Full Text of HB6644 093rd General Assembly
HB6644 93RD GENERAL ASSEMBLY
|
|
|
93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004 HB6644
Introduced 02/09/04, by Jay C. Hoffman SYNOPSIS AS INTRODUCED: |
|
215 ILCS 5/424 |
from Ch. 73, par. 1031 |
215 ILCS 97/50 |
|
215 ILCS 97/60 new |
|
|
Amends the Insurance Code. Provides that it is an unfair or deceptive practice to issue a new policy within an individual health insurance market after notice of withdrawal from that market has been given if that coverage was among the types of coverage for which notice of withdrawal was given. Amends the Illinois Health Insurance Portability and Accountability Act. Provides that a health insurance issuer may not discontinue coverage in an individual market in Illinois if a parent health insurance issuer that owns that health insurance issuer in whole or in part or a subsidiary health insurance issuer that is owned in whole or in part by that health insurance issuer continues selling health insurance in that market. Provides that a modification of coverage by a health insurance issuer is not uniform if a parent health insurance issuer that owns that health insurance issuer in whole or in part or a subsidiary health insurance issuer that is owned in whole or in part by that health insurance issuer does not make the same modification of coverage. Provides that if a health insurance issuer elects to uniformly modify coverage, uniformly terminate coverage, or discontinue coverage in a marketplace, the issuer shall provide notice to the Department of Insurance prior to notifying the plan sponsors, participants, beneficiaries, and covered individuals. Specifies information that shall be included in the notice.
Adds a severability clause. |
| |
|
|
A BILL FOR
|
|
|
|
|
HB6644 |
|
LRB093 19616 SAS 45357 b |
|
| 1 |
| AN ACT in relation to insurance.
| 2 |
| Be it enacted by the People of the State of Illinois, | 3 |
| represented in the General Assembly:
| 4 |
| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section 424 as
follows:
| 6 |
| (215 ILCS 5/424) (from Ch. 73, par. 1031)
| 7 |
| Sec. 424. Unfair methods of competition and unfair or | 8 |
| deceptive acts or
practices defined. The following are hereby | 9 |
| defined as unfair methods of
competition and unfair and | 10 |
| deceptive acts or practices in the business of
insurance:
| 11 |
| (1) The commission by any person of any one or more of the | 12 |
| acts
defined or prohibited by Sections 134, 143.24c, 147, 148, | 13 |
| 149, 151, 155.22,
155.22a,
236, 237, 364, and 469 of this Code.
| 14 |
| (2) Entering into any agreement to commit, or by any | 15 |
| concerted
action committing, any act of boycott, coercion or | 16 |
| intimidation
resulting in or tending to result in unreasonable | 17 |
| restraint of, or
monopoly in, the business of insurance.
| 18 |
| (3) Making or permitting, in the case of insurance of the | 19 |
| types
enumerated in Classes 1, 2, and 3 of Section 4, any | 20 |
| unfair discrimination
between individuals or risks of the same | 21 |
| class or of essentially the same
hazard and expense element | 22 |
| because of the race, color, religion, or national
origin of | 23 |
| such insurance risks or applicants. The application of this | 24 |
| Article
to the types of insurance enumerated in Class 1 of | 25 |
| Section 4 shall in no way
limit, reduce, or impair the | 26 |
| protections and remedies already provided for by
Sections 236 | 27 |
| and 364 of this Code or any other provision of this Code.
| 28 |
| (4) Engaging in any of the acts or practices defined in or | 29 |
| prohibited by
Sections 154.5 through 154.8 of this Code.
| 30 |
| (5) Making or charging any rate for insurance against | 31 |
| losses arising
from the use or ownership of a motor vehicle | 32 |
| which requires a higher
premium of any person by reason of his |
|
|
|
HB6644 |
- 2 - |
LRB093 19616 SAS 45357 b |
|
| 1 |
| physical handicap, race, color,
religion, or national origin.
| 2 |
| (6) Issuing a new policy within an individual health | 3 |
| insurance market
after notice of withdrawal from that market | 4 |
| has been given according to item
(i) of subparagraph (a) of | 5 |
| paragraph (2) of subsection (C) of Section 50 of the
Illinois | 6 |
| Health Insurance Portability and Accountability Act if that | 7 |
| coverage
was among the types of coverage for which notice of | 8 |
| withdrawal has been
given.
| 9 |
| (Source: P.A. 92-399, eff. 8-16-01; 92-651, eff. 7-11-02; | 10 |
| 92-669, eff.
1-1-03.)
| 11 |
| Section 10. The Illinois Health Insurance Portability and | 12 |
| Accountability Act
is amended by changing Section 50 and adding | 13 |
| Section 60 as follows:
| 14 |
| (215 ILCS 97/50)
| 15 |
| Sec. 50. Guaranteed renewability of individual health | 16 |
| insurance coverage.
| 17 |
| (A) In general. Except as provided in this Section, a | 18 |
| health insurance
issuer that provides individual health | 19 |
| insurance coverage to an individual
shall renew or continue in | 20 |
| force such coverage at the option of the individual.
| 21 |
| (B) General exceptions. A health insurance issuer may | 22 |
| nonrenew or
discontinue health insurance coverage of an | 23 |
| individual in the individual market
based only on one or more | 24 |
| of the following:
| 25 |
| (1) Nonpayment of premiums. The individual has failed | 26 |
| to pay premiums or
contributions in accordance with the | 27 |
| terms of the health insurance coverage or
the issuer has | 28 |
| not received timely premium payments.
| 29 |
| (2) Fraud. The individual has performed an act or | 30 |
| practice that
constitutes fraud or made an intentional | 31 |
| misrepresentation of material fact
under the terms of the | 32 |
| coverage.
| 33 |
| (3) Termination of plan. The issuer is ceasing to offer | 34 |
| coverage in the
individual market in accordance with |
|
|
|
HB6644 |
- 3 - |
LRB093 19616 SAS 45357 b |
|
| 1 |
| subsection (C) of this Section and
applicable Illinois law.
| 2 |
| (4) Movement outside the service area. In the case of a | 3 |
| health insurance
issuer that offers health insurance
| 4 |
| coverage in the market through a network plan, the | 5 |
| individual no longer
resides, lives, or works in the | 6 |
| service area (or in an area for which the
issuer is | 7 |
| authorized to do business), but only if such coverage is | 8 |
| terminated
under this paragraph uniformly without regard | 9 |
| to any health status-related
factor of covered | 10 |
| individuals.
| 11 |
| (5) Association membership ceases. In the case of | 12 |
| health insurance
coverage that is made available in the | 13 |
| individual market only through one or
more bona fide | 14 |
| associations, the membership of the individual in the
| 15 |
| association (on the basis of which the coverage is | 16 |
| provided) ceases, but only
if
such coverage is terminated | 17 |
| under this paragraph uniformly without regard to
any health | 18 |
| status-related factor of covered individuals.
| 19 |
| (C) Requirements for uniform termination of coverage.
| 20 |
| (1) Particular type of coverage not offered. In any | 21 |
| case in which an
issuer decides to discontinue offering a | 22 |
| particular type of health insurance
coverage offered in the | 23 |
| individual market, coverage of such type may be
| 24 |
| discontinued by
the issuer only if:
| 25 |
| (a) the issuer provides notice to each covered | 26 |
| individual provided
coverage of this type in such | 27 |
| market of such discontinuation at least 90 days
prior | 28 |
| to the date of the discontinuation of such coverage;
| 29 |
| (b) the issuer offers, to each individual in the | 30 |
| individual market
provided coverage of this type, the | 31 |
| option to purchase any other individual
health | 32 |
| insurance coverage currently being offered by the | 33 |
| issuer for individuals
in such market; and
| 34 |
| (c) in exercising the option to discontinue | 35 |
| coverage of that type and in
offering the option of | 36 |
| coverage under subparagraph (b), the issuer acts
|
|
|
|
HB6644 |
- 4 - |
LRB093 19616 SAS 45357 b |
|
| 1 |
| uniformly without regard to any health status-related | 2 |
| factor of enrolled
individuals or individuals who may | 3 |
| become eligible for such coverage.
| 4 |
| (2) Discontinuance of all coverage.
| 5 |
| (a) In general. Subject to subparagraph (c), in any | 6 |
| case in which a
health insurance issuer elects
to | 7 |
| discontinue offering all health insurance coverage in | 8 |
| the individual market
in Illinois, health insurance | 9 |
| coverage may be discontinued by the issuer only
if:
| 10 |
| (i) the issuer provides notice to the Director | 11 |
| and to each individual
of the discontinuation at | 12 |
| least 180 days prior to the date of the expiration
| 13 |
| of such coverage; and
| 14 |
| (ii) all health insurance issued or delivered | 15 |
| for issuance in Illinois
in such market is | 16 |
| discontinued and coverage under such health | 17 |
| insurance
coverage in such market is not renewed.
| 18 |
| (a-5) A health insurance issuer may not | 19 |
| discontinue
offering health insurance coverage in an | 20 |
| individual market in Illinois if
another health | 21 |
| insurance issuer in the same family of companies | 22 |
| continues
selling health insurance in that market.
Any | 23 |
| health insurance issuer that discontinued coverage | 24 |
| after January 1, 2001,
in such a way as to not comply | 25 |
| with this subparagraph (a-5) shall reunderwrite
all | 26 |
| policyholders affected by that discontinuation under | 27 |
| terms and conditions
identical to those enjoyed by the | 28 |
| affected policyholders immediately prior to
their | 29 |
| policies' discontinuation. The terms and conditions | 30 |
| include, but are not
limited to, any fees and | 31 |
| deductible amounts. To be reunderwritten under these
| 32 |
| terms and conditions, affected policyholders must | 33 |
| notify the relevant insurance
issuer in writing by | 34 |
| January 1, 2006, of their desire to be reunderwritten.
| 35 |
| (b) Prohibition on market reentry. In the case of a | 36 |
| discontinuation
under subparagraph (a) in the |
|
|
|
HB6644 |
- 5 - |
LRB093 19616 SAS 45357 b |
|
| 1 |
| individual market, the issuer may not provide for
the | 2 |
| issuance of any health insurance coverage in Illinois | 3 |
| involved during the
5-year period beginning on the date | 4 |
| of the discontinuation of the last health
insurance | 5 |
| coverage not so renewed.
| 6 |
| (D) Exception for uniform modification of coverage. At the | 7 |
| time of coverage
renewal, a health insurance issuer may modify | 8 |
| the health insurance coverage for
a policy form offered to | 9 |
| individuals in the individual market so long as the
| 10 |
| modification is consistent with Illinois law and effective on a | 11 |
| uniform basis
among all individuals with that policy form. A
| 12 |
| modification of coverage by a health insurance issuer is not | 13 |
| uniform if
another health insurance issuer in the same family | 14 |
| of companies does not make
the same modification of coverage.
| 15 |
| Any health insurance issuer that modified coverage after | 16 |
| January 1, 2001, in
such a way as to not comply with this | 17 |
| paragraph (D) shall reunderwrite all
policyholders affected by | 18 |
| that discontinuation under terms and conditions
identical to | 19 |
| those enjoyed by the affected policyholders immediately prior | 20 |
| to
their policies' modification. The terms and conditions | 21 |
| include, but are not
limited to, any fees and deductible | 22 |
| amounts. To be reunderwritten under these
terms and conditions, | 23 |
| affected policyholders must notify the relevant insurance
| 24 |
| issuer in writing by January 1, 2006.
| 25 |
| (E) Application to coverage offered only through | 26 |
| associations. In applying
this Section in the case of health | 27 |
| insurance coverage that is made available by
a health insurance | 28 |
| issuer in the individual market to individuals only through
one | 29 |
| or more associations, a reference to an "individual" is deemed | 30 |
| to include a
reference to such an association (of which the | 31 |
| individual is a member).
| 32 |
| (F) For the purpose of this Section:
| 33 |
| "Family of companies" means a business entity consisting of | 34 |
| a parent
company and any subidiaries in which the parent | 35 |
| company holds a 50% or greater
ownership stake.
| 36 |
| "Parent company" means a company identified by an employer |
|
|
|
HB6644 |
- 6 - |
LRB093 19616 SAS 45357 b |
|
| 1 |
| identification
number that holds a 50% or greater ownership | 2 |
| stake in one or more other
companies.
| 3 |
| "Subsidiary" means an insurance issuer licensed to do | 4 |
| business in the State
of Illinois and in which another company | 5 |
| holds a 50% or greater ownership
stake.
| 6 |
| (Source: P.A. 90-567, eff. 1-23-98.)
| 7 |
| (215 ILCS 97/60 new)
| 8 |
| Sec. 60. Notice requirement to the Department.
In any case | 9 |
| where a health insurance issuer elects to uniformly modify
| 10 |
| coverage, uniformly terminate coverage, or discontinue | 11 |
| coverage in a
marketplace in accordance with Sections 30 and 50 | 12 |
| of this Act, the issuer shall
provide notice to the Department | 13 |
| prior to notifying the plan sponsors,
participants, | 14 |
| beneficiaries, and covered individuals. The notice shall be | 15 |
| sent
by certified mail to the Department 90 days in advance of | 16 |
| any notification of
the company's actions. The notice shall | 17 |
| include: (i) a complete description of
the action to be taken, | 18 |
| (ii) a specific description of the type of coverage
affected, | 19 |
| (iii) the total number of covered lives affected, (iv) a sample | 20 |
| draft
of all letters being sent to the plan sponsors and | 21 |
| participants, beneficiaries,
or covered individuals, (v) time | 22 |
| frames for the actions being taken, (vi)
options the plans | 23 |
| sponsors, participants, beneficiaries, or covered individuals
| 24 |
| may have available to them under the federal Health Insurance | 25 |
| Portability and
Accountability Act, and (vii) any other
| 26 |
| information as required by the Department.
| 27 |
| Section 97. Severability. The provisions of this Act are | 28 |
| severable under Section 1.31 of the Statute on Statutes.
|
|