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90_HB1312
215 ILCS 5/353.3 new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003 from Ch. 73, par. 1504-3
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
coverage under those Acts may not exclude coverage for a
preexisting condition beyond 6 months after the effective
date of the coverage.
LRB9000394JSmgA
LRB9000394JSmgA
1 AN ACT concerning accident and health insurance coverage,
2 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 353.3 as follows:
7 (215 ILCS 5/353.3 new)
8 Sec. 353.3. Preexisting conditions.
9 (a) This Section applies to an individual or group
10 policy of accident and health insurance amended, delivered,
11 issued, or renewed in this State after the effective date of
12 this amendatory Act of 1997.
13 (b) "Preexisting condition" means the existence of
14 symptoms that would cause an ordinarily prudent person to
15 seek diagnosis, care, or treatment or a condition for which
16 medical advice or treatment was recommended by or received
17 from a provider of health care services during the 6 month
18 period immediately preceding the effective date of the
19 coverage.
20 (c) A policy of accident and health insurance subject to
21 this Section may not exclude or limit coverage for a
22 preexisting condition beyond 6 months after the effective
23 date of the coverage.
24 Section 10. The Health Maintenance Organization Act is
25 amended by changing Section 5-3 as follows:
26 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
27 Sec. 5-3. Insurance Code provisions.
28 (a) Health Maintenance Organizations shall be subject to
29 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
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1 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
2 154.6, 154.7, 154.8, 155.04, 353.3, 355.2, 356m, 367i, 401,
3 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
4 subsection (2) of Section 367, and Articles VIII 1/2, XII,
5 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
6 Code.
7 (b) For purposes of the Illinois Insurance Code, except
8 for Articles XIII and XIII 1/2, Health Maintenance
9 Organizations in the following categories are deemed to be
10 "domestic companies":
11 (1) a corporation authorized under the Medical
12 Service Plan Act, the Dental Service Plan Act, the Vision
13 Service Plan Act, the Pharmaceutical Service Plan Act,
14 the Voluntary Health Services Plan Act, or the Nonprofit
15 Health Care Service Plan Act;
16 (2) a corporation organized under the laws of this
17 State; or
18 (3) a corporation organized under the laws of
19 another state, 30% or more of the enrollees of which are
20 residents of this State, except a corporation subject to
21 substantially the same requirements in its state of
22 organization as is a "domestic company" under Article
23 VIII 1/2 of the Illinois Insurance Code.
24 (c) In considering the merger, consolidation, or other
25 acquisition of control of a Health Maintenance Organization
26 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
27 (1) the Director shall give primary consideration
28 to the continuation of benefits to enrollees and the
29 financial conditions of the acquired Health Maintenance
30 Organization after the merger, consolidation, or other
31 acquisition of control takes effect;
32 (2)(i) the criteria specified in subsection (1)(b)
33 of Section 131.8 of the Illinois Insurance Code shall not
34 apply and (ii) the Director, in making his determination
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1 with respect to the merger, consolidation, or other
2 acquisition of control, need not take into account the
3 effect on competition of the merger, consolidation, or
4 other acquisition of control;
5 (3) the Director shall have the power to require
6 the following information:
7 (A) certification by an independent actuary of
8 the adequacy of the reserves of the Health
9 Maintenance Organization sought to be acquired;
10 (B) pro forma financial statements reflecting
11 the combined balance sheets of the acquiring company
12 and the Health Maintenance Organization sought to be
13 acquired as of the end of the preceding year and as
14 of a date 90 days prior to the acquisition, as well
15 as pro forma financial statements reflecting
16 projected combined operation for a period of 2
17 years;
18 (C) a pro forma business plan detailing an
19 acquiring party's plans with respect to the
20 operation of the Health Maintenance Organization
21 sought to be acquired for a period of not less than
22 3 years; and
23 (D) such other information as the Director
24 shall require.
25 (d) The provisions of Article VIII 1/2 of the Illinois
26 Insurance Code and this Section 5-3 shall apply to the sale
27 by any health maintenance organization of greater than 10% of
28 its enrollee population (including without limitation the
29 health maintenance organization's right, title, and interest
30 in and to its health care certificates).
31 (e) In considering any management contract or service
32 agreement subject to Section 141.1 of the Illinois Insurance
33 Code, the Director (i) shall, in addition to the criteria
34 specified in Section 141.2 of the Illinois Insurance Code,
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1 take into account the effect of the management contract or
2 service agreement on the continuation of benefits to
3 enrollees and the financial condition of the health
4 maintenance organization to be managed or serviced, and (ii)
5 need not take into account the effect of the management
6 contract or service agreement on competition.
7 (f) Except for small employer groups as defined in the
8 Small Employer Rating, Renewability and Portability Health
9 Insurance Act and except for medicare supplement policies as
10 defined in Section 363 of the Illinois Insurance Code, a
11 Health Maintenance Organization may by contract agree with a
12 group or other enrollment unit to effect refunds or charge
13 additional premiums under the following terms and conditions:
14 (i) the amount of, and other terms and conditions
15 with respect to, the refund or additional premium are set
16 forth in the group or enrollment unit contract agreed in
17 advance of the period for which a refund is to be paid or
18 additional premium is to be charged (which period shall
19 not be less than one year); and
20 (ii) the amount of the refund or additional premium
21 shall not exceed 20% of the Health Maintenance
22 Organization's profitable or unprofitable experience with
23 respect to the group or other enrollment unit for the
24 period (and, for purposes of a refund or additional
25 premium, the profitable or unprofitable experience shall
26 be calculated taking into account a pro rata share of the
27 Health Maintenance Organization's administrative and
28 marketing expenses, but shall not include any refund to
29 be made or additional premium to be paid pursuant to this
30 subsection (f)). The Health Maintenance Organization and
31 the group or enrollment unit may agree that the
32 profitable or unprofitable experience may be calculated
33 taking into account the refund period and the immediately
34 preceding 2 plan years.
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1 The Health Maintenance Organization shall include a
2 statement in the evidence of coverage issued to each enrollee
3 describing the possibility of a refund or additional premium,
4 and upon request of any group or enrollment unit, provide to
5 the group or enrollment unit a description of the method used
6 to calculate (1) the Health Maintenance Organization's
7 profitable experience with respect to the group or enrollment
8 unit and the resulting refund to the group or enrollment unit
9 or (2) the Health Maintenance Organization's unprofitable
10 experience with respect to the group or enrollment unit and
11 the resulting additional premium to be paid by the group or
12 enrollment unit.
13 In no event shall the Illinois Health Maintenance
14 Organization Guaranty Association be liable to pay any
15 contractual obligation of an insolvent organization to pay
16 any refund authorized under this Section.
17 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
18 Section 15. The Limited Health Service Organization Act
19 is amended by changing Section 4003 as follows:
20 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
21 Sec. 4003. Illinois Insurance Code provisions. Limited
22 health service organizations shall be subject to the
23 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
24 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
25 154.6, 154.7, 154.8, 155.04, 353.3, 355.2, 401, 401.1, 402,
26 403, 403A, 408, 408.2, and 412, and Articles VIII 1/2, XII,
27 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
28 Code. For purposes of the Illinois Insurance Code, except
29 for Articles XIII and XIII 1/2, limited health service
30 organizations in the following categories are deemed to be
31 domestic companies:
32 (1) a corporation under the laws of this State; or
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1 (2) a corporation organized under the laws of
2 another state, 30% of more of the enrollees of which are
3 residents of this State, except a corporation subject to
4 substantially the same requirements in its state of
5 organization as is a domestic company under Article VIII
6 1/2 of the Illinois Insurance Code.
7 (Source: P.A. 86-600; 87-587; 87-1090.)
8 Section 20. The Voluntary Health Services Plans Act is
9 amended by changing Section 10 as follows:
10 (215 ILCS 165/10) (from Ch. 32, par. 604)
11 Sec. 10. Application of Insurance Code provisions.
12 Health services plan corporations and all persons interested
13 therein or dealing therewith shall be subject to the
14 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
15 143, 143c, 149, 353.3, 354, 355.2, 356r, 367.2, 401, 401.1,
16 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
17 (15) of Section 367 of the Illinois Insurance Code.
18 (Source: P.A. 89-514, eff. 7-17-96.)