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90_HB0579
215 ILCS 5/356t 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
health benefit coverage under those Acts must include
coverage for hospital and medical expenses when dental
services for insureds who are disabled are required to be
delivered in a hospital or medical outpatient facility
because of the insured's medical condition. Defines terms.
Effective January 1, 1998.
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1 AN ACT concerning insurance coverage for certain dental
2 expenses, 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 356t as follows:
7 (215 ILCS 5/356t new)
8 Sec. 356t. Coverage of medical services ancillary to
9 dental services for the disabled. An individual or group
10 policy of accident and health insurance amended, delivered,
11 issued, or renewed after the effective date of this
12 amendatory Act of 1997 that covers hospital and medical
13 expenses may not deny coverage for hospital and medical
14 expenses incurred by an insured person who has a disability,
15 as defined by the federal Americans with Disabilities Act of
16 1990, when those hospital and medical expenses are incurred
17 in conjunction with dental services that are required, due to
18 the nature of the disability, to be delivered in a hospital
19 or medical outpatient facility. Nothing in this Section
20 requires that the actual dental services be covered.
21 Section 10. The Health Maintenance Organization Act is
22 amended by changing Section 5-3 as follows:
23 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
24 Sec. 5-3. Insurance Code provisions.
25 (a) Health Maintenance Organizations shall be subject to
26 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
27 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
28 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356t, 367i, 401,
29 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
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1 subsection (2) of Section 367, and Articles VIII 1/2, XII,
2 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
3 Code.
4 (b) For purposes of the Illinois Insurance Code, except
5 for Articles XIII and XIII 1/2, Health Maintenance
6 Organizations in the following categories are deemed to be
7 "domestic companies":
8 (1) a corporation authorized under the Medical
9 Service Plan Act, the Dental Service Plan Act, the Vision
10 Service Plan Act, the Pharmaceutical Service Plan Act,
11 the Voluntary Health Services Plan Act, or the Nonprofit
12 Health Care Service Plan Act;
13 (2) a corporation organized under the laws of this
14 State; or
15 (3) a corporation organized under the laws of
16 another state, 30% or more of the enrollees of which are
17 residents of this State, except a corporation subject to
18 substantially the same requirements in its state of
19 organization as is a "domestic company" under Article
20 VIII 1/2 of the Illinois Insurance Code.
21 (c) In considering the merger, consolidation, or other
22 acquisition of control of a Health Maintenance Organization
23 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
24 (1) the Director shall give primary consideration
25 to the continuation of benefits to enrollees and the
26 financial conditions of the acquired Health Maintenance
27 Organization after the merger, consolidation, or other
28 acquisition of control takes effect;
29 (2)(i) the criteria specified in subsection (1)(b)
30 of Section 131.8 of the Illinois Insurance Code shall not
31 apply and (ii) the Director, in making his determination
32 with respect to the merger, consolidation, or other
33 acquisition of control, need not take into account the
34 effect on competition of the merger, consolidation, or
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1 other acquisition of control;
2 (3) the Director shall have the power to require
3 the following information:
4 (A) certification by an independent actuary of
5 the adequacy of the reserves of the Health
6 Maintenance Organization sought to be acquired;
7 (B) pro forma financial statements reflecting
8 the combined balance sheets of the acquiring company
9 and the Health Maintenance Organization sought to be
10 acquired as of the end of the preceding year and as
11 of a date 90 days prior to the acquisition, as well
12 as pro forma financial statements reflecting
13 projected combined operation for a period of 2
14 years;
15 (C) a pro forma business plan detailing an
16 acquiring party's plans with respect to the
17 operation of the Health Maintenance Organization
18 sought to be acquired for a period of not less than
19 3 years; and
20 (D) such other information as the Director
21 shall require.
22 (d) The provisions of Article VIII 1/2 of the Illinois
23 Insurance Code and this Section 5-3 shall apply to the sale
24 by any health maintenance organization of greater than 10% of
25 its enrollee population (including without limitation the
26 health maintenance organization's right, title, and interest
27 in and to its health care certificates).
28 (e) In considering any management contract or service
29 agreement subject to Section 141.1 of the Illinois Insurance
30 Code, the Director (i) shall, in addition to the criteria
31 specified in Section 141.2 of the Illinois Insurance Code,
32 take into account the effect of the management contract or
33 service agreement on the continuation of benefits to
34 enrollees and the financial condition of the health
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1 maintenance organization to be managed or serviced, and (ii)
2 need not take into account the effect of the management
3 contract or service agreement on competition.
4 (f) Except for small employer groups as defined in the
5 Small Employer Rating, Renewability and Portability Health
6 Insurance Act and except for medicare supplement policies as
7 defined in Section 363 of the Illinois Insurance Code, a
8 Health Maintenance Organization may by contract agree with a
9 group or other enrollment unit to effect refunds or charge
10 additional premiums under the following terms and conditions:
11 (i) the amount of, and other terms and conditions
12 with respect to, the refund or additional premium are set
13 forth in the group or enrollment unit contract agreed in
14 advance of the period for which a refund is to be paid or
15 additional premium is to be charged (which period shall
16 not be less than one year); and
17 (ii) the amount of the refund or additional premium
18 shall not exceed 20% of the Health Maintenance
19 Organization's profitable or unprofitable experience with
20 respect to the group or other enrollment unit for the
21 period (and, for purposes of a refund or additional
22 premium, the profitable or unprofitable experience shall
23 be calculated taking into account a pro rata share of the
24 Health Maintenance Organization's administrative and
25 marketing expenses, but shall not include any refund to
26 be made or additional premium to be paid pursuant to this
27 subsection (f)). The Health Maintenance Organization and
28 the group or enrollment unit may agree that the
29 profitable or unprofitable experience may be calculated
30 taking into account the refund period and the immediately
31 preceding 2 plan years.
32 The Health Maintenance Organization shall include a
33 statement in the evidence of coverage issued to each enrollee
34 describing the possibility of a refund or additional premium,
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1 and upon request of any group or enrollment unit, provide to
2 the group or enrollment unit a description of the method used
3 to calculate (1) the Health Maintenance Organization's
4 profitable experience with respect to the group or enrollment
5 unit and the resulting refund to the group or enrollment unit
6 or (2) the Health Maintenance Organization's unprofitable
7 experience with respect to the group or enrollment unit and
8 the resulting additional premium to be paid by the group or
9 enrollment unit.
10 In no event shall the Illinois Health Maintenance
11 Organization Guaranty Association be liable to pay any
12 contractual obligation of an insolvent organization to pay
13 any refund authorized under this Section.
14 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
15 Section 15. The Limited Health Service Organization Act
16 is amended by changing Section 3009 as follows:
17 (215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
18 Sec. 3009. Point-of-service limited health service
19 contracts.
20 (a) An LHSO that offers a POS contract:
21 (1) shall include as in-plan covered services all
22 services required by law to be provided by an LHSO;
23 (2) shall provide incentives, which shall include
24 financial incentives, for enrollees to use in-plan
25 covered services;
26 (3) shall not offer services out-of-plan without
27 providing those services on an in-plan basis;
28 (4) may limit or exclude specific types of services
29 from coverage when obtained out-of-plan;
30 (5) may include annual out-of-pocket limits and
31 lifetime maximum benefits allowances for out-of-plan
32 services that are separate from any limits or allowances
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1 applied to in-plan services;
2 (6) shall include an annual maximum benefit
3 allowance not to exceed $2,500 per year that is separate
4 from any limits or allowances applied to in-plan
5 services;
6 (7) may limit the groups to which a POS product is
7 offered, however, if a POS product is offered to a group,
8 then it must be offered to all eligible members of that
9 group, when an LHSO provider is available;
10 (8) shall not consider emergency services,
11 authorized referral services, or non-routine services
12 obtained out of the service area to be POS services; and
13 (9) may treat as out-of-plan services those
14 services that an enrollee obtains from a participating
15 provider, but for which the proper authorization was not
16 given by the LHSO.
17 (b) An LHSO offering a POS contract shall be subject to
18 the following limitations:
19 (1) The LHSO shall not expend in any calendar
20 quarter more than 20% of its total limited health
21 services expenditures for all its members for out-of-plan
22 covered services.
23 (2) If the amount specified in paragraph (1) is
24 exceeded by 2% in a quarter, the LHSO shall effect
25 compliance with paragraph (1) by the end of the following
26 quarter.
27 (3) If compliance with the amount specified in
28 paragraph (1) is not demonstrated in the LHSO's next
29 quarterly report, the LHSO may not offer the POS contract
30 to new groups or include the POS option in the renewal of
31 an existing group until compliance with the amount
32 specified in paragraph (1) is demonstrated or otherwise
33 allowed by the Director.
34 (4) Any LHSO failing, without just cause, to comply
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1 with the provisions of this subsection shall be required,
2 after notice and hearing, to pay a penalty of $250 for
3 each day out of compliance, to be recovered by the
4 Director of Insurance. Any penalty recovered shall be
5 paid into the General Revenue Fund. The Director may
6 reduce the penalty if the LHSO demonstrates to the
7 Director that the imposition of the penalty would
8 constitute a financial hardship to the LHSO.
9 (c) Any LHSO that offers a POS product shall:
10 (1) File a quarterly financial statement detailing
11 compliance with the requirements of subsection (b).
12 (2) Track out-of-plan POS utilization separately
13 from in-plan or non-POS out-of-plan emergency care,
14 referral care, and urgent care out of the service area
15 utilization.
16 (3) Record out-of-plan utilization in a manner that
17 will permit such utilization and cost reporting as the
18 Director may, by regulation, require.
19 (4) Demonstrate to the Director's satisfaction that
20 the LHSO has the fiscal, administrative, and marketing
21 capacity to control its POS enrollment, utilization, and
22 costs so as not to jeopardize the financial security of
23 the LHSO.
24 (5) Maintain the deposit required by subsection (b)
25 of Section 2006 in addition to any other deposit required
26 under this Act.
27 (d) An LHSO shall not issue a POS contract until it has
28 filed and had approved by the Director a plan to comply with
29 the provisions of this Section. The compliance plan shall at
30 a minimum include provisions demonstrating that the LHSO will
31 do all of the following:
32 (1) Design the benefit levels and conditions of
33 coverage for in-plan covered services and out-of-plan
34 covered services as required by this Article.
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1 (2) Provide or arrange for the provision of
2 adequate systems to:
3 (A) process and pay claims for all out-of-plan
4 covered services;
5 (B) meet the requirements for a POS contract
6 set forth in this Section and any additional
7 requirements that may be set forth by the Director;
8 and
9 (C) generate accurate data and financial and
10 regulatory reports on a timely basis so that the
11 Department can evaluate the LHSO's experience with
12 the POS contract and monitor compliance with POS
13 contract provisions.
14 (3) Comply initially and on an ongoing basis with
15 the requirements of subsections (b) and (c).
16 (e) A POS contract must comply with the requirements of
17 Section 356t of the Illinois Insurance Code.
18 (Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
19 Section 20. The Voluntary Health Services Plans Act is
20 amended by changing Section 10 as follows:
21 (215 ILCS 165/10) (from Ch. 32, par. 604)
22 Sec. 10. Application of Insurance Code provisions.
23 Health services plan corporations and all persons interested
24 therein or dealing therewith shall be subject to the
25 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
26 143, 143c, 149, 354, 355.2, 356r, 356t, 367.2, 401, 401.1,
27 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
28 (15) of Section 367 of the Illinois Insurance Code.
29 (Source: P.A. 89-514, eff. 7-17-96.)
30 Section 99. Effective date. This Act takes effect
31 January 1, 1998.