Full Text of HB1501 97th General Assembly
HB1501ham001 97TH GENERAL ASSEMBLY | Rep. Greg Harris Filed: 3/9/2011
| | 09700HB1501ham001 | | LRB097 08008 RPM 51900 a |
|
| 1 | | AMENDMENT TO HOUSE BILL 1501
| 2 | | AMENDMENT NO. ______. Amend House Bill 1501 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 1. This Act may be referred to as the Health | 5 | | Insurance Rate Fairness and Affordability Act. | 6 | | Section 5. The Illinois Insurance Code is amended by | 7 | | changing Sections 355 and 367 and by adding Section 355.01 as | 8 | | follows:
| 9 | | (215 ILCS 5/355) (from Ch. 73, par. 967)
| 10 | | Sec. 355. Accident
and health policies-Provisions. )
| 11 | | (a) No individual or group policy of insurance against loss | 12 | | or damage from the sickness, or from
the bodily injury or death | 13 | | of the insured by accident shall be issued or
delivered to any | 14 | | person in this State until a copy of the form thereof and
of | 15 | | the classification of risks and the premium rates pertaining |
| | | 09700HB1501ham001 | - 2 - | LRB097 08008 RPM 51900 a |
|
| 1 | | thereto
have been filed with the Director; nor shall it be so | 2 | | issued or delivered
until the Director shall have approved such | 3 | | policy pursuant to the provisions
of Section 143. If the | 4 | | Director
disapproves the policy form he shall make a written | 5 | | decision stating the
respects in which such form does not | 6 | | comply with the requirements of law
and shall deliver a copy | 7 | | thereof to the company and it shall be unlawful
thereafter for | 8 | | any such company to issue any policy in such form.
| 9 | | (b) With respect to health insurance coverage offered by a | 10 | | health insurance issuer, a filing of premium rates pursuant to | 11 | | subsection (a) of this Section shall not be complete unless it | 12 | | contains all information necessary to justify the premium rate | 13 | | and such other information as the Director may require to | 14 | | determine the rate's compliance with Section 355.01 of this | 15 | | Code. Each rate filing must also include a certification by a | 16 | | qualified actuary that to the best of the actuary's knowledge | 17 | | and judgment the rate filing is in compliance with applicable | 18 | | laws and regulations and that the benefits are reasonable in | 19 | | relation to premiums. | 20 | | (c) With respect to premium rate changes, the filing under | 21 | | subsection (a) of this Section shall clearly indicate the | 22 | | percentage change from the previously filed rate and the | 23 | | percentage change from the rate that was in effect 12 months | 24 | | prior to the proposed effective date of such rate. The filing | 25 | | shall also include, in a form prescribed by the Director, a | 26 | | summary of the rate change and a written description justifying |
| | | 09700HB1501ham001 | - 3 - | LRB097 08008 RPM 51900 a |
|
| 1 | | the rate change, which the Department shall make publicly | 2 | | available on its website. | 3 | | (d) In addition to filing premium rates, a company shall | 4 | | notify the Director whenever a policy form subject to this | 5 | | Section has been closed for sale. | 6 | | (e) As used in this Section, the terms "health insurance | 7 | | coverage" and "health insurance issuer" have the meanings given | 8 | | those terms in the Illinois Health Insurance Portability and | 9 | | Accountability Act. | 10 | | (Source: P.A. 79-777.)
| 11 | | (215 ILCS 5/355.01 new) | 12 | | Sec. 355.01. Health insurance premium rates; prior | 13 | | approval. | 14 | | (a) This Section shall apply to health insurance coverage | 15 | | offered by a health insurance issuer. The following provisions | 16 | | shall apply with regard to such issuers: | 17 | | (1) No health insurance policy, plan, or contract shall | 18 | | be issued or delivered to any person in this State until | 19 | | the classification of risks and the premium rates | 20 | | pertaining thereto have been approved by the Director under | 21 | | this Section. Any subsequent addition to or change in | 22 | | premium rates shall also be subject to the Director's | 23 | | approval under this Section. | 24 | | (2) The Director shall approve or disapprove a premium | 25 | | rate within 60 days after submission unless the Director |
| | | 09700HB1501ham001 | - 4 - | LRB097 08008 RPM 51900 a |
|
| 1 | | extends by not more than an additional 60 days the period | 2 | | within which the Director shall approve or disapprove such | 3 | | premium rate by giving written notice to the health | 4 | | insurance issuer of the extension before expiration of the | 5 | | initial 60-day period. | 6 | | (3) The Director may, at his or her discretion, convene | 7 | | a public hearing to review a proposed premium rate before | 8 | | making a determination to approve or disapprove a premium | 9 | | rate under paragraph (2) of subsection (a) of this Section. | 10 | | (b) The Director shall disapprove a premium rate under | 11 | | paragraph (2) of subsection (a) of this Section if: | 12 | | (1) the benefits provided are not reasonable in | 13 | | relation to the premium charged; or | 14 | | (2) the proposed premium rate is excessive, | 15 | | inadequate, unjustified, or unfairly discriminatory. | 16 | | The party proposing a rate has the burden of proving by | 17 | | clear and convincing evidence that the rate does not violate | 18 | | this Section. | 19 | | (c) With respect to premium rate changes: | 20 | | (1) the Director's review of a proposed rate change | 21 | | shall include an examination of the factors set forth in | 22 | | regulation promulgated by the Secretary of the U.S. | 23 | | Department of Health and Human Services pursuant to Section | 24 | | 2794 of the Public Health Service Act for the purpose of | 25 | | determining whether a State has an effective rate review | 26 | | program; |
| | | 09700HB1501ham001 | - 5 - | LRB097 08008 RPM 51900 a |
|
| 1 | | (2) except as provided in subsection (e), if the | 2 | | percentage increase of the proposed rate change exceeds the | 3 | | sum of the prior calendar year's percentage increase in the | 4 | | Medical Care Component of the United States Department of | 5 | | Labor Consumer Price Index for All Urban Consumers plus 6%, | 6 | | the Director shall convene a public hearing before making a | 7 | | determination to approve or disapprove the rate change | 8 | | under paragraph (2) of subsection (a) of this Section; and | 9 | | (3) if a rate change is approved by the Director under | 10 | | paragraph (2) of subsection (a) of this Section, then the | 11 | | following provisions shall apply: | 12 | | (A) the rate change shall take effect no sooner | 13 | | than 30 days after the issuer provides written | 14 | | notification to policyholders as required by | 15 | | subparagraph (B) of paragraph (3) of subsection (c) of | 16 | | this Section; | 17 | | (B) a health insurance issuer shall notify in | 18 | | writing all policyholders to which such rate change | 19 | | applies at least 30 days prior to the effective date of | 20 | | such rate change; the written notice shall also advise | 21 | | the policyholders of the right to a hearing under | 22 | | subsection (h) of this Section; and | 23 | | (C) the rate change shall be stayed if a written | 24 | | request for a hearing is filed with the Director in | 25 | | accordance with subsection (h) of this Section. | 26 | | (d) If a rate increase that does not otherwise meet or |
| | | 09700HB1501ham001 | - 6 - | LRB097 08008 RPM 51900 a |
|
| 1 | | exceed the threshold under paragraph (2) of subsection (c) of | 2 | | this Section meets or exceeds the threshold if combined with a | 3 | | previous increase or increases during the 12 month period | 4 | | preceding the date on which the rate increase was filed, then | 5 | | the rate increase shall be considered to meet or exceed the | 6 | | threshold and the Director shall convene a public hearing | 7 | | before making a determination to approve or disapprove the rate | 8 | | under paragraph (2) of subsection (a) of this Section, except | 9 | | as provided in subsection (e) of this Section. | 10 | | (e) With respect to a rate increase that meets or exceeds | 11 | | the threshold under paragraph (2) of subsection (c) of this | 12 | | Section, the Director may forgo a public hearing and approve | 13 | | the rate increase under paragraph (2) of subsection (a) of this | 14 | | Section if there is clear and convincing evidence that: | 15 | | (1) the benefits provided are reasonable in relation to | 16 | | the premium charged; and | 17 | | (2) the new proposed premium rate is not excessive, | 18 | | inadequate, unjustified, or unfairly discriminatory. | 19 | | (f) The Director shall notify a health insurance issuer in | 20 | | writing of the approval or disapproval of a premium rate under | 21 | | paragraph (2) of subsection (a) of this Section, and the notice | 22 | | shall be posted on the Department's website. If the Director | 23 | | disapproves the premium rate, then the written notice shall | 24 | | clearly state the respects in which the premium rate does not | 25 | | comply with the requirements of law and it shall be unlawful | 26 | | thereafter for any such health insurance issuer to use the |
| | | 09700HB1501ham001 | - 7 - | LRB097 08008 RPM 51900 a |
|
| 1 | | premium rate. The written notice of disapproval shall also | 2 | | advise the health insurance issuer of the right to a hearing | 3 | | under subsection (h) of this Section. | 4 | | (g) The Director may request actuarial reasons and data, as | 5 | | well as other information, needed to determine if a previously | 6 | | approved rate continues to satisfy the requirements of this | 7 | | Section. The Director may withdraw approval of any rate that | 8 | | has been previously approved on any of the grounds stated in | 9 | | subsection (b) of this Section. The Director shall notify a | 10 | | health insurance issuer in writing of the withdrawal of | 11 | | approval. The written notice shall clearly state the respects | 12 | | in which the premium rate ceases to comply with the | 13 | | requirements of law and shall advise the health insurance | 14 | | issuer of the right to a hearing under subsection (h) of this | 15 | | Section. The written withdrawal of approval shall take effect | 16 | | 30 days after the date of mailing but shall be stayed if within | 17 | | the 30-day period a written request for hearing is filed with | 18 | | the Director under subsection (h) of this Section. | 19 | | (h) A health insurance issuer may appeal a decision by the | 20 | | Director under paragraph (2) of subsection (a) of this Section | 21 | | or subsection (g) of this Section by making a written request | 22 | | for a hearing before the Director within 30 days after | 23 | | receiving the written notice under subsections (f) or (g) of | 24 | | this Section. One percent or 25 of the covered lives (whichever | 25 | | is greater) to which such rate change applies may appeal a | 26 | | decision by the Director under paragraph (2) of subsection (a) |
| | | 09700HB1501ham001 | - 8 - | LRB097 08008 RPM 51900 a |
|
| 1 | | of this Section by submitting a written request to the | 2 | | Department for a hearing before the Director within 30 days | 3 | | after the Department posts public notice under subsection (f) | 4 | | of this Section. | 5 | | (i) As used in this Section, the terms "health insurance | 6 | | coverage" and "health insurance issuer" have the meanings given | 7 | | those terms in the Illinois Health Insurance Portability and | 8 | | Accountability Act.
| 9 | | (215 ILCS 5/367) (from Ch. 73, par. 979)
| 10 | | Sec. 367. Group accident and health insurance.
| 11 | | (1) Group accident and health insurance is hereby declared | 12 | | to be that
form of accident and health insurance covering not | 13 | | less than 2
employees,
members, or employees of members, | 14 | | written under a
master policy issued to any governmental | 15 | | corporation, unit, agency or
department thereof, or to any | 16 | | corporation, copartnership, individual
employer, or to any | 17 | | association upon application of an executive officer or
trustee | 18 | | of such association having a constitution or bylaws and formed | 19 | | in
good faith for purposes other than that of obtaining | 20 | | insurance, where
officers, members, employees, employees of | 21 | | members or classes or department
thereof, may be insured for | 22 | | their individual benefit. In addition a group
accident and | 23 | | health policy may be written to insure any group which may be
| 24 | | insured under a group life insurance policy. The term | 25 | | "employees" shall
include the officers, managers and employees |
| | | 09700HB1501ham001 | - 9 - | LRB097 08008 RPM 51900 a |
|
| 1 | | of subsidiary or affiliated
corporations, and the individual | 2 | | proprietors, partners and employees of
affiliated individuals | 3 | | and firms, when the business of such subsidiary or
affiliated | 4 | | corporations, firms or individuals, is controlled by a common
| 5 | | employer through stock ownership, contract or otherwise.
| 6 | | (2) Any insurance company authorized to write accident and | 7 | | health
insurance in this State shall have power to issue group | 8 | | accident and
health policies. No policy of group accident and | 9 | | health insurance may
be issued or delivered in this State | 10 | | unless a copy of the form thereof and of the classification of | 11 | | risks and the premium rates pertaining thereto
shall have been | 12 | | filed with the department and approved by it in
accordance with | 13 | | Section 355 and Section 355.01 , and it contains in substance | 14 | | those
provisions contained in Sections 357.1 through 357.30 as | 15 | | may be applicable
to group accident and health insurance and | 16 | | the following provisions:
| 17 | | (a) A provision that the policy, the application of the | 18 | | employer, or
executive officer or trustee of any | 19 | | association, and the individual
applications, if any, of | 20 | | the employees, members or employees of members
insured | 21 | | shall constitute the entire contract between the parties, | 22 | | and
that all statements made by the employer, or the | 23 | | executive officer or
trustee, or by the individual | 24 | | employees, members or employees of members
shall (in the | 25 | | absence of fraud) be deemed representations and not
| 26 | | warranties, and that no such statement shall be used in |
| | | 09700HB1501ham001 | - 10 - | LRB097 08008 RPM 51900 a |
|
| 1 | | defense to a
claim under the policy, unless it is contained | 2 | | in a written application.
| 3 | | (b) A provision that the insurer will issue to the | 4 | | employer, or to
the executive officer or trustee of the | 5 | | association, for delivery to the
employee, member or | 6 | | employee of a member, who is insured under such
policy, an | 7 | | individual certificate setting forth a statement as to the
| 8 | | insurance protection to which he is entitled and to whom | 9 | | payable.
| 10 | | (c) A provision that to the group or class thereof | 11 | | originally
insured shall be added from time to time all new | 12 | | employees of the
employer, members of the association or | 13 | | employees of members eligible to
and applying for insurance | 14 | | in such group or class.
| 15 | | (3) Anything in this code to the contrary notwithstanding, | 16 | | any group
accident and health policy may provide that all or | 17 | | any portion of any
indemnities provided by any such policy on | 18 | | account of hospital, nursing,
medical or surgical services, | 19 | | may, at the insurer's option, be paid
directly to the hospital | 20 | | or person rendering such services; but the
policy may not | 21 | | require that the service be rendered by a particular
hospital | 22 | | or person. Payment so made shall discharge the insurer's
| 23 | | obligation with respect to the amount of insurance so paid. | 24 | | Nothing in this
subsection (3) shall prohibit an insurer from | 25 | | providing incentives for
insureds to utilize the services of a | 26 | | particular hospital or person.
|
| | | 09700HB1501ham001 | - 11 - | LRB097 08008 RPM 51900 a |
|
| 1 | | (4) Special group policies may be issued to school | 2 | | districts
providing medical or hospital service, or both, for | 3 | | pupils of the
district injured while participating in any | 4 | | athletic activity under the
jurisdiction of or sponsored or | 5 | | controlled by the district or the
authorities of any school | 6 | | thereof. The provisions of this Section
governing the issuance | 7 | | of group accident and health insurance shall,
insofar as | 8 | | applicable, control the issuance of such policies issued to
| 9 | | schools.
| 10 | | (5) No policy of group accident and health insurance may be | 11 | | issued
or delivered in this State unless it provides that upon | 12 | | the death of the
insured employee or group member the | 13 | | dependents' coverage, if any,
continues for a period of at | 14 | | least 90 days subject to any other policy
provisions relating | 15 | | to termination of dependents' coverage.
| 16 | | (6) No group hospital policy covering miscellaneous | 17 | | hospital
expenses issued or delivered in this State shall | 18 | | contain any exception
or exclusion from coverage which would | 19 | | preclude the payment of expenses
incurred for the processing | 20 | | and administration of blood and its
components.
| 21 | | (7) No policy of group accident and health insurance, | 22 | | delivered in
this State more than 120 days after the effective | 23 | | day of the Section,
which provides inpatient hospital coverage | 24 | | for sicknesses shall exclude
from such coverage the treatment | 25 | | of alcoholism. This subsection shall
not apply to a policy | 26 | | which covers only specified sicknesses.
|
| | | 09700HB1501ham001 | - 12 - | LRB097 08008 RPM 51900 a |
|
| 1 | | (8) No policy of group accident and health insurance, which
| 2 | | provides benefits for hospital or medical expenses based upon | 3 | | the actual
expenses incurred, issued or delivered in this State | 4 | | shall contain any
specific exception to coverage which would | 5 | | preclude the payment of
actual expenses incurred in the | 6 | | examination and testing of a victim of
an offense defined in | 7 | | Sections 12-13 through 12-16 of the Criminal Code
of 1961, or | 8 | | an attempt to commit such offense,
to establish that sexual | 9 | | contact did occur or did not occur, and to
establish the | 10 | | presence or absence of sexually transmitted
disease or | 11 | | infection, and
examination and treatment of injuries and trauma | 12 | | sustained by the victim of
such offense, arising out of the | 13 | | offense. Every group policy of accident
and health insurance | 14 | | which specifically provides benefits for routine
physical | 15 | | examinations shall provide full coverage for expenses incurred | 16 | | in
the examination and testing of a victim of an offense | 17 | | defined in Sections
12-13 through 12-16 of the Criminal Code of | 18 | | 1961, or an attempt to commit such
offense, as set forth in | 19 | | this
Section. This subsection shall not apply to a policy which | 20 | | covers hospital
and medical expenses for specified illnesses | 21 | | and injuries only.
| 22 | | (9) For purposes of enabling the recovery of State funds, | 23 | | any insurance
carrier subject to this Section shall upon | 24 | | reasonable demand by the Department
of Public Health disclose | 25 | | the names and identities of its insureds entitled
to benefits | 26 | | under this provision to the Department of Public Health |
| | | 09700HB1501ham001 | - 13 - | LRB097 08008 RPM 51900 a |
|
| 1 | | whenever
the Department of Public Health has determined that it | 2 | | has paid, or is about
to pay, hospital or medical expenses for | 3 | | which an insurance carrier is liable
under this Section. All | 4 | | information received by the Department of Public
Health under | 5 | | this provision shall be held on a confidential basis and shall
| 6 | | not be subject to subpoena and shall not be made public by the | 7 | | Department
of Public Health or used for any purpose other than | 8 | | that authorized by this
Section.
| 9 | | (10) Whenever the Department of Public Health finds that it | 10 | | has paid all
or part of any hospital or medical expenses which | 11 | | an insurance carrier is
obligated to pay under this Section, | 12 | | the Department of Public Health shall
be entitled to receive | 13 | | reimbursement for its payments from such insurance
carrier | 14 | | provided that the Department of Public Health has notified the
| 15 | | insurance carrier of its claim before the carrier has paid the | 16 | | benefits to
its insureds or the insureds' assignees.
| 17 | | (11) (a) No group hospital, medical or surgical expense
| 18 | | policy shall contain any provision whereby benefits | 19 | | otherwise payable
thereunder are subject to reduction | 20 | | solely on account of the existence
of similar benefits | 21 | | provided under other group or group-type accident
and | 22 | | sickness insurance policies where such reduction would | 23 | | operate to
reduce total benefits payable under these | 24 | | policies below an amount equal
to 100% of total allowable | 25 | | expenses provided under these policies.
| 26 | | (b) When dependents of insureds are covered under 2 |
| | | 09700HB1501ham001 | - 14 - | LRB097 08008 RPM 51900 a |
|
| 1 | | policies, both
of which contain coordination of benefits | 2 | | provisions, benefits of the
policy of the insured whose | 3 | | birthday falls earlier in the year are
determined before | 4 | | those of the policy of the insured whose birthday falls
| 5 | | later in the year. Birthday, as used herein, refers only to | 6 | | the month and
day in a calendar year, not the year in which | 7 | | the person was born. The
Department of Insurance shall | 8 | | promulgate rules defining the order of
benefit | 9 | | determination pursuant to this paragraph (b).
| 10 | | (12) Every group policy under this Section shall be subject | 11 | | to the
provisions of Sections 356g and 356n of this Code.
| 12 | | (13) No accident and health insurer providing coverage for | 13 | | hospital
or medical expenses on an expense incurred basis shall | 14 | | deny
reimbursement for an otherwise covered expense incurred | 15 | | for any organ
transplantation procedure solely on the basis | 16 | | that such procedure is deemed
experimental or investigational | 17 | | unless supported by the determination of
the Office of Health | 18 | | Care Technology Assessment within the Agency for
Health Care | 19 | | Policy and Research within the federal Department of Health and
| 20 | | Human Services that such procedure is either experimental or | 21 | | investigational or
that there is insufficient data or | 22 | | experience to determine whether an organ
transplantation | 23 | | procedure is clinically acceptable. If an accident and
health | 24 | | insurer has made written request, or had one made on its behalf | 25 | | by a
national organization, for determination by the Office of | 26 | | Health Care
Technology Assessment within the Agency for Health |
| | | 09700HB1501ham001 | - 15 - | LRB097 08008 RPM 51900 a |
|
| 1 | | Care Policy and Research
within the federal Department of | 2 | | Health and Human Services as to whether a
specific organ | 3 | | transplantation procedure is clinically acceptable and said
| 4 | | organization fails to respond to such a request within a period | 5 | | of 90 days,
the failure to act may be deemed a determination | 6 | | that the procedure is
deemed to be experimental or | 7 | | investigational.
| 8 | | (14) Whenever a claim for benefits by an insured under a | 9 | | dental
prepayment program is denied or reduced, based on the | 10 | | review of x-ray
films, such review must be performed by a | 11 | | dentist.
| 12 | | (Source: P.A. 91-549, eff. 8-14-99.)
| 13 | | Section 10. The Health Maintenance Organization Act is | 14 | | amended by changing Section 5-3 and by adding Section 2-11.1 as | 15 | | follows: | 16 | | (215 ILCS 125/2-11.1 new) | 17 | | Sec. 2-11.1. Premium rates; filing and prior approval. | 18 | | (a) Notwithstanding any other provision of law, no group or | 19 | | individual contract or evidence of coverage shall be issued or | 20 | | delivered in this State until the schedule of base rates to be | 21 | | used in conjunction with the contract or evidence of coverage | 22 | | has been filed with the Director; nor shall it be issued or | 23 | | delivered until the Director shall have approved such base | 24 | | rates pursuant to the provisions of Section 355.01 of the |
| | | 09700HB1501ham001 | - 16 - | LRB097 08008 RPM 51900 a |
|
| 1 | | Illinois Insurance Code. Any subsequent addition to or change | 2 | | in rates is also subject to this Section. | 3 | | (b) A filing of rates under this Section shall not be | 4 | | complete unless it contains all information necessary to | 5 | | justify the premium rate and such other information as the | 6 | | Director may require to determine the rate's compliance with | 7 | | Section 355.01 of the Illinois Insurance Code. Each rate filing | 8 | | must also include a certification by a qualified actuary that | 9 | | to the best of the actuary's knowledge and judgment the rate | 10 | | filing is in compliance with the applicable laws and | 11 | | regulations of this State and that the benefits are reasonable | 12 | | in relation to premiums. | 13 | | (c) With respect to rate changes, the filing under this | 14 | | Section shall clearly indicate the percentage change from the | 15 | | previously filed rate and the percentage change from the rate | 16 | | that was in effect 12 months prior to the proposed effective | 17 | | date of such rate. The filing shall also include, in a form | 18 | | prescribed by the Director, a summary of the rate change and a | 19 | | written description justifying the rate change, which the | 20 | | Department shall make publicly available on its website. | 21 | | (d) In addition to filing premium rates, a health | 22 | | maintenance organization shall notify the Director whenever a | 23 | | plan subject to this Section has been closed for sale.
| 24 | | (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
| 25 | | Sec. 5-3. Insurance Code provisions.
|
| | | 09700HB1501ham001 | - 17 - | LRB097 08008 RPM 51900 a |
|
| 1 | | (a) Health Maintenance Organizations
shall be subject to | 2 | | the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, | 3 | | 141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, | 4 | | 154.6,
154.7, 154.8, 155.04, 355.01, 355.2, 356g.5-1, 356m, | 5 | | 356v, 356w, 356x, 356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, | 6 | | 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, | 7 | | 356z.17, 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, | 8 | | 368c, 368d, 368e, 370c,
401, 401.1, 402, 403, 403A,
408, 408.2, | 9 | | 409, 412, 444,
and
444.1,
paragraph (c) of subsection (2) of | 10 | | Section 367, and Articles IIA, VIII 1/2,
XII,
XII 1/2, XIII, | 11 | | XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
| 12 | | (b) For purposes of the Illinois Insurance Code, except for | 13 | | Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health | 14 | | Maintenance Organizations in
the following categories are | 15 | | deemed to be "domestic companies":
| 16 | | (1) a corporation authorized under the
Dental Service | 17 | | Plan Act or the Voluntary Health Services Plans Act;
| 18 | | (2) a corporation organized under the laws of this | 19 | | State; or
| 20 | | (3) a corporation organized under the laws of another | 21 | | state, 30% or more
of the enrollees of which are residents | 22 | | of this State, except a
corporation subject to | 23 | | substantially the same requirements in its state of
| 24 | | organization as is a "domestic company" under Article VIII | 25 | | 1/2 of the
Illinois Insurance Code.
| 26 | | (c) In considering the merger, consolidation, or other |
| | | 09700HB1501ham001 | - 18 - | LRB097 08008 RPM 51900 a |
|
| 1 | | acquisition of
control of a Health Maintenance Organization | 2 | | pursuant to Article VIII 1/2
of the Illinois Insurance Code,
| 3 | | (1) the Director shall give primary consideration to | 4 | | the continuation of
benefits to enrollees and the financial | 5 | | conditions of the acquired Health
Maintenance Organization | 6 | | after the merger, consolidation, or other
acquisition of | 7 | | control takes effect;
| 8 | | (2)(i) the criteria specified in subsection (1)(b) of | 9 | | Section 131.8 of
the Illinois Insurance Code shall not | 10 | | apply and (ii) the Director, in making
his determination | 11 | | with respect to the merger, consolidation, or other
| 12 | | acquisition of control, need not take into account the | 13 | | effect on
competition of the merger, consolidation, or | 14 | | other acquisition of control;
| 15 | | (3) the Director shall have the power to require the | 16 | | following
information:
| 17 | | (A) certification by an independent actuary of the | 18 | | adequacy
of the reserves of the Health Maintenance | 19 | | Organization sought to be acquired;
| 20 | | (B) pro forma financial statements reflecting the | 21 | | combined balance
sheets of the acquiring company and | 22 | | the Health Maintenance Organization sought
to be | 23 | | acquired as of the end of the preceding year and as of | 24 | | a date 90 days
prior to the acquisition, as well as pro | 25 | | forma financial statements
reflecting projected | 26 | | combined operation for a period of 2 years;
|
| | | 09700HB1501ham001 | - 19 - | LRB097 08008 RPM 51900 a |
|
| 1 | | (C) a pro forma business plan detailing an | 2 | | acquiring party's plans with
respect to the operation | 3 | | of the Health Maintenance Organization sought to
be | 4 | | acquired for a period of not less than 3 years; and
| 5 | | (D) such other information as the Director shall | 6 | | require.
| 7 | | (d) The provisions of Article VIII 1/2 of the Illinois | 8 | | Insurance Code
and this Section 5-3 shall apply to the sale by | 9 | | any health maintenance
organization of greater than 10% of its
| 10 | | enrollee population (including without limitation the health | 11 | | maintenance
organization's right, title, and interest in and to | 12 | | its health care
certificates).
| 13 | | (e) In considering any management contract or service | 14 | | agreement subject
to Section 141.1 of the Illinois Insurance | 15 | | Code, the Director (i) shall, in
addition to the criteria | 16 | | specified in Section 141.2 of the Illinois
Insurance Code, take | 17 | | into account the effect of the management contract or
service | 18 | | agreement on the continuation of benefits to enrollees and the
| 19 | | financial condition of the health maintenance organization to | 20 | | be managed or
serviced, and (ii) need not take into account the | 21 | | effect of the management
contract or service agreement on | 22 | | competition.
| 23 | | (f) Except for small employer groups as defined in the | 24 | | Small Employer
Rating, Renewability and Portability Health | 25 | | Insurance Act and except for
medicare supplement policies as | 26 | | defined in Section 363 of the Illinois
Insurance Code, a Health |
| | | 09700HB1501ham001 | - 20 - | LRB097 08008 RPM 51900 a |
|
| 1 | | Maintenance Organization may by contract agree with a
group or | 2 | | other enrollment unit to effect refunds or charge additional | 3 | | premiums
under the following terms and conditions:
| 4 | | (i) the amount of, and other terms and conditions with | 5 | | respect to, the
refund or additional premium are set forth | 6 | | in the group or enrollment unit
contract agreed in advance | 7 | | of the period for which a refund is to be paid or
| 8 | | additional premium is to be charged (which period shall not | 9 | | be less than one
year); and
| 10 | | (ii) the amount of the refund or additional premium | 11 | | shall not exceed 20%
of the Health Maintenance | 12 | | Organization's profitable or unprofitable experience
with | 13 | | respect to the group or other enrollment unit for the | 14 | | period (and, for
purposes of a refund or additional | 15 | | premium, the profitable or unprofitable
experience shall | 16 | | be calculated taking into account a pro rata share of the
| 17 | | Health Maintenance Organization's administrative and | 18 | | marketing expenses, but
shall not include any refund to be | 19 | | made or additional premium to be paid
pursuant to this | 20 | | subsection (f)). The Health Maintenance Organization and | 21 | | the
group or enrollment unit may agree that the profitable | 22 | | or unprofitable
experience may be calculated taking into | 23 | | account the refund period and the
immediately preceding 2 | 24 | | plan years.
| 25 | | The Health Maintenance Organization shall include a | 26 | | statement in the
evidence of coverage issued to each enrollee |
| | | 09700HB1501ham001 | - 21 - | LRB097 08008 RPM 51900 a |
|
| 1 | | describing the possibility of a
refund or additional premium, | 2 | | and upon request of any group or enrollment unit,
provide to | 3 | | the group or enrollment unit a description of the method used | 4 | | to
calculate (1) the Health Maintenance Organization's | 5 | | profitable experience with
respect to the group or enrollment | 6 | | unit and the resulting refund to the group
or enrollment unit | 7 | | or (2) the Health Maintenance Organization's unprofitable
| 8 | | experience with respect to the group or enrollment unit and the | 9 | | resulting
additional premium to be paid by the group or | 10 | | enrollment unit.
| 11 | | In no event shall the Illinois Health Maintenance | 12 | | Organization
Guaranty Association be liable to pay any | 13 | | contractual obligation of an
insolvent organization to pay any | 14 | | refund authorized under this Section.
| 15 | | (g) Rulemaking authority to implement Public Act 95-1045, | 16 | | if any, is conditioned on the rules being adopted in accordance | 17 | | with all provisions of the Illinois Administrative Procedure | 18 | | Act and all rules and procedures of the Joint Committee on | 19 | | Administrative Rules; any purported rule not so adopted, for | 20 | | whatever reason, is unauthorized. | 21 | | (Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; | 22 | | 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; | 23 | | 95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. | 24 | | 1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff. | 25 | | 6-1-10; 96-1000, eff. 7-2-10.)
|
| | | 09700HB1501ham001 | - 22 - | LRB097 08008 RPM 51900 a |
|
| 1 | | Section 99. Effective date. This Act takes effect January | 2 | | 1, 2012.".
|
|