Illinois General Assembly - Full Text of SB1877
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Full Text of SB1877  96th General Assembly

SB1877 96TH GENERAL ASSEMBLY


 


 
96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB1877

 

Introduced 2/20/2009, by Sen. Dan Kotowski

 

SYNOPSIS AS INTRODUCED:
 
5 ILCS 375/6.11
215 ILCS 5/356z.15 new
215 ILCS 125/5-3   from Ch. 111 1/2, par. 1411.2

    Amends the State Employees Group Insurance Act of 1971, the Illinois Insurance Code, and the Health Maintenance Organization Act. Provides that a policy or plan that provides coverage for hospital or medical treatment on an expense incurred basis, may offer a reasonably designed program for wellness coverage that allows for certain incentives for participation in health behavior wellness programs that are approved or offered by the insurer or plan. Provides that wellness coverage, as defined in the Act, shall satisfy the requirements for an exception from the general prohibition against discrimination based on a health factor under the federal Health Insurance Portability and Accountability Act of 1996. Contains a nonacceleration clause. Makes other changes. Effective January 1, 2010.


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FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

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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 State Employees Group Insurance Act of 1971
5 is amended by changing Section 6.11 as follows:
 
6     (5 ILCS 375/6.11)
7     (Text of Section before amendment by P.A. 95-958)
8     Sec. 6.11. Required health benefits; Illinois Insurance
9 Code requirements. The program of health benefits shall provide
10 the post-mastectomy care benefits required to be covered by a
11 policy of accident and health insurance under Section 356t of
12 the Illinois Insurance Code. The program of health benefits
13 shall provide the coverage required under Sections 356g.5,
14 356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10,
15 356z.13 356z.11, and 356z.14, and 356z.15 of the Illinois
16 Insurance Code. The program of health benefits must comply with
17 Section 155.37 of the Illinois Insurance Code.
18 (Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
19 95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-978, eff.
20 1-1-09; 95-1005, eff. 12-12-08; revised 12-15-08.)
 
21     (Text of Section after amendment by P.A. 95-958)
22     Sec. 6.11. Required health benefits; Illinois Insurance

 

 

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1 Code requirements. The program of health benefits shall provide
2 the post-mastectomy care benefits required to be covered by a
3 policy of accident and health insurance under Section 356t of
4 the Illinois Insurance Code. The program of health benefits
5 shall provide the coverage required under Sections 356g.5,
6 356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10,
7 356z.11, and 356z.12, 356z.13 356z.11, and 356z.14, and 356z.15
8 of the Illinois Insurance Code. The program of health benefits
9 must comply with Section 155.37 of the Illinois Insurance Code.
10 (Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
11 95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff.
12 6-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised
13 12-15-08.)
 
14     Section 10. The Illinois Insurance Code is amended by
15 adding Section 356z.15 as follows:
 
16     (215 ILCS 5/356z.15 new)
17     Sec. 356z.15. Wellness coverage.
18     (a) A group or individual policy of accident and health
19 insurance or managed care plan amended, delivered, issued, or
20 renewed after the effective date of this amendatory Act of the
21 96th General Assembly that provides coverage for hospital or
22 medical treatment on an expense incurred basis may offer a
23 reasonably designed program for wellness coverage that allows
24 for a reward, a health spending account contribution, a

 

 

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1 reduction in premiums or reduced medical, prescription drug, or
2 equipment copayments, coinsurance, or deductibles, or a
3 combination of these incentives, for participation in any
4 health behavior wellness, maintenance, or improvement program
5 approved or offered by the insurer or managed care plan. The
6 insured or enrollee may be required to provide evidence of
7 participation in a program, demonstrative compliance with
8 treatment recommendations, or improvement of the individual's
9 or dependent's health behaviors as determined by the health
10 insurer or managed care plan.
11     (b) For purposes of this Section, "wellness coverage" means
12 health care coverage with the primary purpose to engage and
13 motivate the insured or enrollee through: incentives;
14 provision of health education, counseling, and self-management
15 skills; identification of modifiable health risks; and other
16 activities to influence health behavior changes.
17     (c) Incentives as outlined in this Section are specific and
18 unique to the offering of wellness coverage and have no
19 application to any other required or optional health care
20 benefit.
21     (d) Such wellness coverage shall satisfy the requirements
22 for an exception from the general prohibition against
23 discrimination based on a health factor under the federal
24 Health Insurance Portability and Accountability Act of 1996
25 (P.L. 104-191; 110 Stat. 1936), including any federal
26 regulations that are adopted pursuant to that Act.

 

 

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1     (e) A reward, health spending account contribution, or
2 reduction established under this Section does not violate
3 Section 151 of this Code.
 
4     Section 15. The Health Maintenance Organization Act is
5 amended by changing Section 5-3 as follows:
 
6     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
7     (Text of Section before amendment by P.A. 95-958)
8     Sec. 5-3. Insurance Code provisions.
9     (a) Health Maintenance Organizations shall be subject to
10 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
11 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
12 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
13 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10,
14 356z.13 356z.11, 356z.14, 356z.15, 364.01, 367.2, 367.2-5,
15 367i, 368a, 368b, 368c, 368d, 368e, 370c, 401, 401.1, 402, 403,
16 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
17 subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII,
18 XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
19 Insurance Code.
20     (b) For purposes of the Illinois Insurance Code, except for
21 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
22 Maintenance Organizations in the following categories are
23 deemed to be "domestic companies":
24         (1) a corporation authorized under the Dental Service

 

 

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1     Plan Act or the Voluntary Health Services Plans Act;
2         (2) a corporation organized under the laws of this
3     State; or
4         (3) a corporation organized under the laws of another
5     state, 30% or more of the enrollees of which are residents
6     of this State, except a corporation subject to
7     substantially the same requirements in its state of
8     organization as is a "domestic company" under Article VIII
9     1/2 of the Illinois Insurance Code.
10     (c) In considering the merger, consolidation, or other
11 acquisition of control of a Health Maintenance Organization
12 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
13         (1) the Director shall give primary consideration to
14     the continuation of benefits to enrollees and the financial
15     conditions of the acquired Health Maintenance Organization
16     after the merger, consolidation, or other acquisition of
17     control takes effect;
18         (2)(i) the criteria specified in subsection (1)(b) of
19     Section 131.8 of the Illinois Insurance Code shall not
20     apply and (ii) the Director, in making his determination
21     with respect to the merger, consolidation, or other
22     acquisition of control, need not take into account the
23     effect on competition of the merger, consolidation, or
24     other acquisition of control;
25         (3) the Director shall have the power to require the
26     following information:

 

 

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1             (A) certification by an independent actuary of the
2         adequacy of the reserves of the Health Maintenance
3         Organization sought to be acquired;
4             (B) pro forma financial statements reflecting the
5         combined balance sheets of the acquiring company and
6         the Health Maintenance Organization sought to be
7         acquired as of the end of the preceding year and as of
8         a date 90 days prior to the acquisition, as well as pro
9         forma financial statements reflecting projected
10         combined operation for a period of 2 years;
11             (C) a pro forma business plan detailing an
12         acquiring party's plans with respect to the operation
13         of the Health Maintenance Organization sought to be
14         acquired for a period of not less than 3 years; and
15             (D) such other information as the Director shall
16         require.
17     (d) The provisions of Article VIII 1/2 of the Illinois
18 Insurance Code and this Section 5-3 shall apply to the sale by
19 any health maintenance organization of greater than 10% of its
20 enrollee population (including without limitation the health
21 maintenance organization's right, title, and interest in and to
22 its health care certificates).
23     (e) In considering any management contract or service
24 agreement subject to Section 141.1 of the Illinois Insurance
25 Code, the Director (i) shall, in addition to the criteria
26 specified in Section 141.2 of the Illinois Insurance Code, take

 

 

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1 into account the effect of the management contract or service
2 agreement on the continuation of benefits to enrollees and the
3 financial condition of the health maintenance organization to
4 be managed or serviced, and (ii) need not take into account the
5 effect of the management contract or service agreement on
6 competition.
7     (f) Except for small employer groups as defined in the
8 Small Employer Rating, Renewability and Portability Health
9 Insurance Act and except for medicare supplement policies as
10 defined in Section 363 of the Illinois Insurance Code, a Health
11 Maintenance Organization may by contract agree with a group or
12 other enrollment unit to effect refunds or charge additional
13 premiums under the following terms and conditions:
14         (i) the amount of, and other terms and conditions with
15     respect to, the refund or additional premium are set forth
16     in the group or enrollment unit contract agreed in advance
17     of the period for which a refund is to be paid or
18     additional premium is to be charged (which period shall not
19     be less than one year); and
20         (ii) the amount of the refund or additional premium
21     shall not exceed 20% of the Health Maintenance
22     Organization's profitable or unprofitable experience with
23     respect to the group or other enrollment unit for the
24     period (and, for purposes of a refund or additional
25     premium, the profitable or unprofitable experience shall
26     be calculated taking into account a pro rata share of the

 

 

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1     Health Maintenance Organization's administrative and
2     marketing expenses, but shall not include any refund to be
3     made or additional premium to be paid pursuant to this
4     subsection (f)). The Health Maintenance Organization and
5     the group or enrollment unit may agree that the profitable
6     or unprofitable experience may be calculated taking into
7     account the refund period and the immediately preceding 2
8     plan years.
9     The Health Maintenance Organization shall include a
10 statement in the evidence of coverage issued to each enrollee
11 describing the possibility of a refund or additional premium,
12 and upon request of any group or enrollment unit, provide to
13 the group or enrollment unit a description of the method used
14 to calculate (1) the Health Maintenance Organization's
15 profitable experience with respect to the group or enrollment
16 unit and the resulting refund to the group or enrollment unit
17 or (2) the Health Maintenance Organization's unprofitable
18 experience with respect to the group or enrollment unit and the
19 resulting additional premium to be paid by the group or
20 enrollment unit.
21     In no event shall the Illinois Health Maintenance
22 Organization Guaranty Association be liable to pay any
23 contractual obligation of an insolvent organization to pay any
24 refund authorized under this Section.
25 (Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
26 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.

 

 

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1 8-21-08; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised
2 12-15-08.)
 
3     (Text of Section after amendment by P.A. 95-958)
4     Sec. 5-3. Insurance Code provisions.
5     (a) Health Maintenance Organizations shall be subject to
6 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
7 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
8 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
9 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10,
10 356z.11, 356z.12, 356z.13 356z.11, 356z.14, 356z.15, 364.01,
11 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c, 401,
12 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1,
13 paragraph (c) of subsection (2) of Section 367, and Articles
14 IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
15 the Illinois Insurance Code.
16     (b) For purposes of the Illinois Insurance Code, except for
17 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
18 Maintenance Organizations in the following categories are
19 deemed to be "domestic companies":
20         (1) a corporation authorized under the Dental Service
21     Plan Act or the Voluntary Health Services Plans Act;
22         (2) a corporation organized under the laws of this
23     State; or
24         (3) a corporation organized under the laws of another
25     state, 30% or more of the enrollees of which are residents

 

 

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1     of this State, except a corporation subject to
2     substantially the same requirements in its state of
3     organization as is a "domestic company" under Article VIII
4     1/2 of the Illinois Insurance Code.
5     (c) In considering the merger, consolidation, or other
6 acquisition of control of a Health Maintenance Organization
7 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
8         (1) the Director shall give primary consideration to
9     the continuation of benefits to enrollees and the financial
10     conditions of the acquired Health Maintenance Organization
11     after the merger, consolidation, or other acquisition of
12     control takes effect;
13         (2)(i) the criteria specified in subsection (1)(b) of
14     Section 131.8 of the Illinois Insurance Code shall not
15     apply and (ii) the Director, in making his determination
16     with respect to the merger, consolidation, or other
17     acquisition of control, need not take into account the
18     effect on competition of the merger, consolidation, or
19     other acquisition of control;
20         (3) the Director shall have the power to require the
21     following information:
22             (A) certification by an independent actuary of the
23         adequacy of the reserves of the Health Maintenance
24         Organization sought to be acquired;
25             (B) pro forma financial statements reflecting the
26         combined balance sheets of the acquiring company and

 

 

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1         the Health Maintenance Organization sought to be
2         acquired as of the end of the preceding year and as of
3         a date 90 days prior to the acquisition, as well as pro
4         forma financial statements reflecting projected
5         combined operation for a period of 2 years;
6             (C) a pro forma business plan detailing an
7         acquiring party's plans with respect to the operation
8         of the Health Maintenance Organization sought to be
9         acquired for a period of not less than 3 years; and
10             (D) such other information as the Director shall
11         require.
12     (d) The provisions of Article VIII 1/2 of the Illinois
13 Insurance Code and this Section 5-3 shall apply to the sale by
14 any health maintenance organization of greater than 10% of its
15 enrollee population (including without limitation the health
16 maintenance organization's right, title, and interest in and to
17 its health care certificates).
18     (e) In considering any management contract or service
19 agreement subject to Section 141.1 of the Illinois Insurance
20 Code, the Director (i) shall, in addition to the criteria
21 specified in Section 141.2 of the Illinois Insurance Code, take
22 into account the effect of the management contract or service
23 agreement on the continuation of benefits to enrollees and the
24 financial condition of the health maintenance organization to
25 be managed or serviced, and (ii) need not take into account the
26 effect of the management contract or service agreement on

 

 

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1 competition.
2     (f) Except for small employer groups as defined in the
3 Small Employer Rating, Renewability and Portability Health
4 Insurance Act and except for medicare supplement policies as
5 defined in Section 363 of the Illinois Insurance Code, a Health
6 Maintenance Organization may by contract agree with a group or
7 other enrollment unit to effect refunds or charge additional
8 premiums under the following terms and conditions:
9         (i) the amount of, and other terms and conditions with
10     respect to, the refund or additional premium are set forth
11     in the group or enrollment unit contract agreed in advance
12     of the period for which a refund is to be paid or
13     additional premium is to be charged (which period shall not
14     be less than one year); and
15         (ii) the amount of the refund or additional premium
16     shall not exceed 20% of the Health Maintenance
17     Organization's profitable or unprofitable experience with
18     respect to the group or other enrollment unit for the
19     period (and, for purposes of a refund or additional
20     premium, the profitable or unprofitable experience shall
21     be calculated taking into account a pro rata share of the
22     Health Maintenance Organization's administrative and
23     marketing expenses, but shall not include any refund to be
24     made or additional premium to be paid pursuant to this
25     subsection (f)). The Health Maintenance Organization and
26     the group or enrollment unit may agree that the profitable

 

 

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1     or unprofitable experience may be calculated taking into
2     account the refund period and the immediately preceding 2
3     plan years.
4     The Health Maintenance Organization shall include a
5 statement in the evidence of coverage issued to each enrollee
6 describing the possibility of a refund or additional premium,
7 and upon request of any group or enrollment unit, provide to
8 the group or enrollment unit a description of the method used
9 to calculate (1) the Health Maintenance Organization's
10 profitable experience with respect to the group or enrollment
11 unit and the resulting refund to the group or enrollment unit
12 or (2) the Health Maintenance Organization's unprofitable
13 experience with respect to the group or enrollment unit and the
14 resulting additional premium to be paid by the group or
15 enrollment unit.
16     In no event shall the Illinois Health Maintenance
17 Organization Guaranty Association be liable to pay any
18 contractual obligation of an insolvent organization to pay any
19 refund authorized under this Section.
20 (Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
21 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
22 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
23 eff. 12-12-08; revised 12-15-08.)
 
24     Section 95. No acceleration or delay. Where this Act makes
25 changes in a statute that is represented in this Act by text

 

 

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1 that is not yet or no longer in effect (for example, a Section
2 represented by multiple versions), the use of that text does
3 not accelerate or delay the taking effect of (i) the changes
4 made by this Act or (ii) provisions derived from any other
5 Public Act.
 
6     Section 99. Effective date. This Act takes effect January
7 1, 2010.