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90_HB3161
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.
LRB9010506JSdv
LRB9010506JSdv
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 1998.
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 (Text of Section before amendment by P.A. 90-372)
28 Sec. 5-3. Insurance Code provisions.
29 (a) Health Maintenance Organizations shall be subject to
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1 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
2 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
3 154.6, 154.7, 154.8, 155.04, 353.3, 355.2, 356m, 356v, 356t,
4 367i, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412,
5 paragraph (c) of subsection (2) of Section 367, and Articles
6 VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, and XXVI of the
7 Illinois Insurance Code.
8 (b) For purposes of the Illinois Insurance Code, except
9 for Articles XIII and XIII 1/2, Health Maintenance
10 Organizations in the following categories are deemed to be
11 "domestic companies":
12 (1) a corporation authorized under the Medical
13 Service Plan Act, the Dental Service Plan Act, the
14 Pharmaceutical Service Plan Act, or the Voluntary Health
15 Services Plans Plan Act, or the Nonprofit Health Care
16 Service Plan Act;
17 (2) a corporation organized under the laws of this
18 State; or
19 (3) a corporation organized under the laws of
20 another state, 30% or more of the enrollees of which are
21 residents of this State, except a corporation subject to
22 substantially the same requirements in its state of
23 organization as is a "domestic company" under Article
24 VIII 1/2 of the Illinois Insurance Code.
25 (c) In considering the merger, consolidation, or other
26 acquisition of control of a Health Maintenance Organization
27 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
28 (1) the Director shall give primary consideration
29 to the continuation of benefits to enrollees and the
30 financial conditions of the acquired Health Maintenance
31 Organization after the merger, consolidation, or other
32 acquisition of control takes effect;
33 (2)(i) the criteria specified in subsection (1)(b)
34 of Section 131.8 of the Illinois Insurance Code shall not
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1 apply and (ii) the Director, in making his determination
2 with respect to the merger, consolidation, or other
3 acquisition of control, need not take into account the
4 effect on competition of the merger, consolidation, or
5 other acquisition of control;
6 (3) the Director shall have the power to require
7 the following information:
8 (A) certification by an independent actuary of
9 the adequacy of the reserves of the Health
10 Maintenance Organization sought to be acquired;
11 (B) pro forma financial statements reflecting
12 the combined balance sheets of the acquiring company
13 and the Health Maintenance Organization sought to be
14 acquired as of the end of the preceding year and as
15 of a date 90 days prior to the acquisition, as well
16 as pro forma financial statements reflecting
17 projected combined operation for a period of 2
18 years;
19 (C) a pro forma business plan detailing an
20 acquiring party's plans with respect to the
21 operation of the Health Maintenance Organization
22 sought to be acquired for a period of not less than
23 3 years; and
24 (D) such other information as the Director
25 shall require.
26 (d) The provisions of Article VIII 1/2 of the Illinois
27 Insurance Code and this Section 5-3 shall apply to the sale
28 by any health maintenance organization of greater than 10% of
29 its enrollee population (including without limitation the
30 health maintenance organization's right, title, and interest
31 in and to its health care certificates).
32 (e) In considering any management contract or service
33 agreement subject to Section 141.1 of the Illinois Insurance
34 Code, the Director (i) shall, in addition to the criteria
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1 specified in Section 141.2 of the Illinois Insurance Code,
2 take into account the effect of the management contract or
3 service agreement on the continuation of benefits to
4 enrollees and the financial condition of the health
5 maintenance organization to be managed or serviced, and (ii)
6 need not take into account the effect of the management
7 contract or service agreement on competition.
8 (f) Except for small employer groups as defined in the
9 Small Employer Rating, Renewability and Portability Health
10 Insurance Act and except for medicare supplement policies as
11 defined in Section 363 of the Illinois Insurance Code, a
12 Health Maintenance Organization may by contract agree with a
13 group or other enrollment unit to effect refunds or charge
14 additional premiums under the following terms and conditions:
15 (i) the amount of, and other terms and conditions
16 with respect to, the refund or additional premium are set
17 forth in the group or enrollment unit contract agreed in
18 advance of the period for which a refund is to be paid or
19 additional premium is to be charged (which period shall
20 not be less than one year); and
21 (ii) the amount of the refund or additional premium
22 shall not exceed 20% of the Health Maintenance
23 Organization's profitable or unprofitable experience with
24 respect to the group or other enrollment unit for the
25 period (and, for purposes of a refund or additional
26 premium, the profitable or unprofitable experience shall
27 be calculated taking into account a pro rata share of the
28 Health Maintenance Organization's administrative and
29 marketing expenses, but shall not include any refund to
30 be made or additional premium to be paid pursuant to this
31 subsection (f)). The Health Maintenance Organization and
32 the group or enrollment unit may agree that the
33 profitable or unprofitable experience may be calculated
34 taking into account the refund period and the immediately
-5- LRB9010506JSdv
1 preceding 2 plan years.
2 The Health Maintenance Organization shall include a
3 statement in the evidence of coverage issued to each enrollee
4 describing the possibility of a refund or additional premium,
5 and upon request of any group or enrollment unit, provide to
6 the group or enrollment unit a description of the method used
7 to calculate (1) the Health Maintenance Organization's
8 profitable experience with respect to the group or enrollment
9 unit and the resulting refund to the group or enrollment unit
10 or (2) the Health Maintenance Organization's unprofitable
11 experience with respect to the group or enrollment unit and
12 the resulting additional premium to be paid by the group or
13 enrollment unit.
14 In no event shall the Illinois Health Maintenance
15 Organization Guaranty Association be liable to pay any
16 contractual obligation of an insolvent organization to pay
17 any refund authorized under this Section.
18 (Source: P.A. 89-90, eff. 6-30-95; 90-25, eff. 1-1-98;
19 90-177, eff. 7-23-97; revised 11-21-97.)
20 (Text of Section after amendment by P.A. 90-372)
21 Sec. 5-3. Insurance Code provisions.
22 (a) Health Maintenance Organizations shall be subject to
23 the 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, 356m, 356v, 356t,
26 367i, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412,
27 paragraph (c) of subsection (2) of Section 367, and Articles
28 VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, and XXVI of the
29 Illinois Insurance Code.
30 (b) For purposes of the Illinois Insurance Code, except
31 for Articles XIII and XIII 1/2, Health Maintenance
32 Organizations in the following categories are deemed to be
33 "domestic companies":
34 (1) a corporation authorized under the Medical
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1 Service Plan Act, the Dental Service Plan Act or, the
2 Voluntary Health Services Plans Plan Act, or the
3 Nonprofit Health Care Service Plan Act;
4 (2) a corporation organized under the laws of this
5 State; or
6 (3) a corporation organized under the laws of
7 another state, 30% or more of the enrollees of which are
8 residents of this State, except a corporation subject to
9 substantially the same requirements in its state of
10 organization as is a "domestic company" under Article
11 VIII 1/2 of the Illinois Insurance Code.
12 (c) In considering the merger, consolidation, or other
13 acquisition of control of a Health Maintenance Organization
14 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
15 (1) the Director shall give primary consideration
16 to the continuation of benefits to enrollees and the
17 financial conditions of the acquired Health Maintenance
18 Organization after the merger, consolidation, or other
19 acquisition of control takes effect;
20 (2)(i) the criteria specified in subsection (1)(b)
21 of Section 131.8 of the Illinois Insurance Code shall not
22 apply and (ii) the Director, in making his determination
23 with respect to the merger, consolidation, or other
24 acquisition of control, need not take into account the
25 effect on competition of the merger, consolidation, or
26 other acquisition of control;
27 (3) the Director shall have the power to require
28 the following information:
29 (A) certification by an independent actuary of
30 the adequacy of the reserves of the Health
31 Maintenance Organization sought to be acquired;
32 (B) pro forma financial statements reflecting
33 the combined balance sheets of the acquiring company
34 and the Health Maintenance Organization sought to be
-7- LRB9010506JSdv
1 acquired as of the end of the preceding year and as
2 of a date 90 days prior to the acquisition, as well
3 as pro forma financial statements reflecting
4 projected combined operation for a period of 2
5 years;
6 (C) a pro forma business plan detailing an
7 acquiring party's plans with respect to the
8 operation of the Health Maintenance Organization
9 sought to be acquired for a period of not less than
10 3 years; and
11 (D) such other information as the Director
12 shall require.
13 (d) The provisions of Article VIII 1/2 of the Illinois
14 Insurance Code and this Section 5-3 shall apply to the sale
15 by any health maintenance organization of greater than 10% of
16 its enrollee population (including without limitation the
17 health maintenance organization's right, title, and interest
18 in and to its health care certificates).
19 (e) In considering any management contract or service
20 agreement subject to Section 141.1 of the Illinois Insurance
21 Code, the Director (i) shall, in addition to the criteria
22 specified in Section 141.2 of the Illinois Insurance Code,
23 take into account the effect of the management contract or
24 service agreement on the continuation of benefits to
25 enrollees and the financial condition of the health
26 maintenance organization to be managed or serviced, and (ii)
27 need not take into account the effect of the management
28 contract or service agreement on competition.
29 (f) Except for small employer groups as defined in the
30 Small Employer Rating, Renewability and Portability Health
31 Insurance Act and except for medicare supplement policies as
32 defined in Section 363 of the Illinois Insurance Code, a
33 Health Maintenance Organization may by contract agree with a
34 group or other enrollment unit to effect refunds or charge
-8- LRB9010506JSdv
1 additional premiums under the following terms and conditions:
2 (i) the amount of, and other terms and conditions
3 with respect to, the refund or additional premium are set
4 forth in the group or enrollment unit contract agreed in
5 advance of the period for which a refund is to be paid or
6 additional premium is to be charged (which period shall
7 not be less than one year); and
8 (ii) the amount of the refund or additional premium
9 shall not exceed 20% of the Health Maintenance
10 Organization's profitable or unprofitable experience with
11 respect to the group or other enrollment unit for the
12 period (and, for purposes of a refund or additional
13 premium, the profitable or unprofitable experience shall
14 be calculated taking into account a pro rata share of the
15 Health Maintenance Organization's administrative and
16 marketing expenses, but shall not include any refund to
17 be made or additional premium to be paid pursuant to this
18 subsection (f)). The Health Maintenance Organization and
19 the group or enrollment unit may agree that the
20 profitable or unprofitable experience may be calculated
21 taking into account the refund period and the immediately
22 preceding 2 plan years.
23 The Health Maintenance Organization shall include a
24 statement in the evidence of coverage issued to each enrollee
25 describing the possibility of a refund or additional premium,
26 and upon request of any group or enrollment unit, provide to
27 the group or enrollment unit a description of the method used
28 to calculate (1) the Health Maintenance Organization's
29 profitable experience with respect to the group or enrollment
30 unit and the resulting refund to the group or enrollment unit
31 or (2) the Health Maintenance Organization's unprofitable
32 experience with respect to the group or enrollment unit and
33 the resulting additional premium to be paid by the group or
34 enrollment unit.
-9- LRB9010506JSdv
1 In no event shall the Illinois Health Maintenance
2 Organization Guaranty Association be liable to pay any
3 contractual obligation of an insolvent organization to pay
4 any refund authorized under this Section.
5 (Source: P.A. 89-90, eff. 6-30-95; 90-25, eff. 1-1-98;
6 90-177, eff. 7-23-97; 90-372, eff. 7-1-98; revised 11-21-97.)
7 Section 15. The Limited Health Service Organization Act
8 is amended by changing Section 4003 as follows:
9 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
10 Sec. 4003. Illinois Insurance Code provisions. Limited
11 health service organizations shall be subject to the
12 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
13 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
14 154.6, 154.7, 154.8, 155.04, 353.3, 355.2, 356v, 356t, 401,
15 401.1, 402, 403, 403A, 408, 408.2, and 412, and Articles VIII
16 1/2, XII, XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois
17 Insurance Code. For purposes of the Illinois Insurance Code,
18 except for Articles XIII and XIII 1/2, limited health service
19 organizations in the following categories are deemed to be
20 domestic companies:
21 (1) a corporation under the laws of this State; or
22 (2) a corporation organized under the laws of
23 another state, 30% of more of the enrollees of which are
24 residents of this State, except a corporation subject to
25 substantially the same requirements in its state of
26 organization as is a domestic company under Article VIII
27 1/2 of the Illinois Insurance Code.
28 (Source: P.A. 90-25, eff. 1-1-98; revised 10-14-97.)
29 Section 20. The Voluntary Health Services Plans Act is
30 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, 354, 353.3, 355.2, 356r, 356t, 356u, 356v,
7 367.2, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and
8 paragraphs (7) and (15) of Section 367 of the Illinois
9 Insurance Code.
10 (Source: P.A. 89-514, eff. 7-17-96; 90-7, eff. 6-10-97;
11 90-25, eff. 1-1-98; revised 10-14-97.)
12 Section 95. No acceleration or delay. Where this Act
13 makes changes in a statute that is represented in this Act by
14 text that is not yet or no longer in effect (for example, a
15 Section represented by multiple versions), the use of that
16 text does not accelerate or delay the taking effect of (i)
17 the changes made by this Act or (ii) provisions derived from
18 any other Public Act.