Illinois General Assembly - Full Text of HB1424
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Full Text of HB1424  97th General Assembly




State of Illinois
2011 and 2012


Introduced , by Rep. Sara Feigenholtz


215 ILCS 5/364a new
215 ILCS 125/5-3  from Ch. 111 1/2, par. 1411.2

    Amends the Illinois Insurance Code. Provides that no company may determine the premium rate or underwriting through a method that is in any way based upon the gender of any person. Amends the Health Maintenance Organization Act to provide that health maintenance organizations shall be subject to the provisions of the Illinois Insurance Code prohibiting gender rating. Effective immediately.

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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 Illinois Insurance Code is amended by adding
5Section 364a as follows:
6    (215 ILCS 5/364a new)
7    Sec. 364a. Gender rating prohibited. No company, in any
8individual or group policy of accident and health insurance
9issued in this State, may determine the premium rate or any
10other underwriting decision, including initial issuance,
11through a method that is in any way based upon the gender of
12any person covered or to be covered under the policy.
13    Section 10. The Health Maintenance Organization Act is
14amended by changing Section 5-3 as follows:
15    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
16    Sec. 5-3. Insurance Code provisions.
17    (a) Health Maintenance Organizations shall be subject to
18the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
19141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
20154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
21356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,



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1356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
2356z.18, 364a, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c,
3368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2, 409,
4412, 444, and 444.1, paragraph (c) of subsection (2) of Section
5367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2,
6XXV, and XXVI of the Illinois Insurance Code.
7    (b) For purposes of the Illinois Insurance Code, except for
8Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
9Maintenance Organizations in the following categories are
10deemed to be "domestic companies":
11        (1) a corporation authorized under the Dental Service
12    Plan Act or the Voluntary Health Services Plans Act;
13        (2) a corporation organized under the laws of this
14    State; or
15        (3) a corporation organized under the laws of another
16    state, 30% or 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    (c) In considering the merger, consolidation, or other
22acquisition of control of a Health Maintenance Organization
23pursuant to Article VIII 1/2 of the Illinois Insurance Code,
24        (1) the Director shall give primary consideration to
25    the continuation of benefits to enrollees and the financial
26    conditions of the acquired Health Maintenance Organization



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1    after the merger, consolidation, or other acquisition of
2    control takes effect;
3        (2)(i) the criteria specified in subsection (1)(b) of
4    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 the
11    following information:
12            (A) certification by an independent actuary of the
13        adequacy of the reserves of the Health Maintenance
14        Organization sought to be acquired;
15            (B) pro forma financial statements reflecting the
16        combined balance sheets of the acquiring company and
17        the Health Maintenance Organization sought to be
18        acquired as of the end of the preceding year and as of
19        a date 90 days prior to the acquisition, as well as pro
20        forma financial statements reflecting projected
21        combined operation for a period of 2 years;
22            (C) a pro forma business plan detailing an
23        acquiring party's plans with respect to the operation
24        of the Health Maintenance Organization sought to be
25        acquired for a period of not less than 3 years; and
26            (D) such other information as the Director shall



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



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



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1unit and the resulting refund to the group or enrollment unit
2or (2) the Health Maintenance Organization's unprofitable
3experience with respect to the group or enrollment unit and the
4resulting additional premium to be paid by the group or
5enrollment unit.
6    In no event shall the Illinois Health Maintenance
7Organization Guaranty Association be liable to pay any
8contractual obligation of an insolvent organization to pay any
9refund authorized under this Section.
10    (g) Rulemaking authority to implement Public Act 95-1045,
11if any, is conditioned on the rules being adopted in accordance
12with all provisions of the Illinois Administrative Procedure
13Act and all rules and procedures of the Joint Committee on
14Administrative Rules; any purported rule not so adopted, for
15whatever reason, is unauthorized.
16(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
1795-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
1895-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
191-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
206-1-10; 96-1000, eff. 7-2-10.)
21    Section 99. Effective date. This Act takes effect upon
22becoming law.