Definitions. As used in this Act, unless the
9 context otherwise requires, the following terms shall have the
10 meanings ascribed to them:
11     (1) "Advertisement" means any printed or published
12 material, audiovisual material and descriptive literature of
13 the health care plan used in direct mail, newspapers,
14 magazines, radio scripts, television scripts, billboards and
15 similar displays; and any descriptive literature or sales aids
16 of all kinds disseminated by a representative of the health
17 care plan for presentation to the public including, but not
18 limited to, circulars, leaflets, booklets, depictions,
19 illustrations, form letters and prepared sales presentations.
20     (2) "Director" means the Director of Insurance.
21     (3) "Basic health care services" means emergency care, and
22 inpatient hospital and physician care, outpatient medical
23 services, mental health services and care for alcohol and drug
24 abuse, including any reasonable deductibles and co-payments,
25 all of which are subject to limitations in Section 4-20 of this
26 Act and to such limitations as are determined by the Director
27 pursuant to rule.
28     (4) "Enrollee" means an individual who has been enrolled in
29 a health care plan.
30     (5) "Evidence of coverage" means any certificate,
31 agreement, or contract issued to an enrollee setting out the
32 coverage to which he is entitled in exchange for a per capita



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1 prepaid sum.
2     (6) "Group contract" means a contract for health care
3 services which by its terms limits eligibility to members of a
4 specified group.
5     (7) "Health care plan" means any arrangement whereby any
6 organization undertakes to provide or arrange for and pay for
7 or reimburse the cost of basic health care services from
8 providers selected by the Health Maintenance Organization and
9 such arrangement consists of arranging for or the provision of
10 such health care services, as distinguished from mere
11 indemnification against the cost of such services, except as
12 otherwise authorized by Section 2-3 of this Act, on a per
13 capita prepaid basis, through insurance or otherwise. A "health
14 care plan" also includes any arrangement whereby an
15 organization undertakes to provide or arrange for or pay for or
16 reimburse the cost of any health care service for persons who
17 are enrolled under Article V of the Illinois Public Aid Code or
18 under the Children's Health Insurance Program Act through
19 providers selected by the organization and the arrangement
20 consists of making provision for the delivery of health care
21 services, as distinguished from mere indemnification. A
22 "health care plan" also includes any arrangement pursuant to
23 Section 4-17. Nothing in this definition, however, affects the
24 total medical services available to persons eligible for
25 medical assistance under the Illinois Public Aid Code.
26     (8) "Health care services" means any services included in
27 the furnishing to any individual of medical or dental care, or
28 the hospitalization or incident to the furnishing of such care
29 or hospitalization as well as the furnishing to any person of
30 any and all other services for the purpose of preventing,
31 alleviating, curing or healing human illness or injury.
32     (9) "Health Maintenance Organization" means any
33 organization formed under the laws of this or another state to
34 provide or arrange for one or more health care plans under a
35 system which causes any part of the risk of health care
36 delivery to be borne by the organization or its providers.



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1     (10) "Net worth" means admitted assets, as defined in
2 Section 1-3 of this Act, minus liabilities.
3     (11) "Organization" means any insurance company, a
4 nonprofit corporation authorized under the Dental Service Plan
5 Act or the Voluntary Health Services Plans Act, or a
6 corporation organized under the laws of this or another state
7 for the purpose of operating one or more health care plans and
8 doing no business other than that of a Health Maintenance
9 Organization or an insurance company. "Organization" shall
10 also mean the University of Illinois Hospital as defined in the
11 University of Illinois Hospital Act.
12     (12) "Provider" means any physician, hospital facility, or
13 other person which is licensed or otherwise authorized to
14 furnish health care services and also includes any other entity
15 that arranges for the delivery or furnishing of health care
16 service.
17     (13) "Producer" means a person directly or indirectly
18 associated with a health care plan who engages in solicitation
19 or enrollment.
20     (14) "Per capita prepaid" means a basis of prepayment by
21 which a fixed amount of money is prepaid per individual or any
22 other enrollment unit to the Health Maintenance Organization or
23 for health care services which are provided during a definite
24 time period regardless of the frequency or extent of the
25 services rendered by the Health Maintenance Organization,
26 except for copayments and deductibles and except as provided in
27 subsection (f) of Section 5-3 of this Act.
28     (15) "Subscriber" means a person who has entered into a
29 contractual relationship with the Health Maintenance
30 Organization for the provision of or arrangement of at least
31 basic health care services to the beneficiaries of such
32 contract.
33 (Source: P.A. 92-370, eff. 8-15-01.)
34     (215 ILCS 125/4-14)  (from Ch. 111 1/2, par. 1409.7)
35     Sec. 4-14. Evidence of Coverage. (a) Every subscriber shall



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1 be issued an evidence of coverage, which shall contain a clear
2 and complete statement of:
3     (1) The health services to which each enrollee is entitled;
4     (2) Eligibility requirements indicating the conditions
5 which must be met to enroll in a Health Care Plan;
6     (3) Any limitation of the services, kinds of services or
7 benefits to be provided, and exclusions, including any
8 co-payment, or other charges, including deductibles;
9     (4) The terms or conditions upon which coverage may be
10 cancelled or otherwise terminated;
11     (5) Where and in what manner information is available as to
12 where and how services may be obtained; and
13     (6) The method for resolving complaints.
14     (b) Any amendment to the evidence of coverage may be
15 provided to the subscriber in a separate document.
16 (Source: P.A. 86-620.)
17     (215 ILCS 125/4-20 new)
18     Sec. 4-20. Deductibles and co-payments.
19     (a) Annual deductibles established by HMOs shall not exceed
20 $1,000 for a single enrollee or $2,000 for a family.
21     (b) No co-payment for basic health care services may exceed
22 50% of the usual and customary fee charged to the HMO for that
23 service.
24     (c) Deductibles are not subject to the limitation contained
25 in subsection (b) of this Section.
26     (215 ILCS 125/5-7)  (from Ch. 111 1/2, par. 1415)
27     Sec. 5-7. Rules and regulations to carry out provisions of
28 Act. The Director may, after notice and hearing, promulgate
29 reasonable rules and regulations as are necessary and proper
30 to:
31     (1) Establish minimum coverage standards for basic health
32 care services, the application of which standards discriminate
33 against no class of physician;
34     (2) Establish specific standards, including standards for



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1 the full and fair disclosure of health care services provided
2 by group contracts or evidences of coverage which may cover but
3 shall not be limited to:
4     (a) Coordination of benefits;
5     (b) Conversion;
6     (c) Cancellation and termination;
7     (d) Co-payments; Deductibles and co-payments
8     (e) Pre-existing conditions; and
9     (3) Otherwise carry out the provisions of this Act.
10 (Source: P.A. 86-620.)
11     Section 99. Effective date. This Act takes effect upon
12 becoming law.