SB1877sam001 96TH GENERAL ASSEMBLY 
Sen. Dan Kotowski
Filed: 3/25/2009
 
 

 




 

 		












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AMENDMENT TO SENATE BILL 1877 




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    AMENDMENT NO. ______. Amend Senate Bill 1877  by replacing 
3
everything after the enacting clause with the following:


 
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 
 


 






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Section 155.37 of the
Illinois Insurance Code.

2
(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07; 
3
95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-978, eff. 
4
1-1-09; 95-1005, eff. 12-12-08; revised 12-15-08.)

 
5
    (Text of Section after amendment by P.A. 95-958)

6
    Sec. 6.11. Required health benefits; Illinois Insurance 
7
Code
requirements.  The program of health
benefits shall provide 
8
the post-mastectomy care benefits required to be covered
by a 
9
policy of accident and health insurance under Section 356t of 
10
the Illinois
Insurance Code.  The program of health benefits 
11
shall provide the coverage
required under Sections 356g.5,

12
356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10, 
13
356z.11, and 356z.12, 356z.13
356z.11, and 356z.14, and 356z.15 
14
of the
Illinois Insurance Code.
The program of health benefits 
15
must comply with Section 155.37 of the
Illinois Insurance Code.

16
(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07; 
17
95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff. 
18
6-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised 
19
12-15-08.)
 
20
    Section 10. The Illinois Insurance Code is amended  by 
21
adding Section 356z.15 as follows:
 
22
    (215 ILCS 5/356z.15 new)

23
    Sec. 356z.15. Wellness coverage.
 


 






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    (a) A group or individual policy of accident and health 
2
insurance or managed care plan amended, delivered, issued, or 
3
renewed after the effective date of this amendatory Act of the 
4
96th General Assembly that provides coverage for hospital or 
5
medical treatment on an expense incurred basis may offer a 
6
reasonably designed program for wellness coverage that allows 
7
for a reward, a health spending account contribution, a 
8
reduction in premiums or reduced medical, prescription drug, or 
9
equipment copayments, coinsurance, or deductibles, or a 
10
combination of these incentives, for participation in any 
11
health behavior wellness, maintenance, or improvement program 
12
approved or offered by the insurer or managed care plan. The 
13
insured or enrollee may be required to provide evidence of 
14
participation in a program, or demonstrative compliance with 
15
treatment recommendations as determined by the health insurer 
16
or managed care plan.
17
    (b) For purposes of this Section, "wellness coverage" means 
18
health care coverage with the primary purpose to engage and 
19
motivate the insured or enrollee through: incentives; 
20
provision of health education, counseling, and self-management 
21
skills; identification of modifiable health risks; and other 
22
activities to influence health behavior changes.
23
    (c) Incentives as outlined in this Section are specific and 
24
unique to the offering of wellness coverage and have no 
25
application to any other required or optional health care 
26
benefit.
 


 






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    (d) Such wellness coverage must satisfy the requirements 
2
for an exception from the general prohibition against 
3
discrimination based on a health factor under the federal 
4
Health Insurance Portability and Accountability Act of 1996 
5
(P.L. 104-191; 110 Stat. 1936), including any federal 
6
regulations that are adopted pursuant to that Act.
7
    (e) A plan offering wellness coverage must do the 
8
following: 
9
        (i) give participants the opportunity to qualify for 
10
    offered incentives at least once a year; 
11
        (ii) allow a reasonable alternative to any individual 
12
    for whom it is unreasonably difficult, due to a medical 
13
    condition, to satisfy otherwise applicable wellness 
14
    program standards. Plans may seek physician verification 
15
    that health factors make it unreasonably difficult or 
16
    medically inadvisable for the participant to satisfy the 
17
    standards; and
18
        (iii) not provide a total incentive that exceeds 20% of 
19
    the cost of employee-only coverage. The cost of 
20
    employee-only coverage includes both employer and employee 
21
    contributions. For plans offering family coverage, the 20% 
22
    limitation applies to cost of family coverage and applies 
23
    to the entire family. 
24
    (f) A reward, health spending account contribution, or 
25
reduction established under this Section does not violate 
26
Section 151 of this Code. 
 


 






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    (g) Rulemaking authority to implement this amendatory Act 
2
of the 96th General Assembly, if any, is conditioned on the 
3
rules being adopted in accordance with all provisions of the 
4
Illinois Administrative Procedure Act and all rules and 
5
procedures of the Joint Committee on Administrative Rules; any 
6
purported rule not so adopted, for whatever reason, is 
7
unauthorized. 
 
8
    Section 15. The Health Maintenance Organization Act is 
9
amended  by changing Section 5-3 as follows:
 


10
    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)


11
    (Text of Section before amendment by P.A. 95-958)

12
    Sec. 5-3. Insurance Code provisions. 

13
    (a) Health Maintenance Organizations
shall be subject to 
14
the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
15
141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
16
154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
17
356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 
18
356z.13
356z.11, 356z.14, 356z.15,
 364.01, 367.2, 367.2-5, 
19
367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 401.1, 402, 403, 
20
403A,
408, 408.2, 409, 412, 444,
and
444.1,
paragraph (c) of 
21
subsection (2) of Section 367, and Articles IIA, VIII 1/2,
XII,

22
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois 
23
Insurance Code.

24
    (b) For purposes of the Illinois Insurance Code, except for 
 


 






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Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health 
2
Maintenance Organizations in
the following categories are 
3
deemed to be "domestic companies":


4
        (1) a corporation authorized under the
Dental Service 
5
    Plan Act or the Voluntary Health Services Plans Act;


6
        (2) a corporation organized under the laws of this 
7
    State; or


8
        (3) a corporation organized under the laws of another 
9
    state, 30% or more
of the enrollees of which are residents 
10
    of this State, except a
corporation subject to 
11
    substantially the same requirements in its state of

12
    organization as is a "domestic company" under Article VIII 
13
    1/2 of the
Illinois Insurance Code.

14
    (c) In considering the merger, consolidation, or other 
15
acquisition of
control of a Health Maintenance Organization 
16
pursuant to Article VIII 1/2
of the Illinois Insurance Code,


17
        (1) the Director shall give primary consideration to 
18
    the continuation of
benefits to enrollees and the financial 
19
    conditions of the acquired Health
Maintenance Organization 
20
    after the merger, consolidation, or other
acquisition of 
21
    control takes effect;


22
        (2)(i) the criteria specified in subsection (1)(b) of 
23
    Section 131.8 of
the Illinois Insurance Code shall not 
24
    apply and (ii) the Director, in making
his determination 
25
    with respect to the merger, consolidation, or other

26
    acquisition of control, need not take into account the 
 


 






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    effect on
competition of the merger, consolidation, or 
2
    other acquisition of control;


3
        (3) the Director shall have the power to require the 
4
    following
information:


5
            (A) certification by an independent actuary of the 
6
        adequacy
of the reserves of the Health Maintenance 
7
        Organization sought to be acquired;


8
            (B) pro forma financial statements reflecting the 
9
        combined balance
sheets of the acquiring company and 
10
        the Health Maintenance Organization sought
to be 
11
        acquired as of the end of the preceding year and as of 
12
        a date 90 days
prior to the acquisition, as well as pro 
13
        forma financial statements
reflecting projected 
14
        combined operation for a period of 2 years;


15
            (C) a pro forma business plan detailing an 
16
        acquiring party's plans with
respect to the operation 
17
        of the Health Maintenance Organization sought to
be 
18
        acquired for a period of not less than 3 years; and


19
            (D) such other information as the Director shall 
20
        require.

21
    (d) The provisions of Article VIII 1/2 of the Illinois 
22
Insurance Code
and this Section 5-3 shall apply to the sale by 
23
any health maintenance
organization of greater than 10% of its

24
enrollee population (including without limitation the health 
25
maintenance
organization's right, title, and interest in and to 
26
its health care
certificates).

 


 






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    (e) In considering any management contract or service 
2
agreement subject
to Section 141.1 of the Illinois Insurance 
3
Code, the Director (i) shall, in
addition to the criteria 
4
specified in Section 141.2 of the Illinois
Insurance Code, take 
5
into account the effect of the management contract or
service 
6
agreement on the continuation of benefits to enrollees and the

7
financial condition of the health maintenance organization to 
8
be managed or
serviced, and (ii) need not take into account the 
9
effect of the management
contract or service agreement on 
10
competition.

11
    (f) Except for small employer groups as defined in the 
12
Small Employer
Rating, Renewability and Portability Health 
13
Insurance Act and except for
medicare supplement policies as 
14
defined in Section 363 of the Illinois
Insurance Code, a Health 
15
Maintenance Organization may by contract agree with a
group or 
16
other enrollment unit to effect refunds or charge additional 
17
premiums
under the following terms and conditions:


18
        (i) the amount of, and other terms and conditions with 
19
    respect to, the
refund or additional premium are set forth 
20
    in the group or enrollment unit
contract agreed in advance 
21
    of the period for which a refund is to be paid or

22
    additional premium is to be charged (which period shall not 
23
    be less than one
year); and


24
        (ii) the amount of the refund or additional premium 
25
    shall not exceed 20%
of the Health Maintenance 
26
    Organization's profitable or unprofitable experience
with 
 


 






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    respect to the group or other enrollment unit for the 
2
    period (and, for
purposes of a refund or additional 
3
    premium, the profitable or unprofitable
experience shall 
4
    be calculated taking into account a pro rata share of the

5
    Health Maintenance Organization's administrative and 
6
    marketing expenses, but
shall not include any refund to be 
7
    made or additional premium to be paid
pursuant to this 
8
    subsection (f)).  The Health Maintenance Organization and 
9
    the
group or enrollment unit may agree that the profitable 
10
    or unprofitable
experience may be calculated taking into 
11
    account the refund period and the
immediately preceding 2 
12
    plan years.

13
    The Health Maintenance Organization shall include a 
14
statement in the
evidence of coverage issued to each enrollee 
15
describing the possibility of a
refund or additional premium, 
16
and upon request of any group or enrollment unit,
provide to 
17
the group or enrollment unit a description of the method used 
18
to
calculate (1) the Health Maintenance Organization's 
19
profitable experience with
respect to the group or enrollment 
20
unit and the resulting refund to the group
or enrollment unit 
21
or (2) the Health Maintenance Organization's unprofitable

22
experience with respect to the group or enrollment unit and the 
23
resulting
additional premium to be paid by the group or 
24
enrollment unit.

25
    In no event shall the Illinois Health Maintenance 
26
Organization
Guaranty Association be liable to pay any 
 


 






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contractual obligation of an
insolvent organization to pay any 
2
refund authorized under this Section.

3
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06; 
4
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
5
8-21-08; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised 
6
12-15-08.)

 
7
    (Text of Section after 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.11, 356z.12, 356z.13
356z.11, 356z.14, 356z.15, 364.01, 
15
367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, 
16
401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444,
and
444.1,

17
paragraph (c) of subsection (2) of Section 367, and Articles 
18
IIA, VIII 1/2,
XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of 
19
the Illinois 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 
25
    Plan Act or the Voluntary Health Services Plans Act;


 


 






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        (2) a corporation organized under the laws of this 
2
    State; or


3
        (3) a corporation organized under the laws of another 
4
    state, 30% or more
of the enrollees of which are residents 
5
    of this State, except a
corporation subject to 
6
    substantially the same requirements in its state of

7
    organization as is a "domestic company" under Article VIII 
8
    1/2 of the
Illinois Insurance Code.

9
    (c) In considering the merger, consolidation, or other 
10
acquisition of
control of a Health Maintenance Organization 
11
pursuant to Article VIII 1/2
of the Illinois Insurance Code,


12
        (1) the Director shall give primary consideration to 
13
    the continuation of
benefits to enrollees and the financial 
14
    conditions of the acquired Health
Maintenance Organization 
15
    after the merger, consolidation, or other
acquisition of 
16
    control takes effect;


17
        (2)(i) the criteria specified in subsection (1)(b) of 
18
    Section 131.8 of
the Illinois Insurance Code shall not 
19
    apply and (ii) the Director, in making
his determination 
20
    with respect to the merger, consolidation, or other

21
    acquisition of control, need not take into account the 
22
    effect on
competition of the merger, consolidation, or 
23
    other acquisition of control;


24
        (3) the Director shall have the power to require the 
25
    following
information:


26
            (A) certification by an independent actuary of the 
 


 






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        adequacy
of the reserves of the Health Maintenance 
2
        Organization sought to be acquired;


3
            (B) pro forma financial statements reflecting the 
4
        combined balance
sheets of the acquiring company and 
5
        the Health Maintenance Organization sought
to be 
6
        acquired as of the end of the preceding year and as of 
7
        a date 90 days
prior to the acquisition, as well as pro 
8
        forma financial statements
reflecting projected 
9
        combined operation for a period of 2 years;


10
            (C) a pro forma business plan detailing an 
11
        acquiring party's plans with
respect to the operation 
12
        of the Health Maintenance Organization sought to
be 
13
        acquired for a period of not less than 3 years; and


14
            (D) such other information as the Director shall 
15
        require.

16
    (d) The provisions of Article VIII 1/2 of the Illinois 
17
Insurance Code
and this Section 5-3 shall apply to the sale by 
18
any health maintenance
organization of greater than 10% of its

19
enrollee population (including without limitation the health 
20
maintenance
organization's right, title, and interest in and to 
21
its health care
certificates).

22
    (e) In considering any management contract or service 
23
agreement subject
to Section 141.1 of the Illinois Insurance 
24
Code, the Director (i) shall, in
addition to the criteria 
25
specified in Section 141.2 of the Illinois
Insurance Code, take 
26
into account the effect of the management contract or
service 
 


 






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agreement on the continuation of benefits to enrollees and the

2
financial condition of the health maintenance organization to 
3
be managed or
serviced, and (ii) need not take into account the 
4
effect of the management
contract or service agreement on 
5
competition.

6
    (f) Except for small employer groups as defined in the 
7
Small Employer
Rating, Renewability and Portability Health 
8
Insurance Act and except for
medicare supplement policies as 
9
defined in Section 363 of the Illinois
Insurance Code, a Health 
10
Maintenance Organization may by contract agree with a
group or 
11
other enrollment unit to effect refunds or charge additional 
12
premiums
under the following terms and conditions:


13
        (i) the amount of, and other terms and conditions with 
14
    respect to, the
refund or additional premium are set forth 
15
    in the group or enrollment unit
contract agreed in advance 
16
    of the period for which a refund is to be paid or

17
    additional premium is to be charged (which period shall not 
18
    be less than one
year); and


19
        (ii) the amount of the refund or additional premium 
20
    shall not exceed 20%
of the Health Maintenance 
21
    Organization's profitable or unprofitable experience
with 
22
    respect to the group or other enrollment unit for the 
23
    period (and, for
purposes of a refund or additional 
24
    premium, the profitable or unprofitable
experience shall 
25
    be calculated taking into account a pro rata share of the

26
    Health Maintenance Organization's administrative and 
 


 






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1
    marketing expenses, but
shall not include any refund to be 
2
    made or additional premium to be paid
pursuant to this 
3
    subsection (f)).  The Health Maintenance Organization and 
4
    the
group or enrollment unit may agree that the profitable 
5
    or unprofitable
experience may be calculated taking into 
6
    account the refund period and the
immediately preceding 2 
7
    plan years.

8
    The Health Maintenance Organization shall include a 
9
statement in the
evidence of coverage issued to each enrollee 
10
describing the possibility of a
refund or additional premium, 
11
and upon request of any group or enrollment unit,
provide to 
12
the group or enrollment unit a description of the method used 
13
to
calculate (1) the Health Maintenance Organization's 
14
profitable experience with
respect to the group or enrollment 
15
unit and the resulting refund to the group
or enrollment unit 
16
or (2) the Health Maintenance Organization's unprofitable

17
experience with respect to the group or enrollment unit and the 
18
resulting
additional premium to be paid by the group or 
19
enrollment unit.

20
    In no event shall the Illinois Health Maintenance 
21
Organization
Guaranty Association be liable to pay any 
22
contractual obligation of an
insolvent organization to pay any 
23
refund authorized under this Section.

24
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06; 
25
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff. 
26
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005, 
 


 






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eff. 12-12-08; revised 12-15-08.)
 
2
    Section 95. No acceleration or delay. Where this Act makes 
3
changes in a statute that is represented in this Act by text 
4
that is not yet or no longer in effect (for example, a Section 
5
represented by multiple versions), the use of that text does 
6
not accelerate or delay the taking effect of (i) the changes 
7
made by this Act or (ii) provisions derived from any other 
8
Public Act.
 

9
    Section 99. Effective date. This Act takes effect January 
10
1, 2010.".