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90_HB0445
215 ILCS 5/155.31 new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/3009 from Ch. 73, par. 1503-9
215 ILCS 165/10 from Ch. 32, par. 604
Amends the Illinois Insurance Code, Health Maintenance
Organization Act, Limited Health Service Organization Act,
and Voluntary Health Services Plans Act. Provides that
insurers may not discriminate against persons who are victims
of child abuse in the issuance of policies of life insurance,
disability insurance, and accident and health insurance.
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1 AN ACT regarding insurance coverage for persons who have
2 been victims of child abuse, amending named Acts.
3 Be it enacted by the People of the State of Illinois,
4 represented in the General Assembly:
5 Section 5. The Illinois Insurance Code is amended by
6 adding Section 155.31 as follows:
7 (215 ILCS 5/155.31 new)
8 Sec. 155.31. Victims of child abuse; discrimination
9 prohibited.
10 (a) For purposes of this Section, "victim of child
11 abuse" means a person who is or was an abused child as
12 defined in the Abused and Neglected Child Reporting Act.
13 (b) A company subject to this Article may not directly
14 or indirectly cancel, refuse to issue or renew, or in any way
15 make or permit any distinction or discrimination in the
16 amount or payment of premiums or rates charged, in the length
17 of coverage, or in any other of the terms and conditions of a
18 group or individual policy of accident and health insurance,
19 a policy providing coverage against disability from injury or
20 disease, or a policy of life insurance, based on information
21 that the person to be covered has been a victim of child
22 abuse. A company may not directly or indirectly seek
23 information that an insured or proposed insured has been a
24 victim of child abuse. The practices prohibited under this
25 Section include not only those overtly discriminatory, but
26 also practices and devices that are fair in form but
27 discriminatory in practice.
28 (c) Nothing in this Section shall be construed as
29 creating a special class of insureds who have been victims of
30 child abuse.
31 (d) A violation of this Section constitutes an unfair
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1 method of competition or an unfair or deceptive act or
2 practice in violation of Article XXVI of this Code.
3 Section 10. The Health Maintenance Organization Act is
4 amended by changing Section 5-3 as follows:
5 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
6 Sec. 5-3. Insurance Code provisions.
7 (a) Health Maintenance Organizations shall be subject to
8 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
9 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
10 154.6, 154.7, 154.8, 155.04, 155.31, 355.2, 356m, 367i, 401,
11 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
12 subsection (2) of Section 367, and Articles VIII 1/2, XII,
13 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
14 Code.
15 (b) For purposes of the Illinois Insurance Code, except
16 for Articles XIII and XIII 1/2, Health Maintenance
17 Organizations in the following categories are deemed to be
18 "domestic companies":
19 (1) a corporation authorized under the Medical
20 Service Plan Act, the Dental Service Plan Act, the Vision
21 Service Plan Act, the Pharmaceutical Service Plan Act,
22 the Voluntary Health Services Plan Act, or the Nonprofit
23 Health Care Service Plan Act;
24 (2) a corporation organized under the laws of this
25 State; or
26 (3) a corporation organized under the laws of
27 another state, 30% or more of the enrollees of which are
28 residents of this State, except a corporation subject to
29 substantially the same requirements in its state of
30 organization as is a "domestic company" under Article
31 VIII 1/2 of the Illinois Insurance Code.
32 (c) In considering the merger, consolidation, or other
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1 acquisition of control of a Health Maintenance Organization
2 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
3 (1) the Director shall give primary consideration
4 to the continuation of benefits to enrollees and the
5 financial conditions of the acquired Health Maintenance
6 Organization after the merger, consolidation, or other
7 acquisition of control takes effect;
8 (2)(i) the criteria specified in subsection (1)(b)
9 of Section 131.8 of the Illinois Insurance Code shall not
10 apply and (ii) the Director, in making his determination
11 with respect to the merger, consolidation, or other
12 acquisition of control, need not take into account the
13 effect on competition of the merger, consolidation, or
14 other acquisition of control;
15 (3) the Director shall have the power to require
16 the following information:
17 (A) certification by an independent actuary of
18 the adequacy of the reserves of the Health
19 Maintenance Organization sought to be acquired;
20 (B) pro forma financial statements reflecting
21 the combined balance sheets of the acquiring company
22 and the Health Maintenance Organization sought to be
23 acquired as of the end of the preceding year and as
24 of a date 90 days prior to the acquisition, as well
25 as pro forma financial statements reflecting
26 projected combined operation for a period of 2
27 years;
28 (C) a pro forma business plan detailing an
29 acquiring party's plans with respect to the
30 operation of the Health Maintenance Organization
31 sought to be acquired for a period of not less than
32 3 years; and
33 (D) such other information as the Director
34 shall require.
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1 (d) The provisions of Article VIII 1/2 of the Illinois
2 Insurance Code and this Section 5-3 shall apply to the sale
3 by any health maintenance organization of greater than 10% of
4 its enrollee population (including without limitation the
5 health maintenance organization's right, title, and interest
6 in and to its health care certificates).
7 (e) In considering any management contract or service
8 agreement subject to Section 141.1 of the Illinois Insurance
9 Code, the Director (i) shall, in addition to the criteria
10 specified in Section 141.2 of the Illinois Insurance Code,
11 take into account the effect of the management contract or
12 service agreement on the continuation of benefits to
13 enrollees and the financial condition of the health
14 maintenance organization to be managed or serviced, and (ii)
15 need not take into account the effect of the management
16 contract or service agreement on competition.
17 (f) Except for small employer groups as defined in the
18 Small Employer Rating, Renewability and Portability Health
19 Insurance Act and except for medicare supplement policies as
20 defined in Section 363 of the Illinois Insurance Code, a
21 Health Maintenance Organization may by contract agree with a
22 group or other enrollment unit to effect refunds or charge
23 additional premiums under the following terms and conditions:
24 (i) the amount of, and other terms and conditions
25 with respect to, the refund or additional premium are set
26 forth in the group or enrollment unit contract agreed in
27 advance of the period for which a refund is to be paid or
28 additional premium is to be charged (which period shall
29 not be less than one year); and
30 (ii) the amount of the refund or additional premium
31 shall not exceed 20% of the Health Maintenance
32 Organization's profitable or unprofitable experience with
33 respect to the group or other enrollment unit for the
34 period (and, for purposes of a refund or additional
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1 premium, the profitable or unprofitable experience shall
2 be calculated taking into account a pro rata share of the
3 Health Maintenance Organization's administrative and
4 marketing expenses, but shall not include any refund to
5 be made or additional premium to be paid pursuant to this
6 subsection (f)). The Health Maintenance Organization and
7 the group or enrollment unit may agree that the
8 profitable or unprofitable experience may be calculated
9 taking into account the refund period and the immediately
10 preceding 2 plan years.
11 The Health Maintenance Organization shall include a
12 statement in the evidence of coverage issued to each enrollee
13 describing the possibility of a refund or additional premium,
14 and upon request of any group or enrollment unit, provide to
15 the group or enrollment unit a description of the method used
16 to calculate (1) the Health Maintenance Organization's
17 profitable experience with respect to the group or enrollment
18 unit and the resulting refund to the group or enrollment unit
19 or (2) the Health Maintenance Organization's unprofitable
20 experience with respect to the group or enrollment unit and
21 the resulting additional premium to be paid by the group or
22 enrollment unit.
23 In no event shall the Illinois Health Maintenance
24 Organization Guaranty Association be liable to pay any
25 contractual obligation of an insolvent organization to pay
26 any refund authorized under this Section.
27 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
28 Section 15. The Limited Health Service Organization Act
29 is amended by changing Section 3009 as follows:
30 (215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
31 Sec. 3009. Point-of-service limited health service
32 contracts.
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1 (a) An LHSO that offers a POS contract:
2 (1) shall include as in-plan covered services all
3 services required by law to be provided by an LHSO;
4 (2) shall provide incentives, which shall include
5 financial incentives, for enrollees to use in-plan
6 covered services;
7 (3) shall not offer services out-of-plan without
8 providing those services on an in-plan basis;
9 (4) may limit or exclude specific types of services
10 from coverage when obtained out-of-plan;
11 (5) may include annual out-of-pocket limits and
12 lifetime maximum benefits allowances for out-of-plan
13 services that are separate from any limits or allowances
14 applied to in-plan services;
15 (6) shall include an annual maximum benefit
16 allowance not to exceed $2,500 per year that is separate
17 from any limits or allowances applied to in-plan
18 services;
19 (7) may limit the groups to which a POS product is
20 offered, however, if a POS product is offered to a group,
21 then it must be offered to all eligible members of that
22 group, when an LHSO provider is available;
23 (8) shall not consider emergency services,
24 authorized referral services, or non-routine services
25 obtained out of the service area to be POS services; and
26 (9) may treat as out-of-plan services those
27 services that an enrollee obtains from a participating
28 provider, but for which the proper authorization was not
29 given by the LHSO.
30 (b) An LHSO offering a POS contract shall be subject to
31 the following limitations:
32 (1) The LHSO shall not expend in any calendar
33 quarter more than 20% of its total limited health
34 services expenditures for all its members for out-of-plan
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1 covered services.
2 (2) If the amount specified in paragraph (1) is
3 exceeded by 2% in a quarter, the LHSO shall effect
4 compliance with paragraph (1) by the end of the following
5 quarter.
6 (3) If compliance with the amount specified in
7 paragraph (1) is not demonstrated in the LHSO's next
8 quarterly report, the LHSO may not offer the POS contract
9 to new groups or include the POS option in the renewal of
10 an existing group until compliance with the amount
11 specified in paragraph (1) is demonstrated or otherwise
12 allowed by the Director.
13 (4) Any LHSO failing, without just cause, to comply
14 with the provisions of this subsection shall be required,
15 after notice and hearing, to pay a penalty of $250 for
16 each day out of compliance, to be recovered by the
17 Director of Insurance. Any penalty recovered shall be
18 paid into the General Revenue Fund. The Director may
19 reduce the penalty if the LHSO demonstrates to the
20 Director that the imposition of the penalty would
21 constitute a financial hardship to the LHSO.
22 (c) Any LHSO that offers a POS product shall:
23 (1) File a quarterly financial statement detailing
24 compliance with the requirements of subsection (b).
25 (2) Track out-of-plan POS utilization separately
26 from in-plan or non-POS out-of-plan emergency care,
27 referral care, and urgent care out of the service area
28 utilization.
29 (3) Record out-of-plan utilization in a manner that
30 will permit such utilization and cost reporting as the
31 Director may, by regulation, require.
32 (4) Demonstrate to the Director's satisfaction that
33 the LHSO has the fiscal, administrative, and marketing
34 capacity to control its POS enrollment, utilization, and
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1 costs so as not to jeopardize the financial security of
2 the LHSO.
3 (5) Maintain the deposit required by subsection (b)
4 of Section 2006 in addition to any other deposit required
5 under this Act.
6 (d) An LHSO shall not issue a POS contract until it has
7 filed and had approved by the Director a plan to comply with
8 the provisions of this Section. The compliance plan shall at
9 a minimum include provisions demonstrating that the LHSO will
10 do all of the following:
11 (1) Design the benefit levels and conditions of
12 coverage for in-plan covered services and out-of-plan
13 covered services as required by this Article.
14 (2) Provide or arrange for the provision of
15 adequate systems to:
16 (A) process and pay claims for all out-of-plan
17 covered services;
18 (B) meet the requirements for a POS contract
19 set forth in this Section and any additional
20 requirements that may be set forth by the Director;
21 and
22 (C) generate accurate data and financial and
23 regulatory reports on a timely basis so that the
24 Department can evaluate the LHSO's experience with
25 the POS contract and monitor compliance with POS
26 contract provisions.
27 (3) Comply initially and on an ongoing basis with
28 the requirements of subsections (b) and (c).
29 (e) A POS contract must comply with the requirements of
30 Section 155.31 of the Illinois Insurance Code.
31 (Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
32 Section 20. The Voluntary Health Services Plans Act is
33 amended by changing Section 10 as follows:
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1 (215 ILCS 165/10) (from Ch. 32, par. 604)
2 Sec. 10. Application of Insurance Code provisions.
3 Health services plan corporations and all persons interested
4 therein or dealing therewith shall be subject to the
5 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
6 143, 143c, 149, 155.31, 354, 355.2, 356r, 367.2, 401, 401.1,
7 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
8 (15) of Section 367 of the Illinois Insurance Code.
9 (Source: P.A. 89-514, eff. 7-17-96.)