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| [ Engrossed ] | [ Enrolled ] | [ Senate Amendment 001 ] |
90_SB0802
New Act
215 ILCS 5/155.31 new
215 ILCS 105/1.1 from Ch. 73, par. 1301.1
215 ILCS 105/2 from Ch. 73, par. 1302
215 ILCS 105/3 from Ch. 73, par. 1303
215 ILCS 105/4 from Ch. 73, par. 1304
215 ILCS 105/5 from Ch. 73, par. 1305
215 ILCS 105/7 from Ch. 73, par. 1307
215 ILCS 105/7.1 new
215 ILCS 105/8 from Ch. 73, par. 1308
215 ILCS 105/10 from Ch. 73, par. 1310
215 ILCS 105/12 from Ch. 73, par. 1312
215 ILCS 105/14 from Ch. 73, par. 1314
215 ILCS 105/15 new
215 ILCS 125/5-3.5 new
215 ILCS 130/4002.5 new
215 ILCS 165/15.25 new
Creates the Illinois Health Insurance Portability and
Accountability Act. Sets forth State provisions for
portability of coverage in accordance with federal law.
Amends the Comprehensive Health Insurance Plan Act. Provides
for the Plan to extend coverage to individuals in conformance
with the portability requirements of the federal Health
Insurance Portability and Accountability Act of 1996.
Authorizes the use of management programs for cost effective
provision of health care services. Increases the lifetime
benefit under the Plan to $1,000,000. Authorizes the Board to
assess insurers in this State to pay costs not covered by
appropriation with respect to federally eligible individuals.
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 is subject to the Illinois Health
Insurance Portability and Accountability Act. Effective July
1, 1997.
LRB9002422JSdvA
LRB9002422JSdvA
1 AN ACT concerning health insurance, amending named Acts.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 1. Short title. This Act may be cited as the
5 Illinois Health Insurance Portability and Accountability Act.
6 Section 5. Definitions.
7 "Beneficiary" has the meaning given such term under
8 Section 3(8) of the Employee Retirement Income Security Act
9 of 1974.
10 "Bona fide association" means, with respect to health
11 insurance coverage offered in a State, an association which:
12 (1) has been actively in existence for at least 5 years;
13 (2) has been formed and maintained in good faith for
14 purposes other than obtaining insurance;
15 (3) does not condition membership in the association on
16 any health status-related factor relating to an individual
17 (including an employee of an employer or a dependent of an
18 employee);
19 (4) makes health insurance coverage offered through the
20 association available to all members regardless of any health
21 status-related factor relating to such members (or
22 individuals eligible for coverage through a member);
23 (5) does not make health insurance coverage offered
24 through the association available other than in connection
25 with a member of the association; and
26 (6) meets such additional requirements as may be imposed
27 under State law.
28 "Church plan" has the meaning given that term under
29 Section 3(33) of the Employee Retirement Income Security Act
30 of 1974.
31 "COBRA continuation provision" means any of the
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1 following:
2 (1) Section 4980B of the Internal Revenue Code of
3 1986, other than subsection (f)(1) of that section
4 insofar as it relates to pediatric vaccines.
5 (2) Part 6 of subtitle B of title I of the Employee
6 Retirement Income Security Act of 1974, other than
7 Section 609 of that Act.
8 (3) Title XXII of federal Public Health Service
9 Act.
10 "Department" means the Department of Insurance.
11 "Employee" has the meaning given that term under Section
12 3(6) of the Employee Retirement Income Security Act of 1974.
13 "Employer" has the meaning given that term under Section
14 3(5) of the Employee Retirement Income Security Act of 1974,
15 except that the term shall include only employers of 2 or
16 more employees.
17 "Enrollment date" means, with respect to an individual
18 covered under a group health plan or group health insurance
19 coverage, the date of enrollment of the individual in the
20 plan or coverage, or if earlier, the first day of the waiting
21 period for enrollment.
22 "Federal governmental plan" means a governmental plan
23 established or maintained for its employees by the government
24 of the United States or by any agency or instrumentality of
25 that government.
26 "Governmental plan" has the meaning given that term under
27 Section 3(32) of the Employee Retirement Income Security Act
28 of 1974 and any federal governmental plan.
29 "Group health insurance coverage" means, in connection
30 with a group health plan, health insurance coverage offered
31 in connection with the plan.
32 "Group health plan" means an employee welfare benefit
33 plan (as defined in Section 3(1) of the Employee Retirement
34 Income Security Act of 1974) to the extent that the plan
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1 provides medical care (as defined in paragraph (2) of that
2 Section and including items and services paid for as medical
3 care) to employees or their dependents (as defined under the
4 terms of the plan) directly or through insurance,
5 reimbursement, or otherwise.
6 "Health insurance coverage" means benefits consisting of
7 medical care (provided directly, through insurance or
8 reimbursement, or otherwise and including items and services
9 paid for as medical care) under any hospital or medical
10 service policy or certificate, hospital or medical service
11 plan contract, or health maintenance organization contract
12 offered by a health insurance issuer.
13 "Health insurance issuer" means an insurance company,
14 insurance service, or insurance organization (including a
15 health maintenance organization, as defined herein) which is
16 licensed to engage in the business of insurance in a state
17 and which is subject to Illinois law which regulates
18 insurance (within the meaning of Section 514(b)(2) of the
19 Employee Retirement Income Security Act of 1974). The term
20 does not include a group health plan.
21 "Health maintenance organization" means:
22 (1) a Federally qualified health maintenance
23 organization (as defined in Section 1301(a) by the Health
24 Care Finance Administration).
25 (2) an organization recognized under State law as a
26 health maintenance organization; or
27 (3) a similar organization regulated under State
28 law for solvency in the same manner and to the same
29 extent as such a health maintenance organization.
30 "Individual health insurance coverage" means health
31 insurance coverage offered to individuals in the individual
32 market, but does not include short-term limited duration
33 insurance.
34 "Individual market" means the market for health insurance
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1 coverage offered to individuals other than in connection with
2 a group health plan.
3 "Large employer" means, in connection with a group health
4 plan with respect to a calendar year and a plan year, an
5 employer who employed an average of at least 51 employees on
6 business days during the preceding calendar year and who
7 employs at least 2 employees on the first day of the plan
8 year.
9 (1) Application of aggregation rule for large
10 employers. All persons treated as a single employer
11 under subsection (b), (c), (m), or (o) of Section 414 of
12 the Internal Revenue Code of 1986 shall be treated as one
13 employer.
14 (2) Employers not in existence in preceding year.
15 In the case of an employer which was not in existence
16 throughout the preceding calendar year, the determination
17 of whether the employer is a large employer shall be
18 based on the average number of employees that it is
19 reasonably expected the employer will employ on business
20 days in the current calendar year.
21 (3) Predecessors. Any reference in this Act to an
22 employer shall include a reference to any predecessor of
23 such employer.
24 "Large group market" means the health insurance market
25 under which individuals obtain health insurance coverage
26 (directly or through any arrangement) on behalf of themselves
27 (and their dependents) through a group health plan maintained
28 by a large employer.
29 "Late enrollee" means with respect to coverage under a
30 group health plan, a participant or beneficiary who enrolls
31 under the plan other than during:
32 (1) the first period in which the individual is
33 eligible to enroll under the plan; or
34 (2) a special enrollment period under subsection
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1 (F) of Section 20.
2 "Medical care" means amounts paid for:
3 (1) the diagnosis, cure, mitigation, treatment, or
4 prevention of disease, or amounts paid for the purpose of
5 affecting any structure or function of the body;
6 (2) amounts paid for transportation primarily for
7 and essential to medical care referred to in item (1);
8 and
9 (3) amounts paid for insurance covering medical
10 care referred to in items (1) and (2).
11 "Nonfederal governmental plan" means a governmental plan
12 that is not a federal governmental plan.
13 "Network plan" means health insurance coverage of a
14 health insurance issuer under which the financing and
15 delivery of medical care (including items and services paid
16 for as medical care) are provided, in whole or in part,
17 through a defined set of providers under contract with the
18 issuer.
19 "Participant" has the meaning given that term under
20 Section 3(7) of the Employee Retirement Income Security Act
21 of 1974.
22 "Placement" or being "placed" for adoption, in connection
23 with any placement for adoption of a child with any person,
24 means the assumption and retention by the person of a legal
25 obligation for total or partial support of the child in
26 anticipation of adoption of the child. The child's placement
27 with the person terminates upon the termination of the legal
28 obligation.
29 "Plan sponsor" has the meaning given that term under
30 Section 3(16)(B) of the Employee Retirement Income Security
31 Act of 1974.
32 "Preexisting condition exclusion" means, with respect to
33 coverage, a limitation or exclusion of benefits relating to a
34 condition based on the fact that the condition was present
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1 before the date of enrollment for such coverage, whether or
2 not any medical advice, diagnosis, care, or treatment was
3 recommended or received before such date.
4 "Small employer" means, in connection with a group health
5 plan with respect to a calendar year and a plan year, an
6 employer who employed an average of at least 2 but not more
7 than 50 employees on business days during the preceding
8 calendar year and who employs at least 2 employees on the
9 first day of the plan year.
10 (1) Application of aggregation rule for small
11 employers. All persons treated as a single employer
12 under subsection (b), (c), (m), or (o) of Section 414 of
13 the Internal Revenue Code of 1986 shall be treated as one
14 employer.
15 (2) Employers not in existence in preceding year.
16 In the case of an employer which was not in existence
17 throughout the preceding calendar year, the determination
18 of whether the employer is a small employer shall be
19 based on the average number of employees that it is
20 reasonably expected the employer will employ on business
21 days in the current calendar year.
22 (3) Predecessors. Any reference in this Act to a
23 small employer shall include a reference to any
24 predecessor of that employer.
25 "Small group market" means the health insurance market
26 under which individuals obtain health insurance coverage
27 (directly or through any arrangement) on behalf of themselves
28 (and their dependents) through a group health plan maintained
29 by a small employer.
30 "State" means each of the several States, the District of
31 Columbia, Puerto Rico, the Virgin Islands, Guam, American
32 Samoa, and the Northern Mariana Islands.
33 "Waiting period" means with respect to a group health
34 plan and an individual who is a potential participant or
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1 beneficiary in the plan, the period of time that must pass
2 with respect to the individual before the individual is
3 eligible to be covered for benefits under the terms of the
4 plan.
5 Section 15. Applicability and scope. This Act applies to
6 all health insurance policies and all health service
7 contracts issued, renewed, or delivered for issuance or
8 renewal in this State by a health insurance issuer after the
9 effective date of this Act. Unless otherwise specifically
10 provided by this Act, the standards and requirements imposed
11 by this Act shall supersede and replace any and all
12 conflicting inconsistent, or less restrictive standards or
13 requirements contained in the Illinois Insurance Code, the
14 Health Maintenance Organization Act, the Limited Health
15 Service Organization Act, and the Voluntary Health Services
16 Plans Act.
17 Section 20. Increased portability through limitation on
18 preexisting condition exclusions.
19 (A) Limitation of preexisting condition exclusion
20 period; crediting for periods of previous coverage. Subject
21 to subsection (D), a group health plan, and a health
22 insurance issuer offering group health insurance coverage,
23 may, with respect to a participant or beneficiary, impose a
24 preexisting condition exclusion only if:
25 (1) the exclusion relates to a condition (whether
26 physical or mental), regardless of the cause of the
27 condition, for which medical advice, diagnosis, care, or
28 treatment was recommended or received within the 6-month
29 period ending on the enrollment date;
30 (2) the exclusion extends for a period of not more
31 than 12 months (or 18 months in the case of a late
32 enrollee) after the enrollment date; and
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1 (3) the period of any such preexisting condition
2 exclusion is reduced by the aggregate of the periods of
3 creditable coverage (if any, as defined in subsection
4 (C)(1)) applicable to the participant or beneficiary as
5 of the enrollment date.
6 (B) Preexisting condition exclusion. A group health
7 plan, and health insurance issuer offering group health
8 insurance coverage, may not impose any preexisting condition
9 exclusion relating to pregnancy as a preexisting condition.
10 Genetic information shall not be treated as a condition
11 described in subsection (A)(1) in the absence of a diagnosis
12 of the condition related to such information.
13 (C) Rules relating to crediting previous coverage.
14 (1) Creditable coverage defined. For purposes of this
15 Act, the term "creditable coverage" means, with respect
16 to an individual, coverage of the individual under any of
17 the following:
18 (a) A group health plan.
19 (b) Health insurance coverage.
20 (c) Part A or part B of title XVIII of the Social
21 Security Act.
22 (d) Title XIX of the Social Security Act, other
23 than coverage consisting solely of benefits under Section
24 1928.
25 (e) Chapter 55 of title 10, United States Code.
26 (f) A medical care program of the Indian Health
27 Service or of a tribal organization.
28 (g) A State health benefits risk pool.
29 (h) A health plan offered under chapter 89 of title
30 5, United States Code.
31 (i) A public health plan (as defined in
32 regulations).
33 (j) A health benefit plan under Section 5(e) of the
34 Peace Corps Act (22 U.S.C. 2504(e)).
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1 Such term does not include coverage consisting solely of
2 coverage of excepted benefits.
3 (2) Excepted benefits. For purposes of this Act, the
4 term "excepted benefits" means benefits under one or more of
5 the following:
6 (a) Benefits not subject to requirements:
7 (i) Coverage only for accident, or disability
8 income insurance, or any combination thereof.
9 (ii) Coverage issued as a supplement to
10 liability insurance.
11 (iii) Liability insurance, including general
12 liability insurance and automobile liability
13 insurance.
14 (iv) Workers' compensation or similar
15 insurance.
16 (v) Automobile medical payment insurance.
17 (vi) Credit-only insurance.
18 (vii) Coverage for on-site medical clinics.
19 (viii) Other similar insurance coverage,
20 specified in regulations, under which benefits for
21 medical care are secondary or incidental to other
22 insurance benefits.
23 (b) Benefits not subject to requirements if offered
24 separately:
25 (i) Limited scope dental or vision benefits.
26 (ii) Benefits for long-term care, nursing home
27 care, home health care, community-based care, or any
28 combination thereof.
29 (iii) Such other similar, limited benefits as
30 are specified in rules.
31 (c) Benefits not subject to requirements if
32 offered, as independent, noncoordinated benefits:
33 (i) Coverage only for a specified disease or
34 illness.
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1 (ii) Hospital indemnity or other fixed
2 indemnity insurance.
3 (d) Benefits not subject to requirements if offered
4 as separate insurance policy. Medicare supplemental
5 health insurance (as defined under Section 1882(g)(1) of
6 the Social Security Act), coverage supplemental to the
7 coverage provided under chapter 55 of title 10, United
8 States Code, and similar supplemental coverage provided
9 to coverage under a group health plan.
10 (3) Not counting periods before significant breaks in
11 coverage.
12 (a) In general. A period of creditable coverage
13 shall not be counted, with respect to enrollment of an
14 individual under a group health plan, if, after such
15 period and before the enrollment date, there was a 63-
16 day period during all of which the individual was not
17 covered under any creditable coverage.
18 (b) Waiting period not treated as a break in
19 coverage. For purposes of subparagraph (a) and
20 subsection (D)(3), any period that an individual is in a
21 waiting period for any coverage under a group health plan
22 (or for group health insurance coverage) or is in an
23 affiliation period (as defined in subsection (G)(2))
24 shall not be taken into account in determining the
25 continuous period under subparagraph (a).
26 (4) Method of crediting coverage.
27 (a) Standard method. Except as otherwise provided
28 under subparagraph (b), for purposes of applying
29 subsection (A)(3), a group health plan, and a health
30 insurance issuer offering group health insurance
31 coverage, shall count a period of creditable coverage
32 without regard to the specific benefits covered during
33 the period.
34 (b) Election of alternative method. A group health
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1 plan, or a health insurance issuer offering group health
2 insurance, may elect to apply subsection (A)(3) based on
3 coverage of benefits within each of several classes or
4 categories of benefits specified in regulations rather
5 than as provided under subparagraph (a). Such election
6 shall be made on a uniform basis for all participants and
7 beneficiaries. Under such election a group health plan
8 or issuer shall count a period of creditable coverage
9 with respect to any class or category of benefits if any
10 level of benefits is covered within such class or
11 category.
12 (c) Plan notice. In the case of an election with
13 respect to a group health plan under subparagraph (b)
14 (whether or not health insurance coverage is provided in
15 connection with such plan), the plan shall:
16 (i) prominently state in any disclosure
17 statements concerning the plan, and state to each
18 enrollee at the time of enrollment under the plan,
19 that the plan has made such election; and
20 (ii) include in such statements a description
21 of the effect of this election.
22 (d) Issuer notice. In the case of an election
23 under subparagraph (b) with respect to health insurance
24 coverage offered by an issuer in the small or large group
25 market, the issuer:
26 (i) shall prominently state in any disclosure
27 statements concerning the coverage, and to each
28 employer at the time of the offer or sale of the
29 coverage, that the issuer has made such election;
30 and
31 (ii) shall include in such statements a
32 description of the effect of such election.
33 (5) Establishment of period. Periods of creditable
34 coverage with respect to an individual shall be established
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1 through presentation or certifications described in
2 subsection (E) or in such other manner as may be specified in
3 regulations.
4 (D) Exceptions:
5 (1) Exclusion not applicable to certain newborns.
6 Subject to paragraph (3), a group health plan, and a health
7 insurance issuer offering group health insurance coverage,
8 may not impose any preexisting condition exclusion in the
9 case of an individual who, as of the last day of the 30-day
10 period beginning with the date of birth, is covered under
11 creditable coverage.
12 (2) Exclusion not applicable to certain adopted
13 children. Subject to paragraph (3), a group health plan, and
14 a health insurance issuer offering group health insurance
15 coverage, may not impose any preexisting condition exclusion
16 in the case of a child who is adopted or placed for adoption
17 before attaining 18 years of age and who, as of the last day
18 of the 30-day period beginning on the date of the adoption or
19 placement for adoption, is covered under creditable coverage.
20 The previous sentence shall not apply to coverage before
21 the date of such adoption or placement for adoption.
22 (3) Loss if break in coverage. Paragraphs (1) and (2)
23 shall no longer apply to an individual after the end of the
24 first 63-day period during all of which the individual was
25 not covered under any creditable coverage.
26 (E) Certifications and disclosure of coverage.
27 (1) Requirement for Certification of Period of
28 Creditable Coverage
29 (a) A group health plan, and a health insurance
30 issuer offering group health insurance coverage, shall
31 provide the certification described in subparagraph (b):
32 (i) at the time an individual ceases to be
33 covered under the plan or otherwise becomes covered
34 under a COBRA continuation provision;
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1 (ii) in the case of an individual becoming
2 covered under such a provision, at the time the
3 individual ceases to be covered under such
4 provision; and
5 (iii) on the request on behalf of an
6 individual made not later than 24 months after the
7 date of cessation of the coverage described in
8 clause (i) or (ii), whichever is later.
9 The certification under clause (i) may be provided, to
10 the extent practicable, at a time consistent with notices
11 required under any applicable COBRA continuation
12 provision.
13 (b) The certification described in this
14 subparagraph is a written certification of:
15 (i) the period of creditable coverage of the
16 individual under such plan and the coverage (if any)
17 under such COBRA continuation provision; and
18 (ii) the waiting period (if any) (and
19 affiliation period, if applicable) imposed with
20 respect to the individual for any coverage under
21 such plan.
22 (c) To the extent that medical care under a group
23 health plan consists of group health insurance coverage,
24 the plan is deemed to have satisfied the certification
25 requirement under this paragraph if the health insurance
26 issuer offering the coverage provides for such
27 certification in accordance with this paragraph.
28 (2) Disclosure of information on previous benefits. In
29 the case of an election described in subsection (C)(4)(b) by
30 a group health plan or health insurance issuer, if the plan
31 or issuer enrolls an individual for coverage under the plan
32 and the individual provides a certification of coverage of
33 the individual under paragraph (1):
34 (a) upon request of such plan or issuer, the entity
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1 which issued the certification provided by the individual
2 shall promptly disclose to such requesting plan or issuer
3 information on coverage of classes and categories of
4 health benefits available under such entity's plan or
5 coverage; and
6 (b) such entity may charge the requesting plan or
7 issuer for the reasonable cost of disclosing such
8 information.
9 (3) Rules. The Department shall establish rules to
10 prevent an entity's failure to provide information under
11 paragraph (1) or (2) with respect to previous coverage of an
12 individual from adversely affecting any subsequent coverage
13 of the individual under another group health plan or health
14 insurance coverage.
15 (4) Treatment of certain plans as group health plan for
16 notice provision. A program under which creditable coverage
17 described in subparagraph (c), (d), (e), or (f) of Section
18 20(C)(1) is provided shall be treated as a group health plan
19 for purposes of this Section.
20 (F) Special enrollment periods.
21 (1) Individuals losing other coverage. A group health
22 plan, and a health insurance issuer offering group health
23 insurance coverage in connection with a group health plan,
24 shall permit an employee who is eligible, but not enrolled,
25 for coverage under the terms of the plan (or a dependent of
26 such an employee if the dependent is eligible, but not
27 enrolled, for coverage under such terms) to enroll for
28 coverage under the terms of the plan if each of the following
29 conditions is met:
30 (a) The employee or dependent was covered under a
31 group health plan or had health insurance coverage at the
32 time coverage was previously offered to the employee or
33 dependent.
34 (b) The employee stated in writing at such time
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1 that coverage under a group health plan or health
2 insurance coverage was the reason for declining
3 enrollment, but only if the plan sponsor or issuer (if
4 applicable) required such a statement at such time and
5 provided the employee with notice of such requirement
6 (and the consequences of such requirement) at such time.
7 (c) The employee's or dependent's coverage
8 described in subparagraph (a):
9 (i) was under a COBRA continuation provision
10 and the coverage under such provision was exhausted;
11 or
12 (ii) was not under such a provision and either
13 the coverage was terminated as a result of loss of
14 eligibility for the coverage (including as a result
15 of legal separation, divorce, death, termination of
16 employment, or reduction in the number of hours of
17 employment) or employer contributions towards such
18 coverage were terminated.
19 (d) Under the terms of the plan, the employee
20 requests such enrollment not later than 30 days after the
21 date of exhaustion of coverage described in subparagraph
22 (c)(i) or termination of coverage or employer
23 contributions described in subparagraph (c)(ii).
24 (2) For dependent beneficiaries.
25 (a) In general. If:
26 (i) a group health plan makes coverage
27 available with respect to a dependent of an
28 individual,
29 (ii) the individual is a participant under the
30 plan (or has met any waiting period applicable to
31 becoming a participant under the plan and is
32 eligible to be enrolled under the plan but for a
33 failure to enroll during a previous enrollment
34 period), and
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1 (iii) a person becomes such a dependent of the
2 individual through marriage, birth, or adoption or
3 placement for adoption,
4 then the group health plan shall provide for a dependent
5 special enrollment period described in subparagraph (b)
6 during which the person (or, if not otherwise enrolled,
7 the individual) may be enrolled under the plan as a
8 dependent of the individual, and in the case of the birth
9 or adoption of a child, the spouse of the individual may
10 be enrolled as a dependent of the individual if such
11 spouse is otherwise eligible for coverage.
12 (b) Dependent special enrollment period. A
13 dependent special enrollment period under this
14 subparagraph shall be a period of not less than 30 days
15 and shall begin on the later of:
16 (i) the date dependent coverage is made
17 available; or
18 (ii) the date of the marriage, birth, or
19 adoption or placement for adoption (as the case may
20 be) described in subparagraph (a)(iii).
21 (c) No waiting period. If an individual seeks to
22 enroll a dependent during the first 30 days of such a
23 dependent special enrollment period, the coverage of the
24 dependent shall become effective:
25 (i) in the case of marriage, not later than
26 the first day of the first month beginning after the
27 date the completed request for enrollment is
28 received;
29 (ii) in the case of a dependent's birth, as of
30 the date of such birth; or
31 (iii) in the case of a dependent's adoption or
32 placement for adoption, the date of such adoption or
33 placement for adoption.
34 (G) Use of affiliation period by HMOs as alternative to
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1 preexisting condition exclusion.
2 (1) In general. A health maintenance organization which
3 offers health insurance coverage in connection with a group
4 health plan and which does not impose any pre-existing
5 condition exclusion allowed under subsection (A) with respect
6 to any particular coverage option may impose an affiliation
7 period for such coverage option, but only if:
8 (a) such period is applied uniformly without regard
9 to any health status-related factors; and
10 (b) such period does not exceed 2 months (or 3
11 months in the case of a late enrollee).
12 (2) Affiliation period.
13 (a) Defined. For purposes of this Act, the term
14 "affiliation period" means a period which, under the
15 terms of the health insurance coverage offered by the
16 health maintenance organization, must expire before the
17 health insurance coverage becomes effective. The
18 organization is not required to provide health care
19 services or benefits during such period and no premium
20 shall be charged to the participant or beneficiary for
21 any coverage during the period.
22 (b) Beginning. Such period shall begin on the
23 enrollment date.
24 (c) Runs concurrently with waiting periods. An
25 affiliation period under a plan shall run concurrently
26 with any waiting period under the plan.
27 (3) Alternative methods. A health maintenance
28 organization described in paragraph (1) may use alternative
29 methods, from those described in such paragraph, to address
30 adverse selection as approved by the State insurance
31 commissioner or official or officials designated by the
32 Department.
33 Section 25. Prohibiting discrimination against
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1 individual participants.
2 (A) In eligibility to enroll.
3 (1) In general. Subject to paragraph (2), a group
4 health plan, and a health insurance issuer offering group
5 health insurance coverage in connection with a group health
6 plan, may not establish rules for eligibility (including
7 continued eligibility) of any individual to enroll under the
8 terms of the plan based on any of the following health
9 status-related factors in relation to the individual or a
10 dependent of the individual:
11 (a) Health status.
12 (b) Medical condition (including both physical and
13 mental illnesses).
14 (c) Claims experience.
15 (d) Receipt of health care.
16 (e) Medical history.
17 (f) Genetic information.
18 (g) Evidence of insurability (including conditions
19 arising out of acts of domestic violence).
20 (h) Disability.
21 (2) No application to benefits or exclusions. To the
22 extent consistent with Section 20, the provisions of
23 paragraph (1) shall not be construed:
24 (a) to require a group health plan, or group health
25 insurance coverage, to provide particular benefits other
26 than those provided under the terms of such plan or
27 coverage; or
28 (b) to prevent such a plan or coverage from
29 establishing limitations or restrictions on the amount,
30 level, extent, or nature of the benefits or coverage for
31 similarly situated individuals enrolled in the plan or
32 coverage.
33 (3) Construction. For purposes of paragraph (1), rules
34 for eligibility to enroll under a plan include rules defining
-19- LRB9002422JSdvA
1 any applicable waiting periods for such enrollment.
2 (B) In premium contributions.
3 (1) In general. A group health plan, and a health
4 insurance issuer offering health insurance coverage in
5 connection with a group health plan, may not require any
6 individual (as a condition of enrollment or continued
7 enrollment under the plan) to pay a premium or contribution
8 which is greater than such premium or contribution for a
9 similarly situated individual enrolled in the plan on the
10 basis of any health status-related factor in relation to the
11 individual or to an individual enrolled under the plan as a
12 dependent of the individual.
13 (2) Construction. Nothing in paragraph (1) shall be
14 construed:
15 (a) to restrict the amount that an employer may be
16 charged for coverage under a group health plan; or
17 (b) to prevent a group health plan, and a health
18 insurance issuer offering group health insurance
19 coverage, from establishing premium discounts or rebates
20 or modifying otherwise applicable copayments or
21 deductibles in return for adherence to programs of health
22 promotion and disease prevention.
23 Section 30. Guaranteed renewability of coverage for
24 employers in the group market.
25 (A) In general. Except as provided in this Section, if
26 a health insurance issuer offers health insurance coverage in
27 the small or large group market in connection with a group
28 health plan, the issuer must renew or continue in force such
29 coverage at the option of the plan sponsor of the plan.
30 (B) General exceptions. A health insurance issuer may
31 nonrenew or discontinue health insurance coverage offered in
32 connection with a group health plan in the small or large
33 group market based only on one or more of the following:
-20- LRB9002422JSdvA
1 (1) Nonpayment of premiums. The plan sponsor has failed
2 to pay premiums or contributions in accordance with the terms
3 of the health insurance coverage or the issuer has not
4 received timely premium payments.
5 (2) Fraud. The plan sponsor has performed an act or
6 practice that constitutes fraud or made an intentional
7 misrepresentation of material fact under the terms of the
8 coverage.
9 (3) Violation of participation or contribution rules.
10 The plan sponsor has failed to comply with a material plan
11 provision relating to employer contribution or group
12 participation rules, as permitted under Section 40(E) in the
13 case of the small group market or pursuant to applicable
14 State law in the case of the large group market.
15 (4) Termination of coverage. The issuer is ceasing to
16 offer coverage in such market in accordance with subsection
17 (C) and applicable State law.
18 (5) Movement outside service area. In the case of a
19 health insurance issuer that offers health insurance coverage
20 in the market through a network plan, there is no longer any
21 enrollee in connection with such plan who lives, resides, or
22 works in the service area of the issuer (or in the area for
23 which the issuer is authorized to do business) and, in the
24 case of the small group market, the issuer would deny
25 enrollment with respect to such plan under Section
26 40(C)(1)(a).
27 (6) Association membership ceases. In the case of
28 health insurance coverage that is made available in the small
29 or large group market (as the case may be) only through one
30 or more bona fide association, the membership of an employer
31 in the association (on the basis of which the coverage is
32 provided) ceases but only if such coverage is terminated
33 under this paragraph uniformly without regard to any health
34 status-related factor relating to any covered individual.
-21- LRB9002422JSdvA
1 (C) Requirements for uniform termination of coverage.
2 (1) Particular type of coverage not offered. In any
3 case in which an issuer decides to discontinue offering a
4 particular type of group health insurance coverage offered in
5 the small or large group market, coverage of such type may be
6 discontinued by the issuer in accordance with applicable
7 State law in such market only if:
8 (a) the issuer provides notice to each plan sponsor
9 provided coverage of this type in such market (and
10 participants and beneficiaries covered under such
11 coverage) of such discontinuation at least 90 days prior
12 to the date of the discontinuation of such coverage;
13 (b) the issuer offers to each plan sponsor provided
14 coverage of this type in such market, the option to
15 purchase all (or, in the case of the large group market,
16 any) other health insurance coverage currently being
17 offered by the issuer to a group health plan in such
18 market; and
19 (c) in exercising the option to discontinue
20 coverage of this type and in offering the option of
21 coverage under subparagraph (b), the issuer acts
22 uniformly without regard to the claims experience of
23 those sponsors or any health status-related factor
24 relating to any participants or beneficiaries who may
25 become eligible for such coverage.
26 (2) Discontinuance of all coverage.
27 (a) In general. In any case in which a health
28 insurance issuer elects to discontinue offering all
29 health insurance coverage in the small group market or
30 the large group market, or both markets, in Illinois,
31 health insurance coverage may be discontinued by the
32 issuer only in accordance with Illinois law and if:
33 (i) the issuer provides notice to the
34 Department and to each plan sponsor (and
-22- LRB9002422JSdvA
1 participants and beneficiaries covered under such
2 coverage) of such discontinuation at least 180 days
3 prior to the date of the discontinuation of such
4 coverage; and
5 (ii) all health insurance issued or delivered
6 for issuance in Illinois in such market (or markets)
7 are discontinued and coverage under such health
8 insurance coverage in such market (or markets) is
9 not renewed.
10 (b) Prohibition on market reentry. In the case of a
11 discontinuation under subparagraph (a) in a market, the
12 issuer may not provide for the issuance of any health
13 insurance coverage in the Illinois market and State involved
14 during the 5-year period beginning on the date of the
15 discontinuation of the last health insurance coverage not so
16 renewed.
17 (D) Exception for uniform modification of coverage. At
18 the time of coverage renewal, a health insurance issuer may
19 modify the health insurance coverage for a product offered to
20 a group health plan:
21 (1) in the large group market; or
22 (2) in the small group market if, for coverage that is
23 available in such market other than only through one or more
24 bona fide associations, such modification is consistent with
25 State law and effective on a uniform basis among group health
26 plans with that product.
27 (E) Application to coverage offered only through
28 associations. In applying this Section in the case of health
29 insurance coverage that is made available by a health
30 insurance issuer in the small or large group market to
31 employers only through one or more associations, a reference
32 to "plan sponsor" is deemed, with respect to coverage
33 provided to an employer member of the association, to include
34 a reference to such employer.
-23- LRB9002422JSdvA
1 Section 35. Disclosure of Information.
2 (A) Disclosure of information by health plan issuers.
3 In connection with the offering of any health insurance
4 coverage to a small employer, a health insurance issuer:
5 (1) shall make a reasonable disclosure to such employer,
6 as part of its solicitation and sales materials, of the
7 availability of information described in subsection (B), and
8 (2) upon request of such a small employer, provide such
9 information.
10 (B) Information described.
11 (1) In general. Subject to paragraph (3), with respect
12 to a health insurance offering health insurance coverage to a
13 small employer, information described in this subsection is
14 information concerning:
15 (a) the provisions of such coverage concerning
16 issuer's right to change premium rates and the factors
17 that may affect changes in premium rates;
18 (b) the provisions of such coverage relating to
19 renewability of coverage;
20 (c) the provisions of such coverage relating to any
21 pre-existing condition exclusion; and
22 (d) the benefits and premiums available under all
23 health insurance coverage for which the employer is
24 qualified.
25 (2) Form of information. Information under this
26 subsection shall be provided to small employers in a manner
27 determined to be understandable by the average small
28 employer, and shall be sufficient to reasonably inform small
29 employers of their rights and obligations under the health
30 insurance coverage.
31 (3) Exception. An issuer is not required under this
32 Section to disclose any information that is proprietary and
33 trade secret information under applicable law.
-24- LRB9002422JSdvA
1 Section 40. Guaranteed availability of coverage for
2 employers in the group market.
3 (A) Issuance of coverage in the small group market.
4 (1) In general. Subject to subsections (C) through (F),
5 each health insurance issuer that offers health insurance
6 coverage in the small group market in a State:
7 (a) must accept every small employer (as defined in
8 Section 10) in the State that applies for such coverage;
9 and
10 (b) must accept for enrollment under such coverage
11 every eligible individual (as defined in paragraph (2))
12 who applies for enrollment during the period in which the
13 individual first becomes eligible to enroll under the
14 terms of the group health plan and may not place any
15 restriction which is inconsistent with Section 25 on an
16 eligible individual being a participant or beneficiary.
17 (2) Eligible individual defined. For purposes of this
18 Section, the term "eligible individual" means, with respect
19 to a health insurance issuer that offers health insurance
20 coverage to a small employer in connection with a group
21 health plan in the small group market, such an individual in
22 relation to the employer as shall be determined:
23 (a) in accordance with the terms of such plan;
24 (b) as provided by the issuer under rules of the
25 issuer which are uniformly applicable in a State to small
26 employers in the small group market; and
27 (c) in accordance with all applicable State laws
28 governing such issuer and such market.
29 (B) Special rules for network plans.
30 (1) In general. In the case of a health insurance
31 issuer that offers health insurance coverage in the small
32 group market through a network plan, the issuer may:
33 (a) limit the employers that may apply for such
34 coverage to those with eligible individuals who live,
-25- LRB9002422JSdvA
1 work, or reside in the service area for such network
2 plan; and
3 (b) within the service area of such plan, deny such
4 coverage to such employers if the issuer has
5 demonstrated, if required, to the Department that:
6 (i) it will not have the capacity to deliver
7 services adequately to enrollees of any additional
8 groups because of its obligations to existing group
9 contract holders and enrollees; and
10 (ii) it is applying this paragraph uniformly to
11 all employers without regard to the claims
12 experience of those employers and their employees
13 (and their dependents) or any health status-related
14 factor relating to such employees and dependents.
15 (2) 180-day suspension upon denial of coverage. An
16 issuer, upon denying health insurance coverage in any service
17 area in accordance with paragraph (1)(b), may not offer
18 coverage in the small group market within such service area
19 for a period of 180 days after the date such coverage is
20 denied.
21 (C) Application of financial capacity limits.
22 (1) In general. A health insurance issuer may deny
23 health insurance coverage in the small group market if the
24 issuer has demonstrated, if required, to the Department:
25 (a) it does not have the financial capacity
26 necessary to underwrite additional coverage; and
27 (b) it is applying this paragraph uniformly to all
28 employers in the small group market in the State and
29 without regard to the claims experience of those
30 employers and their employees (and their dependents) or
31 any health status-related factor relating to such
32 employees and dependents.
33 (2) 180-day suspension upon denial of coverage. A
34 health insurance issuer upon denying health insurance
-26- LRB9002422JSdvA
1 coverage in connection with group health plans in accordance
2 with paragraph (1) may not offer coverage in connection with
3 group health plans in the small group market for a period of
4 180 days after the date such coverage is denied or until the
5 issuer has demonstrated to the Department that the issuer has
6 sufficient financial reserves to underwrite additional
7 coverage, whichever is later. The Department may provide for
8 the application of this subsection on a service-area-specific
9 basis.
10 (D) Exception to requirement for failure to meet certain
11 minimum participation or continuation rules.
12 (1) In general. Subsection (A) shall not be construed
13 to preclude a health insurance issuer from establishing
14 employer contribution rules or group participation rules for
15 the offering of health insurance coverage in connection with
16 a group health plan in the small group market.
17 (2) Rules defined. For purposes of paragraph (1):
18 (a) the term "employer contribution rule" means a
19 requirement relating to the minimum level or amount of
20 employer contribution toward the premium for enrollment
21 of participants and beneficiaries; and
22 (b) the term "group participation rule" means a
23 requirement relating to the minimum number of
24 participants or beneficiaries that must be enrolled in
25 relation to a specified percentage or number of eligible
26 individuals or employees of an employer.
27 (E) Exception for coverage offered only to bona fide
28 association members. Subsection (A) shall not apply to
29 health insurance coverage offered by a health insurance
30 issuer if such coverage is made available in the small group
31 market only through one or more bona fide associations (as
32 defined in Section 10).
33 Section 45. Exclusion of certain plans.
-27- LRB9002422JSdvA
1 (A) Exception for certain small group health plans. The
2 requirements of this Act shall not apply to any group health
3 plan (and health insurance coverage offered in connection
4 with a group health plan) for any plan year if, on the first
5 day of such plan year, such plan has less than 2 participants
6 who are current employees.
7 (B) Limitation on application of provisions relating to
8 group health plans.
9 (1) In general. The requirements of this Act shall
10 apply with respect to group health plans only:
11 (a) subject to paragraph (2), in the case of a plan
12 that is a nonfederal governmental plan; and
13 (b) with respect to health insurance coverage
14 offered in connection with a group health plan (including
15 such a plan that is a church plan or a governmental
16 plan).
17 (2) Treatment of nonfederal governmental plans.
18 (a) Election to be excluded. If the plan sponsor
19 of a nonfederal governmental plan which is a group health
20 plan to which the provisions of this Act otherwise apply
21 makes an election under this subparagraph (in such form
22 and manner as may be prescribed by rule), then the
23 requirements of this Act insofar as they apply directly
24 to group health plans (and not merely to group health
25 insurance coverage) shall not apply to such governmental
26 plans for such period except as provided in this
27 paragraph.
28 (b) Period of election. An election under
29 subparagraph (a) shall apply:
30 (i) for a single specified plan year; or
31 (ii) in the case of a plan provided pursuant to
32 a collective bargaining agreement, for the term of
33 such agreement.
34 An election under clause (i) may be extended through
-28- LRB9002422JSdvA
1 subsequent elections under this paragraph.
2 (c) Notice to enrollees. Under such an election,
3 the plan shall provide for:
4 (i) notice to enrollees (on an annual basis
5 and at the time of enrollment under the plan) of the
6 fact and consequences of such election; and
7 (ii) certification and disclosure of creditable
8 coverage under the plan with respect to enrollees in
9 accordance with Section 20(E).
10 (C) Exception for certain benefits. The requirements of
11 this Act shall not apply to any group health plan (or group
12 health insurance coverage) in relation to its provision of
13 excepted benefits described in Section 20(C)(1).
14 (D) Exception for certain benefits if certain conditions
15 met.
16 (1) Limited, excepted benefits. The requirements of
17 this Act shall not apply to any group health plan (and group
18 health insurance coverage offered in connection with a group
19 health plan) in relation to its provision of excepted
20 benefits described in Section 20(C)(3) if the benefits:
21 (a) are provided under a separate policy,
22 certificate, or contract of insurance; or
23 (b) are otherwise not an integral part of the plan.
24 (2) Noncoordinated, excepted benefits. The requirements
25 of this Act shall not apply to any group health plan (and
26 group health insurance coverage offered in connection with a
27 group health plan) in relation to its provision of excepted
28 benefits described in Section 20(C)(4) if all of the
29 following conditions are met:
30 (a) The benefits are provided under a separate
31 policy, certificate, or contract of insurance.
32 (b) There is no coordination between the provision
33 of such benefits and any exclusion of benefits under any
34 group health plan maintained by the same plan sponsor.
-29- LRB9002422JSdvA
1 (c) Such benefits are paid with respect to an event
2 without regard to whether benefits are provided with
3 respect to such an event under any group health plan
4 maintained by the same plan sponsor.
5 (3) Supplemental excepted benefits. The requirements of
6 this Act shall not apply to any group health plan (and group
7 health insurance coverage) in relation to its provision of
8 excepted benefits described in Section 20(C)(5) if the
9 benefits are provided under a separate policy, certificate,
10 or contract of insurance.
11 (E) Treatment of partnerships. For purposes of this
12 Act:
13 (1) Treatment as a group health plan. Any plan, fund,
14 or program which would not be (but for this subsection) an
15 employee welfare benefit plan and which is established or
16 maintained by a partnership, to the extent that such plan,
17 fund, or program provides medical care (including items and
18 services paid for as medical care) to present or former
19 partners in the partnership or to their dependents (as
20 defined under the terms of the plan, fund, or program),
21 directly or through insurance, reimbursement, or otherwise,
22 shall be treated (subject to paragraph (2)) as an employee
23 welfare benefit plan which is a group health plan.
24 (2) Employer. In the case of a group health plan, the
25 term "employer" also includes the partnership in relation to
26 any partner.
27 (3) Partnerships of group health plans. In the case of
28 a group health plan, the term "participant" also includes:
29 (a) in connection with a group health plan
30 maintained by a partnership, an individual who is a
31 partner in relation to the partnership, or
32 (b) in connection with a group health plan
33 maintained by a self-employed individual (under which one
34 or more employees are participants), the self-employed
-30- LRB9002422JSdvA
1 individual, if such individual is or may become eligible
2 to receive a benefit under the plan or the individual's
3 beneficiaries may be eligible for any benefit.
4 Section 90. The Illinois Insurance Code is amended by
5 adding Section 155.31 as follows:
6 (215 ILCS 5/155.31 new)
7 Sec. 155.31. Illinois Health Insurance Portability and
8 Accountability Act. The provisions of this Code are subject
9 to the Illinois Health Insurance Portability and
10 Accountability Act as provided in Section 15 of that Act.
11 (215 ILCS 95/Act rep.)
12 Section 91. The Small Employer Rating, Renewability and
13 Portability Health Insurance Act is repealed.
14 Section 92. The Comprehensive Health Insurance Plan Act
15 is amended by changing Sections 1.1, 2, 3, 4, 5, 7, 8, 10,
16 12, and 14 and adding Sections 7.1 and 15 as follows:
17 (215 ILCS 105/1.1) (from Ch. 73, par. 1301.1)
18 Sec. 1.1. The General Assembly hereby makes the
19 following findings and declarations:
20 (a) The Comprehensive Health Insurance Plan is
21 established as a State program that is intended to provide an
22 alternate market for health insurance for certain uninsurable
23 eligible Illinois residents, such insurance being funded
24 primarily by premiums paid by eligible resident policyholders
25 and further is intended to provide an acceptable alternative
26 mechanism as described in the federal Health Insurance
27 Portability and Accountability Act of 1996 for providing
28 portable and accessible individual health insurance coverage
29 for federally eligible individuals as defined in this Act.;
-31- LRB9002422JSdvA
1 (b) The State of Illinois may subsidize the cost of
2 health insurance coverage policies offered by the Plan.
3 However, since the State has only a limited amount of
4 resources, the General Assembly declares that it intends for
5 this program to provide portable and accessible individual
6 health insurance coverage for every federally eligible
7 individual who qualifies for coverage in accordance with
8 Section 15 of this Act, but does not intend for every
9 eligible person who qualifies for Plan coverage in accordance
10 with Section 7 of Act resident to be guaranteed a right to be
11 issued a policy under this Plan as a matter of entitlement.;
12 and
13 (c) The Comprehensive Health Insurance Plan Board shall
14 operate the Plan in a manner so that the estimated cost of
15 the program providing health insurance during any fiscal year
16 will not exceed the total income it expects to receive from
17 policy premiums, investment income, assessments, or fees
18 collected or received by the Board and other and funds which
19 are made available from appropriations for the Plan by the
20 General Assembly for that fiscal year. After determining the
21 amount that it has had appropriated for the fiscal year, the
22 Board shall estimate the number of new policies that it
23 believes it has the financial capacity to issue during that
24 year so that total costs do not exceed income. The Board
25 shall take steps necessary to assure that plan enrollment
26 does not exceed the number of residents it estimates it has
27 the financial capacity to insure.
28 (Source: P.A. 87-560.)
29 (215 ILCS 105/2) (from Ch. 73, par. 1302)
30 Sec. 2. Definitions. As used in this Act, unless the
31 context otherwise requires:
32 "Plan administrator" "Administering carrier" means the
33 insurer or third party administrator designated under Section
-32- LRB9002422JSdvA
1 5 of this Act.
2 "Benefits plan" means the coverage to be offered by the
3 Plan to eligible persons and federally eligible individuals
4 pursuant to this Act.
5 "Board" means the Illinois Comprehensive Health Insurance
6 Board.
7 "Church plan" has the same meaning given that term in the
8 federal Health Insurance Portability and Accountability Act
9 of 1996.
10 "Continuation coverage" means continuation of coverage
11 under a group health plan or other health insurance coverage
12 for former employees or dependents of former employees that
13 would otherwise have terminated under the terms of that
14 coverage pursuant to any continuation provisions under
15 federal or State law, including the Consolidated Omnibus
16 Budget Reconciliation Act of 1985 (COBRA), as amended,
17 Sections 367.2 and 367e of the Illinois Insurance Code, or
18 any other similar requirement in another state.
19 "Covered person" means a person who is and continues to
20 remain eligible for Plan coverage and is covered under one of
21 the benefit plans offered by the Plan.
22 "Creditable coverage" means, with respect to a federally
23 eligible individual, coverage of the individual under any of
24 the following:
25 (A) A group health plan.
26 (B) Health insurance coverage (including group health
27 insurance coverage).
28 (C) Medicare.
29 (D) Medical assistance.
30 (E) Chapter 55 of title 10, United States Code.
31 (F) A medical care program of the Indian Health Service
32 or of a tribal organization.
33 (G) A state health benefits risk pool.
34 (H) A health plan offered under Chapter 89 of title 5,
-33- LRB9002422JSdvA
1 United States Code.
2 (I) A public health plan (as defined in regulations
3 consistent with Section 104 of the Health Care Portability
4 and Accountability Act of 1996 that may be promulgated by the
5 Secretary of the U.S. Department of Health and Human
6 Services).
7 (J) A health benefit plan under Section 5(e) of the
8 Peace Corps Act (22 U.S. C. 2504(e)).
9 (K) Any other qualifying coverage required by the
10 federal Health Insurance Portability and Accountability Act
11 of 1996, as it may be amended, or regulations under that Act.
12 "Creditable coverage" does not include coverage
13 consisting solely of coverage of excepted benefits (as
14 defined in Section 2791(c) of title XXVII of the Public
15 Health Service Act (42 U.S.C. 300 gg-91) nor does it include
16 any period of coverage under any of items (A) through (K)
17 that occurred before a break of more than 63 days during all
18 of which the individual was not covered under any of items
19 (A) through (K) above. Any period that an individual is in a
20 waiting period for any coverage under a group health plan (or
21 for group health insurance coverage) or is in an affiliation
22 period under the terms of health insurance coverage offered
23 by a health maintenance organization shall not be taken into
24 account in determining if there has been a break of more than
25 63 days in any credible coverage.
26 "Department" means the Illinois Department of Insurance.
27 "Dependent" means an Illinois resident: who is a spouse;
28 or who is claimed as a dependent by the principal insured for
29 purposes of filing a federal income tax return and resides in
30 the principal insured's household, and is a resident
31 unmarried child under the age of 19 years; or who is an
32 unmarried child who also is a full-time student under the age
33 of 23 years and who is financially dependent upon the
34 principal insured; or who is child of any age and who is
-34- LRB9002422JSdvA
1 disabled and financially dependent upon the principal
2 insured.
3 "Direct Illinois premiums" means, for Illinois business,
4 an insurer's direct premium income for the kinds of business
5 described in clause (b) of Class 1 or clause (a) of Class 2
6 of Section 4 of the Illinois Insurance Code, and direct
7 premium income of a health maintenance organization or a
8 voluntary health services plan, except it shall not include
9 credit health insurance as defined in Article IX 1/2 of the
10 Illinois Insurance Code.
11 "Director" means the Director of the Illinois Department
12 of Insurance.
13 "Eligible person" means a resident of this State who
14 qualifies for Plan coverage under Section 7 of this Act.
15 "Employee" means a resident of this State who is employed
16 by an employer or has entered into the employment of or works
17 under contract or service of an employer including the
18 officers, managers and employees of subsidiary or affiliated
19 corporations and the individual proprietors, partners and
20 employees of affiliated individuals and firms when the
21 business of the subsidiary or affiliated corporations, firms
22 or individuals is controlled by a common employer through
23 stock ownership, contract, or otherwise.
24 "Employer" means any individual, partnership,
25 association, corporation, business trust, or any person or
26 group of persons acting directly or indirectly in the
27 interest of an employer in relation to an employee, for which
28 one or more persons is gainfully employed.
29 "Family" coverage means the coverage provided by the Plan
30 for the covered eligible person and his or her eligible
31 dependents who also are covered persons legal spouse, the
32 eligible person's dependent children under the age of 19, the
33 eligible person's dependent children under the age of 23 who
34 are full-time students, the eligible person's dependent
-35- LRB9002422JSdvA
1 disabled children of any age, or any other member of the
2 eligible person's family who is claimed as a dependent for
3 purposes of filing federal income tax returns and resides in
4 the eligible person's household.
5 "Federally eligible individual" means an individual
6 resident of this State:
7 (1)(A) for whom, as of the date on which the individual
8 seeks Plan coverage under Section 15 of this Act, the
9 aggregate of the periods of creditable coverage is 18 or more
10 months, and (B) whose most recent prior creditable coverage
11 was under group health insurance coverage offered by a health
12 insurance issuer, a group health plan, a governmental plan,
13 or a church plan (or health insurance coverage offered in
14 connection with any such plans) or any other type of
15 creditable coverage that may be required by the federal
16 Health Insurance Portability and Accountability Act of 1996,
17 as it may be amended, or the regulations under that Act;
18 (2) who is not eligible for coverage under (A) a group
19 health plan, (B) part A or part B of Medicare, or (C) medical
20 assistance, and does not have other health insurance
21 coverage;
22 (3) with respect to whom the most recent coverage within
23 the coverage period described in paragraph (1)(A) of this
24 definition was not terminated based upon a factor relating to
25 nonpayment of premiums or fraud;
26 (4) if the individual had been offered the option of
27 continuation coverage under a COBRA continuation provision or
28 under a similar State program, who elected such coverage; and
29 (5) who, if the individual elected such continuation
30 coverage, has exhausted such continuation coverage under such
31 provision or program.
32 "Group health plan" has the same meaning given that term
33 in the federal Health Insurance Portability and
34 Accountability Act of 1996.
-36- LRB9002422JSdvA
1 "Governmental plan" has the same meaning given that term
2 in the federal Health Insurance Portability and
3 Accountability Act of 1996.
4 "Health insurance" means any hospital and , surgical, or
5 medical coverage provided under an expense-incurred policy,
6 certificate, or contract provided by an insurer, minimum
7 premium plan, stop loss coverage, non-profit health care
8 service plan contract, health maintenance organization or
9 other subscriber contract, or any other health care plan or
10 arrangement that pays for or furnishes medical or health care
11 services by a provider of these services, whether by
12 insurance or otherwise. Health insurance shall not include
13 short term, accident only, disability income, hospital
14 confinement or fixed indemnity, dental only, vision only,
15 limited benefit, or credit insurance, coverage issued as a
16 supplement to liability insurance, insurance arising out of a
17 workers' compensation or similar law, automobile
18 medical-payment insurance, or insurance under which benefits
19 are payable with or without regard to fault and which is
20 statutorily required to be contained in any liability
21 insurance policy or equivalent self-insurance.
22 "Health insurance coverage" means benefits consisting of
23 medical care (provided directly, through insurance or
24 reimbursement, or otherwise and including items and services
25 paid for as medical care) under any hospital or medical
26 service policy or certificate, hospital or medical service
27 plan contract, or health maintenance organization contract
28 offered by a health insurance issuer.
29 "Health insurance issuer" means an insurance company,
30 insurance service, or insurance organization (including a
31 health maintenance organization and a voluntary health
32 services plan) that is authorized to transact health
33 insurance business in this State. Such term does not include
34 a group health plan.
-37- LRB9002422JSdvA
1 "Health Maintenance Organization" means an organization
2 as defined in the Health Maintenance Organization Act.
3 "Hospice" means a program as defined in and licensed
4 under the Hospice Program Licensing Act.
5 "Hospital" means a duly licensed an institution as
6 defined in the Hospital Licensing Act, an institution that
7 meets all comparable conditions and requirements in effect in
8 the state in which it is located, or the University of
9 Illinois Hospital as defined in the University of Illinois
10 Hospital Act.
11 "Individual health insurance coverage" means health
12 insurance coverage offered to individuals in the individual
13 market, but does not include short-term, limited-duration
14 insurance.
15 "Insured" means any individual resident of this State who
16 is eligible to receive benefits from any insurer (including
17 health insurance coverage offered in connection with a group
18 health plan) or health insurance issuer arrangement as
19 defined in this Section.
20 "Insurer" means any insurance company authorized to
21 transact health insurance business in this State and any
22 corporation that provides medical services and is organized
23 under the Voluntary Health Services Plans Act or the Health
24 Maintenance Organization Act.
25 "Medical assistance" means the state medical assistance
26 or medical assistance no grant (MANG) programs health care
27 benefits provided under Title XIX of the Social Security Act
28 and Articles V (Medical Assistance) and VI (General
29 Assistance) of the Illinois Public Aid Code (or any successor
30 program) or under any similar program of health care benefits
31 in a state other than Illinois.
32 "Medically necessary" means that a service, drug, or
33 supply is necessary and appropriate for the diagnosis or
34 treatment of an illness or injury in accord with generally
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1 accepted standards of medical practice at the time the
2 service, drug, or supply is provided. When specifically
3 applied to a confinement it further means that the diagnosis
4 or treatment of the covered insured person's medical symptoms
5 or condition cannot be safely provided to that person as an
6 outpatient. A service, drug, or supply shall not be medically
7 necessary if it: (i) is investigational, experimental, or for
8 research purposes; or (ii) is provided solely for the
9 convenience of the patient, the patient's family, physician,
10 hospital, or any other provider; or (iii) exceeds in scope,
11 duration, or intensity that level of care that is needed to
12 provide safe, adequate, and appropriate diagnosis or
13 treatment; or (iv) could have been omitted without adversely
14 affecting the covered insured person's condition or the
15 quality of medical care; or (v) involves the use of a medical
16 device, drug, or substance not formally approved by the
17 United States Food and Drug Administration.
18 "Medical care" means the ordinary and usual professional
19 services rendered by a physician or other specified provider
20 during a professional visit for treatment of an illness or
21 injury.
22 "Medicare" means coverage under both Part A and Part B of
23 Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395,
24 et seq..
25 "Minimum premium plan" means an arrangement whereby a
26 specified amount of health care claims is self-funded, but
27 the insurance company assumes the risk that claims will
28 exceed that amount.
29 "Participating transplant center" means a hospital
30 designated by the Board as a preferred or exclusive provider
31 of services for one or more specified human organ or tissue
32 transplants for which the hospital has signed an agreement
33 with the Board to accept a transplant payment allowance for
34 all expenses related to the transplant during a transplant
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1 benefit period.
2 "Physician" means a person licensed to practice medicine
3 pursuant to the Medical Practice Act of 1987.
4 "Plan" means the Comprehensive Health Insurance Plan
5 established by this Act.
6 "Plan of operation" means the plan of operation of the
7 Plan, including articles, bylaws and operating rules, adopted
8 by the board pursuant to this Act.
9 "Provider" means any hospital, skilled nursing facility,
10 hospice, home health agency, physician, registered pharmacist
11 acting within the scope of that registration, or any other
12 person or entity licensed in Illinois to furnish medical
13 care.
14 "Qualified high risk pool" has the same meaning given
15 that term in the federal Health Insurance Portability and
16 Accountability Act of 1996.
17 "Resident eligible person" means a person who has been
18 legally domiciled in this State for a period of at least 180
19 days and continues to be domiciled in this State.
20 "Skilled nursing facility" means a facility or that
21 portion of a facility that is licensed by the Illinois
22 Department of Public Health under the Nursing Home Care Act
23 or a comparable licensing authority in another state to
24 provide skilled nursing care.
25 "Stop-loss coverage" means an arrangement whereby an
26 insurer insures against the risk that any one claim will
27 exceed a specific dollar amount or that the entire loss of a
28 self-insurance plan will exceed a specific amount.
29 "Third party administrator" means an administrator as
30 defined in Section 511.101 of the Illinois Insurance Code who
31 is licensed under Article XXXI 1/4 of that Code.
32 (Source: P.A. 87-560; 88-364.)
33 (215 ILCS 105/3) (from Ch. 73, par. 1303)
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1 Sec. 3. Operation of the Plan.
2 a. There is hereby created an Illinois Comprehensive
3 Health Insurance Plan.
4 b. The Plan shall operate subject to the supervision and
5 control of the board. The board is created as a political
6 subdivision and body politic and corporate and, as such, is
7 not a State agency. The board shall consist of 10 public
8 members, appointed by the Governor with the advice and
9 consent of the Senate.
10 Initial members shall be appointed to the Board by the
11 Governor as follows: 2 members to serve until July 1, 1988,
12 and until their successors are appointed and qualified; 2
13 members to serve until July 1, 1989, and until their
14 successors are appointed and qualified; 3 members to serve
15 until July 1, 1990, and until their successors are appointed
16 and qualified; and 3 members to serve until July 1, 1991, and
17 until their successors are appointed and qualified. As terms
18 of initial members expire, their successors shall be
19 appointed for terms to expire the first day in July 3 years
20 thereafter, and until their successors are appointed and
21 qualified.
22 Any vacancy in the Board occurring for any reason other
23 than the expiration of a term shall be filled for the
24 unexpired term in the same manner as the original
25 appointment.
26 Any member of the Board may be removed by the Governor
27 for neglect of duty, misfeasance, malfeasance, or nonfeasance
28 in office.
29 In addition, a representative of the Illinois Health Care
30 Cost Containment Council, a representative of the Office of
31 the Attorney General and the Director or the Director's
32 designated representative shall be members of the board.
33 Four members of the General Assembly, one each appointed by
34 the President and Minority Leader of the Senate and by the
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1 Speaker and Minority Leader of the House of Representatives,
2 shall serve as nonvoting members of the board. At least 2 of
3 the public members shall be individuals reasonably expected
4 to qualify for coverage under the Plan, the parent or spouse
5 of such an individual, or a surviving family member of an
6 individual who could have qualified for the plan during his
7 lifetime. The Director or Director's representative shall be
8 the chairperson of the board. Members of the board shall
9 receive no compensation, but shall be reimbursed for
10 reasonable expenses incurred in the necessary performance of
11 their duties.
12 c. The board shall make an annual report in September
13 and shall file the report with the Secretary of the Senate
14 and the Clerk of the House of Representatives. The report
15 shall summarize the activities of the Plan in the preceding
16 calendar year, including net written and earned premiums, the
17 expense of administration, the paid and incurred losses for
18 the year and other information as may be requested by the
19 General Assembly. The report shall also include analysis and
20 recommendations regarding utilization review, quality
21 assurance and access to cost effective quality health care.
22 d. In its plan of operation the board shall:
23 (1) Establish procedures for selecting a plan
24 administrator an administering carrier in accordance with
25 Section 5 of this Act.
26 (2) Establish procedures for the operation of the
27 board.
28 (3) Create a Plan fund, under management of the
29 board, to fund administrative, claim, and other expenses
30 of the Plan.
31 (4) Establish procedures for the handling and
32 accounting of assets and monies of the Plan.
33 (5) Develop and implement a program to publicize
34 the existence of the Plan, the eligibility requirements
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1 and procedures for enrollment and to maintain public
2 awareness of the Plan.
3 (6) Establish procedures under which applicants and
4 participants may have grievances reviewed by a grievance
5 committee appointed by the board. The grievances shall
6 be reported to the board immediately after completion of
7 the review. The Department and the board shall retain
8 all written complaints regarding the Plan for at least 3
9 years. Oral complaints shall be reduced to written form
10 and maintained for at least 3 years.
11 (7) Provide for other matters as may be necessary
12 and proper for the execution of its powers, duties and
13 obligations under the Plan.
14 e. No later than 5 years after the Plan is operative the
15 board and the Department shall conduct cooperatively a study
16 of the Plan and the persons insured by the Plan to determine:
17 (1) claims experience including a breakdown of medical
18 conditions for which claims were paid; (2) whether
19 availability of the Plan affected employment opportunities
20 for participants; (3) whether availability of the Plan
21 affected the receipt of medical assistance benefits by Plan
22 participants; (4) whether a change occurred in the number of
23 personal bankruptcies due to medical or other health related
24 costs; (5) data regarding all complaints received about the
25 Plan including its operation and services; (6) and any other
26 significant observations regarding utilization of the Plan.
27 The study shall culminate in a written report to be presented
28 to the Governor, the President of the Senate, the Speaker of
29 the House and the chairpersons of the House and Senate
30 Insurance Committees. The report shall be filed with the
31 Secretary of the Senate and the Clerk of the House of
32 Representatives. The report shall also be available to
33 members of the general public upon request.
34 f. The board may:
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1 (1) Prepare and distribute certificate of
2 eligibility forms and enrollment instruction forms to
3 insurance producers and to the general public in this
4 State.
5 (2) Provide for reinsurance of risks incurred by
6 the Plan and enter into reinsurance agreements with
7 insurers to establish a reinsurance plan for risks of
8 coverage described in the Plan, or obtain commercial
9 reinsurance to reduce the risk of loss through the Plan.
10 (3) Issue additional types of health insurance
11 policies to provide optional coverages as are otherwise
12 permitted by this Act including a Medicare supplement
13 policy designed to supplement Medicare.
14 (4) Provide for and employ cost containment
15 measures and requirements including, but not limited to,
16 preadmission certification, second surgical opinion,
17 concurrent utilization review programs, and individual
18 case management for the purpose of making the pool more
19 cost effective.
20 (5) Design, utilize, or contract, or otherwise
21 arrange for the delivery of cost effective health care
22 services, including establishing or contracting with
23 preferred provider organizations, and health maintenance
24 organizations, and other limited network provider
25 arrangements otherwise arrange for the delivery of cost
26 effective health care services.
27 (6) Adopt bylaws, rules, regulations, policies and
28 procedures as may be necessary or convenient for the
29 implementation of the Act and the operation of the Plan.
30 (7) Administer separate pools, separate accounts,
31 or other plans or arrangements as required by this Act to
32 separate federally eligible individuals or groups of
33 federally eligible individuals who qualify for plan
34 coverage under Section 15 of this Act from eligible
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1 persons or groups of eligible persons who qualify for
2 plan coverage under Section 7 of this Act and apportion
3 the costs of the administration among such separate
4 pools, separate accounts, or other plans or arrangements.
5 g. The Director may, by rule, establish additional
6 powers and duties of the board and may adopt rules for any
7 other purposes, including the operation of the Plan, as are
8 necessary or proper to implement this Act.
9 h. The board is not liable for any obligation of the
10 Plan. There is no liability on the part of any member or
11 employee of the board or the Department, and no cause of
12 action of any nature may arise against them, for any action
13 taken or omission made by them in the performance of their
14 powers and duties under this Act, unless the action or
15 omission constitutes willful or wanton misconduct. The board
16 may provide in its bylaws or rules for indemnification of,
17 and legal representation for, its members and employees.
18 i. There is no liability on the part of any insurance
19 producer for the failure of any applicant to be accepted by
20 the Plan unless the failure of the applicant to be accepted
21 by the Plan is due to an act or omission by the insurance
22 producer which constitutes willful or wanton misconduct.
23 (Source: P.A. 86-547; 86-1322; 87-560.)
24 (215 ILCS 105/4) (from Ch. 73, par. 1304)
25 Sec. 4. Powers and authority of the board. The board
26 shall have the general powers and authority granted under the
27 laws of this State to insurance companies licensed to
28 transact health and accident insurance and in addition
29 thereto, the specific authority to:
30 a. Enter into contracts as are necessary or proper to
31 carry out the provisions and purposes of this Act, including
32 the authority, with the approval of the Director, to enter
33 into contracts with similar plans of other states for the
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1 joint performance of common administrative functions, or with
2 persons or other organizations for the performance of
3 administrative functions including, without limitation,
4 utilization review and quality assurance programs, or with
5 health maintenance organizations or preferred provider
6 organizations for the provision of health care services.
7 b. Sue or be sued, including taking any legal actions
8 necessary or proper.
9 c. Take such legal action as necessary to:
10 (1) avoid the payment of improper claims against
11 the plan or the coverage provided by or through the plan;
12 (2) to recover any amounts erroneously or
13 improperly paid by the plan; or
14 (3) to recover any amounts paid by the plan as a
15 result of a mistake of fact or law; or.
16 (4) to recover or collect any other amounts,
17 including assessments, that are due or owed the Plan or
18 have been billed on its or the Plan's behalf.
19 d. Establish appropriate rates, rate schedules, rate
20 adjustments, expense allowances, agents' referral fees, claim
21 reserves, and formulas and any other actuarial function
22 appropriate to the operation of the plan. Rates shall not be
23 unreasonable in relation to the coverage provided, the risk
24 experience and expenses of providing the coverage. Rates and
25 rate schedules may be adjusted for appropriate risk factors
26 such as age and area variation in claim costs and shall take
27 into consideration appropriate risk factors in accordance
28 with established actuarial and underwriting practices.
29 e. Issue policies of insurance in accordance with the
30 requirements of this Act.
31 f. Appoint appropriate legal, actuarial and other
32 committees as necessary to provide technical assistance in
33 the operation of the plan, policy and other contract design,
34 and any other function within the authority of the plan.
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1 g. Borrow money to effect the purposes of the Illinois
2 Comprehensive Health Insurance Plan. Any notes or other
3 evidence of indebtedness of the plan not in default shall be
4 legal investments for insurers and may be carried as admitted
5 assets.
6 h. Establish rules, conditions and procedures for
7 reinsuring risks under this Act.
8 i. Employ and fix the compensation of employees. Such
9 employees may be paid on a warrant issued by the State
10 Treasurer pursuant to a payroll voucher certified by the
11 Board and drawn by the Comptroller against appropriations or
12 trust funds held by the State Treasurer.
13 j. Enter into intergovernmental cooperation agreements
14 with other agencies or entities of State government for the
15 purpose of sharing the cost of providing health care services
16 that are otherwise authorized by this Act for children who
17 are both plan participants and eligible for financial
18 assistance from the Division of Specialized Care for Children
19 of the University of Illinois.
20 k. Establish conditions and procedures under which the
21 plan may, if funds permit, discount or subsidize premium
22 rates that are paid directly by senior citizens, as defined
23 by the Board, and other plan participants, who are retired or
24 unemployed and meet other qualifications.
25 l. Establish and maintain the Plan Fund authorized in
26 Section 3 of this Act, which shall be divided into separate
27 accounts, as follows:
28 (1) accounts to fund the administrative, claim, and
29 other expenses of the Plan associated with eligible
30 persons who qualify for Plan coverage under Section 7 of
31 this Act, which shall consist of:
32 (A) premiums paid on behalf of covered
33 persons;
34 (B) appropriated funds and other revenues
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1 collected or received by the Board;
2 (C) reserves for future losses maintained by
3 the Board; and
4 (D) interest earnings from investment of the
5 funds in the Plan Fund or any of its accounts other
6 than the funds in the account established under item
7 2 of this subsection.
8 (2) an account, to be denominated the federally
9 eligible individuals account, to fund the administrative,
10 claim, and other expenses of the Plan associated with
11 federally eligible individuals who qualify for Plan
12 coverage under Section 15 of this Act, which shall
13 consist of:
14 (A) premiums paid on behalf of covered
15 persons;
16 (B) assessments and other revenues collected
17 or received by the Board;
18 (C) reserves for future losses maintained by
19 the Board; and
20 (D) interest earnings from investment of the
21 federally eligible individuals account funds; and
22 (3) such other accounts as may be appropriate.
23 m. Charge and collect assessments paid by insurers
24 pursuant to Section 12 of this Act and recover any
25 assessments for, on behalf of, or against those insurers.
26 (Source: P.A. 88-625, eff. 9-9-94; 89-628, eff. 8-9-96.)
27 (215 ILCS 105/5) (from Ch. 73, par. 1305)
28 Sec. 5. Plan administrator Administering Carrier.
29 a. The board shall select a plan administrator an
30 administering carrier through a competitive bidding process
31 to administer the plan. The board shall evaluate bids
32 submitted under this Section based on criteria established by
33 the board which shall include:
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1 (1) The plan administrator's carrier's proven ability to
2 handle other large group accident and health benefit plans.
3 (2) The efficiency and timeliness of the plan
4 administrator's carrier's claim processing paying procedures.
5 (3) An estimate of total charges for administering the
6 plan.
7 (4) The plan administrator's ability to apply effective
8 cost containment programs and procedures and of the carrier
9 to administer the plan in a cost-efficient manner.
10 (5) The financial condition and stability of the plan
11 administrator carrier.
12 b. The plan administrator administering carrier shall
13 serve for a period of 5 years subject to removal for cause
14 and subject to the terms, conditions and limitations of the
15 contract between the board and the plan administrator
16 administering carrier. At least one year prior to the
17 expiration of each 5 year period of service by the current
18 plan administrator an administering carrier, the board shall
19 advertise for and accept bids to serve as the plan
20 administrator administering carrier for the succeeding 5 year
21 period. Selection of the plan administrator administering
22 carrier for the succeeding period shall be made at least 6
23 months prior to the end of the current 5 year period.
24 c. The plan administrator administering carrier shall
25 perform such eligibility and administrative claims payment
26 functions relating to the plan as may be assigned to it
27 including:
28 (1) establishment of the administering carrier shall
29 establish a premium billing procedure for collection of
30 premiums from plan participants. Billings shall be made on a
31 periodic basis as determined by the board;.
32 (2) payment and processing of claims; and
33 (3) (2) other The administering carrier shall perform
34 all necessary functions to assure timely payment of benefits
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1 to participants under the plan, including:
2 (a) Making available information relating to the proper
3 manner of submitting a claim for benefits under the plan and
4 distributing forms upon which submissions shall be made.
5 (b) Evaluating the eligibility of each claim for payment
6 under the plan.
7 (c) The plan administrator administering carrier shall
8 be governed by the requirements of Part 919 of Title 50 of
9 the Illinois Administrative Code, promulgated by the
10 Department of Insurance, regarding the handling of claims
11 under this Act.
12 d. The plan administrator administering carrier shall
13 submit regular reports to the board regarding the operation
14 of the plan. The frequency, content and form of the report
15 shall be as determined by the board.
16 e. The plan administrator administering carrier shall
17 pay claims expenses from the premium payments received from
18 or on behalf of plan participants. If the plan
19 administrator's administering carrier's payments for claims
20 expenses exceed the portion of premiums allocated by the
21 board for payment of claims expenses, the board shall provide
22 to the administering carrier additional funds to the plan
23 administrator for payment of claims expenses.
24 f. The plan administrator administering carrier shall be
25 paid as provided in the board's contract between the Board
26 and the plan administrator with the administering carrier for
27 expenses incurred in the performance of its services.
28 (Source: P.A. 85-1013.)
29 (215 ILCS 105/7) (from Ch. 73, par. 1307)
30 Sec. 7. Eligibility.
31 a. Except as provided in subsection (e) of this Section
32 or in Section 15 of this Act, any individual person who is
33 either a citizen of the United States or an alien lawfully
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1 admitted for permanent residence and continues to be a
2 resident of this State shall be eligible for Plan coverage if
3 evidence is provided of:
4 (1) A notice of rejection or refusal to issue
5 substantially similar individual health insurance
6 coverage for health reasons by a health insurance issuer
7 one insurer; or
8 (2) A refusal by a health insurance issuer to issue
9 individual health the insurance coverage except at a rate
10 exceeding the applicable Plan rate for which the person
11 is responsible.
12 A rejection or refusal by a group health plan or health
13 insurance issuer an insurer offering only stop-loss or excess
14 of loss insurance or contracts, agreements, or other
15 arrangements for reinsurance coverage with respect to the
16 applicant shall not be sufficient evidence under this
17 subsection.
18 b. The board shall promulgate a list of medical or
19 health conditions for which a person who is either a citizen
20 of the United States or an alien lawfully admitted for
21 permanent residence and a resident of this State would be
22 eligible for Plan coverage without applying for health
23 insurance coverage pursuant to subsection a. of this Section.
24 Persons who can demonstrate the existence or history of any
25 medical or health conditions on the list promulgated by the
26 board shall not be required to provide the evidence specified
27 in subsection a. of this Section. The list shall be
28 effective on the first day of the operation of the Plan and
29 may be amended from time to time as appropriate.
30 c. Resident Family members of the same household who
31 each are covered persons meet the eligibility criteria set
32 forth in this Section are eligible for optional family
33 coverage under the Plan.
34 d. For persons qualifying for coverage in accordance
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1 with Section 7 of this Act, the board shall, if it determines
2 that such appropriations as are made pursuant to Section 12
3 of this Act are insufficient to allow the board to accept all
4 of the eligible persons which it projects will apply for
5 enrollment under the Plan, limit or close enrollment to
6 ensure that the Plan is not over-subscribed and that it has
7 sufficient resources to meet its obligations to existing
8 enrollees. The board shall not limit or close enrollment for
9 federally eligible individuals.
10 e. A person shall not be eligible for coverage under the
11 Plan if:
12 (1) He or she has or obtains other coverage under a
13 group health plan or health insurance coverage
14 substantially similar to or better than a Plan policy as
15 an insured or covered dependent or would be eligible to
16 have that coverage if he or she elected to obtain it.
17 Persons otherwise eligible for Plan coverage may,
18 however, solely for the purpose of having coverage for a
19 pre-existing condition, maintain other coverage only
20 while satisfying any pre-existing condition waiting
21 period under a Plan policy or a subsequent replacement
22 policy of a Plan policy.
23 (1.1) His or her prior coverage under a group
24 health plan or health insurance coverage, provided or
25 arranged by under a group policy or plan of an employer
26 of more than 10 employees was discontinued for any reason
27 without the entire group or plan being discontinued and
28 not replaced, provided he or she remains an employee, or
29 dependent thereof, of the same employer.
30 (2) He or she is a recipient of or is approved to
31 receive medical assistance, except that a person may
32 continue to receive medical assistance through the
33 medical assistance no grant program, but only while
34 satisfying the requirements for a preexisting condition
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1 under Section 8, subsection f. of this Act. Payment of
2 premiums pursuant to this Act shall be allocable to the
3 person's spenddown for purposes of the medical assistance
4 no grant program, but that person shall not be eligible
5 for any Plan benefits while that person remains eligible
6 for medical assistance. If the person continues to
7 receive or be approved to receive medical assistance
8 through the medical assistance no grant program at or
9 after the time that requirements for a preexisting
10 condition are satisfied, the person shall not be eligible
11 for coverage under the Plan. In that circumstance,
12 coverage under the plan shall terminate as of the
13 expiration of the preexisting condition limitation
14 period. Under all other circumstances, coverage under
15 the Plan shall automatically terminate as of the
16 effective date of any medical assistance.
17 (3) Except as provided in Section 15, the person
18 has previously participated in the Plan and voluntarily
19 terminated Plan terminates coverage, unless 12 months
20 have elapsed since the person's latest voluntary
21 termination of coverage.
22 (4) The person fails to pay the required premium
23 under the covered person's insured's terms of enrollment
24 and participation, in which event the liability of the
25 Plan shall be limited to benefits incurred under the Plan
26 for the time period for which premiums had been paid and
27 the covered person remained eligible for Plan coverage.
28 (5) The Plan has paid a total of $1,000,000
29 $500,000 in benefits on behalf of the covered person.
30 (6) The person is a resident of a public
31 institution.
32 (7) The person's premium is paid for or reimbursed
33 under any government sponsored program or by any
34 government agency or health care provider, except as an
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1 otherwise qualifying full-time employee, or dependent of
2 such employee, of a government agency or health care
3 provider.
4 (8) The person has or later receives other benefits
5 or funds from any settlement, judgement, or award
6 resulting from any accident or injury, regardless of the
7 date of the accident or injury, or any other
8 circumstances creating a legal liability for damages due
9 that person by a third party, whether the settlement,
10 judgment, or award is in the form of a contract,
11 agreement, or trust on behalf of a minor or otherwise and
12 whether the settlement, judgment, or award is payable to
13 the person, his or her dependent, estate, personal
14 representative, or guardian in a lump sum or over time,
15 so long as there continues to be benefits or assets
16 remaining from those sources in an amount in excess of
17 $100,000.
18 f. The board or the administrator shall require
19 verification of residency and may require any additional
20 information or documentation, or statements under oath, when
21 necessary to determine residency upon initial application and
22 for the entire term of the policy.
23 g. Coverage shall cease (i) on the date a person is no
24 longer a resident of Illinois, (ii) on the date a person
25 requests coverage to end, (iii) upon the death of the covered
26 person, (iv) on the date State law requires cancellation of
27 the policy, or (v) at the Plan's option, 30 days after the
28 Plan makes any inquiry concerning a person's eligibility or
29 place of residence to which the person does not reply.
30 h. Except under the conditions set forth in subsection g
31 of this Section, the coverage of any person who ceases to
32 meet the eligibility requirements of this Section shall be
33 terminated at the end of the current policy period for which
34 the necessary premiums have been paid.
-54- LRB9002422JSdvA
1 (Source: P.A. 88-364; 89-486, eff. 6-21-96.)
2 (215 ILCS 105/7.1 new)
3 Sec. 7.1. Premiums.
4 (a) The Board shall establish premium rates for coverage
5 as provided in subsection (d) of this Section.
6 (b) Separate schedules of premium rates based on sex,
7 age, geographical location, and benefit plan shall apply for
8 individual risks.
9 (c) The Board may provide for separate premium rates for
10 optional family coverage for the spouse or one or more
11 dependents who reside together in any eligible individual's
12 or eligible person's household. The rates for each spouse or
13 dependent who qualifies to be covered under this optional
14 family coverage shall be such percentage of the applicable
15 individual Plan rate as the Board, in accordance with
16 appropriate actuarial principles, shall establish.
17 (d) The Board, with the assistance of the Director and
18 in accordance with appropriate actuarial principles, shall
19 determine a standard risk rate by using the average rates
20 that individual standard risks in this State are charged by
21 at least 5 of the largest health insurance issuers providing
22 individual health insurance coverage to residents of Illinois
23 that is substantially similar to the coverage offered by the
24 Plan. In determining the average rate or charges of those
25 health insurance issuers, the rates charged by those issuers
26 shall be actuarially adjusted to determine the rate or charge
27 that would have been charged for benefits similar to those
28 provided by the Plan. The standard risk rates shall be
29 established using reasonable actuarial techniques and shall
30 reflect anticipated claims experience, expenses, and other
31 appropriate risk factors for such coverage.
32 (e) Rates for Plan coverage shall not be less than 125%
33 nor more than 150% of rates established as applicable for
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1 individual standard risks pursuant to subsection (d).
2 (215 ILCS 105/8) (from Ch. 73, par. 1308)
3 Sec. 8. Minimum benefits.
4 a. Availability. The Plan shall offer in an annually
5 renewable policy major medical expense coverage to every
6 eligible person who is not eligible for Medicare. Major
7 medical expense coverage offered by the Plan shall pay an
8 eligible person's covered expenses, subject to limit on the
9 deductible and coinsurance payments authorized under
10 paragraph (4) of subsection d of this Section, up to a
11 lifetime benefit limit of $1,000,000 $500,000 per covered
12 individual. The maximum limit under this subsection shall
13 not be altered by the Board, and no actuarial equivalent
14 benefit may be substituted by the Board. Any person who
15 otherwise would qualify for coverage under the Plan, but is
16 excluded because he or she is eligible for Medicare, shall be
17 eligible for any separate Medicare supplement policy or
18 policies which the Board may offer.
19 b. Outline of benefits Covered expenses. Covered
20 expenses shall be limited to the usual reasonable and
21 customary charge, including negotiated fees, in the locality
22 for the following services and articles when prescribed by a
23 physician and determined by the Plan to be medically
24 necessary for the following areas of services, subject to
25 such separate deductibles, co-payments, exclusions, and other
26 limitations on benefits as the Board shall establish and
27 approve, and the other provisions of this Section and
28 prescribed by a person licensed and practicing within the
29 scope of his or her profession as authorized by State law:
30 (1) Hospital services room and board and any other
31 hospital services, except that inpatient hospitalization
32 for the treatment of mental and emotional disorders shall
33 only be covered for a maximum of 45 days in a calendar
-56- LRB9002422JSdvA
1 year.
2 (2) Professional services for the diagnosis or
3 treatment of injuries, illnesses or conditions, other
4 than dental and, or outpatient mental and nervous
5 disorders as described in paragraph (17), which are
6 rendered by a physician or chiropractor, or by other
7 licensed professionals at the physician's or
8 chiropractor's direction.
9 (3) (Blank). If surgery has been recommended, a
10 second opinion may be required. The charge for a second
11 opinion as to whether the surgery is required will be
12 paid in full without regard to deductible or co-payment
13 requirements. If the second opinion differs from the
14 first, the charge for a third opinion, if desired, will
15 also be paid in full without regard to deductible or
16 co-payment requirements. Regardless of whether the
17 second opinion or third opinion confirms the original
18 recommendation, it is the patient's decision whether to
19 undergo surgery.
20 (4) Drugs requiring a physician's or other legally
21 authorized prescription.
22 (5) Skilled nursing services of care provided in a
23 licensed skilled nursing facility for not more than 120
24 days during in a policy calendar year, provided the
25 service commences within 14 days following a confinement
26 of at least 3 consecutive days in a hospital for the same
27 condition.
28 (6) Services of a home health agency in accord with
29 a home health care plan, up to a maximum of 270 visits
30 per year.
31 (7) Services of a licensed hospice for not more
32 than 180 days during a policy year.
33 (8) Use of radium or other radioactive materials.
34 (9) Oxygen.
-57- LRB9002422JSdvA
1 (10) Anesthetics.
2 (11) Orthoses and prostheses other than dental.
3 (12) Rental or purchase in accordance with Board
4 policies or procedures of durable medical equipment,
5 other than eyeglasses or hearing aids, for which there is
6 no personal use in the absence of the condition for which
7 it is prescribed.
8 (13) Diagnostic x-rays and laboratory tests.
9 (14) Oral surgery for excision of partially or
10 completely unerupted impacted teeth or the gums and
11 tissues of the mouth, when not performed in connection
12 with the routine extraction or repair of teeth, and oral
13 surgery and procedures, including orthodontics and
14 prosthetics necessary for craniofacial or maxillofacial
15 conditions and to correct congenital defects or injuries
16 due to accident.
17 (15) Physical, speech, and functional occupational
18 therapy as medically necessary and provided by
19 appropriate licensed professionals.
20 (16) Emergency and other medically necessary
21 transportation provided by a licensed ambulance service
22 to the nearest health care facility qualified to treat a
23 covered the illness, injury, or condition, subject to the
24 provisions of the Emergency Medical Systems (EMS) Act.
25 (17) The first 50 professional Outpatient services
26 visits for diagnosis and treatment of mental and nervous
27 emotional disorders provided that a covered person shall
28 be required to make a copayment not to exceed 50% and
29 that the Plan's payment shall not exceed such amounts as
30 are established by the Board rendered during the year, up
31 to a maximum of $80 per visit.
32 (18) Human organ or tissue transplants specified by
33 the Board that are performed at a hospital designated by
34 the Board as a participating transplant center for that
-58- LRB9002422JSdvA
1 specific organ or tissue transplant.
2 c. Exclusions Exclusion. Covered expenses of the Plan
3 shall not include the following:
4 (1) Any charge for treatment for cosmetic purposes
5 other than for reconstructive surgery when the service is
6 incidental to or follows surgery resulting from injury,
7 sickness or other diseases of the involved part or
8 surgery for the repair or treatment of a congenital
9 bodily defect to restore normal bodily functions.
10 (2) Any charge for care that is primarily for rest,
11 custodial, educational, or domiciliary purposes.
12 (3) Any charge for services in a private room to
13 the extent it is in excess of the institution's charge
14 for its most common semiprivate room, unless a private
15 room is prescribed as medically necessary by a physician.
16 (4) That part of any charge for room and board or
17 for services rendered or articles prescribed by a
18 physician, dentist, or other health care personnel that
19 exceeds the reasonable and customary charge in the
20 locality or for any services or supplies not medically
21 necessary for the diagnosed injury or illness.
22 (5) Any charge for services or articles the
23 provision of which is not within the scope of licensure
24 of the institution or individual providing the services
25 or articles.
26 (6) Any expense incurred prior to the effective
27 date of coverage by the Plan for the person on whose
28 behalf the expense is incurred.
29 (7) Dental care, dental surgery, dental treatment
30 or dental appliances, except as provided in paragraph
31 (14) of subsection b of this Section.
32 (8) Eyeglasses, contact lenses, hearing aids or
33 their fitting.
34 (9) Illness or injury due to (A) war or any acts of
-59- LRB9002422JSdvA
1 war; (B) commission of, or attempt to commit, a felony;
2 or (C) aviation activities, except when traveling as a
3 fare-paying passenger on a commercial airline.
4 (10) Services of blood donors and any fee for
5 failure to replace the first 3 pints of blood provided to
6 a covered an eligible person each policy year.
7 (11) Personal supplies or services provided by a
8 hospital or nursing home, or any other nonmedical or
9 nonprescribed supply or service.
10 (12) Routine maternity charges for a pregnancy,
11 except where added as optional coverage with payment of
12 an additional premium for pregnancy resulting from
13 conception occurring after the effective date of the
14 optional coverage.
15 (13) (Blank). Expenses of obtaining an abortion,
16 induced miscarriage or induced premature birth unless, in
17 the opinion of a physician, those procedures are
18 necessary for the preservation of life of the woman
19 seeking such treatment, or except an induced premature
20 birth intended to produce a live viable child and the
21 procedure is necessary for the health of the mother or
22 unborn child.
23 (14) Any expense or charge for services, drugs, or
24 supplies that are: (i) not provided in accord with
25 generally accepted standards of current medical practice;
26 (ii) for procedures, treatments, equipment, transplants,
27 or implants, any of which are investigational,
28 experimental, or for research purposes; (iii)
29 investigative and not proven safe and effective; or (iv)
30 for, or resulting from, a gender transformation
31 operation.
32 (15) Any expense or charge for routine physical
33 examinations or tests.
34 (16) Any expense for which a charge is not made in
-60- LRB9002422JSdvA
1 the absence of insurance or for which there is no legal
2 obligation on the part of the patient to pay.
3 (17) Any expense incurred for benefits provided
4 under the laws of the United States and this State,
5 including Medicare and Medicaid and other medical
6 assistance, military service-connected disability
7 payments, medical services provided for members of the
8 armed forces and their dependents or employees of the
9 armed forces of the United States, and medical services
10 financed on behalf of all citizens by the United States.
11 (18) Any expense or charge for in vitro
12 fertilization, artificial insemination, or any other
13 artificial means used to cause pregnancy.
14 (19) Any expense or charge for oral contraceptives
15 used for birth control or any other temporary birth
16 control measures.
17 (20) Any expense or charge for sterilization or
18 sterilization reversals.
19 (21) Any expense or charge for weight loss
20 programs, exercise equipment, or treatment of obesity,
21 except when certified by a physician as morbid obesity
22 (at least 2 times normal body weight).
23 (22) Any expense or charge for acupuncture
24 treatment unless used as an anesthetic agent for a
25 covered surgery.
26 (23) Any expense or charge for or related to organ
27 or tissue transplants other than those performed at a
28 hospital with a Board approved organ transplant program
29 that has been designated by the Board as a preferred or
30 exclusive provider organization for that specific organ
31 or tissue transplant.
32 (24) Any expense or charge for procedures,
33 treatments, equipment, or services that are provided in
34 special settings for research purposes or in a controlled
-61- LRB9002422JSdvA
1 environment, are being studied for safety, efficiency,
2 and effectiveness, and are awaiting endorsement by the
3 appropriate national medical speciality college for
4 general use within the medical community.
5 d. Premiums, Deductibles, and coinsurance. (1) Premiums
6 charged for coverage issued by the Plan may not be
7 unreasonable in relation to the benefits provided, the risk
8 experience and the reasonable expenses of providing the
9 coverage.
10 (2) Separate schedules of premium rates based on sex,
11 age and geographical location shall apply for individual
12 risks.
13 (3) The Plan may provide for separate premium rates for
14 optional family coverage for the spouse or one or more
15 dependents of any person eligible to be insured under the
16 Plan who is also the oldest adult member of the family and
17 remains continuously enrolled in the Plan as the primary
18 enrollee. The rates shall be such percentage of the
19 applicable individual Plan rate as the Board, in accordance
20 with appropriate actuarial principles, shall establish for
21 each spouse or dependent.
22 (4) The Board shall determine, in accordance with
23 appropriate actuarial principles, the average rates that
24 individual standard risks in this State are charged by at
25 least 5 of the largest insurers providing coverage to
26 residents of Illinois that is substantially similar to the
27 Plan coverage. In the event at least 5 insurers do not offer
28 substantially similar coverage, the rates shall be
29 established using reasonable actuarial techniques and shall
30 reflect anticipated claims experience, expenses, and other
31 appropriate risk factors relating to the Plan. Rates for
32 Plan coverage shall be 135% of rates so established as
33 applicable for individual standard risks; provided, however,
34 if after determining that the appropriations made pursuant to
-62- LRB9002422JSdvA
1 Section 12 of this Act are insufficient to ensure that total
2 income from all sources will equal or exceed the total
3 incurred costs and expenses for the current number of
4 enrollees, the board shall raise premium rates above this
5 135% standard to the level it deems necessary to ensure the
6 financial solvency of the Plan for enrollees already in the
7 Plan. All rates and rate schedules shall be submitted to the
8 board for approval.
9 (5) The Plan coverage defined in Section 6 shall provide
10 for a choice of deductibles per individual as authorized by
11 the Board per individual per annum. If 2 individual members
12 of the same a family household, who are both covered persons
13 under the Plan, satisfy the same applicable deductibles, no
14 other member of that family who is also a covered person
15 eligible for coverage under the Plan shall be required to
16 meet any deductibles for the balance of that calendar year.
17 The deductibles must be applied first to the authorized
18 amount of covered expenses incurred by the covered person. A
19 mandatory coinsurance requirement shall be imposed at the
20 rate authorized by the Board in excess of the mandatory
21 deductible, the coinsurance in the aggregate not to exceed
22 such amounts as are authorized by the Board per annum. At
23 its discretion the Board may, however, offer catastrophic
24 coverages or other policies that provide for larger
25 deductibles with or without coinsurance requirements. The
26 deductibles and coinsurance factors may be adjusted annually
27 according to the Medical Component of the Consumer Price
28 Index.
29 (6) The Plan may provide for and employ cost containment
30 measures and requirements including, but not limited to,
31 preadmission certification, second surgical opinion,
32 concurrent utilization review programs, individual case
33 management, preferred provider organizations, and other cost
34 effective arrangements for paying for covered expenses.
-63- LRB9002422JSdvA
1 e. Scope of coverage.
2 (1) In approving any of the benefit plans to be offered
3 by the Plan, the Board shall establish such benefit levels,
4 deductibles, coinsurance factors, exclusions, and limitations
5 as it may deem appropriate and that it believes to be
6 generally reflective of and commensurate with health
7 insurance coverage that is provided in the individual market
8 in this State.
9 (2) The benefit plans approved by the Board may also
10 provide for and employ various cost containment measures and
11 other requirements including, but not limited to,
12 preadmission certification, prior approval, second surgical
13 opinions, concurrent utilization review programs, individual
14 case management, preferred provider organizations, health
15 maintenance organizations, and other cost effective
16 arrangements for paying for covered expenses. Except as
17 provided in subsection c of this Section, if the covered
18 expenses incurred by the eligible person exceed the
19 deductible for major medical expense coverage in a calendar
20 year, the Plan shall pay at least 80% of any additional
21 covered expenses incurred by the person during the calendar
22 year.
23 f. Preexisting conditions.
24 (1) Except for federally eligible individuals
25 qualifying for Plan coverage under Section 15 of this Act
26 or eligible persons who qualify for and elect to purchase
27 the waiver authorized in paragraph (3) of this
28 subsection, Six months: plan coverage shall exclude
29 charges or expenses incurred during the first 6 months
30 following the effective date of coverage as to any
31 condition if: (a) the condition had manifested itself
32 within the 6 month period immediately preceding the
33 effective date of coverage in such a manner as would
34 cause an ordinarily prudent person to seek diagnosis,
-64- LRB9002422JSdvA
1 care or treatment; or (b) medical advice, care or
2 treatment was recommended or received within the 6 month
3 period immediately preceding the effective date of
4 coverage.
5 (2) (Blank).
6 (3) Waiver: The preexisting condition exclusions as
7 set forth in paragraph (1) of this subsection shall be
8 waived to the extent to which the eligible person: (a)
9 has satisfied similar exclusions under any prior health
10 insurance coverage policy or group health plan that was
11 involuntarily terminated; (b) is ineligible for any
12 continuation coverage or conversion rights that would
13 continue or provide substantially similar coverage
14 following that termination; and (c) has applied for Plan
15 coverage not later than 30 days following the involuntary
16 termination. No policy or plan shall be deemed to have
17 been involuntarily terminated if the master policyholder
18 or other controlling party elected to change insurance
19 coverage from one health insurance issuer company or
20 group health plan to another even if that decision
21 resulted in a discontinuation of coverage for any
22 individual under the plan, either totally or for any
23 medical condition. For each eligible person who qualifies
24 for and elects this waiver, there shall be added to each
25 payment of premium, on a prorated basis, a surcharge of
26 up to 10% of the otherwise applicable annual premium for
27 as long as that individual's coverage under the Plan
28 remains in effect or 60 months, whichever is less.
29 g. Other sources primary; nonduplication of benefits.
30 (1) The Plan shall be the last payor of benefits
31 whenever any other benefit or source of third party
32 payment is available. Subject to the provisions of
33 subsection e of Section 7, benefits otherwise payable
34 under Plan coverage shall be reduced by all amounts paid
-65- LRB9002422JSdvA
1 or payable by Medicare or any other government program or
2 through any health insurance or group other health
3 benefit plan, whether by insurance, reimbursement,
4 insured or otherwise, or through any third party
5 liability, settlement, judgment, or award, regardless of
6 the date of the settlement, judgment, or award, whether
7 the settlement, judgment, or award is in the form of a
8 contract, agreement, or trust on behalf of a minor or
9 otherwise and whether the settlement, judgment, or award
10 is payable to the covered person, his or her dependent,
11 estate, personal representative, or guardian in a lump
12 sum or over time, and by all hospital or medical expense
13 benefits paid or payable under any worker's compensation
14 coverage, automobile medical payment, or liability
15 insurance, whether provided on the basis of fault or
16 nonfault, and by any hospital or medical benefits paid or
17 payable under or provided pursuant to any State or
18 federal law or program.
19 (2) The Plan shall have a cause of action against
20 any covered person or any other person or entity for the
21 recovery of any amount paid to the extent the amount was
22 for treatment, services, or supplies not covered in this
23 Section or in excess of benefits as set forth in this
24 Section.
25 (3) Whenever benefits are due from the Plan because
26 of sickness or an injury to a covered person resulting
27 from a third party's wrongful act or negligence and the
28 covered person has recovered or may recover damages from
29 a third party or its insurer, the Plan shall have the
30 right to reduce benefits or to refuse to pay benefits
31 that otherwise may be payable by the amount of damages
32 that the covered person has recovered or may recover
33 regardless of the date of the sickness or injury or the
34 date of any settlement, judgment, or award resulting from
-66- LRB9002422JSdvA
1 that sickness or injury.
2 During the pendency of any action or claim that is
3 brought by or on behalf of a covered person against a
4 third party or its insurer, any benefits that would
5 otherwise be payable except for the provisions of this
6 paragraph (3) shall be paid if payment by or for the
7 third party has not yet been made and the covered person
8 or, if incapable, that person's legal representative
9 agrees in writing to pay back promptly the benefits paid
10 as a result of the sickness or injury to the extent of
11 any future payments made by or for the third party for
12 the sickness or injury. This agreement is to apply
13 whether or not liability for the payments is established
14 or admitted by the third party or whether those payments
15 are itemized.
16 Any amounts due the plan to repay benefits may be
17 deducted from other benefits payable by the Plan after
18 payments by or for the third party are made.
19 (4) Benefits due from the Plan may be reduced or
20 refused as an offset against any amount otherwise
21 recoverable under this Section.
22 h. Right of subrogation; recoveries.
23 (1) Whenever the Plan has paid benefits because of
24 sickness or an injury to any covered person resulting
25 from a third party's wrongful act or negligence, or for
26 which an insurer is liable in accordance with the
27 provisions of any policy of insurance, and the covered
28 person has recovered or may recover damages from a third
29 party that is liable for the damages, the Plan shall have
30 the right to recover the benefits it paid from any
31 amounts that the covered person has received or may
32 receive regardless of the date of the sickness or injury
33 or the date of any settlement, judgment, or award
34 resulting from that sickness or injury. The Plan shall
-67- LRB9002422JSdvA
1 be subrogated to any right of recovery the covered person
2 may have under the terms of any private or public health
3 care coverage or liability coverage, including coverage
4 under the Workers' Compensation Act or the Workers'
5 Occupational Diseases Act, without the necessity of
6 assignment of claim or other authorization to secure the
7 right of recovery. To enforce its subrogation right, the
8 Plan may (i) intervene or join in an action or proceeding
9 brought by the covered person or his personal
10 representative, including his guardian, conservator,
11 estate, dependents, or survivors, against any third party
12 or the third party's insurer that may be liable or (ii)
13 institute and prosecute legal proceedings against any
14 third party or the third party's insurer that may be
15 liable for the sickness or injury in an appropriate court
16 either in the name of the Plan or in the name of the
17 covered person or his personal representative, including
18 his guardian, conservator, estate, dependents, or
19 survivors.
20 (2) If any action or claim is brought by or on
21 behalf of a covered person against a third party or the
22 third party's insurer, the covered person or his personal
23 representative, including his guardian, conservator,
24 estate, dependents, or survivors, shall notify the Plan
25 by personal service or registered mail of the action or
26 claim and of the name of the court in which the action or
27 claim is brought, filing proof thereof in the action or
28 claim. The Plan may, at any time thereafter, join in the
29 action or claim upon its motion so that all orders of
30 court after hearing and judgment shall be made for its
31 protection. No release or settlement of a claim for
32 damages and no satisfaction of judgment in the action
33 shall be valid without the written consent of the Plan to
34 the extent of its interest in the settlement or judgment
-68- LRB9002422JSdvA
1 and of the covered person or his personal representative.
2 (3) In the event that the covered person or his
3 personal representative fails to institute a proceeding
4 against any appropriate third party before the fifth
5 month before the action would be barred, the Plan may, in
6 its own name or in the name of the covered person or
7 personal representative, commence a proceeding against
8 any appropriate third party for the recovery of damages
9 on account of any sickness, injury, or death to the
10 covered person. The covered person shall cooperate in
11 doing what is reasonably necessary to assist the Plan in
12 any recovery and shall not take any action that would
13 prejudice the Plan's right to recovery. The Plan shall
14 pay to the covered person or his personal representative
15 all sums collected from any third party by judgment or
16 otherwise in excess of amounts paid in benefits under the
17 Plan and amounts paid or to be paid as costs, attorneys
18 fees, and reasonable expenses incurred by the Plan in
19 making the collection or enforcing the judgment.
20 (4) In the event that a covered person or his
21 personal representative, including his guardian,
22 conservator, estate, dependents, or survivors, recovers
23 damages from a third party for sickness or injury caused
24 to the covered person, the covered person or the personal
25 representative shall pay to the Plan from the damages
26 recovered the amount of benefits paid or to be paid on
27 behalf of the covered person.
28 (5) When the action or claim is brought by the
29 covered person alone and the covered person incurs a
30 personal liability to pay attorney's fees and costs of
31 litigation, the Plan's claim for reimbursement of the
32 benefits provided to the covered person shall be the full
33 amount of benefits paid to or on behalf of the covered
34 person under this Act less a pro rata share that
-69- LRB9002422JSdvA
1 represents the Plan's reasonable share of attorney's fees
2 paid by the covered person and that portion of the cost
3 of litigation expenses determined by multiplying by the
4 ratio of the full amount of the expenditures to the full
5 amount of the judgement, award, or settlement.
6 (6) In the event of judgment or award in a suit or
7 claim against a third party or insurer, the court shall
8 first order paid from any judgement or award the
9 reasonable litigation expenses incurred in preparation
10 and prosecution of the action or claim, together with
11 reasonable attorney's fees. After payment of those
12 expenses and attorney's fees, the court shall apply out
13 of the balance of the judgment or award an amount
14 sufficient to reimburse the Plan the full amount of
15 benefits paid on behalf of the covered person under this
16 Act, provided the court may reduce and apportion the
17 Plan's portion of the judgement proportionate to the
18 recovery of the covered person. The burden of producing
19 evidence sufficient to support the exercise by the court
20 of its discretion to reduce the amount of a proven charge
21 sought to be enforced against the recovery shall rest
22 with the party seeking the reduction. The court may
23 consider the nature and extent of the injury, economic
24 and non-economic loss, settlement offers, comparative
25 negligence as it applies to the case at hand, hospital
26 costs, physician costs, and all other appropriate costs.
27 The Plan shall pay its pro rata share of the attorney
28 fees based on the Plan's recovery as it compares to the
29 total judgment. Any reimbursement rights of the Plan
30 shall take priority over all other liens and charges
31 existing under the laws of this State with the exception
32 of any attorney liens filed under the Attorneys Lien Act.
33 (7) The Plan may compromise or settle and release
34 any claim for benefits provided under this Act or waive
-70- LRB9002422JSdvA
1 any claims for benefits, in whole or in part, for the
2 convenience of the Plan or if the Plan determines that
3 collection would result in undue hardship upon the
4 covered person.
5 (Source: P.A. 89-486, eff. 6-21-96.)
6 (215 ILCS 105/10) (from Ch. 73, par. 1310)
7 Sec. 10. Collective action. Participation in the
8 operation of the Plan, the establishment of rates, forms or
9 procedures, or any other joint or collective action required
10 by this Act shall not be the basis of any legal action,
11 criminal or civil liability or penalty against the Plan, the
12 plan administrator, the board or any of its members,
13 employees, contractors, or consultants.
14 (Source: P.A. 85-702; 86-1322.)
15 (215 ILCS 105/12) (from Ch. 73, par. 1312)
16 Sec. 12. Deficit or surplus.
17 a. If premiums or other receipts by the Director, Board,
18 or administering carrier exceed the amount required for the
19 operation of the Plan, including actual losses and
20 administrative expenses of the Plan, the Board shall direct
21 that the excess be held at interest, in a bank designated by
22 the Board, or used to offset future losses or to reduce Plan
23 premiums. In this subsection, the term "future losses"
24 includes reserves for incurred but not reported claims.
25 b. Any deficit incurred or expected to be incurred on
26 behalf of eligible persons who qualify for plan coverage
27 under Section 7 of this Act the Plan shall be recouped by an
28 appropriation made by the General Assembly.
29 c. For the purposes of this Section, a deficit shall be
30 incurred when anticipated losses and incurred but not
31 reported claims expenses exceed anticipated income from
32 earned premiums net of administrative expenses.
-71- LRB9002422JSdvA
1 d. Any deficit incurred or expected to be incurred on
2 behalf of federally eligible individuals who qualify for Plan
3 coverage under Section 15 of this Act shall be recouped by an
4 assessment of all insurers made in accordance with the
5 provisions of this Section. The Board shall within 90 days
6 of the effective date of this amendatory Act of 1997 and
7 within the first quarter of each fiscal year thereafter
8 assess all insurers for the anticipated deficit in accordance
9 with the provisions of this Section. The board may also make
10 additional assessments no more than 4 times a year to fund
11 unanticipated deficits, implementation expenses, and cash
12 flow needs.
13 e. An insurer's assessment shall be determined by
14 multiplying the total assessment, as determined in subsection
15 d. of this Section, by a fraction, the numerator of which
16 equals that insurer's direct Illinois premiums during the
17 preceding calendar year and the denominator of which equals
18 the total of all insurers' direct Illinois premiums. The
19 Board may exempt those insurers whose share as determined
20 under this subsection would be so minimal as to not exceed
21 the estimated cost of levying the assessment.
22 f. The Board shall charge and collect from each insurer
23 the amounts determined to be due under this Section. The
24 assessment shall be billed by Board invoice based upon the
25 insurer's direct Illinois premium income as shown in its
26 annual statement for the preceding calendar year as filed
27 with the Director. The invoice shall be due upon receipt and
28 must be paid no later than 30 days after receipt by the
29 insurer.
30 g. When an insurer fails to pay the full amount of any
31 assessment of $100 or more due under this Section there shall
32 be added to the amount due as a penalty the greater of $50 or
33 an amount equal to 5% of the deficiency for each month or
34 part of a month that the deficiency remains unpaid.
-72- LRB9002422JSdvA
1 h. Amounts collected under this Section shall be paid to
2 the Board for deposit into the Plan Fund authorized by
3 Section 3 of this Act.
4 i. An insurer may petition the Director for an abatement
5 or deferment of all or part of an assessment imposed by the
6 Board. The Director may abate or defer, in whole or in part,
7 the assessment if, in the opinion of the Director, payment of
8 the assessment would endanger the ability of the insurer to
9 fulfill its contractual obligations. In the event an
10 assessment against an insurer is abated or deferred in whole
11 or in part, the amount by which the assessment is abated or
12 deferred shall be assessed against the other insurers in a
13 manner consistent with the basis for assessments set forth in
14 this subsection. The insurer receiving a deferment shall
15 remain liable to the plan for the deficiency for 4 years.
16 (Source: P.A. 85-702; 86-1322.)
17 (215 ILCS 105/14) (from Ch. 73, par. 1314)
18 Sec. 14. Confidentiality.
19 (a) All steps necessary under State and Federal law to
20 protect insured confidentiality of applicants and covered
21 persons shall be undertaken by the board to prevent the
22 identification of individual records of persons covered
23 insured under the Plan, rejected by the Plan, or who become
24 ineligible for further participation in the Plan. Procedures
25 shall Regulations are to be written by the board to assure
26 the confidentiality of records of persons covered insured
27 under, rejected by, or who become ineligible for further
28 participation in, the Plan when gathering and submitting data
29 to the board or any other entity.
30 (b) The information submitted to the board by hospitals
31 pursuant to this Act shall be privileged and confidential,
32 and shall not be disclosed in any manner. The foregoing
33 includes, but shall not be limited to, disclosure, inspection
-73- LRB9002422JSdvA
1 or copying under The Freedom of Information Act, The State
2 Records Act, and paragraph (1) of Section 404 of the Illinois
3 Insurance Code. However, the prohibitions stated in this
4 subsection shall not apply to the compilations of information
5 assembled by the board pursuant to subsections c. and e. of
6 Section 3 of this Act.
7 (Source: P.A. 85-702; 86-1322.)
8 (215 ILCS 105/15 new)
9 Sec. 15. Alternative portable coverage for federally
10 eligible individuals.
11 (a) Notwithstanding the requirements of subsection a. of
12 Section 7, any federally eligible individual for whom a Plan
13 application, and such enclosures and supporting documentation
14 as the Board may require, is received by the Board within 63
15 days after the termination of prior creditable coverage shall
16 qualify to enroll in the Plan under the portability
17 provisions of this Section.
18 (b) Any federally eligible individual seeking Plan
19 coverage under this Section must submit with his or her
20 application evidence, including acceptable written
21 certification of previous creditable coverage, that will
22 establish to the Board's satisfaction, that he or she meets
23 all of the requirements to be a federally eligible individual
24 and is currently and permanently residing in this State (as
25 of the date his or her application was received by the
26 Board).
27 (c) A period of creditable coverage shall not be
28 counted, with respect to qualifying an applicant for Plan
29 coverage as a federally eligible individual under this
30 Section, if after such period and before the application for
31 Plan coverage was received by the Board, there was at least a
32 63 day period during all of which the individual was not
33 covered under any creditable coverage.
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1 (d) Any federally eligible individual who the Board
2 determines qualifies for Plan coverage under this Section
3 shall be offered his or her choice of enrolling in one of
4 alternative portability health benefit plans which the Board
5 is authorized under this Section to establish for these
6 federally eligible individuals and their dependents.
7 (e) The Board shall offer a choice of health care
8 coverages consistent with major medical coverage under the
9 alternative health benefit plans authorized by this Section
10 to every federally eligible individual. The coverages to be
11 offered under the plans, the schedule of benefits,
12 deductibles, co-payments, exclusions, and other limitations
13 shall be approved by the Board. One optional form of
14 coverage shall be comparable to comprehensive health
15 insurance coverage offered in the individual market in this
16 State or a standard option of coverage available under the
17 group or individual health insurance laws of the State. The
18 standard benefit plan that is authorized by Section 8 of this
19 Act may be used for this purpose. The Board may also offer a
20 preferred provider option and such other options as the Board
21 determines may be appropriate for these federally eligible
22 individuals who qualify for Plan coverage pursuant to this
23 Section.
24 (f) Not withstanding the requirements of subsection f.
25 of Section 8, any plan coverage that is issued to federally
26 eligible individuals who qualify for the Plan pursuant to the
27 portability provisions of this Section shall not be subject
28 to any preexisting conditions exclusion, waiting period, or
29 other similar limitation on coverage.
30 (g) Federally eligible individuals who qualify and
31 enroll in the Plan pursuant to this Section shall be required
32 to pay such premium rates as the Board shall establish and
33 approve in accordance with the requirements of Section 7.1 of
34 this Act.
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1 (h) A federally eligible individual who qualifies and
2 enrolls in the Plan pursuant to this Section must satisfy on
3 an on-going basis all of the other eligibility requirements
4 of this Act to the extent not inconsistent with the federal
5 Health Insurance Portability and Accountability Act of 1996
6 in order to maintain continued eligibility for coverage under
7 the Plan.
8 Section 94. The Health Maintenance Organization Act is
9 amended by adding Section 5-3.5 as follows:
10 (215 ILCS 125/5-3.5 new)
11 Sec. 5-3.5. Illinois Health Insurance Portability and
12 Accountability Act. The provisions of this Act are subject
13 to the Illinois Health Insurance Portability and
14 Accountability Act as provided in Section 15 of that Act.
15 Section 96. The Limited Health Service Organization Act
16 is amended by adding Section 4002.5 as follows:
17 (215 ILCS 130/4002.5 new)
18 Sec. 4002.5. Illinois Health Insurance Portability and
19 Accountability Act. The provisions of this Act are subject
20 to the Illinois Health Insurance Portability and
21 Accountability Act as provided in Section 15 of that Act.
22 Section 98. The Voluntary Health Services Plans Act is
23 amended by adding Section 15.25 as follows:
24 (215 ILCS 165/15.25 new)
25 Sec. 15.25. Illinois Health Insurance Portability and
26 Accountability Act. The provisions of this Act are subject to
27 the Illinois Health Insurance Portability and Accountability
28 Act as provided in Section 15 of that Act.
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1 Section 99. Effective date. This Act takes effect on
2 July 1, 1997.