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90_SB0275
215 ILCS 5/155.31 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
managed care plans under those Acts must contain a
point-of-service option allowing covered individuals the
option of obtaining service from providers not included in
the health care plan panel of providers.
LRB9002229JSmg
LRB9002229JSmg
1 AN ACT relating to point-of-service options in connection
2 with health care services, 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 155.31 as follows:
7 (215 ILCS 5/155.31 new)
8 Sec. 155.31. Point-of-service option.
9 (a) A company that is subject to this Article and that
10 provides coverage for health care services under individual
11 or group policies of accident and health insurance or
12 administers, arranges, pays for, or provides health care
13 services as a health care plan, as defined in the Health
14 Maintenance Organization Act, must comply with this Section.
15 (b) A company subject to this Section must offer a
16 point-of-service option to the individuals covered under the
17 health care plan at the individual's option to accept or
18 reject. This Section applies to all health care plans
19 amended, delivered, issued, or renewed after the effective
20 date of this amendatory Act of 1997.
21 (c) An individual that accepts the additional coverage
22 under a point-of-service option is responsible for payment of
23 the additional premium, if any, required for the
24 point-of-service option.
25 (d) In this Section, "point-of-service option" means a
26 delivery system that permits a covered individual to receive
27 services outside the provider panel of the company under
28 terms and conditions of the contract extending the coverage,
29 and "provider panel" means those providers with which a
30 company contracts to provide services to the covered
31 individuals under the health care plan.
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1 Section 10. The Health Maintenance Organization Act is
2 amended by changing Section 5-3 as follows:
3 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
4 Sec. 5-3. Insurance Code provisions.
5 (a) Health Maintenance Organizations shall be subject to
6 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
7 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
8 154.6, 154.7, 154.8, 155.04, 155.31, 355.2, 356m, 367i, 401,
9 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
10 subsection (2) of Section 367, and Articles VIII 1/2, XII,
11 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
12 Code.
13 (b) For purposes of the Illinois Insurance Code, except
14 for Articles XIII and XIII 1/2, Health Maintenance
15 Organizations in the following categories are deemed to be
16 "domestic companies":
17 (1) a corporation authorized under the Medical
18 Service Plan Act, the Dental Service Plan Act, the Vision
19 Service Plan Act, the Pharmaceutical Service Plan Act,
20 the Voluntary Health Services Plan Act, or the Nonprofit
21 Health Care Service Plan Act;
22 (2) a corporation organized under the laws of this
23 State; or
24 (3) a corporation organized under the laws of
25 another state, 30% or more of the enrollees of which are
26 residents of this State, except a corporation subject to
27 substantially the same requirements in its state of
28 organization as is a "domestic company" under Article
29 VIII 1/2 of the Illinois Insurance Code.
30 (c) In considering the merger, consolidation, or other
31 acquisition of control of a Health Maintenance Organization
32 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
33 (1) the Director shall give primary consideration
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1 to the continuation of benefits to enrollees and the
2 financial conditions of the acquired Health Maintenance
3 Organization after the merger, consolidation, or other
4 acquisition of control takes effect;
5 (2)(i) the criteria specified in subsection (1)(b)
6 of Section 131.8 of the Illinois Insurance Code shall not
7 apply and (ii) the Director, in making his determination
8 with respect to the merger, consolidation, or other
9 acquisition of control, need not take into account the
10 effect on competition of the merger, consolidation, or
11 other acquisition of control;
12 (3) the Director shall have the power to require
13 the following information:
14 (A) certification by an independent actuary of
15 the adequacy of the reserves of the Health
16 Maintenance Organization sought to be acquired;
17 (B) pro forma financial statements reflecting
18 the combined balance sheets of the acquiring company
19 and the Health Maintenance Organization sought to be
20 acquired as of the end of the preceding year and as
21 of a date 90 days prior to the acquisition, as well
22 as pro forma financial statements reflecting
23 projected combined operation for a period of 2
24 years;
25 (C) a pro forma business plan detailing an
26 acquiring party's plans with respect to the
27 operation of the Health Maintenance Organization
28 sought to be acquired for a period of not less than
29 3 years; and
30 (D) such other information as the Director
31 shall require.
32 (d) The provisions of Article VIII 1/2 of the Illinois
33 Insurance Code and this Section 5-3 shall apply to the sale
34 by any health maintenance organization of greater than 10% of
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1 its enrollee population (including without limitation the
2 health maintenance organization's right, title, and interest
3 in and to its health care certificates).
4 (e) In considering any management contract or service
5 agreement subject to Section 141.1 of the Illinois Insurance
6 Code, the Director (i) shall, in addition to the criteria
7 specified in Section 141.2 of the Illinois Insurance Code,
8 take into account the effect of the management contract or
9 service agreement on the continuation of benefits to
10 enrollees and the financial condition of the health
11 maintenance organization to be managed or serviced, and (ii)
12 need not take into account the effect of the management
13 contract or service agreement on competition.
14 (f) Except for small employer groups as defined in the
15 Small Employer Rating, Renewability and Portability Health
16 Insurance Act and except for medicare supplement policies as
17 defined in Section 363 of the Illinois Insurance Code, a
18 Health Maintenance Organization may by contract agree with a
19 group or other enrollment unit to effect refunds or charge
20 additional premiums under the following terms and conditions:
21 (i) the amount of, and other terms and conditions
22 with respect to, the refund or additional premium are set
23 forth in the group or enrollment unit contract agreed in
24 advance of the period for which a refund is to be paid or
25 additional premium is to be charged (which period shall
26 not be less than one year); and
27 (ii) the amount of the refund or additional premium
28 shall not exceed 20% of the Health Maintenance
29 Organization's profitable or unprofitable experience with
30 respect to the group or other enrollment unit for the
31 period (and, for purposes of a refund or additional
32 premium, the profitable or unprofitable experience shall
33 be calculated taking into account a pro rata share of the
34 Health Maintenance Organization's administrative and
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1 marketing expenses, but shall not include any refund to
2 be made or additional premium to be paid pursuant to this
3 subsection (f)). The Health Maintenance Organization and
4 the group or enrollment unit may agree that the
5 profitable or unprofitable experience may be calculated
6 taking into account the refund period and the immediately
7 preceding 2 plan years.
8 The Health Maintenance Organization shall include a
9 statement in the evidence of coverage issued to each enrollee
10 describing the possibility of a refund or additional premium,
11 and upon request of any group or enrollment unit, provide to
12 the group or enrollment unit a description of the method used
13 to calculate (1) the Health Maintenance Organization's
14 profitable experience with respect to the group or enrollment
15 unit and the resulting refund to the group or enrollment unit
16 or (2) the Health Maintenance Organization's unprofitable
17 experience with respect to the group or enrollment unit and
18 the resulting additional premium to be paid by the group or
19 enrollment unit.
20 In no event shall the Illinois Health Maintenance
21 Organization Guaranty Association be liable to pay any
22 contractual obligation of an insolvent organization to pay
23 any refund authorized under this Section.
24 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
25 Section 15. The Limited Health Service Organization Act
26 is amended by changing Section 4003 as follows:
27 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
28 Sec. 4003. Illinois Insurance Code provisions. Limited
29 health service organizations shall be subject to the
30 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
31 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
32 154.6, 154.7, 154.8, 155.04, 155.31, 355.2, 401, 401.1, 402,
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1 403, 403A, 408, 408.2, and 412, and Articles VIII 1/2, XII,
2 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
3 Code. For purposes of the Illinois Insurance Code, except
4 for Articles XIII and XIII 1/2, limited health service
5 organizations in the following categories are deemed to be
6 domestic companies:
7 (1) a corporation under the laws of this State; or
8 (2) a corporation organized under the laws of
9 another state, 30% of more of the enrollees of which are
10 residents of this State, except a corporation subject to
11 substantially the same requirements in its state of
12 organization as is a domestic company under Article VIII
13 1/2 of the Illinois Insurance Code.
14 (Source: P.A. 86-600; 87-587; 87-1090.)
15 Section 20. The Voluntary Health Services Plans Act is
16 amended by changing Section 10 as follows:
17 (215 ILCS 165/10) (from Ch. 32, par. 604)
18 Sec. 10. Application of Insurance Code provisions.
19 Health services plan corporations and all persons interested
20 therein or dealing therewith shall be subject to the
21 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
22 143, 143c, 149, 155.31, 354, 355.2, 356r, 367.2, 401, 401.1,
23 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
24 (15) of Section 367 of the Illinois Insurance Code.
25 (Source: P.A. 89-514, eff. 7-17-96.)