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90_HB1400enr
215 ILCS 105/5 from Ch. 73, par. 1305
Amends the Comprehensive Health Insurance Plan Act.
Provides that the Plan shall be administered by a plan
administrator rather than an administering carrier. Provides
that criteria for bids to administer the Plan shall include
disclosure of discounts or income that may be derived by the
Plan and the timeliness of claim processing procedures.
Effective July 1, 1997.
LRB9002243JSgc
HB1400 Enrolled LRB9002243JSgc
1 AN ACT concerning health insurance coverage, amending
2 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 Health Insurance Portability and
6 Accountability Act is amended by adding Section 50 as
7 follows:
8 (215 ILCS 97/50 new)
9 Sec. 50. Guaranteed renewability of individual health
10 insurance coverage.
11 (A) In general. Except as provided in this Section, a
12 health insurance issuer that provides individual health
13 insurance coverage to an individual shall renew or continue
14 in force such coverage at the option of the individual.
15 (B) General exceptions. A health insurance issuer may
16 nonrenew or discontinue health insurance coverage of an
17 individual in the individual market based only on one or more
18 of the following:
19 (1) Nonpayment of premiums. The individual has
20 failed to pay premiums or contributions in accordance
21 with the terms of the health insurance coverage or the
22 issuer has not received timely premium payments.
23 (2) Fraud. The individual has performed an act or
24 practice that constitutes fraud or made an intentional
25 misrepresentation of material fact under the terms of the
26 coverage.
27 (3) Termination of plan. The issuer is ceasing to
28 offer coverage in the individual market in accordance
29 with subsection (C) of this Section and applicable
30 Illinois law.
31 (4) Movement outside the service area. In the case
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1 of a health insurance issuer that offers health insurance
2 coverage in the market through a network plan, the
3 individual no longer resides, lives, or works in the
4 service area (or in an area for which the issuer is
5 authorized to do business), but only if such coverage is
6 terminated under this paragraph uniformly without regard
7 to any health status-related factor of covered
8 individuals.
9 (5) Association membership ceases. In the case of
10 health insurance coverage that is made available in the
11 individual market only through one or more bona fide
12 associations, the membership of the individual in the
13 association (on the basis of which the coverage is
14 provided) ceases, but only if such coverage is terminated
15 under this paragraph uniformly without regard to any
16 health status-related factor of covered individuals.
17 (C) Requirements for uniform termination of coverage.
18 (1) Particular type of coverage not offered. In
19 any case in which an issuer decides to discontinue
20 offering a particular type of health insurance coverage
21 offered in the individual market, coverage of such type
22 may be discontinued by the issuer only if:
23 (a) the issuer provides notice to each covered
24 individual provided coverage of this type in such
25 market of such discontinuation at least 90 days
26 prior to the date of the discontinuation of such
27 coverage;
28 (b) the issuer offers, to each individual in
29 the individual market provided coverage of this
30 type, the option to purchase any other individual
31 health insurance coverage currently being offered by
32 the issuer for individuals in such market; and
33 (c) in exercising the option to discontinue
34 coverage of that type and in offering the option of
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1 coverage under subparagraph (b), the issuer acts
2 uniformly without regard to any health
3 status-related factor of enrolled individuals or
4 individuals who may become eligible for such
5 coverage.
6 (2) Discontinuance of all coverage.
7 (a) In general. Subject to subparagraph (c),
8 in any case in which a health insurance issuer
9 elects to discontinue offering all health insurance
10 coverage in the individual market in Illinois,
11 health insurance coverage may be discontinued by the
12 issuer only if:
13 (i) the issuer provides notice to the
14 Director and to each individual of the
15 discontinuation at least 180 days prior to the
16 date of the expiration of such coverage; and
17 (ii) all health insurance issued or
18 delivered for issuance in Illinois in such
19 market is discontinued and coverage under such
20 health insurance coverage in such market is not
21 renewed.
22 (b) Prohibition on market reentry. In the
23 case of a discontinuation under subparagraph (a) in
24 the individual market, the issuer may not provide
25 for the issuance of any health insurance coverage in
26 Illinois involved during the 5-year period beginning
27 on the date of the discontinuation of the last
28 health insurance coverage not so renewed.
29 (D) Exception for uniform modification of coverage. At
30 the time of coverage renewal, a health insurance issuer may
31 modify the health insurance coverage for a policy form
32 offered to individuals in the individual market so long as
33 the modification is consistent with Illinois law and
34 effective on a uniform basis among all individuals with that
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1 policy form.
2 (E) Application to coverage offered only through
3 associations. In applying this Section in the case of health
4 insurance coverage that is made available by a health
5 insurance issuer in the individual market to individuals only
6 through one or more associations, a reference to an
7 "individual" is deemed to include a reference to such an
8 association (of which the individual is a member).
9 Section 10. The Comprehensive Health Insurance Plan Act
10 is amended by changing Sections 5 and 12 as follows:
11 (215 ILCS 105/5) (from Ch. 73, par. 1305)
12 Sec. 5. Plan administrator Administering Carrier.
13 a. The board shall select a plan administrator an
14 administering carrier through a competitive bidding process
15 to administer the plan. The board shall evaluate bids
16 submitted under this Section based on criteria established by
17 the board which shall include:
18 (1) The administrator's carrier's proven ability to
19 handle other large group accident and health benefit plans.
20 (2) The efficiency and timeliness of the administrator's
21 carrier's claim processing paying procedures.
22 (3) An estimate of total net cost charges for
23 administering the plan, including any discounts or income the
24 Plan could expect to receive or benefit from.
25 (4) The administrator's ability to apply effective cost
26 containment programs and procedures and of the carrier to
27 administer the plan in a cost-efficient manner.
28 (5) The financial condition and stability of the
29 administrator carrier.
30 b. The plan administrator administering carrier shall
31 serve for a period of 5 years subject to removal for cause
32 and subject to the terms, conditions and limitations of the
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1 contract between the board and the plan administrator
2 administering carrier. At least one year prior to the
3 expiration of each 5 year period of service by the current
4 plan administrator an administering carrier, the board shall
5 begin to advertise for and accept bids to serve as the plan
6 administrator administering carrier for the succeeding 5 year
7 period. Selection of the plan administrator administering
8 carrier for the succeeding period shall be made at least 6
9 months prior to the end of the current 5 year period.
10 c. The plan administrator administering carrier shall
11 perform such eligibility and administrative claims payment
12 functions relating to the plan as may be assigned to it
13 including:
14 (1) The establishment of administering carrier shall
15 establish a premium billing procedure for collection of
16 premiums from plan participants. Billings shall be made on a
17 periodic basis as determined by the board.
18 (2) Processing of claims and various cost containment
19 functions.
20 (3) (2) Other The administering carrier shall perform
21 all necessary functions to assure timely payment of benefits
22 to participants under the plan, including:
23 (a) Making available information relating to the proper
24 manner of submitting a claim for benefits under the plan and
25 distributing forms upon which submissions shall be made.
26 (b) Evaluating the eligibility of each claim for payment
27 under the plan.
28 (c) The administrator administering carrier shall be
29 governed by the requirements of Part 919 of Title 50 of the
30 Illinois Administrative Code, promulgated by the Department
31 of Insurance, regarding the handling of claims under this
32 Act.
33 d. The administrator administering carrier shall submit
34 regular reports to the board regarding the operation of the
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1 plan. The frequency, content and form of the report shall be
2 as determined by the board.
3 e. The administrator administering carrier shall pay or
4 be reimbursed for claims expenses from the premium payments
5 received from or on behalf of plan participants. If the
6 administrator's administering carrier's payments or
7 reimbursements for claims expenses exceed the portion of
8 premiums allocated by the board for payment of claims
9 expenses, the board shall provide to the administering
10 carrier additional funds to the administrator for payment or
11 reimbursement of such claims expenses.
12 f. The administrator administering carrier shall be paid
13 as provided in the board's contract between the Board and the
14 plan administrator with the administering carrier for
15 expenses incurred in the performance of its services.
16 (Source: P.A. 85-1013.)
17 (215 ILCS 105/12) (from Ch. 73, par. 1312)
18 Sec. 12. Deficit or surplus.
19 a. If premiums or other receipts by the Board exceed the
20 amount required for the operation of the Plan, including
21 actual losses and administrative expenses of the Plan, the
22 Board shall direct that the excess be held at interest, in a
23 bank designated by the Board, or used to offset future losses
24 or to reduce Plan premiums. In this subsection, the term
25 "future losses" includes reserves for incurred but not
26 reported claims.
27 b. Any deficit incurred or expected to be incurred on
28 behalf of eligible persons who qualify for plan coverage
29 under Section 7 of this Act shall be recouped by an
30 appropriation made by the General Assembly.
31 c. For the purposes of this Section, a deficit shall be
32 incurred when anticipated losses and incurred but not
33 reported claims expenses exceed anticipated income from
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1 earned premiums net of administrative expenses.
2 d. Any deficit incurred or expected to be incurred on
3 behalf of federally eligible individuals who qualify for Plan
4 coverage under Section 15 of this Act shall be recouped by an
5 assessment of all insurers made in accordance with the
6 provisions of this Section. The Board shall within 90 days
7 of the effective date of this amendatory Act of 1997 and
8 within the first quarter of each fiscal year thereafter
9 assess all insurers for the anticipated deficit in accordance
10 with the provisions of this Section. The board may also make
11 additional assessments no more than 4 times a year to fund
12 unanticipated deficits, implementation expenses, and cash
13 flow needs.
14 e. An insurer's assessment shall be determined by
15 multiplying the total assessment, as determined in subsection
16 d. of this Section, by a fraction, the numerator of which
17 equals that insurer's direct Illinois premiums during the
18 preceding calendar year and the denominator of which equals
19 the total of all insurers' direct Illinois premiums. The
20 Board may exempt those insurers whose share as determined
21 under this subsection would be so minimal as to not exceed
22 the estimated cost of levying the assessment.
23 f. The Board shall charge and collect from each insurer
24 the amounts determined to be due under this Section. The
25 assessment shall be billed by Board invoice based upon the
26 insurer's direct Illinois premium income as shown in its
27 annual statement for the preceding calendar year as filed
28 with the Director. The invoice shall be due upon receipt and
29 must be paid no later than 30 days after receipt by the
30 insurer.
31 g. When an insurer fails to pay the full amount of any
32 assessment of $100 or more due under this Section there shall
33 be added to the amount due as a penalty the greater of $50 or
34 an amount equal to 5% of the deficiency for each month or
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1 part of a month that the deficiency remains unpaid.
2 h. Amounts collected under this Section shall be paid to
3 the Board for deposit into the Plan Fund authorized by
4 Section 3 of this Act.
5 i. An insurer may petition the Director for an abatement
6 or deferment of all or part of an assessment imposed by the
7 Board. The Director may abate or defer, in whole or in part,
8 the assessment if, in the opinion of the Director, payment of
9 the assessment would endanger the ability of the insurer to
10 fulfill its contractual obligations. In the event an
11 assessment against an insurer is abated or deferred in whole
12 or in part, the amount by which the assessment is abated or
13 deferred shall be assessed against the other insurers in a
14 manner consistent with the basis for assessments set forth in
15 this subsection. The insurer receiving a deferment shall
16 remain liable to the plan for the deficiency for 4 years.
17 j. The board shall establish procedures for appeal by
18 any insurer subject to assessment pursuant to this Section.
19 Such procedures shall require that:
20 (1) Any insurer that wishes to appeal all or any
21 part of an assessment made pursuant to this Section shall
22 first pay the amount of the assessment as set forth in
23 the invoice provided by the board within the time
24 provided in subsection f. of this Section. The board
25 shall hold such payments in a separate interest-bearing
26 account. The payments shall be accompanied by a statement
27 in writing that the payment is made under appeal. The
28 statement shall specify the grounds for the appeal. The
29 insurer may be represented in its appeal by counsel or
30 other representative of its choosing.
31 (2) Within 90 days following the payment of an
32 assessment under appeal by any insurer, the board shall
33 notify the insurer or representative designated by the
34 insurer in writing of its determination with respect to
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1 the appeal and the basis or bases for that determination
2 unless the Board notifies the insurer that a reasonable
3 amount of additional time is required to resolve the
4 issues raised by the appeal.
5 (3) The board shall refer to the Director any
6 question concerning the amount of direct Illinois premium
7 income as shown in an insurer's annual statement for the
8 preceding calendar year on file with the Director on the
9 invoice date of the assessment. Unless additional time
10 is required to resolve the question, the Director shall
11 within 60 days report to the board in writing his
12 determination respecting the amount of direct Illinois
13 premium income on file on the invoice date of the
14 assessment.
15 (4) In the event the board determines that the
16 insurer is entitled to a refund, the refund shall be paid
17 within 30 days following the date upon which the board
18 makes its determination, together with the accrued
19 interest. Interest on any refund due an insurer shall be
20 paid at the rate actually earned by the Board on the
21 separate account.
22 (5) The amount of any such refund shall then be
23 assessed against all insurers in a manner consistent with
24 the basis for assessment as otherwise authorized by this
25 Section.
26 (6) The board's determination with respect to any
27 appeal received pursuant to this subsection shall be a
28 final administrative decision as defined in Section 3-101
29 of the Code of Civil Procedure. The provisions of the
30 Administrative Review Law shall apply to and govern all
31 proceedings for the judicial review of final
32 administrative decisions of the board.
33 (7) If an insurer fails to appeal an assessment in
34 accordance with the provisions of this subsection, the
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1 insurer shall be deemed to have waived its right of
2 appeal.
3 The provisions of this subsection apply to all
4 assessments made in any calendar year ending on or after
5 December 31, 1997.
6 (Source: P.A. 90-30, eff. 7-1-97.)
7 Section 15. The Health Care Purchasing Group Act is
8 amended by changing Sections 5, 10, 35, 40, 45, and 65 as
9 follows:
10 (215 ILCS 123/5)
11 Sec. 5. Purpose; applicability of Illinois Health
12 Insurance Portability and Accountability Act.
13 (a) The purpose and intent of this Act is to authorize
14 the formation, operation, and regulation of health care
15 purchasing groups (referred to in this Act as "HPGs") as
16 described by this Act, to authorize the sale and regulation
17 of health insurance products for employers that are sold to
18 HPGs, and to encourage the development of financially secure
19 and cost effective markets for the basic health care needs of
20 employers, employees, and their dependents in this State.
21 Nothing in this Act authorizes an employer to join with other
22 employers to self-insure through risk pooling.
23 (b) All health insurance contracts issued under this Act
24 are subject to the Illinois Health Insurance Portability and
25 Accountability Act.
26 (Source: P.A. 90-337, eff. 1-1-98.)
27 (215 ILCS 123/10)
28 Sec. 10. Definitions. Words and phrases As used in this
29 Act, unless defined in this Section, have the meanings
30 attributed to them in Section 5 of the Illinois Health
31 Insurance Portability and Accountability Act.:
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1 "Director" means the Director of Insurance.
2 "Employee" means a person who works on a full-time basis
3 for the employer, with a normal week of 30 or more hours, and
4 has satisfied any applicable waiting periods for insurance.
5 "Employee" may also include a sole proprietor, a partner of a
6 partnership, a retired employee, or an independent
7 contractor, provided the sole proprietor, partner, retired
8 employee, or independent contractor is included as an
9 employee under a health benefit plan of the employer. It
10 does not need to include an employee who works on a
11 part-time, temporary, seasonal, or substitute basis.
12 "Employer" may include any legal form of doing business
13 or employing people, including a self-employed sole
14 proprietor.
15 "Health benefit plan" means any hospital or medical
16 expense-incurred policy or certificate, hospital or medical
17 service plan contract, or health maintenance organization
18 subscriber contract. Health benefit plan shall not include a
19 policy or certificate of individual, accident-only, credit,
20 dental, vision, medicare supplement, hospital indemnity,
21 specified disease, long term care or disability income
22 insurance, coverage issued as a supplement to liability
23 insurance, workers' compensation or similar insurance, or
24 automobile medical payment insurance.
25 "Health insurance contract", "group or master health
26 insurance contract" and "insurance" refer to the forms of
27 insurance obligations which a "risk-bearer" as defined in
28 this Section has been authorized to issue.
29 "Late enrollee" means an employee or dependent who
30 requests enrollment in a health benefit plan of an employer
31 following the initial enrollment period during which the
32 individual is entitled to enroll under the terms of the
33 health insurance contract, provided that the initial
34 enrollment period is a period of at least 30 days. However,
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1 an employee or dependent shall not be considered a late
2 enrollee if:
3 (1) The individual meets each of the following:
4 (A) the individual was covered under a prior
5 employer based health benefit plan at the time of the
6 initial enrollment;
7 (B) the individual lost coverage under qualifying
8 previous coverage as a result of termination of
9 employment or eligibility, the involuntary termination of
10 the qualifying previous coverage, death of a spouse or
11 divorce; and
12 (C) the individual requests enrollment within 30
13 days after the termination of the qualifying previous
14 coverage;
15 (2) the individual is employed by an employer that
16 offers multiple health insurance alternatives and the
17 individual elects a different coverage during an open
18 enrollment period; or
19 (3) a court has ordered coverage be provided for a
20 spouse or minor or dependent child under a covered employee's
21 health insurance contract and request for enrollment is made
22 within 30 days after issuance of the court order.
23 "Preexisting condition" means a condition that, during a
24 period of no more than 12 months immediately preceding the
25 effective date of coverage, had manifested itself in a manner
26 that would cause an ordinarily prudent person to seek medical
27 advice, diagnosis, care, or treatment, or for which medical
28 advice, diagnosis, care, or treatment was recommended or
29 received.
30 "Risk-bearer" means an insurance company licensed in this
31 State and authorized to transact the kinds of business
32 described in clause (b) of Class 1 and clause (a) of Class 2
33 of Section 4 of the Illinois Insurance Code and entities
34 authorized under the Health Maintenance Organization Act.
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1 (Source: P.A. 90-337, eff. 1-1-98.)
2 (215 ILCS 123/35)
3 Sec. 35. Underwriting provisions. All health insurance
4 contracts issued under this Act shall be subject to the
5 portability and preexisting condition provisions of the
6 Illinois Health Insurance Portability and Accountability Act.
7 following provisions, as applicable:
8 (1) Preexisting condition limitation: No health
9 insurance contract or certificate issued under the
10 contract shall exclude or limit coverage for a
11 preexisting condition for a period beyond 12 months from
12 the effective date of a person's coverage.
13 (2) Portability of coverage: Preexisting condition
14 limitation periods shall be reduced to the extent a
15 person was covered under a prior employer-based health
16 benefit plan, notwithstanding the benefit levels of the
17 prior plan, if:
18 (A) the person is not a late enrollee; and
19 (B) the prior coverage was continuous to a
20 date not more than 30 days prior to the effective
21 date of the new coverage, exclusive of any
22 applicable waiting period.
23 (3) If a risk-bearer offers coverage to an
24 employer, the risk-bearer shall offer coverage to all of
25 the employees of an employer and their dependents. A
26 risk-bearer shall not offer coverage to only certain
27 individuals of an employer group, except in the case of
28 late enrollees.
29 (4) As to employees to whom portability provisions
30 do not apply, a risk-bearer shall not modify a health
31 insurance contract or certificate thereunder with respect
32 to an employer or any employee or dependent, except a
33 risk-bearer may restrict or exclude coverage or benefits
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1 for a specific condition for a maximum period of 12
2 months from the effective date of the employee's or
3 dependant's coverage by way of rider or endorsement. As
4 to employees to whom the portability of coverage
5 provisions apply, no riders or endorsements may reduce or
6 limit benefits to be provided under the portability of
7 coverage provisions.
8 (Source: P.A. 90-337, eff. 1-1-98.)
9 (215 ILCS 123/40)
10 Sec. 40. Renewability. All health insurance contracts
11 issued under this Act are subject to the renewability
12 provisions of the Illinois Health Insurance Portability and
13 Accountability Act.
14 (a) A health insurance contract subject to this Act
15 shall be renewable with respect to all insured employees or
16 dependents, at the option of the HPG or employer, whichever
17 is a party to the master health insurance contract, except in
18 any of the following cases:
19 (1) nonpayment of required premiums;
20 (2) fraud or misrepresentation of the employer or,
21 with respect to coverage of individual insureds, the
22 insureds or their representatives;
23 (3) noncompliance with the risk-bearer's minimum
24 participation requirements;
25 (4) noncompliance with the risk-bearer's employer
26 contribution requirements;
27 (5) noncompliance with contract provisions;
28 (6) repeated misuse of a provider network
29 provision;
30 (7) the risk-bearer elects to non-renew all of its
31 health insurance contracts delivered or issued for
32 delivery to HPGs or employers under this Act; or
33 (8) the Director finds that the continuation of the
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1 coverage would:
2 (A) Not be in the best interests of the policy
3 holders or certificate holders; or
4 (B) Impair the risk-bearer's ability to meet
5 its contractual obligations.
6 (b) A risk-bearer that elects not to renew a health
7 insurance contract under item (7) of subsection (a) shall
8 provide notice of the decision not to renew coverage to all
9 affected employers and to the official in charge of insurance
10 regulation in each state in which an affected insured
11 individual is known to reside at least 180 days prior to the
12 nonrenewal of any health insurance contract by the
13 risk-bearer. Notice to an official in charge of insurance
14 regulation under this subsection shall be provided at least
15 3 working days before the notice to the affected employers.
16 Further, the risk-bearer shall be prohibited from writing new
17 business under this Act for a period of 5 years from the date
18 of notice to the Director.
19 (Source: P.A. 90-337, eff. 1-1-98.)
20 (215 ILCS 123/45)
21 Sec. 45. Disclosure requirements. In connection with the
22 offering for sale of any health insurance contract or
23 certificate under the contract to an HPG sponsor, HPG,
24 employer, and employee, a risk-bearer shall make a reasonable
25 disclosure, as part of its solicitation and sales materials
26 of all of the following:
27 (1) the provisions of the health insurance contracts
28 concerning the risk-bearer's right to change premium rates
29 and the factors, other than claim experience, that affect
30 changes in premium rates;
31 (2) that the rating restrictions contained in Section 30
32 of the Small Employer Rating, Renewability and Portability
33 Health Insurance Act are not applicable to the health
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1 insurance contract being offered;
2 (2)(3) the provisions relating to renewability of
3 policies and contracts;
4 (3)(4) the provisions relating to any preexisting
5 condition provision; and
6 (4)(5) the provisions relating to portability
7 provisions.
8 (Source: P.A. 90-337, eff. 1-1-98.)
9 (215 ILCS 123/65)
10 Sec. 65. Fees.
11 (a) The Director shall charge, collect, and give proper
12 acquittance for the payment all fees provided for by this
13 Act, except that any Illinois corporations licensed by the
14 Department of Insurance pursuant to the provisions of the
15 Illinois Insurance Code, the Dental Service Plan Act, the
16 Health Maintenance Organization Act, the Limited Health
17 Service Organization Act, the Vision Service Plan Act and the
18 Voluntary Health Services Plans Act or licensed as a third
19 party administrator or as a managing general agent is exempt
20 from the registration fee imposed under this Act.
21 (b) Any funds collected under provisions of this Act
22 shall be deposited in the Insurance Producer Administration
23 Fund treated in the manner provided in subsection (11) of
24 Section 408 of the Illinois Insurance Code.
25 (Source: P.A. 90-337, eff. 1-1-98.)
26 (215 ILCS 123/50 rep.)
27 Section 20. The Health Care Purchasing Group Act is
28 amended by repealing Section 50.
29 Section 99. Effective date. This Act takes effect upon
30 becoming law.