Full Text of HB2624 100th General Assembly
HB2624eng 100TH GENERAL ASSEMBLY |
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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 1. Short title. This Act may be cited as the Health | 5 | | Insurance Rate Review Act. | 6 | | Section 5. Definitions. For the purposes of this Act: | 7 | | "Board" means the Health Insurance Rate Review Board.
| 8 | | "Director" means the Director of Insurance.
| 9 | | "Health benefit plan" means a policy, contract, | 10 | | certificate, plan, or agreement offered or issued by a health | 11 | | carrier to provide, deliver, arrange for, pay for, or reimburse | 12 | | any of the costs of health care services. | 13 | | "Health care services" means services for the diagnosis, | 14 | | prevention, treatment, cure, or relief of a health condition, | 15 | | illness, injury or disease.
| 16 | | "Health carrier" means an entity subject to the insurance | 17 | | laws and regulations of this State, or subject to the | 18 | | jurisdiction of the Director, that contracts or offers to | 19 | | contract to provide, deliver, arrange for, pay for, or | 20 | | reimburse any of the costs of health care services, including a | 21 | | sickness and accident insurance company, a health maintenance | 22 | | organization, or any other entity providing a plan of health | 23 | | insurance, health benefits, or health care services. "Health |
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| 1 | | carrier" also means Limited Health Service Organizations and | 2 | | Voluntary Health Service Plans. | 3 | | "Insured" means an individual who is enrolled in or | 4 | | otherwise participating in a health benefit plan. | 5 | | "Rate" means premium, deductible, co-payment, or any other | 6 | | amount that the health carrier requires its policyholders to | 7 | | pay.
| 8 | | "Supplementary rating information" means any manual, | 9 | | rating schedule, plan of rules, rating rules, classification | 10 | | systems, territory codes and descriptions, rating plans, and | 11 | | other similar information used by the insurer or health | 12 | | maintenance organization to determine the applicable rates for | 13 | | an insured. The term includes factors and relativities, | 14 | | including increased limits factors, classification | 15 | | relativities, deductible relativities, premium discount, and | 16 | | other similar factors and rating plans such as experience, | 17 | | schedule, and retrospective rating. | 18 | | Section 10. Health Insurance Rate Review Board. | 19 | | (a) There is created the Health Insurance Rate Review Board | 20 | | independent of the Department of Insurance to ensure insurance | 21 | | rates are reasonable and justified. The Board shall be a | 22 | | quasi-judicial body.
The Board shall consist of 5 persons | 23 | | appointed, with the advice and consent of the Senate, by the | 24 | | Governor with the assistance of a Nomination Panel. The term of | 25 | | each member of the Board shall be 4 years.
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| 1 | | (b) No member of the Board shall be involved in the | 2 | | operation or management of, have a pecuniary interest or a | 3 | | direct financial interest in, or be otherwise employed by a | 4 | | health carrier or any other organization or entity regulated by | 5 | | the Department of Insurance.
| 6 | | (c) Each member of the Board shall devote his or her entire | 7 | | time to the duties of his or her office, and shall hold no | 8 | | other office or position of profit, or engage in any other | 9 | | business, employment, or vocation.
| 10 | | (d) No member of the Board or person employed by the Board | 11 | | shall solicit or accept any gift, gratuity, emolument, or | 12 | | employment from any person or corporation subject to the | 13 | | supervision of the Board, or from any officer, agent, or | 14 | | employee thereof; nor solicit, request from, or recommend, | 15 | | directly or indirectly, to any such person or corporation, and | 16 | | every officer, agent, or employee thereof, the appointment of | 17 | | any persons to any place or position. If any Board member or | 18 | | person employed by the Board violates any provisions of this | 19 | | subsection (d), then he or she shall be removed from the Board | 20 | | or employment. Every person violating the provisions of this | 21 | | subsection (d) shall be guilty of a Class A misdemeanor.
| 22 | | (e) No former member of the Board or person formerly | 23 | | employed by the Board may represent any person before the Board | 24 | | in any capacity with respect to any particular Board proceeding | 25 | | in which he or she participated personally and substantially as | 26 | | a member or employee of the Board.
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| 1 | | (f) No former member of the Board may appear before the | 2 | | Board in connection with any Board proceeding for a period of 2 | 3 | | years following the termination of service with the Board.
| 4 | | (g) No former member of the Board may accept any employment | 5 | | for 2 years following the termination of services with the | 6 | | Board with any entity subject to Board regulation or with any | 7 | | industry trade association that (1) receives a majority of its | 8 | | funding from entities regulated by the Board or (ii) has a | 9 | | majority of members regulated by the Board.
| 10 | | (h) No entity subject to Board regulation or trade | 11 | | association that (i) receives a majority of its funding from | 12 | | entities regulated by the Board or (ii) has a majority of | 13 | | members regulated by the Board shall offer a former member of | 14 | | the Board employment for a period of 2 years following the | 15 | | termination of member's services with the Board, or otherwise | 16 | | hire such person as an agent, consultant, or attorney where | 17 | | such employment or contractual relation would be in violation | 18 | | of this Act.
| 19 | | (i) The Board shall employ employees as may be necessary to | 20 | | carry out the provisions of this Act or to perform duties and | 21 | | exercise the powers conferred by law upon the Board.
| 22 | | (j) The Board shall adopt rules that the Board considers | 23 | | necessary to carry out the provisions of this Act or to perform | 24 | | duties and exercise the powers conferred by law upon the Board.
| 25 | | Section 15. Nomination panel. |
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| 1 | | (a) The Health Insurance Rate Review Board Nomination Panel | 2 | | is established to provide a list of nominees to the Governor | 3 | | for appointment to the Health Insurance Rate Review Board.
| 4 | | The Panel shall consist of 5 members. Members of the Panel | 5 | | must be appointed by majority vote of the following appointing | 6 | | authorities: the Governor, the Director, and the Attorney | 7 | | General.
The term of each member of the Panel shall be 4 years. | 8 | | The Panel shall solicit recommendations from consumer | 9 | | advocates, health providers, insurers, and business advocates. | 10 | | Candidates for nomination to the Health Insurance Rate | 11 | | Review Board may apply or be nominated. The Panel has 30 days | 12 | | after it is established to accept applications and nominations. | 13 | | All candidates must fill out a written application and submit | 14 | | to a background investigation to be eligible for consideration. | 15 | | The written application must include a sworn statement signed | 16 | | by the candidate disclosing communications relating to the | 17 | | regulation of health insurance, managed care plans, and health | 18 | | maintenance organizations that the applicant has engaged in | 19 | | within the last year with a constitutional officer, a member of | 20 | | the General Assembly, an officer or other employee of the | 21 | | executive branch of the State, or an employee of the | 22 | | legislative branch of this State.
| 23 | | A person who provides false or misleading information on | 24 | | the application or fails to disclose a communication required | 25 | | to be disclosed in the sworn statement under this Section is | 26 | | guilty of a Class 4 felony.
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| 1 | | Once an application is submitted to the Nomination Panel | 2 | | and until (i) the candidate is rejected by the Nomination | 3 | | Panel, (ii) the candidate is rejected by the Governor, (iii) | 4 | | the candidate is rejected by the Senate, or (iv) the candidate | 5 | | is confirmed by the Senate, whichever is applicable, a | 6 | | candidate may not engage in ex parte communications.
| 7 | | Within 60 days after the Nomination Panel is established, | 8 | | the Nomination Panel must review written applications, | 9 | | determine eligibility for oral interviews, confirm | 10 | | satisfactory background investigations, and hold public | 11 | | hearings on qualifications of the candidates. Initial | 12 | | interviews of candidates need not be held in meetings subject | 13 | | to the Open Meetings Act; members or staff may arrange for | 14 | | informal interviews. Prior to recommendation, however, the | 15 | | Nomination Panel must question candidates under oath in a | 16 | | meeting subject to the Open Meetings Act.
| 17 | | The Nomination Panel must recommend 10 nominees for | 18 | | appointment to the Health Insurance Rate Review Board within 60 | 19 | | days after the Nomination Panel is established. The Governor | 20 | | may choose only from these nominations. The Nomination Panel | 21 | | shall deliver a list of the nominees, including a memorandum | 22 | | detailing the nominees' qualifications, to the Governor. After | 23 | | submitting the list to the Governor, the Nomination Panel shall | 24 | | file a copy along with a statement confirming delivery of the | 25 | | list and memorandum to the Governor with the Secretary of | 26 | | State. The Secretary of State shall indicate the date and time |
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| 1 | | of filing.
| 2 | | After reviewing the nominations, the Governor may select 5 | 3 | | nominees, including the chairperson, for appointment to the | 4 | | Health Insurance Rate Review Board, to be confirmed by the | 5 | | Senate. The Governor shall file the names of his or her | 6 | | appointments with the Senate and the Secretary of State. The | 7 | | Secretary of State shall indicate the date and time of filing.
| 8 | | The Governor shall have 30 days from the date the | 9 | | Nomination Panel files its list of nominees with the Secretary | 10 | | of State to make appointments to be confirmed by the Senate. If | 11 | | the Governor does not select all appointees within the 30 days, | 12 | | the Nomination Panel may appoint those members not yet selected | 13 | | for appointment by the Governor. The Nomination Panel shall | 14 | | file the names of its appointments with the Senate and the | 15 | | Secretary of State. The Secretary of State shall indicate the | 16 | | date and time of filing.
| 17 | | Appointments by the Governor or Nomination Panel must be | 18 | | confirmed by the Senate by two-thirds of its members by record | 19 | | vote. Any appointment not acted upon within 30 calendar days | 20 | | after the date of filing the names of appointments with the | 21 | | Secretary of State shall be deemed to have received the advice | 22 | | and consent of the Senate.
| 23 | | (b) When a vacancy occurs on the Health Insurance Rate | 24 | | Review Board, the Nomination Panel shall accept applications | 25 | | and nominations of candidates for 30 days from the date the | 26 | | vacancy occurs. All candidates must fill out a written |
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| 1 | | application and submit to a background investigation to be | 2 | | eligible for consideration. The written application must | 3 | | include a sworn statement signed by the candidate disclosing | 4 | | communications relating to the regulation of health insurance, | 5 | | managed care plans, and health maintenance organizations that | 6 | | the applicant engaged in within the last year with a | 7 | | constitutional officer, a member of the General Assembly, an | 8 | | officer or other employee of the executive branch of this | 9 | | State, or an employee of the legislative branch of this State.
| 10 | | A person who provides false or misleading information on | 11 | | the application or fails to disclose a communication required | 12 | | to be disclosed in the sworn statement under this Section is | 13 | | guilty of a Class 4 felony.
| 14 | | Once an application is submitted to the Nomination Panel | 15 | | and until (i) the candidate is rejected by the Nomination | 16 | | Panel, (ii) the candidate is rejected by the Governor, (iii) | 17 | | the candidate is rejected by the Senate, or (iv) the candidate | 18 | | is confirmed by the Senate, whichever is applicable, a | 19 | | candidate may not engage in ex parte communications.
| 20 | | The Nomination Panel must review written applications, | 21 | | determine eligibility for oral interviews, confirm | 22 | | satisfactory background investigations, and hold public | 23 | | hearings on the qualifications of the candidates. Initial | 24 | | interviews of candidates need not be held in meetings subject | 25 | | to the Open Meetings Act; members or staff may arrange for | 26 | | informal interviews. Prior to recommendation, however, the |
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| 1 | | Nomination Panel must question candidates under oath in a | 2 | | meeting subject to the Open Meetings Act.
| 3 | | The Nomination Panel must recommend 2 nominees for the | 4 | | vacancy within 60 days after the vacancy occurs. Within 30 days | 5 | | after the Nomination Panel's recommendation, the Governor | 6 | | shall appoint one of the nominees to fill the vacancy for the | 7 | | remainder of the unexpired term. If the Governor does not fill | 8 | | the vacancy within the 30 days, the Nomination Panel may make | 9 | | the appointment. Vacancies shall be confirmed by the Senate in | 10 | | the same manner as full-term appointments
| 11 | | Section 20. Filing and approval of rates and rate | 12 | | schedules. | 13 | | (a) Notwithstanding any law to the contrary, a health | 14 | | carrier may not deliver or issue for delivery any health | 15 | | benefit plan after the effective date of this Act unless:
| 16 | | (1) the health carrier has filed with the Health | 17 | | Insurance Rate Review Board:
| 18 | | (a) all current and proposed rates and rate | 19 | | schedules of the health benefit plan; and
| 20 | | (b) if filing changes to a previously approved rate | 21 | | or rate schedule:
| 22 | | (i) proposed changes to the rate or rate | 23 | | schedule;
| 24 | | (ii) an explanation of the changes;
| 25 | | (iii) financial information describing the |
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| 1 | | basis for the proposed changes;
| 2 | | (iv) the rate of return anticipated if the rate | 3 | | or rate schedule is approved;
| 4 | | (v) the average rate increase or decrease | 5 | | anticipated per insured;
| 6 | | (vi) the medical loss ratio reserves and | 7 | | surpluses anticipated if the rate or rate schedule | 8 | | is approved;
| 9 | | (vii) a summary of the health carrier's | 10 | | nonmedical expenses for the most recent fiscal | 11 | | year;
| 12 | | (viii) supplementary rating information;
| 13 | | (ix) any other information required by the | 14 | | Board by rule; and
| 15 | | (2) the Board has approved the rates and rate schedules | 16 | | of the health benefit plan.
| 17 | | (b) The Board shall review and approve or disapprove all | 18 | | rates and rate schedules filed or used by a health carrier or | 19 | | filed by a rating or advisory organization on behalf of a | 20 | | health carrier.
| 21 | | (c) Within 30 days after the date a rate or rate schedule | 22 | | is filed with the Board, the Board shall:
| 23 | | (1) approve the rate or rate schedule if the Board | 24 | | determines that the rate or rate schedule is not excessive, | 25 | | inadequate, or unfairly discriminatory; or
| 26 | | (2) disapprove the rate or rate schedule if the Board |
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| 1 | | determines the rate or rate schedule is excessive, | 2 | | inadequate, or unfairly discriminatory.
| 3 | | (d) Except as provided in subsection (e), if a rate or rate | 4 | | schedule has not been approved or disapproved by the Board | 5 | | before the expiration of the 30-day period, the rate or rate | 6 | | schedule is considered approved and the rate or rate schedule | 7 | | may be used.
| 8 | | (e) For good cause, the Board may, on expiration of the | 9 | | 30-day period, extend the period for approval or disapproval of | 10 | | a rate or rate schedule for one additional 30-day period.
| 11 | | (f) If the Board determines that the information filed by a | 12 | | health carrier under this Section is incomplete or otherwise | 13 | | deficient, the Board may request additional information from | 14 | | the health carrier. If the Board requests additional | 15 | | information from the insurer during the 30-day period provided | 16 | | in subsection (c) or under a second 30-day period provided | 17 | | under subsection (e), then the time between the date the that | 18 | | Board submits the request to the health carrier and the date | 19 | | that the Board receives the information requested is not | 20 | | included in the computation of the first 30-day period or the | 21 | | second 30-day period, as applicable.
| 22 | | Section 25. Rate standards. | 23 | | (a) A rate or rate schedule is excessive if the rate or | 24 | | rate schedule is likely to produce a long-term profit that is | 25 | | unreasonably high in relation to the insurance coverage |
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| 1 | | provided.
| 2 | | (b) A rate or rate schedule is inadequate if:
| 3 | | (1) the rate or rate schedule is insufficient to | 4 | | sustain projected losses and expenses to which the rate | 5 | | applies; and
| 6 | | (2) the continued use of the rate or rate schedule:
| 7 | | (a) endangers the solvency of an insurer using the | 8 | | rate or rate schedule; or
| 9 | | (b) has the effect of substantially lessening | 10 | | competition or creating a monopoly in a market.
| 11 | | (c) A rate or rate schedule is unfairly discriminatory if | 12 | | the rate or rate schedule:
| 13 | | (1) is not based on sound actuarial principles;
| 14 | | (2) does not bear a reasonable relationship to the | 15 | | expected loss and expense experience among risks; or
| 16 | | (3) is based wholly or partly on the race, creed, | 17 | | color, ethnicity, or national origin of the policyholder or | 18 | | an insured.
| 19 | | Section 30. Public notice of filing. | 20 | | (a) The Board must issue a notice to the public within 7 | 21 | | days after a filing for approval of a rate or rate schedule is | 22 | | received by the Board. The notice must include:
| 23 | | (1) the filing health carrier;
| 24 | | (2) the current rate or rate schedule;
| 25 | | (3) the proposed rate or rate schedule;
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| 1 | | (4) notice that a consumer who is aggrieved by the rate | 2 | | change may request a hearing on the proposed change within | 3 | | 30 days after the proposed change has been filed;
and | 4 | | (5) address and contact information of the Board.
| 5 | | Section 35. Hearings on proposed changes. | 6 | | (a) Within 30 days after the proposed change to a rate or | 7 | | rate schedule has been filed, the Board may request a hearing | 8 | | on the filing to hear testimony on the filing.
| 9 | | (b) Within 30 days after the proposed change has been | 10 | | filed, any person who is aggrieved with respect to any filing | 11 | | under this Act, the Director, or any public official charged | 12 | | with protecting insurance consumers may submit a request in | 13 | | writing to the Board for a hearing on the filing. The request | 14 | | must specify the grounds for the requester's grievance.
| 15 | | (c) The Board must hold a hearing as requested under | 16 | | subsection (b) not later than 30 days after the date the Board | 17 | | receives the request for hearing if the Board determines that:
| 18 | | (1) the request is made in good faith;
| 19 | | (2) the requester would be aggrieved as alleged if the | 20 | | grounds specified in request were established; and
| 21 | | (3) the grounds specified in the request otherwise | 22 | | justify holding the hearing.
| 23 | | (d) The Board must provide written notice of a hearing to | 24 | | the requester, if any, and each affected health carrier not | 25 | | later than 10 days before the date of the hearing. The Board |
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| 1 | | shall also provide public notice of the hearing not later than | 2 | | 10 days before the date of the hearing.
| 3 | | (e) If, after the hearing, the Board disapproves of the | 4 | | filing, the Board shall issue an order:
| 5 | | (1) specifying in what respects the filing fails to | 6 | | meet those requirements; and
| 7 | | (2) stating the date on which the filing is no longer | 8 | | in effect, which must be within a reasonable period after | 9 | | the order date.
| 10 | | The Board must send copies of the order to the requester, | 11 | | if any, and each affected health carrier.
| 12 | | Section 40. Hearings on filings in effect. | 13 | | (a) The Board may disapprove a rate or rate schedule that | 14 | | is in effect only after a hearing. The Board must provide the | 15 | | filer at least 20 days written notice of the hearing.
| 16 | | The Board must issue an order disapproving a rate or rate | 17 | | schedule under this subsection (a) within 15 days after the | 18 | | close of the hearing. The order must:
| 19 | | (1) specify in what respects the filing fails to meet | 20 | | those requirements; and
| 21 | | (2) state the date on which further use of the rate or | 22 | | rate schedule is prohibited.
| 23 | | (b) Any person who is aggrieved with respect to any filing | 24 | | under this Act that is in effect, the Director, or any public | 25 | | official charged with protecting insurance consumers may apply |
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| 1 | | to the Board in writing for a hearing on the filing. The | 2 | | request must specify the grounds for the requester's grievance.
| 3 | | (c) The Board must hold a hearing as requested under | 4 | | subsection (b) not later than 30 days after the date the Board | 5 | | receives the request for hearing if the Board determines that:
| 6 | | (1) the request is made in good faith;
| 7 | | (2) the requester would be aggrieved as alleged if the | 8 | | grounds specified in request were established; and
| 9 | | (3) the grounds specified in the request otherwise | 10 | | justify holding the hearing.
| 11 | | (d) The Board must provide written notice of a hearing to | 12 | | the requester, if any, and each affected health carrier not | 13 | | later than 10 days before the date of the hearing. The Board | 14 | | shall also provide public notice of the hearing not later than | 15 | | 10 days before the date of the hearing.
| 16 | | (e) If, after the hearing, the Board disapproves of the | 17 | | filing, the Board shall issue an order:
| 18 | | (1) specifying in what respects the filing fails to | 19 | | meet those requirements; and
| 20 | | (2) stating the date on which the filing is no longer | 21 | | in effect, which must be within a reasonable period after | 22 | | the order date.
| 23 | | The Board must send copies of the order to the requester, | 24 | | if any, and each affected health carrier. | 25 | | Section 45. Disapproval of rate or rate schedule. |
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| 1 | | (a) If the Board disapproves a filing under this Act, then | 2 | | the Board shall issue an order specifying in what respects the | 3 | | filing fails to meet the requirements of this Act.
| 4 | | (b) The aggrieved filer is entitled to a hearing on written | 5 | | request made to the Board within 30 days after the date the | 6 | | order disapproving the rate or rate schedule filing takes | 7 | | effect.
| 8 | | Section 50. Approval of rate or rate schedule; use of the | 9 | | approved rate or rate schedule. If the board approves a rate or | 10 | | rate schedule filing under this Act, the Board shall provide | 11 | | the health carrier with a written or electronic notification of | 12 | | the approval. The health carrier may use the rate or rate | 13 | | schedule on receipt of the approval notice. The Board shall | 14 | | provide public notice of its approval or disapproval of all | 15 | | filings.
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