(215 ILCS 93/10)
Sec. 10.
Definitions.
For purposes of this Act:
"Actuarial certification" means a written statement by a member of the
American Academy of Actuaries or other individual acceptable to the Director
that a small employer carrier is in compliance with the provisions of Section
25 of this Act, based upon an examination which includes a review of the
appropriate records and of the actuarial assumptions and methods utilized by
the small employer carrier in establishing premium rates for the applicable
health benefit plans.
"Base premium rate" means for each class of business as to a rating period,
the lowest premium rate charged or which could be charged under a rating system
for that class of business by the small employer carrier to small employers
with similar case characteristics for health benefit plans with the same or
similar coverage.
"Carrier" means any entity which provides health insurance in this State.
For the purposes of this Act, carrier includes a licensed insurance company, a
prepaid hospital or medical service plan, a health maintenance organization,
or any other entity providing a plan of
health insurance or health benefits subject to state insurance regulation.
"Case characteristics" means demographic, geographic or other objective
characteristics of a small employer, that are considered by the small employer
carrier, in the determination of premium rates for the small employer. Claim
experience, health status, and duration of coverage shall not be
characteristics
for the purposes of the Small Employer Health Insurance Rating Act.
"Class of business" means all or a separate grouping of small employers
established pursuant to Section 20.
"Director" means the Director of Insurance.
"Department" means the Department of Insurance.
"Health benefit plan" or "plan" shall mean any hospital or medical
expense-incurred policy, hospital or medical service plan
contract, or health maintenance organization subscriber contract. Health
benefit plan shall not include individual, accident-only, credit, dental,
vision, medicare supplement, hospital indemnity, long term care, specific
disease, stop loss or disability
income insurance,
coverage issued as a supplement to liability insurance, workers' compensation
or similar insurance, or automobile medical payment insurance.
"Index rate" means, for each class of business as to a rating period for
small employers with similar case characteristics, the arithmetic mean of
the applicable base premium rate and the corresponding highest premium rate.
"Late enrollee" has the meaning given that term in the Illinois Health
Insurance Portability and Accountability Act.
"New business premium rate" means, for each class of business as to a rating
period, the lowest premium rate charged or offered or which could have been
charged or offered by the small employer carrier to small employers with
similar case characteristics for newly issued health benefit plans with the
same or similar coverage.
"Objective characteristics" means measurable or observable phenomena. An
example of a measurable characteristic would be the number of employees who
were late enrollees. Examples of observable characteristics would be
geographic location of the employer or gender of the employee.
"Premium" means all monies paid by a small employer and eligible employees as
a condition of receiving coverage from a small employer carrier, including any
fees or other contributions associated with the health benefit plan.
"Rating period" means the calendar period for which premium rates established
by a small employer carrier are assumed to be in effect.
"Small employer" has the meaning given that term in the Illinois Health
Insurance Portability and Accountability Act.
"Small employer carrier" means a carrier that offers health benefit plans
covering employees of one or more small employers in this State.
(Source: P.A. 91-510, eff. 1-1-00.)
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(215 ILCS 93/20)
Sec. 20.
Establishment of Class of Business.
(a) A small employer carrier may establish a separate class of business only
to reflect substantial differences in expected claims experience or
administrative costs related to the following reasons:
(1) the small employer carrier uses more than one |
| type of system for the marketing and sale of health benefit plans to small employers;
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(2) the small employer carrier has acquired a class
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| of business from another small employer carrier; or
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(3) the small employer carrier provides coverage to
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| one or more association groups.
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(b) A small employer carrier may establish up to 4 separate classes
of business under subsection (a).
(c) The Director may approve the establishment of additional classes of
business upon application to the Director and a finding by the Director that
such action would enhance the efficiency and fairness of the small employer
marketplace.
(Source: P.A. 91-510, eff. 1-1-00.)
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(215 ILCS 93/25)
Sec. 25. Premium Rates.
(a) Premium rates for health benefit plans subject to this Act shall be
subject to all of the following provisions:
(1) The index rate for a rating period for any class |
| of business shall not exceed the index rate for any other class of business by more than 20%.
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(2) For a class of business, the premium rates
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| charged during a rating period to small employers with similar case characteristics for the same or similar coverage, or the rates that could be charged to such employers under the rating system for that class of business, shall not vary from the index rate by more than 25% of the index rate.
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(3) The percentage increase in the premium rate
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| charged to a small employer for a new rating period shall not exceed the sum of the following:
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(A) the percentage change in the new business
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| premium rate measured from the first day of the prior rating period to the first day of the new rating period. In the case of a health benefit plan into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate;
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(B) an adjustment, not to exceed 15% annually and
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| adjusted pro rata for rating periods of less than one year, due to claim experience, health status, or duration of coverage of the employees or dependents of the small employer as determined from the small employer carrier's rate manual for the class of business; and
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(C) any adjustment due to change in coverage or
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| change in the case characteristics of the small employer as determined from the small employer carrier's rate manual for the class of business.
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(4) Adjustments in rates for a new rating period due
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| to claim experience, health status, and duration of coverage shall not be charged to individual employees or dependents. Any such adjustment shall be applied uniformly to the rates charged for all employees and dependents of the small employer.
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(5) In the case of health benefit plans delivered or
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| issued for delivery prior to the effective date of this Act, a premium rate for a rating period may exceed the ranges set forth in items (1) and (2) of this subsection (a) for a period of 3 years following the effective date of this Act. In such case, the percentage increase in the premium rate charged to a small employer for a new rating period shall not exceed the sum of the following:
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(A) the percentage change in the new business
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| premium rate measured from the first day of the prior rating period to the first day of the new rating period; in the case of a class of business into which the small employer carrier is no longer enrolling new small employers, the small employer carrier shall use the percentage change in the base premium rate, provided that such change does not exceed, on a percentage basis, the change in the new business premium rate for the most similar class of business into which the small employer carrier is actively enrolling new small employers; and
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(B) any adjustment due to change in coverage or
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| change in the case characteristics of the small employer as determined from the carrier's rate manual for the class of business.
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(6) Small employer carriers shall apply rating
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| factors, including case characteristics, consistently with respect to all small employers in a class of business. A small employer carrier shall treat all health benefit plans issued or renewed in the same calendar month as having the same rating period.
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(7) For the purposes of this subsection, a health
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| benefit plan that contains a restricted network provision shall not be considered similar coverage to a health benefit plan that does not contain such a provision, provided that the restriction of benefits to network providers results in substantial differences in claim costs.
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(b) A small employer carrier shall not transfer a small employer
involuntarily into or out of a class of business. A small employer carrier
shall not offer to transfer a small employer into or out of a class of business
unless such offer is made to transfer all small employers in the class of
business without regard to case characteristics, claim experience, health
status, or duration of coverage since issue.
(Source: P.A. 103-154, eff. 6-30-23.)
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