(215 ILCS 130/Art. 1 heading) ARTICLE 1.
SHORT TITLE AND DEFINITIONS
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(215 ILCS 130/1001) (from Ch. 73, par. 1501-1)
Sec. 1001.
Short Title.
This Act may be cited as the Limited Health Service Organization Act.
(Source: P.A. 86-600.)
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(215 ILCS 130/1002) (from Ch. 73, par. 1501-2)
Sec. 1002.
Definitions.
As used in this Act, unless the context
otherwise requires, the following terms shall have the meanings ascribed
to them:
"Advertisement" means any printed or published material,
audiovisual material and descriptive literature of the limited health care
plan used in direct mail, newspapers, magazines, radio scripts, television
scripts, billboards and similar displays; and any descriptive literature or
sales aids of all kinds disseminated by a representative of the limited
health care plan for presentation to the public including, but not limited
to, circulars, leaflets, booklets, depictions, illustrations, form letters
and prepared sales presentations.
"Copayment" means the amount that an enrollee must pay in order to
receive a specific service that is not fully prepaid.
"Director" means the Director of Insurance.
"Enrollee" means an individual who has been enrolled in a limited health care plan.
"Evidence of coverage" means any certificate, agreement or
contract issued to an enrollee setting out the coverage to which that
enrollee is entitled in exchange for a per capita prepaid sum.
"Group contract" means a contract for limited health services
which by its terms limits eligibility to members of a specified group.
"In-plan covered services" means covered limited health services
obtained from providers who are employed by, under contract with, referred
by, or otherwise affiliated with the LHSO and emergency services.
"Limited health care plan" means any arrangement whereby an
organization undertakes to provide or arrange for and, pay for or reimburse
the cost of any limited health services from providers selected by the
limited health service organization and such arrangement consists of
arranging for or the provision of such limited health services on a per
capita prepaid basis, as distinguished from mere indemnification against
the cost of such limited services on a per capita prepaid basis through
insurance except as otherwise provided under Section 3009.
"Limited health service" means ambulance care services, dental care
services, vision care services, pharmaceutical services, clinical laboratory
services, and podiatric care services. Limited health service shall not
include hospital, medical, surgical or emergency services except when those
services are essential to the delivery of the limited health service.
Essential hospital, medical, surgical, or emergency services shall be covered
unless specifically excluded.
"Limited health service organization" (LHSO) means any organization
formed under the laws of this or another state to provide or arrange for
one or more limited health care plans under a system which causes any part
of the risk of limited health care delivery to be borne by the organization
or its providers.
"Net worth" means admitted assets, as defined in Section 1003 of
this Act, minus liabilities.
"Organization" means any insurance company or other corporation
organized under the laws of this or another state for the purpose of
operating one or more limited health care plans and doing no business other
than that of a health maintenance organization or a limited health service
organization or an insurance company. Organization does not include (1)
any entity otherwise authorized on the effective date of this Act pursuant
to the laws of this State either to provide any limited health service on a
prepayment basis or to indemnity for any limited health service; nor does
it include (2) any provider or other entity when providing or arranging for
the provision of limited health services pursuant to a contract with a
limited health service organization or with any entity described in (1) of
this definition.
"Out-of-plan covered services" means non-emergency, self-referred
covered limited health services obtained from providers who are not
otherwise employed by, under contract with, or otherwise affiliated with
the LHSO or services obtained without a referral from providers who have
contracted to provide limited health services to the enrollee on behalf of
the limited health care plan.
"Point-of-service product" (POS) means a group contract that includes
both in-plan covered services and out-of-plan covered services as well as a
POS contract in which the risk for out-of-plan covered services is borne
through reinsurance. This term does not apply to indemnity benefits
offered through an LHSO that are underwritten in whole by a licensed
insurance carrier and offered in conjunction with the LHSO benefit package.
"Provider" means any physician, dentist, health facility, or
other person or institution which is duly licensed or otherwise authorized
to deliver or furnish limited health services and also includes any other
entity that arranges for the delivery or furnishing of limited health service.
"Per capita prepaid" means a basis of payment by which a fixed
amount of money is prepaid per individual or any other enrollment unit to
the limited health service organization or for limited health services
which are provided during a definite time period regardless of the
frequency or extent of the services rendered, except for copayments of a
fixed amount by the limited health service organization.
"Subscriber" means the person whose employment or other status,
except for family dependency, is the basis for entitlement to limited
health services pursuant to a contract with an organization authorized to
provide or arrange for such services under this Act.
"Uncovered expense" means the cost of limited health services that
are the obligation of a limited health service organization for which an
enrollee may be liable in the event of the insolvency of the organization.
Costs incurred by a provider who has agreed in writing not to bill
enrollees, except for permissible supplemental charges, shall be considered
covered expenses.
(Source: P.A. 87-1079; 88-568, eff. 8-5-94; 88-667, eff. 9-16-94.)
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(215 ILCS 130/1003) (from Ch. 73, par. 1501-3)
Sec. 1003.
Definition of admitted assets.
"Admitted assets" of a limited health service organization shall only
include the admitted assets and investments authorized or permitted for
health maintenance organizations by Sections 1-3 and 3-1 of the Health
Maintenance Organization Act, as now or hereafter amended.
(Source: P.A. 86-600.)
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(215 ILCS 130/Art. 2 heading) ARTICLE 2.
CERTIFICATE OF AUTHORITY;
GENERAL CORPORATE AND FINANCIAL REQUIREMENTS
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(215 ILCS 130/2001) (from Ch. 73, par. 1502-1)
Sec. 2001.
Certificate of authority; exception for corporate employee
programs; applications; material modification of operation.
(a) No organization shall establish or operate a limited health service
organization in this State without obtaining and maintaining a certificate
of authority under this Act. No person other than an organization may
lawfully establish or operate a limited health service organization in this
State. This Act shall not apply to the establishment and operation of a
limited health service organization exclusively providing or arranging for
limited health services to employees of a corporate affiliate of such
limited health service organization. This exclusion shall be available
only to those limited health service organizations which require employee
contributions which equal less than 50% of the total cost of the limited
health care plan, with the remainder of the cost being paid by the
corporate affiliate which is the employer of the participants in the plan.
(b) Any organization may apply to the Director for and obtain a
certificate of authority to establish and operate a limited health service
organization in compliance with this Act. A foreign corporation may
qualify under this Act, subject to its obtaining and maintaining
authorization to do business in this State as a foreign corporation.
(c) Each application for certificate of authority shall be filed in
triplicate and verified by an officer or authorized representative
of the applicant, shall be in a form prescribed by the Director, and shall
set forth, without limiting what may be required by the Director, the following:
(1) A copy of the organization document.
(2) A copy of the bylaws, rules and regulations, or | ||
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(3) A list of the names, addresses, and official | ||
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(4) A statement generally describing the application, | ||
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(5) A copy of the form of any contract made or be | ||
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(6) A copy of the form of any contract made, or to be | ||
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(7) A copy of the form of any contract made or to be | ||
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(8) A copy of the form of any group contract which is | ||
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(9) A copy of the applicant's most recent financial | ||
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(10) A copy of the applicant's financial plan, | ||
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(11) A description of rate methodology.
(12) A description of the proposed method of | ||
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(13) Except in the case of a foreign applicant | ||
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(14) A description of the complaint procedures to be | ||
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(15) A description of the quality assessment and | ||
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(16) The fee for filing an application for issuance | ||
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(17) Such other information as the Director may | ||
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(Source: P.A. 86-600.)
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(215 ILCS 130/2002) (from Ch. 73, par. 1502-2)
Sec. 2002.
Issuance of certificate of authority.
(a) Issuance of a certificate of authority shall be granted if the
following conditions are met:
(1) The requirements of subsection (c) of Section | ||
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(2) The persons responsible for conducting the | ||
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(3) The applicant has demonstrated the willingness | ||
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(4) The applicant has arrangements for an ongoing | ||
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(5) The applicant is financially responsible and may | ||
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(A) the financial soundness of the applicant's | ||
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(B) the adequacy of working capital, other | ||
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(6) The limited health care plan furnishes limited | ||
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(7) The agreements with providers for the provision | ||
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(8) Any deficiencies identified by the Director have | ||
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(b) No certificate of authority shall be issued if the initial minimum net
worth of the applicant is less than $100,000. The initial net worth shall
be provided in cash and securities in combination and form acceptable to the
Director.
(Source: P.A. 86-600.)
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(215 ILCS 130/2003) (from Ch. 73, par. 1502-3)
Sec. 2003. Powers of limited health service organizations. The powers of a limited health service organization include, but are not
limited to the following:
(1) The purchase, lease, construction, renovation, | ||
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(2) The making of loans to a provider group under | ||
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(3) The furnishing of limited health services through | ||
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(4) The contracting with any person for the | ||
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(5) The contracting with an insurance company | ||
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(6) Rendering services related to the functions | ||
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(7) Indemnity benefits covering out of area or | ||
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(8) The offering of point-of-service products as | ||
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(9) Any other business activity reasonably | ||
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(Source: P.A. 97-813, eff. 7-13-12.)
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(215 ILCS 130/2004) (from Ch. 73, par. 1502-4)
Sec. 2004.
Required minimum net worth; impairment.
(a) A limited health service organization issued a certificate of
authority shall have and at all times maintain net worth of not less than
the greater of:
(1) $50,000; or
(2) 2% of the organization's annual gross premium | ||
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(b) A limited health service organization that has annual uncovered
expenses in excess of $50,000, as reported on the most recent annual
financial statement filed with the Director, shall maintain additional net
worth equal to 25% of such uncovered expenses in excess of $50,000 in
addition to the net worth required by subsection (a), subject to the maximum
net worth set forth in item (2) of subsection (a).
(c) A limited health service organization that has been approved by
the Director to offer a POS contract shall have and at all times maintain
net worth of not less than the greater of:
(1) $100,000 if the LHSO's expenditures for | ||
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(2) $100,000 plus an additional $10,000 for each | ||
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(3) the amount set forth in item (2) of subsection | ||
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(d) A deficiency in meeting amounts required in subsection (a), (b), or (c)
shall require (1) filing with the Director a plan of correction of the
deficiency, acceptable to the Director and (2) correction of the deficiency
within a reasonable time, not to exceed 60 days unless an extension of
time, not to exceed 60 additional days, is granted by the Director. Such a
deficiency will be deemed an impairment, and failure to correct the
deficiency in the prescribed time shall be grounds for suspension or
revocation pursuant to subsection (h) of Section 4005 of this Act.
(e) Unless allowed by the Director, no limited health service
organization, officer, director, trustee, producer or employee of such
organization may renew, issue, or deliver, or cause to be renewed, issued or
delivered, any evidence of coverage in this State, for which a premium is
charged or collected, when the organization writing such coverage is
insolvent or impaired, and the fact of such insolvency or impairment is
known to the organization, officer, director, producer or employee of such
organization. An organization is impaired when a deficiency exists in
meeting the amounts required in subsection (a), (b), or (c) of this Section.
However, the existence of an impairment does not prevent the issuance or
renewal of any evidence of coverage when the enrollee exercises an option
granted under the plan to obtain new, renewed or converted coverage.
Any organization, officer, director, producer or employee of such
organization violating this subsection shall be guilty of a Class A
misdemeanor.
(Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
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(215 ILCS 130/2005) (from Ch. 73, par. 1502-5)
Sec. 2005.
Claims liabilities.
(a) Every limited health service organization shall, at all times, maintain
liabilities in an amount estimated in the aggregate to provide for the
payment of all claims incurred and any due and unpaid provider capitation,
whether reported or unreported, which are unpaid and for which such
organization is or may be liable, and to provide for the expense of
adjustment or settlement of such claims. Such liabilities shall be
computed in accordance with regulations promulgated by the Director upon
reasonable consideration of the ascertained experience and character of
such business for the purpose of adequately protecting enrollees and
securing the solvency of such organizations.
(b) Whenever the claim and claim expense experience of any such organization
shows the liabilities calculated in accordance with such regulations to be
inadequate, the Director may require such organization to maintain additional liabilities.
(Source: P.A. 86-600 .)
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(215 ILCS 130/2006) (from Ch. 73, par. 1502-6)
Sec. 2006.
Statutory deposits.
(a) An organization subject to the provisions of this Act
shall make and
maintain with the Director, for the protection of enrollees of the
organization, a deposit of securities that are in the form authorized under
Section 2-6 of the Health Maintenance Organization Act having a fair market
value equal to the minimum net worth required under subsection (a) of Section
2004. The amount on deposit shall remain as an admitted asset of the
organization in the determination of its net worth. The Director may release
the required deposit of securities required by this Section
upon receipt of
an order of a court having proper jurisdiction or
upon: (i)
certification by the organization that it has no outstanding
enrollee creditors, enrollees, certificate holders, or enrollee obligations
in effect and no plans to engage in the
business of insurance as a limited health service organization; (ii) receipt of
a lawful resolution of the
organization's governing body effecting the surrender of
its certificate of authority, articles of incorporation, or other
organizational documents to their issuing governmental officer for voluntary or
administrative dissolution; and (iii) receipt of the name and
forwarding address for each of the final officers and directors of the
organization,
together with a plan of dissolution approved by the Director.
(b) An LHSO that offers a POS contract shall, in addition to the
deposit required by subsection (a), deposit and maintain with the Director
cash or securities that are authorized investments under Section 1003
having a fair market value equal to the greater of:
(1) $50,000 if the LHSO's expenditures for | ||
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(2) $100,000 if the LHSO's expenditures for | ||
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(3) 120% of its current actual monthly out-of-plan | ||
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(c) The combined deposit amount required in subsections (a) and (b) shall
not exceed $200,000.
(Source: P.A. 92-75, eff. 7-12-01.)
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(215 ILCS 130/2007)
Sec. 2007. (Repealed).
(Source: P.A. 91-549, eff. 8-14-99. Repealed by P.A. 97-486, eff. 1-1-12.)
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(215 ILCS 130/2008) (from Ch. 73, par. 1502-8)
Sec. 2008.
Provider contracts.
(a) All contracts with providers or with
entities which subcontract for the provision of limited health services to
enrollees on a prepayment or other basis and any contract with any
subcontractor thereof shall contain the following hold-harmless clause:
"The provider agrees that in no event including, but not limited to,
nonpayment by the organization of amounts due the provider under this
contract, insolvency of the organization or any breach of this contract by
the organization, shall the provider or its assignees or subcontractors
have a right to seek any type of payment from, bill, charge, collect a
deposit from or have any recourse against the enrollee, persons acting on
the enrollee's behalf (other than the organization), the employer or group
contractholder for services provided pursuant to this contract except for
the payment of applicable copayments for services covered by the
organization or fees for services not covered by the organization. The
requirements of this clause shall survive any termination of this contract
for services rendered prior to such termination, regardless of the cause of
such termination. The organization's enrollees shall be third party
beneficiaries of this clause. This clause supersedes any oral or written
agreement now existing or hereafter entered into between the provider and
the enrollee or persons acting on the enrollee's behalf (other than the
organization).". To the extent that any provider or subcontractor's
contract, fails to incorporate such provisions, such provisions shall be
deemed incorporated into such contracts by operation of law.
(b) All provider and subcontractor contracts must contain provisions
whereby the provider or subcontractor shall provide, arrange for or
participate in the quality assessment programs mandated by this Act, unless
the Department of Insurance certifies that such programs will
be fully implemented without any participation or action from such
contracting provider.
(c) The Director may promulgate rules requiring that provider contracts
contain provisions concerning reasonable notices to be given between the
parties and for the organization to provide reasonable notice to its
enrollees and to the Director. Notice shall be given for such events as,
but not limited to, termination of insurance protection, quality assessment
or availability of medical area.
(Source: P.A. 86-600; 86-1408.)
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(215 ILCS 130/2009) (from Ch. 73, par. 1502-9)
Sec. 2009.
Subordinated indebtedness.
An organization having a
certificate of authority under this Act may borrow or assume a liability
for the repayment of a sum of money upon a written agreement that the loan
or advance with interest thereon not exceeding a reasonable rate shall be
repaid only out of net worth of the organization in excess of such minimum
net worth as is stipulated in and by the agreement. The agreement shall
first be submitted to and approved by the appropriate authoritative body of
the organization and the Director. Repayment of principal or payment of
interest may be made only with the approval of the Director when he is
satisfied that the financial condition of the organization warrants such
action, but such approval may not be withheld if the organization shall
have and submit satisfactory evidence of net worth of not less than the
amount stipulated in the repayment of principal or interest payment clause
of the agreement. No loan or advance made under this Section or interest
accruing thereon shall form a part of the legal liabilities of the
organization until authorized for payment by the Director, but until such
authorization all statements published by the organization or filed with
the Director shall show the amount thereof then remaining unpaid as a
special surplus account. Nothing in this Section shall be construed to
mean that an organization may not otherwise borrow money, but the amount so
borrowed with accrued interest thereon shall be carried by the company as
a liability.
(Source: P.A. 86-600.)
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(215 ILCS 130/Art. 3 heading) ARTICLE 3.
DELIVERY OF SERVICES; REQUIRED
PROVISIONS AND MARKETING
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(215 ILCS 130/3001) (from Ch. 73, par. 1503-1)
Sec. 3001.
Description and securing of services.
The limited health service organization shall issue to each subscriber or
enrollee a group contract or evidence of coverage. Any such group contract
or evidence of coverage shall provide for the rendering of limited health
services as defined therein for a period of 12 months from the date of
issuance; and shall provide that it shall be renewed from year to year
unless there has been 31 days written notice of termination prior to the
annual renewal of the contract by the subscriber, enrollee or the limited
health service organization. The group contract, evidence of coverage and
related material shall be delivered or issued for delivery to an enrollee
within 30 days from the later of the effective date of coverage or the date
on which the limited health service organization is notified of enrollment.
(Source: P.A. 86-600.)
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(215 ILCS 130/3002) (from Ch. 73, par. 1503-2)
Sec. 3002.
Complaint system.
Every limited health service organization
shall establish and maintain a complaint system providing reasonable
procedures for resolving complaints initiated by enrollees. Nothing herein
shall be construed to preclude an enrollee or a provider from filing a
complaint with the Director or as limiting the Director's ability to
investigate such complaints.
(Source: P.A. 86-600.)
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(215 ILCS 130/3003) (from Ch. 73, par. 1503-3)
Sec. 3003.
Department complaint handling procedure.
(a) When a complaint is received by the Department of Insurance
(Department) against a limited health service organization (respondent) or
producer (respondent), the respondent shall be notified of the complaint.
The Department in its notification shall specify the date when a report is
to be received from the respondent, which shall be no later than 21 days
after notification is sent to the respondent. A failure to reply by the
date specified may be followed by a collect telephone call or collect
telegram. Repeated instances of failing to reply by the date specified may
result in further regulatory action.
(b) Contents of response or report.
(1) Each respondent shall supply adequate | ||
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(2) Documents necessary to support the respondent's | ||
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(3) The respondent's reply shall be duplicate, but | ||
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(4) The respondent's reply shall include the name, | ||
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(5) The Department shall respect the confidentiality | ||
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(c) Follow-up conclusion. Upon receipt of the respondent's report, the
investigating deputy shall evaluate the material submitted; and
(1) advise the complainant of the action taken and | ||
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(2) pursue further investigation with respondent or | ||
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(3) refer the investigation report to the appropriate | ||
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(Source: P.A. 86-600.)
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(215 ILCS 130/3004) (from Ch. 73, par. 1503-4)
Sec. 3004.
Solicitations of enrollees.
(a) Solicitations of enrollees by a
limited health service organization authorized under this Act, or its
representatives shall not be construed to be violative of any provisions
of law relating to solicitation or advertising by health professionals.
Nothing in this Section precludes a limited health service organization
from providing to a particular potential enrollee the names of health
providers. No limited health service organization, or representative
thereof, may cause or knowingly permit the use of advertising which is
untrue or misleading, solicitation which is untrue or misleading or any
form of evidence of coverage which is deceptive. Limited health service
organizations shall be subject to Section 143c or the Illinois Insurance
Code as now or hereafter amended.
(b) If the Director finds that any advertisement of a plan has materially
failed to comply with the provisions of this Act or the rules hereunder,
the Director may, by order, require the plan to publish in the same or
similar medium, an approved correction or retraction of any untrue,
misleading or deceptive statement contained in the advertising and may
prohibit such plan from publishing, distributing or allowing to be
published or distributed on its behalf such advertisement or any new
materially revised advertisement without first having filed a copy thereof
with the Director 30 days prior to the publication or distribution thereof,
or any shorter period specified in such order. An order issued under this
Section shall be effective for 12 months from its issuance and may be
renewed by order if the advertisements submitted under this Section
indicate difficulties of voluntary compliance with the applicable
provisions of this Act and the rules hereunder.
(Source: P.A. 86-600.)
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(215 ILCS 130/3005) (from Ch. 73, par. 1503-5)
Sec. 3005.
Producers.
No person may apply, procure, solicit,
negotiate, or place for others any evidence of coverage of a limited health
service organization unless that person holds a valid limited insurance
representative license or producers license to sell accident and health
insurance policies pursuant to Article XXXI of the Illinois Insurance Code,
as now and hereafter amended.
(Source: P.A. 86-600.)
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(215 ILCS 130/3006) (from Ch. 73, par. 1503-6) (Text of Section before amendment by P.A. 103-650 ) Sec. 3006. Changes in rate methodology and benefits; material modifications; addition of limited health services. (a) A limited health service organization shall file with the Director prior to use, a notice of any change in rate methodology, charges, or benefits and of any material modification of any matter or document furnished pursuant to Section 2001, together with such supporting documents as are necessary to fully explain the change or modification. (1) Contract modifications described in paragraphs | ||
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(2) Contract modification for reinsurance. Any | ||
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(b) If a limited health service organization desires to add one or more additional limited health services, it shall file a notice with the Director and, at the same time, submit the information required by Section 2001 if different from that filed with the prepaid limited health service organization's application. Issuance of such an amended certificate of authority shall be subject to the conditions of Section 2002 of this Act. (c) In addition to any applicable provisions of this Act, premium rate filings shall be subject to subsection (i) of Section 355 of the Illinois Insurance Code. (Source: P.A. 103-106, eff. 1-1-24; 103-605, eff. 7-1-24.) (Text of Section after amendment by P.A. 103-650 ) Sec. 3006. Changes in rate methodology and benefits; material modifications; addition of limited health services. (a) A limited health service organization shall file with the Director prior to use, a notice of any change in rate methodology, charges, or benefits and of any material modification of any matter or document furnished pursuant to Section 2001, together with such supporting documents as are necessary to fully explain the change or modification. (1) Contract modifications described in paragraphs | ||
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(2) Contract modification for reinsurance. Any | ||
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(b) If a limited health service organization desires to add one or more additional limited health services, it shall file a notice with the Director and, at the same time, submit the information required by Section 2001 if different from that filed with the prepaid limited health service organization's application. Issuance of such an amended certificate of authority shall be subject to the conditions of Section 2002 of this Act. (c) In addition to any applicable provisions of this Act, premium rate filings shall be subject to subsection (i) and, for pharmaceutical policies, subsection (j) of Section 355 of the Illinois Insurance Code. (Source: P.A. 103-106, eff. 1-1-24; 103-605, eff. 7-1-24; 103-650, eff. 1-1-25.) |
(215 ILCS 130/3007) (from Ch. 73, par. 1503-7)
Sec. 3007.
Prior approval of policy forms.
(a) No limited health
service organization shall issue or deliver, in this State, a group
contract or evidence of coverage, attach an endorsement or rider thereto,
incorporate by reference, bylaws or other matter therein or use an
application blank in this State until the form and content of such group
contract or evidence of coverage, endorsement, rider, bylaw or other matter
incorporated by reference or application blank has been filed with and
approved by the Director and, provided further, except that any such
endorsement or rider which is to be attached to a group contract or
evidence of coverage subsequent to the date the group contract or evidence
of coverage is issued must be filed with, reviewed and approved by the
Director prior to the date it is attached to a group contract or evidence
of coverage issued or delivered in this State. The Director shall withhold
approval of any such group contract, evidence of coverage, endorsement,
rider, bylaw or other matter incorporated by reference or application blank
if it contains provisions which may encourage misrepresentation or are
unjust, unfair, inequitable, ambiguous, misleading, inconsistent,
deceptive, contrary to law or to the public policy of this State, or
contains exceptions and conditions that unreasonably or deceptively affect
the risk purported to be assumed in the general coverage of the group
contract or evidence of coverage. In all cases the Director shall approve
or disapprove any such form within 60 days after submission unless the
Director extends, by not more than an additional 30 days, the period within
which he shall approve or disapprove any such form by giving written notice
to the organization of such extension before expiration of the initial 60
day period. The Director shall withdraw his approval of a group contract
or evidence of coverage, endorsement rider, bylaw or other matter
incorporated by reference or application blank if he subsequently
determines that such group contract or evidence of coverage, endorsement,
rider, bylaw, other matter incorporated by reference or
application blank is misrepresentative, unjust, unfair, unequitable,
ambiguous, misleading, inconsistent, deceptive, contrary to law or public
policy of this State, or contains exceptions or conditions which
unreasonably or deceptively affect the risk purported to be assumed in the
general coverage of the group contract or evidence of coverage.
(b) If a previously approved group contract or evidence of coverage,
endorsement, rider, bylaw or other matter incorporated by reference or
application blank is withdrawn from use, the Director shall serve upon the
company an order of withdrawal of use, either personally or by mail, and if
by mail, such service shall be completed if such notice is deposited in the
post office, postage prepaid, addressed to the limited health service
organization's last known address specified in the records of the
Department of Insurance. The order of withdrawal of use shall take effect
30 days from the date of mailing, but shall be stayed if within the 30 day
period a written request for hearing is filed with the Director. Such
hearing shall be held at such time and place as designated in the order
given by the Director. The hearing may be held either in the City of
Springfield, the City of Chicago or in the county where the principal
business address of the limited health service organization is located.
The action of the Director in disapproving or withdrawing such form shall
be subject to judicial review under the Administrative Review Law, as now or
hereafter amended.
(Source: P.A. 86-600.)
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(215 ILCS 130/3008) (from Ch. 73, par. 1503-8)
Sec. 3008.
Evidence of coverage.
(a) Every subscriber shall be issued
an evidence of coverage, which shall contain a clear and complete statement of:
(1) The limited health services to which each | ||
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(2) Eligibility requirements indicating the | ||
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(3) Any limitation of the services or benefits to be | ||
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(4) The terms or conditions upon which coverage may | ||
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(5) Where and in what manner information is available | ||
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(6) The method for resolving complaints.
(b) Any amendment to the evidence of coverage may be provided to the
subscriber in a separate document.
(Source: P.A. 86-600.)
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(215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
Sec. 3009.
Point-of-service limited health service contracts.
(a) An LHSO that offers a POS contract:
(1) shall include as in-plan covered services all | ||
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(2) shall provide incentives, which shall include | ||
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(3) shall not offer services out-of-plan without | ||
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(4) may limit or exclude specific types of services | ||
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(5) may include annual out-of-pocket limits and | ||
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(6) shall include an annual maximum benefit allowance | ||
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(7) may limit the groups to which a POS product is | ||
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(8) shall not consider emergency services, authorized | ||
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(9) may treat as out-of-plan services those services | ||
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(b) An LHSO offering a POS contract shall be subject to the following
limitations:
(1) The LHSO shall not expend in any calendar quarter | ||
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(2) If the amount specified in paragraph (1) is | ||
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(3) If compliance with the amount specified in | ||
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(4) Any LHSO failing, without just cause, to comply | ||
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(c) Any LHSO that offers a POS product shall:
(1) File a quarterly financial statement detailing | ||
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(2) Track out-of-plan POS utilization separately from | ||
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(3) Record out-of-plan utilization in a manner that | ||
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(4) Demonstrate to the Director's satisfaction that | ||
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(5) Maintain the deposit required by subsection (b) | ||
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(d) An LHSO shall not issue a POS contract until it has filed and had
approved by the Director a plan to comply with the provisions of this
Section. The compliance plan shall at a minimum include provisions
demonstrating that the LHSO will do all of the following:
(1) Design the benefit levels and conditions of | ||
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(2) Provide or arrange for the provision of adequate | ||
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(A) process and pay claims for all out-of-plan | ||
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(B) meet the requirements for a POS contract set | ||
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(C) generate accurate data and financial and | ||
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(3) Comply initially and on an ongoing basis with the | ||
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(e) A limited health service organization that offers a POS contract must
comply with Sections 356w and 356x of the Illinois Insurance Code.
(Source: P.A. 90-741, eff. 1-1-99.)
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(215 ILCS 130/3010) Sec. 3010. Purchase of ophthalmic goods or services. An organization may not require a provider, as a condition of participation in the organization's limited health care plan, to purchase ophthalmic goods or services, including but not limited to eyeglass frames, in a quantity or dollar amount in excess of the quantity or dollar amount an enrollee purchases under the terms of the limited health care plan.
(Source: P.A. 93-1077, eff. 1-18-05.) |
(215 ILCS 130/Art. 4 heading) ARTICLE 4.
GENERAL PROVISIONS
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(215 ILCS 130/4001) (from Ch. 73, par. 1504-1)
Sec. 4001.
Applicability of Section 155 of the Illinois Insurance
Code to limited health service organizations. Section 155 of the Illinois
Insurance Code, as now or hereafter amended, shall apply to limited health
service organizations; except that no actions shall be brought for an
unreasonable delay in the settling of a claim if the delay is caused by the
failure of the enrollee to execute a lien as requested by the health care plan.
(Source: P.A. 86-600.)
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(215 ILCS 130/4002) (from Ch. 73, par. 1504-2)
Sec. 4002.
Health Maintenance Organization Act.
Limited health service
organizations shall be subject to the provisions of Sections 1-3
and 3-1 of the Health Maintenance Organization Act, as now or hereafter
amended.
(Source: P.A. 86-600 .)
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(215 ILCS 130/4002.1)
Sec. 4002.1.
Woman's health care provider.
Limited health
service organizations are subject to the provisions of Section 356r
of the Illinois Insurance Code.
(Source: P.A. 89-514, eff. 7-17-96.)
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(215 ILCS 130/4002.5)
Sec. 4002.5.
Illinois Health Insurance Portability and Accountability Act.
The provisions of this Act are subject to the Illinois Health Insurance
Portability and Accountability Act as provided in Section 15 of that Act.
(Source: P.A. 90-30, eff. 7-1-97.)
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(215 ILCS 130/4002.6)
Sec. 4002.6.
Managed Care Reform and Patient Rights Act.
Except for
health care
plans offering only dental services or only vision services, limited
health service organizations are subject to the provisions of the Managed Care
Reform and Patient Rights Act.
(Source: P.A. 91-617, eff. 1-1-00.)
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(215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
(Text of Section from P.A. 103-84) Sec. 4003. Illinois Insurance Code provisions. Limited health service
organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139,
140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 155.37, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 364.3, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII
and XIII 1/2, limited health service organizations in the following categories
are deemed to be domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another | ||
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(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24.) (Text of Section from P.A. 103-91) Sec. 4003. Illinois Insurance Code provisions. Limited health service
organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139,
140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 155.37, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 364.3, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII
and XIII 1/2, limited health service organizations in the following categories
are deemed to be domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another | ||
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(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-91, eff. 1-1-24.) (Text of Section from P.A. 103-420) Sec. 4003. Illinois Insurance Code provisions. Limited health service
organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139,
140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 155.37, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 364.3, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII
and XIII 1/2, limited health service organizations in the following categories
are deemed to be domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another | ||
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(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-420, eff. 1-1-24.) (Text of Section from P.A. 103-426) Sec. 4003. Illinois Insurance Code provisions. Limited health service
organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139,
140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 356q, 356v, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 364.3, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII
and XIII 1/2, limited health service organizations in the following categories
are deemed to be domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another | ||
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(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 103-426, eff. 8-4-23.) (Text of Section from P.A. 103-445) Sec. 4003. Illinois Insurance Code provisions. Limited health service
organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139,
140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 155.37, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 364.3, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII
and XIII 1/2, limited health service organizations in the following categories
are deemed to be domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another | ||
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(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-445, eff. 1-1-24.) |
(215 ILCS 130/4004) (from Ch. 73, par. 1504-4)
Sec. 4004.
Examination of affairs and quality of services by the
Director; books and records.
(a) The Director shall have, with respect to
limited health service organizations, the powers of examination conferred
upon him pursuant to Sections 132 through 132.7 of the
Illinois Insurance Code. The Director shall make an examination
concerning the quality of limited health services of any limited health
service organization and providers with whom the organization has
contracts, agreements, or other arrangements pursuant to its limited
health care plan as often as he deems it necessary for the protection of
the interests of the people of this State. The cost of any examination
shall be paid by the limited health service organization being examined.
(b) Every limited health service organization and provider shall submit
its books and records relating to the limited health care plan to
examination and in every way facilitate it. For the purpose of
examination, the Director may administer an oath to and examine the
officers, agents, employees, and producers of the limited health service
organization and the principals of providers concerning their business.
(Source: P.A. 89-97, eff. 7-7-95.)
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(215 ILCS 130/4005) (from Ch. 73, par. 1504-5)
Sec. 4005.
Suspension or revocation or denial of certification of
authority. (a) The Director may suspend or revoke any certificate of
authority issued to a limited health service organization under this Act or
deny an application for a certificate of authority if he finds:
(1) That the limited health service organization is | ||
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(2) The limited health service organization issues | ||
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(3) The limited health care plan does not provide or | ||
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(4) That the limited health service organization has | ||
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(5) That the limited health service organization is | ||
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(6) The limited health service organization is no | ||
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(7) The limited health service organization, or any | ||
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(8) The continued operation of the limited health | ||
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(9) The limited health service organization has | ||
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(10) The limited health service organization has | ||
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(b) When the certificate of authority of a limited health service
organization is revoked, such organization shall proceed, immediately
following the effective date of the order of revocation, to wind up its
affairs and shall conduct no further business except as may be essential to
the orderly conclusion of the affairs of such organization. The Director
may permit such further operation of the organization as he may find to be
in the best interest of enrollees to the end that the enrollees will be
afforded the greatest practical opportunity to obtain limited health services.
(Source: P.A. 86-600.)
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(215 ILCS 130/4006) (from Ch. 73, par. 1504-6)
Sec. 4006. Supervision of rehabilitation, liquidation or conservation
by the Director. (a) For purposes of the rehabilitation, liquidation or
conservation of a limited health service organization, the operation of a
limited health service organization in this State constitutes a form of
insurance protection which should be governed by the same provisions
governing the rehabilitation, liquidation or conservation of insurance
companies. Any rehabilitation, liquidation or conservation of a limited
health service organization shall be based upon the grounds set forth in
and subject to the provisions of the laws of this State regarding the
rehabilitation, liquidation or conservation of an insurance company and
shall be conducted under the supervision of the Director. Insolvency, as a
ground for rehabilitation, liquidation or conservation of a limited health
service organization, shall be recognized when a limited health service
organization cannot be expected to satisfy its financial
obligations when such obligations are to become due or when the limited
health service organization has neglected to correct, within the time
prescribed by subsection (c) of Section 2004, a deficiency occurring due to
such organization's prescribed minimum net worth being impaired. For
purpose of determining the priority of distribution of general assets,
claims of enrollees and enrollees' beneficiaries shall have the same
priority as established by Section 205 of the Illinois Insurance Code, for policyholders and beneficiaries of insureds
of insurance companies. If an enrollee is liable to any provider for
services provided pursuant to and covered by the limited health care plan,
that liability shall have the status of an enrollee claim for distribution
of general assets.
Any provider who is obligated by statute or agreement to hold enrollees
harmless from liability for services provided pursuant to and covered by a
limited health care plan shall have a priority of distribution of the
general assets immediately following that of enrollees and enrollees'
beneficiaries as described herein, and immediately preceding the priority
of distribution described in paragraph (e) of subsection (1) of Section
205 of the Illinois Insurance
Code.
(b) For purposes of Articles XIII and XIII 1/2 of the Illinois Insurance
Code, organizations in the following
categories shall be deemed to be a domestic company and a domiciliary company:
(1) a corporation organized under the laws of this | ||
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(2) a corporation organized under the laws of another | ||
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(Source: P.A. 100-201, eff. 8-18-17.)
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(215 ILCS 130/4007) (from Ch. 73, par. 1504-7)
Sec. 4007.
Rules and regulations.
(a) The Director may promulgate
reasonable rules and regulations as are necessary and proper to
establish specific standards, including standards for the full and
fair disclosure of limited health services provided by group contracts and
evidences of coverage, which may cover, but shall not be limited to:
(1) Coordination of benefits.
(2) Conversion.
(3) Cancellation and termination.
(b) The Director may promulgate reasonable rules and regulations as are
necessary and proper to otherwise carry out the provisions of this Act.
(Source: P.A. 86-600.)
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(215 ILCS 130/4008) (from Ch. 73, par. 1504-8)
Sec. 4008.
Grounds for denial, suspension or revocation of
certificate of authority under Administrative Review Law.
(a) When the Director has cause to believe that grounds for the denial
of an application for a certificate of authority exist or that grounds
for the suspension or revocation of a certificate of authority exist, he
shall issue an order to the organization or applicant stating the grounds
upon which the suspension, revocation or denial is based. The order shall
be sent to the organization or applicant by certified or registered mail.
The organization or applicant may in writing request a hearing within 30
days from the date of mailing of the order. If no written request is made,
the order shall be final upon the expiration of said 30 days.
(b) If the organization or applicant requests a hearing pursuant to this
Section the Director shall issue a written notice of hearing sent to the
organization or applicant by certified or registered mail stating:
(1) A specific time for the hearing, which may not be | ||
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(2) A specific place for the hearing, which may be | ||
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(c) After such hearing, or upon the failure of the limited health
service organization to appear at such hearing, the Director shall take
action as is deemed advisable on written findings which shall
be mailed to the organization or applicant. The action of the Director
shall be subject to review under the Administrative Review Law, as now or
hereafter amended.
(Source: P.A. 86-600.)
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(215 ILCS 130/4009) (from Ch. 73, par. 1504-9)
Sec. 4009.
Violations; cease and desist
order; corrective orders. (a) Any organization which violates this Act
shall be guilty of a Class B misdemeanor.
(b) The Director may issue to any organization subject to this Act, a
cease and desist order as provided in Article XXIV of the
Illinois Insurance Code, as now or hereafter amended.
(c) The Director may issue corrective orders to any organization subject
to this Act, as provided in Article XII 1/2 of the Illinois Insurance Code,
as now or hereafter amended.
(Source: P.A. 86-600.)
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