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90_HB1400ccr001
SRS90HB1400MNbmccr2
1 90TH GENERAL ASSEMBLY
2 CONFERENCE COMMITTEE REPORT
3 ON HOUSE BILL 1400
4 -------------------------------------------------------------
5 -------------------------------------------------------------
6 To the President of the Senate and the Speaker of the
7 House of Representatives:
8 We, the conference committee appointed to consider the
9 differences between the houses in relation to Senate
10 Amendment No. 1 to House Bill 1400, recommend the following:
11 (1) that the House of Representatives concur in Senate
12 Amendment No. 1; and
13 (2) that House Bill 1400 be further amended on page 1 by
14 replacing lines 1 and 2 with the following;
15 "AN ACT concerning health insurance coverage, amending
16 named Acts."; and
17 on page 1 by replacing lines 5 and 6 with the following:
18 "Section 5. The Illinois Health Insurance Portability
19 and Accountability Act is amended by adding Section 50 as
20 follows:
21 (215 ILCS 97/50 new)
22 Sec. 50. Guaranteed renewability of individual health
23 insurance coverage.
24 (A) In general. Except as provided in this Section, a
25 health insurance issuer that provides individual health
26 insurance coverage to an individual shall renew or continue
27 in force such coverage at the option of the individual.
28 (B) General exceptions. A health insurance issuer may
29 nonrenew or discontinue health insurance coverage of an
30 individual in the individual market based only on one or more
31 of the following:
32 (1) Nonpayment of premiums. The individual has
33 failed to pay premiums or contributions in accordance
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1 with the terms of the health insurance coverage or the
2 issuer has not received timely premium payments.
3 (2) Fraud. The individual has performed an act or
4 practice that constitutes fraud or made an intentional
5 misrepresentation of material fact under the terms of the
6 coverage.
7 (3) Termination of plan. The issuer is ceasing to
8 offer coverage in the individual market in accordance
9 with subsection (C) of this Section and applicable
10 Illinois law.
11 (4) Movement outside the service area. In the case
12 of a health insurance issuer that offers health insurance
13 coverage in the market through a network plan, the
14 individual no longer resides, lives, or works in the
15 service area (or in an area for which the issuer is
16 authorized to do business), but only if such coverage is
17 terminated under this paragraph uniformly without regard
18 to any health status-related factor of covered
19 individuals.
20 (5) Association membership ceases. In the case of
21 health insurance coverage that is made available in the
22 individual market only through one or more bona fide
23 associations, the membership of the individual in the
24 association (on the basis of which the coverage is
25 provided) ceases, but only if such coverage is terminated
26 under this paragraph uniformly without regard to any
27 health status-related factor of covered individuals.
28 (C) Requirements for uniform termination of coverage.
29 (1) Particular type of coverage not offered. In
30 any case in which an issuer decides to discontinue
31 offering a particular type of health insurance coverage
32 offered in the individual market, coverage of such type
33 may be discontinued by the issuer only if:
34 (a) the issuer provides notice to each covered
35 individual provided coverage of this type in such
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1 market of such discontinuation at least 90 days
2 prior to the date of the discontinuation of such
3 coverage;
4 (b) the issuer offers, to each individual in
5 the individual market provided coverage of this
6 type, the option to purchase any other individual
7 health insurance coverage currently being offered by
8 the issuer for individuals in such market; and
9 (c) in exercising the option to discontinue
10 coverage of that type and in offering the option of
11 coverage under subparagraph (b), the issuer acts
12 uniformly without regard to any health
13 status-related factor of enrolled individuals or
14 individuals who may become eligible for such
15 coverage.
16 (2) Discontinuance of all coverage.
17 (a) In general. Subject to subparagraph (c),
18 in any case in which a health insurance issuer
19 elects to discontinue offering all health insurance
20 coverage in the individual market in Illinois,
21 health insurance coverage may be discontinued by the
22 issuer only if:
23 (i) the issuer provides notice to the
24 Director and to each individual of the
25 discontinuation at least 180 days prior to the
26 date of the expiration of such coverage; and
27 (ii) all health insurance issued or
28 delivered for issuance in Illinois in such
29 market is discontinued and coverage under such
30 health insurance coverage in such market is not
31 renewed.
32 (b) Prohibition on market reentry. In the
33 case of a discontinuation under subparagraph (a) in
34 the individual market, the issuer may not provide
35 for the issuance of any health insurance coverage in
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1 Illinois involved during the 5-year period beginning
2 on the date of the discontinuation of the last
3 health insurance coverage not so renewed.
4 (D) Exception for uniform modification of coverage. At
5 the time of coverage renewal, a health insurance issuer may
6 modify the health insurance coverage for a policy form
7 offered to individuals in the individual market so long as
8 the modification is consistent with Illinois law and
9 effective on a uniform basis among all individuals with that
10 policy form.
11 (E) Application to coverage offered only through
12 associations. In applying this Section in the case of health
13 insurance coverage that is made available by a health
14 insurance issuer in the individual market to individuals only
15 through one or more associations, a reference to an
16 "individual" is deemed to include a reference to such an
17 association (of which the individual is a member).
18 Section 10. The Comprehensive Health Insurance Plan Act
19 is amended by changing Sections 5 and 12 as follows:"; and
20 on page 3 by inserting immediately below line 13 the
21 following:
22 "(215 ILCS 105/12) (from Ch. 73, par. 1312)
23 Sec. 12. Deficit or surplus.
24 a. If premiums or other receipts by the Board exceed the
25 amount required for the operation of the Plan, including
26 actual losses and administrative expenses of the Plan, the
27 Board shall direct that the excess be held at interest, in a
28 bank designated by the Board, or used to offset future losses
29 or to reduce Plan premiums. In this subsection, the term
30 "future losses" includes reserves for incurred but not
31 reported claims.
32 b. Any deficit incurred or expected to be incurred on
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1 behalf of eligible persons who qualify for plan coverage
2 under Section 7 of this Act shall be recouped by an
3 appropriation made by the General Assembly.
4 c. For the purposes of this Section, a deficit shall be
5 incurred when anticipated losses and incurred but not
6 reported claims expenses exceed anticipated income from
7 earned premiums net of administrative expenses.
8 d. Any deficit incurred or expected to be incurred on
9 behalf of federally eligible individuals who qualify for Plan
10 coverage under Section 15 of this Act shall be recouped by an
11 assessment of all insurers made in accordance with the
12 provisions of this Section. The Board shall within 90 days
13 of the effective date of this amendatory Act of 1997 and
14 within the first quarter of each fiscal year thereafter
15 assess all insurers for the anticipated deficit in accordance
16 with the provisions of this Section. The board may also make
17 additional assessments no more than 4 times a year to fund
18 unanticipated deficits, implementation expenses, and cash
19 flow needs.
20 e. An insurer's assessment shall be determined by
21 multiplying the total assessment, as determined in subsection
22 d. of this Section, by a fraction, the numerator of which
23 equals that insurer's direct Illinois premiums during the
24 preceding calendar year and the denominator of which equals
25 the total of all insurers' direct Illinois premiums. The
26 Board may exempt those insurers whose share as determined
27 under this subsection would be so minimal as to not exceed
28 the estimated cost of levying the assessment.
29 f. The Board shall charge and collect from each insurer
30 the amounts determined to be due under this Section. The
31 assessment shall be billed by Board invoice based upon the
32 insurer's direct Illinois premium income as shown in its
33 annual statement for the preceding calendar year as filed
34 with the Director. The invoice shall be due upon receipt and
35 must be paid no later than 30 days after receipt by the
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1 insurer.
2 g. When an insurer fails to pay the full amount of any
3 assessment of $100 or more due under this Section there shall
4 be added to the amount due as a penalty the greater of $50 or
5 an amount equal to 5% of the deficiency for each month or
6 part of a month that the deficiency remains unpaid.
7 h. Amounts collected under this Section shall be paid to
8 the Board for deposit into the Plan Fund authorized by
9 Section 3 of this Act.
10 i. An insurer may petition the Director for an abatement
11 or deferment of all or part of an assessment imposed by the
12 Board. The Director may abate or defer, in whole or in part,
13 the assessment if, in the opinion of the Director, payment of
14 the assessment would endanger the ability of the insurer to
15 fulfill its contractual obligations. In the event an
16 assessment against an insurer is abated or deferred in whole
17 or in part, the amount by which the assessment is abated or
18 deferred shall be assessed against the other insurers in a
19 manner consistent with the basis for assessments set forth in
20 this subsection. The insurer receiving a deferment shall
21 remain liable to the plan for the deficiency for 4 years.
22 j. The board shall establish procedures for appeal by
23 any insurer subject to assessment pursuant to this Section.
24 Such procedures shall require that:
25 (1) Any insurer that wishes to appeal all or any
26 part of an assessment made pursuant to this Section shall
27 first pay the amount of the assessment as set forth in
28 the invoice provided by the board within the time
29 provided in subsection f. of this Section. The board
30 shall hold such payments in a separate interest-bearing
31 account. The payments shall be accompanied by a statement
32 in writing that the payment is made under appeal. The
33 statement shall specify the grounds for the appeal. The
34 insurer may be represented in its appeal by counsel or
35 other representative of its choosing.
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1 (2) Within 90 days following the payment of an
2 assessment under appeal by any insurer, the board shall
3 notify the insurer or representative designated by the
4 insurer in writing of its determination with respect to
5 the appeal and the basis or bases for that determination
6 unless the Board notifies the insurer that a reasonable
7 amount of additional time is required to resolve the
8 issues raised by the appeal.
9 (3) The board shall refer to the Director any
10 question concerning the amount of direct Illinois premium
11 income as shown in an insurer's annual statement for the
12 preceding calendar year on file with the Director on the
13 invoice date of the assessment. Unless additional time
14 is required to resolve the question, the Director shall
15 within 60 days report to the board in writing his
16 determination respecting the amount of direct Illinois
17 premium income on file on the invoice date of the
18 assessment.
19 (4) In the event the board determines that the
20 insurer is entitled to a refund, the refund shall be paid
21 within 30 days following the date upon which the board
22 makes its determination, together with the accrued
23 interest. Interest on any refund due an insurer shall be
24 paid at the rate actually earned by the Board on the
25 separate account.
26 (5) The amount of any such refund shall then be
27 assessed against all insurers in a manner consistent with
28 the basis for assessment as otherwise authorized by this
29 Section.
30 (6) The board's determination with respect to any
31 appeal received pursuant to this subsection shall be a
32 final administrative decision as defined in Section 3-101
33 of the Code of Civil Procedure. The provisions of the
34 Administrative Review Law shall apply to and govern all
35 proceedings for the judicial review of final
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1 administrative decisions of the board.
2 (7) If an insurer fails to appeal an assessment in
3 accordance with the provisions of this subsection, the
4 insurer shall be deemed to have waived its right of
5 appeal.
6 The provisions of this subsection apply to all
7 assessments made in any calendar year ending on or after
8 December 31, 1997.
9 (Source: P.A. 90-30, eff. 7-1-97.)
10 Section 15. The Health Care Purchasing Group Act is
11 amended by changing Sections 5, 10, 35, 40, 45, and 65 as
12 follows:
13 (215 ILCS 123/5)
14 Sec. 5. Purpose; applicability of Illinois Health
15 Insurance Portability and Accountability Act.
16 (a) The purpose and intent of this Act is to authorize
17 the formation, operation, and regulation of health care
18 purchasing groups (referred to in this Act as "HPGs") as
19 described by this Act, to authorize the sale and regulation
20 of health insurance products for employers that are sold to
21 HPGs, and to encourage the development of financially secure
22 and cost effective markets for the basic health care needs of
23 employers, employees, and their dependents in this State.
24 Nothing in this Act authorizes an employer to join with other
25 employers to self-insure through risk pooling.
26 (b) All health insurance contracts issued under this Act
27 are subject to the Illinois Health Insurance Portability and
28 Accountability Act.
29 (Source: P.A. 90-337, eff. 1-1-98.)
30 (215 ILCS 123/10)
31 Sec. 10. Definitions. Words and phrases As used in this
32 Act, unless defined in this Section, have the meanings
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1 attributed to them in Section 5 of the Illinois Health
2 Insurance Portability and Accountability Act.:
3 "Director" means the Director of Insurance.
4 "Employee" means a person who works on a full-time basis
5 for the employer, with a normal week of 30 or more hours, and
6 has satisfied any applicable waiting periods for insurance.
7 "Employee" may also include a sole proprietor, a partner of a
8 partnership, a retired employee, or an independent
9 contractor, provided the sole proprietor, partner, retired
10 employee, or independent contractor is included as an
11 employee under a health benefit plan of the employer. It
12 does not need to include an employee who works on a
13 part-time, temporary, seasonal, or substitute basis.
14 "Employer" may include any legal form of doing business
15 or employing people, including a self-employed sole
16 proprietor.
17 "Health benefit plan" means any hospital or medical
18 expense-incurred policy or certificate, hospital or medical
19 service plan contract, or health maintenance organization
20 subscriber contract. Health benefit plan shall not include a
21 policy or certificate of individual, accident-only, credit,
22 dental, vision, medicare supplement, hospital indemnity,
23 specified disease, long term care or disability income
24 insurance, coverage issued as a supplement to liability
25 insurance, workers' compensation or similar insurance, or
26 automobile medical payment insurance.
27 "Health insurance contract", "group or master health
28 insurance contract" and "insurance" refer to the forms of
29 insurance obligations which a "risk-bearer" as defined in
30 this Section has been authorized to issue.
31 "Late enrollee" means an employee or dependent who
32 requests enrollment in a health benefit plan of an employer
33 following the initial enrollment period during which the
34 individual is entitled to enroll under the terms of the
35 health insurance contract, provided that the initial
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1 enrollment period is a period of at least 30 days. However,
2 an employee or dependent shall not be considered a late
3 enrollee if:
4 (1) The individual meets each of the following:
5 (A) the individual was covered under a prior
6 employer based health benefit plan at the time of the
7 initial enrollment;
8 (B) the individual lost coverage under qualifying
9 previous coverage as a result of termination of
10 employment or eligibility, the involuntary termination of
11 the qualifying previous coverage, death of a spouse or
12 divorce; and
13 (C) the individual requests enrollment within 30
14 days after the termination of the qualifying previous
15 coverage;
16 (2) the individual is employed by an employer that
17 offers multiple health insurance alternatives and the
18 individual elects a different coverage during an open
19 enrollment period; or
20 (3) a court has ordered coverage be provided for a
21 spouse or minor or dependent child under a covered employee's
22 health insurance contract and request for enrollment is made
23 within 30 days after issuance of the court order.
24 "Preexisting condition" means a condition that, during a
25 period of no more than 12 months immediately preceding the
26 effective date of coverage, had manifested itself in a manner
27 that would cause an ordinarily prudent person to seek medical
28 advice, diagnosis, care, or treatment, or for which medical
29 advice, diagnosis, care, or treatment was recommended or
30 received.
31 "Risk-bearer" means an insurance company licensed in this
32 State and authorized to transact the kinds of business
33 described in clause (b) of Class 1 and clause (a) of Class 2
34 of Section 4 of the Illinois Insurance Code and entities
35 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
34 for a specific condition for a maximum period of 12
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1 months from the effective date of the employee's or
2 dependant's coverage by way of rider or endorsement. As
3 to employees to whom the portability of coverage
4 provisions apply, no riders or endorsements may reduce or
5 limit benefits to be provided under the portability of
6 coverage provisions.
7 (Source: P.A. 90-337, eff. 1-1-98.)
8 (215 ILCS 123/40)
9 Sec. 40. Renewability. All health insurance contracts
10 issued under this Act are subject to the renewability
11 provisions of the Illinois Health Insurance Portability and
12 Accountability Act.
13 (a) A health insurance contract subject to this Act
14 shall be renewable with respect to all insured employees or
15 dependents, at the option of the HPG or employer, whichever
16 is a party to the master health insurance contract, except in
17 any of the following cases:
18 (1) nonpayment of required premiums;
19 (2) fraud or misrepresentation of the employer or,
20 with respect to coverage of individual insureds, the
21 insureds or their representatives;
22 (3) noncompliance with the risk-bearer's minimum
23 participation requirements;
24 (4) noncompliance with the risk-bearer's employer
25 contribution requirements;
26 (5) noncompliance with contract provisions;
27 (6) repeated misuse of a provider network
28 provision;
29 (7) the risk-bearer elects to non-renew all of its
30 health insurance contracts delivered or issued for
31 delivery to HPGs or employers under this Act; or
32 (8) the Director finds that the continuation of the
33 coverage would:
34 (A) Not be in the best interests of the policy
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1 holders or certificate holders; or
2 (B) Impair the risk-bearer's ability to meet
3 its contractual obligations.
4 (b) A risk-bearer that elects not to renew a health
5 insurance contract under item (7) of subsection (a) shall
6 provide notice of the decision not to renew coverage to all
7 affected employers and to the official in charge of insurance
8 regulation in each state in which an affected insured
9 individual is known to reside at least 180 days prior to the
10 nonrenewal of any health insurance contract by the
11 risk-bearer. Notice to an official in charge of insurance
12 regulation under this subsection shall be provided at least
13 3 working days before the notice to the affected employers.
14 Further, the risk-bearer shall be prohibited from writing new
15 business under this Act for a period of 5 years from the date
16 of notice to the Director.
17 (Source: P.A. 90-337, eff. 1-1-98.)
18 (215 ILCS 123/45)
19 Sec. 45. Disclosure requirements. In connection with the
20 offering for sale of any health insurance contract or
21 certificate under the contract to an HPG sponsor, HPG,
22 employer, and employee, a risk-bearer shall make a reasonable
23 disclosure, as part of its solicitation and sales materials
24 of all of the following:
25 (1) the provisions of the health insurance contracts
26 concerning the risk-bearer's right to change premium rates
27 and the factors, other than claim experience, that affect
28 changes in premium rates;
29 (2) that the rating restrictions contained in Section 30
30 of the Small Employer Rating, Renewability and Portability
31 Health Insurance Act are not applicable to the health
32 insurance contract being offered;
33 (2)(3) the provisions relating to renewability of
34 policies and contracts;
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1 (3)(4) the provisions relating to any preexisting
2 condition provision; and
3 (4)(5) the provisions relating to portability
4 provisions.
5 (Source: P.A. 90-337, eff. 1-1-98.)
6 (215 ILCS 123/65)
7 Sec. 65. Fees.
8 (a) The Director shall charge, collect, and give proper
9 acquittance for the payment all fees provided for by this
10 Act, except that any Illinois corporations licensed by the
11 Department of Insurance pursuant to the provisions of the
12 Illinois Insurance Code, the Dental Service Plan Act, the
13 Health Maintenance Organization Act, the Limited Health
14 Service Organization Act, the Vision Service Plan Act and the
15 Voluntary Health Services Plans Act or licensed as a third
16 party administrator or as a managing general agent is exempt
17 from the registration fee imposed under this Act.
18 (b) Any funds collected under provisions of this Act
19 shall be deposited in the Insurance Producer Administration
20 Fund treated in the manner provided in subsection (11) of
21 Section 408 of the Illinois Insurance Code.
22 (Source: P.A. 90-337, eff. 1-1-98.)
23 (215 ILCS 123/50 rep.)
24 Section 20. The Health Care Purchasing Group Act is
25 amended by repealing Section 50.
26 Section 99. Effective date. This Act takes effect upon
27 becoming law.".
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1 Submitted on , 1997.
2 ______________________________ _____________________________
3 Senator Madigan Representative Mautino
4 ______________________________ _____________________________
5 Senator Walsh Representative Woolard
6 ______________________________ _____________________________
7 Senator Fitzgerald Representative Hannig
8 ______________________________ _____________________________
9 Senator Jacobs Representative Churchill
10 ______________________________ _____________________________
11 Senator Berman Representative Leitch
12 Committee for the Senate Committee for the House