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92_HB2081 LRB9206834JSpc 1 AN ACT concerning health benefits for dependents. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The State Employees Group Insurance Act of 5 1971 is amended by changing Section 3 as follows: 6 (5 ILCS 375/3) (from Ch. 127, par. 523) 7 Sec. 3. Definitions. Unless the context otherwise 8 requires, the following words and phrases as used in this Act 9 shall have the following meanings. The Department may define 10 these and other words and phrases separately for the purpose 11 of implementing specific programs providing benefits under 12 this Act. 13 (a) "Administrative service organization" means any 14 person, firm or corporation experienced in the handling of 15 claims which is fully qualified, financially sound and 16 capable of meeting the service requirements of a contract of 17 administration executed with the Department. 18 (b) "Annuitant" means (1) an employee who retires, or 19 has retired, on or after January 1, 1966 on an immediate 20 annuity under the provisions of Articles 2, 14, 15 (including 21 an employee who has retired under the optional retirement 22 program established under Section 15-158.2), paragraphs (2), 23 (3), or (5) of Section 16-106, or Article 18 of the Illinois 24 Pension Code; (2) any person who was receiving group 25 insurance coverage under this Act as of March 31, 1978 by 26 reason of his status as an annuitant, even though the annuity 27 in relation to which such coverage was provided is a 28 proportional annuity based on less than the minimum period of 29 service required for a retirement annuity in the system 30 involved; (3) any person not otherwise covered by this Act 31 who has retired as a participating member under Article 2 of -2- LRB9206834JSpc 1 the Illinois Pension Code but is ineligible for the 2 retirement annuity under Section 2-119 of the Illinois 3 Pension Code; (4) the spouse of any person who is receiving a 4 retirement annuity under Article 18 of the Illinois Pension 5 Code and who is covered under a group health insurance 6 program sponsored by a governmental employer other than the 7 State of Illinois and who has irrevocably elected to waive 8 his or her coverage under this Act and to have his or her 9 spouse considered as the "annuitant" under this Act and not 10 as a "dependent"; or (5) an employee who retires, or has 11 retired, from a qualified position, as determined according 12 to rules promulgated by the Director, under a qualified local 13 government or a qualified rehabilitation facility or a 14 qualified domestic violence shelter or service. (For 15 definition of "retired employee", see (p) post). 16 (b-5) "New SERS annuitant" means a person who, on or 17 after January 1, 1998, becomes an annuitant, as defined in 18 subsection (b), by virtue of beginning to receive a 19 retirement annuity under Article 14 of the Illinois Pension 20 Code, and is eligible to participate in the basic program of 21 group health benefits provided for annuitants under this Act. 22 (b-6) "New SURS annuitant" means a person who (1) on or 23 after January 1, 1998, becomes an annuitant, as defined in 24 subsection (b), by virtue of beginning to receive a 25 retirement annuity under Article 15 of the Illinois Pension 26 Code, (2) has not made the election authorized under Section 27 15-135.1 of the Illinois Pension Code, and (3) is eligible to 28 participate in the basic program of group health benefits 29 provided for annuitants under this Act. 30 (b-7) "New TRS State annuitant" means a person who, on 31 or after July 1, 1998, becomes an annuitant, as defined in 32 subsection (b), by virtue of beginning to receive a 33 retirement annuity under Article 16 of the Illinois Pension 34 Code based on service as a teacher as defined in paragraph -3- LRB9206834JSpc 1 (2), (3), or (5) of Section 16-106 of that Code, and is 2 eligible to participate in the basic program of group health 3 benefits provided for annuitants under this Act. 4 (c) "Carrier" means (1) an insurance company, a 5 corporation organized under the Limited Health Service 6 Organization Act or the Voluntary Health Services Plan Act, a 7 partnership, or other nongovernmental organization, which is 8 authorized to do group life or group health insurance 9 business in Illinois, or (2) the State of Illinois as a 10 self-insurer. 11 (d) "Compensation" means salary or wages payable on a 12 regular payroll by the State Treasurer on a warrant of the 13 State Comptroller out of any State, trust or federal fund, or 14 by the Governor of the State through a disbursing officer of 15 the State out of a trust or out of federal funds, or by any 16 Department out of State, trust, federal or other funds held 17 by the State Treasurer or the Department, to any person for 18 personal services currently performed, and ordinary or 19 accidental disability benefits under Articles 2, 14, 15 20 (including ordinary or accidental disability benefits under 21 the optional retirement program established under Section 22 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or 23 Article 18 of the Illinois Pension Code, for disability 24 incurred after January 1, 1966, or benefits payable under the 25 Workers' Compensation or Occupational Diseases Act or 26 benefits payable under a sick pay plan established in 27 accordance with Section 36 of the State Finance Act. 28 "Compensation" also means salary or wages paid to an employee 29 of any qualified local government or qualified rehabilitation 30 facility or a qualified domestic violence shelter or service. 31 (e) "Commission" means the State Employees Group 32 Insurance Advisory Commission authorized by this Act. 33 Commencing July 1, 1984, "Commission" as used in this Act 34 means the Illinois Economic and Fiscal Commission as -4- LRB9206834JSpc 1 established by the Legislative Commission Reorganization Act 2 of 1984. 3 (f) "Contributory", when referred to as contributory 4 coverage, shall mean optional coverages or benefits elected 5 by the member toward the cost of which such member makes 6 contribution, or which are funded in whole or in part through 7 the acceptance of a reduction in earnings or the foregoing of 8 an increase in earnings by an employee, as distinguished from 9 noncontributory coverage or benefits which are paid entirely 10 by the State of Illinois without reduction of the member's 11 salary. 12 (g) "Department" means any department, institution, 13 board, commission, officer, court or any agency of the State 14 government receiving appropriations and having power to 15 certify payrolls to the Comptroller authorizing payments of 16 salary and wages against such appropriations as are made by 17 the General Assembly from any State fund, or against trust 18 funds held by the State Treasurer and includes boards of 19 trustees of the retirement systems created by Articles 2, 14, 20 15, 16 and 18 of the Illinois Pension Code. "Department" 21 also includes the Illinois Comprehensive Health Insurance 22 Board, the Board of Examiners established under the Illinois 23 Public Accounting Act, and the Illinois Rural Bond Bank. 24 (h) "Dependent", when the term is used in the context of 25 the health and life plan, means a member's spouse and any 26 unmarried child (1) from birth to age 19 including an adopted 27 child, a child who lives with the member from the time of the 28 filing of a petition for adoption until entry of an order of 29 adoption, a stepchild or recognized child who lives with the 30 member in a parent-child relationship, or a child who lives 31 with the member if such member is a court appointed guardian 32 of the child, or (2) age 19 to 23 enrolled as a full-time 33 student in any accredited school, financially dependent upon 34 the member, and eligible to be claimed as a dependent for -5- LRB9206834JSpc 1 income tax purposes, or (3) age 19 or over who is mentally or 2 physically handicapped. For the health plan only, the term 3 "dependent" also includes any person enrolled prior to the 4 effective date of this Section who is dependent upon the 5 member to the extent that the member may claim such person as 6 a dependent for income tax deduction purposes; no other such 7 person may be enrolled. For the health plan only, the term 8 "dependent" also includes a parent of the member who has 9 lived with the member for at least one year before coverage 10 is sought and who is financially dependent upon the member 11 and eligible to be claimed as a dependent for income tax 12 purposes. 13 (i) "Director" means the Director of the Illinois 14 Department of Central Management Services. 15 (j) "Eligibility period" means the period of time a 16 member has to elect enrollment in programs or to select 17 benefits without regard to age, sex or health. 18 (k) "Employee" means and includes each officer or 19 employee in the service of a department who (1) receives his 20 compensation for service rendered to the department on a 21 warrant issued pursuant to a payroll certified by a 22 department or on a warrant or check issued and drawn by a 23 department upon a trust, federal or other fund or on a 24 warrant issued pursuant to a payroll certified by an elected 25 or duly appointed officer of the State or who receives 26 payment of the performance of personal services on a warrant 27 issued pursuant to a payroll certified by a Department and 28 drawn by the Comptroller upon the State Treasurer against 29 appropriations made by the General Assembly from any fund or 30 against trust funds held by the State Treasurer, and (2) is 31 employed full-time or part-time in a position normally 32 requiring actual performance of duty during not less than 1/2 33 of a normal work period, as established by the Director in 34 cooperation with each department, except that persons elected -6- LRB9206834JSpc 1 by popular vote will be considered employees during the 2 entire term for which they are elected regardless of hours 3 devoted to the service of the State, and (3) except that 4 "employee" does not include any person who is not eligible by 5 reason of such person's employment to participate in one of 6 the State retirement systems under Articles 2, 14, 15 (either 7 the regular Article 15 system or the optional retirement 8 program established under Section 15-158.2) or 18, or under 9 paragraph (2), (3), or (5) of Section 16-106, of the Illinois 10 Pension Code, but such term does include persons who are 11 employed during the 6 month qualifying period under Article 12 14 of the Illinois Pension Code. Such term also includes any 13 person who (1) after January 1, 1966, is receiving ordinary 14 or accidental disability benefits under Articles 2, 14, 15 15 (including ordinary or accidental disability benefits under 16 the optional retirement program established under Section 17 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or 18 Article 18 of the Illinois Pension Code, for disability 19 incurred after January 1, 1966, (2) receives total permanent 20 or total temporary disability under the Workers' Compensation 21 Act or Occupational Disease Act as a result of injuries 22 sustained or illness contracted in the course of employment 23 with the State of Illinois, or (3) is not otherwise covered 24 under this Act and has retired as a participating member 25 under Article 2 of the Illinois Pension Code but is 26 ineligible for the retirement annuity under Section 2-119 of 27 the Illinois Pension Code. However, a person who satisfies 28 the criteria of the foregoing definition of "employee" except 29 that such person is made ineligible to participate in the 30 State Universities Retirement System by clause (4) of 31 subsection (a) of Section 15-107 of the Illinois Pension Code 32 is also an "employee" for the purposes of this Act. 33 "Employee" also includes any person receiving or eligible for 34 benefits under a sick pay plan established in accordance with -7- LRB9206834JSpc 1 Section 36 of the State Finance Act. "Employee" also includes 2 each officer or employee in the service of a qualified local 3 government, including persons appointed as trustees of 4 sanitary districts regardless of hours devoted to the service 5 of the sanitary district, and each employee in the service of 6 a qualified rehabilitation facility and each full-time 7 employee in the service of a qualified domestic violence 8 shelter or service, as determined according to rules 9 promulgated by the Director. 10 (l) "Member" means an employee, annuitant, retired 11 employee or survivor. 12 (m) "Optional coverages or benefits" means those 13 coverages or benefits available to the member on his or her 14 voluntary election, and at his or her own expense. 15 (n) "Program" means the group life insurance, health 16 benefits and other employee benefits designed and contracted 17 for by the Director under this Act. 18 (o) "Health plan" means a health benefits program 19 offered by the State of Illinois for persons eligible for the 20 plan. 21 (p) "Retired employee" means any person who would be an 22 annuitant as that term is defined herein but for the fact 23 that such person retired prior to January 1, 1966. Such term 24 also includes any person formerly employed by the University 25 of Illinois in the Cooperative Extension Service who would be 26 an annuitant but for the fact that such person was made 27 ineligible to participate in the State Universities 28 Retirement System by clause (4) of subsection (a) of Section 29 15-107 of the Illinois Pension Code. 30 (q) "Survivor" means a person receiving an annuity as a 31 survivor of an employee or of an annuitant. "Survivor" also 32 includes: (1) the surviving dependent of a person who 33 satisfies the definition of "employee" except that such 34 person is made ineligible to participate in the State -8- LRB9206834JSpc 1 Universities Retirement System by clause (4) of subsection 2 (a) of Section 15-107 of the Illinois Pension Code; and (2) 3 the surviving dependent of any person formerly employed by 4 the University of Illinois in the Cooperative Extension 5 Service who would be an annuitant except for the fact that 6 such person was made ineligible to participate in the State 7 Universities Retirement System by clause (4) of subsection 8 (a) of Section 15-107 of the Illinois Pension Code. 9 (q-5) "New SERS survivor" means a survivor, as defined 10 in subsection (q), whose annuity is paid under Article 14 of 11 the Illinois Pension Code and is based on the death of (i) an 12 employee whose death occurs on or after January 1, 1998, or 13 (ii) a new SERS annuitant as defined in subsection (b-5). 14 (q-6) "New SURS survivor" means a survivor, as defined 15 in subsection (q), whose annuity is paid under Article 15 of 16 the Illinois Pension Code and is based on the death of (i) an 17 employee whose death occurs on or after January 1, 1998, or 18 (ii) a new SURS annuitant as defined in subsection (b-6). 19 (q-7) "New TRS State survivor" means a survivor, as 20 defined in subsection (q), whose annuity is paid under 21 Article 16 of the Illinois Pension Code and is based on the 22 death of (i) an employee who is a teacher as defined in 23 paragraph (2), (3), or (5) of Section 16-106 of that Code and 24 whose death occurs on or after July 1, 1998, or (ii) a new 25 TRS State annuitant as defined in subsection (b-7). 26 (r) "Medical services" means the services provided 27 within the scope of their licenses by practitioners in all 28 categories licensed under the Medical Practice Act of 1987. 29 (s) "Unit of local government" means any county, 30 municipality, township, school district, special district or 31 other unit, designated as a unit of local government by law, 32 which exercises limited governmental powers or powers in 33 respect to limited governmental subjects, any not-for-profit 34 association with a membership that primarily includes -9- LRB9206834JSpc 1 townships and township officials, that has duties that 2 include provision of research service, dissemination of 3 information, and other acts for the purpose of improving 4 township government, and that is funded wholly or partly in 5 accordance with Section 85-15 of the Township Code; any 6 not-for-profit corporation or association, with a membership 7 consisting primarily of municipalities, that operates its own 8 utility system, and provides research, training, 9 dissemination of information, or other acts to promote 10 cooperation between and among municipalities that provide 11 utility services and for the advancement of the goals and 12 purposes of its membership; the Southern Illinois Collegiate 13 Common Market, which is a consortium of higher education 14 institutions in Southern Illinois; and the Illinois 15 Association of Park Districts. "Qualified local government" 16 means a unit of local government approved by the Director and 17 participating in a program created under subsection (i) of 18 Section 10 of this Act. 19 (t) "Qualified rehabilitation facility" means any 20 not-for-profit organization that is accredited by the 21 Commission on Accreditation of Rehabilitation Facilities or 22 certified by the Department of Human Services (as successor 23 to the Department of Mental Health and Developmental 24 Disabilities) to provide services to persons with 25 disabilities and which receives funds from the State of 26 Illinois for providing those services, approved by the 27 Director and participating in a program created under 28 subsection (j) of Section 10 of this Act. 29 (u) "Qualified domestic violence shelter or service" 30 means any Illinois domestic violence shelter or service and 31 its administrative offices funded by the Department of Human 32 Services (as successor to the Illinois Department of Public 33 Aid), approved by the Director and participating in a program 34 created under subsection (k) of Section 10. -10- LRB9206834JSpc 1 (v) "TRS benefit recipient" means a person who: 2 (1) is not a "member" as defined in this Section; 3 and 4 (2) is receiving a monthly benefit or retirement 5 annuity under Article 16 of the Illinois Pension Code; 6 and 7 (3) either (i) has at least 8 years of creditable 8 service under Article 16 of the Illinois Pension Code, or 9 (ii) was enrolled in the health insurance program offered 10 under that Article on January 1, 1996, or (iii) is the 11 survivor of a benefit recipient who had at least 8 years 12 of creditable service under Article 16 of the Illinois 13 Pension Code or was enrolled in the health insurance 14 program offered under that Article on the effective date 15 of this amendatory Act of 1995, or (iv) is a recipient or 16 survivor of a recipient of a disability benefit under 17 Article 16 of the Illinois Pension Code. 18 (w) "TRS dependent beneficiary" means a person who: 19 (1) is not a "member" or "dependent" as defined in 20 this Section; and 21 (2) is a TRS benefit recipient's: (A) spouse, (B) 22 dependent parent who is receiving at least half of his or 23 her support from the TRS benefit recipient, or (C) 24 unmarried natural or adopted child who is (i) under age 25 19, or (ii) enrolled as a full-time student in an 26 accredited school, financially dependent upon the TRS 27 benefit recipient, eligible to be claimed as a dependent 28 for income tax purposes, and either is under age 24 or 29 was, on January 1, 1996, participating as a dependent 30 beneficiary in the health insurance program offered under 31 Article 16 of the Illinois Pension Code, or (iii) age 19 32 or over who is mentally or physically handicapped. 33 (x) "Military leave with pay and benefits" refers to 34 individuals in basic training for reserves, special/advanced -11- LRB9206834JSpc 1 training, annual training, emergency call up, or activation 2 by the President of the United States with approved pay and 3 benefits. 4 (y) "Military leave without pay and benefits" refers to 5 individuals who enlist for active duty in a regular component 6 of the U.S. Armed Forces or other duty not specified or 7 authorized under military leave with pay and benefits. 8 (z) "Community college benefit recipient" means a person 9 who: 10 (1) is not a "member" as defined in this Section; 11 and 12 (2) is receiving a monthly survivor's annuity or 13 retirement annuity under Article 15 of the Illinois 14 Pension Code; and 15 (3) either (i) was a full-time employee of a 16 community college district or an association of community 17 college boards created under the Public Community College 18 Act (other than an employee whose last employer under 19 Article 15 of the Illinois Pension Code was a community 20 college district subject to Article VII of the Public 21 Community College Act) and was eligible to participate in 22 a group health benefit plan as an employee during the 23 time of employment with a community college district 24 (other than a community college district subject to 25 Article VII of the Public Community College Act) or an 26 association of community college boards, or (ii) is the 27 survivor of a person described in item (i). 28 (aa) "Community college dependent beneficiary" means a 29 person who: 30 (1) is not a "member" or "dependent" as defined in 31 this Section; and 32 (2) is a community college benefit recipient's: (A) 33 spouse, (B) dependent parent who is receiving at least 34 half of his or her support from the community college -12- LRB9206834JSpc 1 benefit recipient, or (C) unmarried natural or adopted 2 child who is (i) under age 19, or (ii) enrolled as a 3 full-time student in an accredited school, financially 4 dependent upon the community college benefit recipient, 5 eligible to be claimed as a dependent for income tax 6 purposes and under age 23, or (iii) age 19 or over and 7 mentally or physically handicapped. 8 (Source: P.A. 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448, 9 eff. 8-16-97; 90-497, eff. 8-18-97; 90-511, eff. 8-22-97; 10 90-582, eff. 5-27-98; 90-655, eff. 7-30-98; 91-390, eff. 11 7-30-99; 91-395, eff. 7-30-99; 91-617, eff, 8-19-99; revised 12 10-19-99.) 13 Section 10. The Illinois Insurance Code is amended by 14 changing Section 356a as follows: 15 (215 ILCS 5/356a) (from Ch. 73, par. 968a) 16 Sec. 356a. Form of policy. 17 (1) No policy of accident and health insurance shall be 18 delivered or issued for delivery to any person in this state 19 unless: 20 (a) the entire money and other considerations therefor 21 are expressed therein; and 22 (b) the time at which the insurance takes effect and 23 terminates is expressed therein; and 24 (c) it purports to insure only one person, except that a 25 policy may insure, originally or by subsequent amendment, 26 upon the application of an adult member of a family who shall 27 be deemed the policyholder, any two or more eligible members 28 of that family, including husband, wife, dependent children 29 or any children under a specified age which shall not exceed 30 19 years, and any other person dependent upon the 31 policyholder including a parent of the policyholder who has 32 lived with the policyholder for at least one year before -13- LRB9206834JSpc 1 coverage is sought; and 2 (d) the style, arrangement and over-all appearance of 3 the policy give no undue prominence to any portion of the 4 text, and unless every printed portion of the text of the 5 policy and of any endorsements or attached papers is plainly 6 printed in light-faced type of a style in general use, the 7 size of which shall be uniform and not less than ten-point 8 with a lower-case unspaced alphabet length not less than one 9 hundred and twenty-point (the "text" shall include all 10 printed matter except the name and address of the insurer, 11 name or title of the policy, the brief description if any, 12 and captions and subcaptions); and 13 (e) the exceptions and reductions of indemnity are set 14 forth in the policy and, except those which are set forth in 15 Sections 357.1 through 357.30 of this act, are printed, at 16 the insurer's option, either included with the benefit 17 provision to which they apply, or under an appropriate 18 caption such as "EXCEPTIONS", or "EXCEPTIONS AND REDUCTIONS", 19 provided that if an exception or reduction specifically 20 applies only to a particular benefit of the policy, a 21 statement of such exception or reduction shall be included 22 with the benefit provision to which it applies; and 23 (f) each such form, including riders and endorsements, 24 shall be identified by a form number in the lower left-hand 25 corner of the first page thereof; and 26 (g) it contains no provision purporting to make any 27 portion of the charter, rules, constitution, or by-laws of 28 the insurer a part of the policy unless such portion is set 29 forth in full in the policy, except in the case of the 30 incorporation of, or reference to, a statement of rates or 31 classification of risks, or short-rate table filed with the 32 Director. 33 (2) If any policy is issued by an insurer domiciled in 34 this state for delivery to a person residing in another -14- LRB9206834JSpc 1 state, and if the official having responsibility for the 2 administration of the insurance laws of such other state 3 shall have advised the Director that any such policy is not 4 subject to approval or disapproval by such official, the 5 Director may by ruling require that such policy meet the 6 standards set forth in subsection (1) of this section and in 7 Sections 357.1 through 357.30. 8 (Source: P.A. 76-860.) 9 Section 15. The Health Maintenance Organization Act is 10 amended by changing Section 5-3 as follows: 11 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2) 12 Sec. 5-3. Insurance Code provisions. 13 (a) Health Maintenance Organizations shall be subject to 14 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2, 15 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 16 154.6, 154.7, 154.8, 155.04, 355.2, 356a, 356m, 356v, 356w, 17 356x, 356y, 367i, 368a, 401, 401.1, 402, 403, 403A, 408, 18 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection 19 (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, 20 XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. 21 (b) For purposes of the Illinois Insurance Code, except 22 for Sections 444 and 444.1 and Articles XIII and XIII 1/2, 23 Health Maintenance Organizations in the following categories 24 are deemed to be "domestic companies": 25 (1) a corporation authorized under the Dental 26 Service Plan Act or the Voluntary Health Services Plans 27 Act; 28 (2) a corporation organized under the laws of this 29 State; or 30 (3) a corporation organized under the laws of 31 another state, 30% or more of the enrollees of which are 32 residents of this State, except a corporation subject to -15- LRB9206834JSpc 1 substantially the same requirements in its state of 2 organization as is a "domestic company" under Article 3 VIII 1/2 of the Illinois Insurance Code. 4 (c) In considering the merger, consolidation, or other 5 acquisition of control of a Health Maintenance Organization 6 pursuant to Article VIII 1/2 of the Illinois Insurance Code, 7 (1) the Director shall give primary consideration 8 to the continuation of benefits to enrollees and the 9 financial conditions of the acquired Health Maintenance 10 Organization after the merger, consolidation, or other 11 acquisition of control takes effect; 12 (2)(i) the criteria specified in subsection (1)(b) 13 of Section 131.8 of the Illinois Insurance Code shall not 14 apply and (ii) the Director, in making his determination 15 with respect to the merger, consolidation, or other 16 acquisition of control, need not take into account the 17 effect on competition of the merger, consolidation, or 18 other acquisition of control; 19 (3) the Director shall have the power to require 20 the following information: 21 (A) certification by an independent actuary of 22 the adequacy of the reserves of the Health 23 Maintenance Organization sought to be acquired; 24 (B) pro forma financial statements reflecting 25 the combined balance sheets of the acquiring company 26 and the Health Maintenance Organization sought to be 27 acquired as of the end of the preceding year and as 28 of a date 90 days prior to the acquisition, as well 29 as pro forma financial statements reflecting 30 projected combined operation for a period of 2 31 years; 32 (C) a pro forma business plan detailing an 33 acquiring party's plans with respect to the 34 operation of the Health Maintenance Organization -16- LRB9206834JSpc 1 sought to be acquired for a period of not less than 2 3 years; and 3 (D) such other information as the Director 4 shall require. 5 (d) The provisions of Article VIII 1/2 of the Illinois 6 Insurance Code and this Section 5-3 shall apply to the sale 7 by any health maintenance organization of greater than 10% of 8 its enrollee population (including without limitation the 9 health maintenance organization's right, title, and interest 10 in and to its health care certificates). 11 (e) In considering any management contract or service 12 agreement subject to Section 141.1 of the Illinois Insurance 13 Code, the Director (i) shall, in addition to the criteria 14 specified in Section 141.2 of the Illinois Insurance Code, 15 take into account the effect of the management contract or 16 service agreement on the continuation of benefits to 17 enrollees and the financial condition of the health 18 maintenance organization to be managed or serviced, and (ii) 19 need not take into account the effect of the management 20 contract or service agreement on competition. 21 (f) Except for small employer groups as defined in the 22 Small Employer Rating, Renewability and Portability Health 23 Insurance Act and except for medicare supplement policies as 24 defined in Section 363 of the Illinois Insurance Code, a 25 Health Maintenance Organization may by contract agree with a 26 group or other enrollment unit to effect refunds or charge 27 additional premiums under the following terms and conditions: 28 (i) the amount of, and other terms and conditions 29 with respect to, the refund or additional premium are set 30 forth in the group or enrollment unit contract agreed in 31 advance of the period for which a refund is to be paid or 32 additional premium is to be charged (which period shall 33 not be less than one year); and 34 (ii) the amount of the refund or additional premium -17- LRB9206834JSpc 1 shall not exceed 20% of the Health Maintenance 2 Organization's profitable or unprofitable experience with 3 respect to the group or other enrollment unit for the 4 period (and, for purposes of a refund or additional 5 premium, the profitable or unprofitable experience shall 6 be calculated taking into account a pro rata share of the 7 Health Maintenance Organization's administrative and 8 marketing expenses, but shall not include any refund to 9 be made or additional premium to be paid pursuant to this 10 subsection (f)). The Health Maintenance Organization and 11 the group or enrollment unit may agree that the 12 profitable or unprofitable experience may be calculated 13 taking into account the refund period and the immediately 14 preceding 2 plan years. 15 The Health Maintenance Organization shall include a 16 statement in the evidence of coverage issued to each enrollee 17 describing the possibility of a refund or additional premium, 18 and upon request of any group or enrollment unit, provide to 19 the group or enrollment unit a description of the method used 20 to calculate (1) the Health Maintenance Organization's 21 profitable experience with respect to the group or enrollment 22 unit and the resulting refund to the group or enrollment unit 23 or (2) the Health Maintenance Organization's unprofitable 24 experience with respect to the group or enrollment unit and 25 the resulting additional premium to be paid by the group or 26 enrollment unit. 27 In no event shall the Illinois Health Maintenance 28 Organization Guaranty Association be liable to pay any 29 contractual obligation of an insolvent organization to pay 30 any refund authorized under this Section. 31 (Source: P.A. 90-25, eff. 1-1-98; 90-177, eff. 7-23-97; 32 90-372, eff. 7-1-98; 90-583, eff. 5-29-98; 90-655, eff. 33 7-30-98; 90-741, eff. 1-1-99; 91-357, eff. 7-29-99; 91-406, 34 eff. 1-1-00; 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; -18- LRB9206834JSpc 1 91-788, eff. 6-9-00.) 2 Section 20. The Voluntary Health Services Plans Act is 3 amended by changing Section 10 as follows: 4 (215 ILCS 165/10) (from Ch. 32, par. 604) 5 Sec. 10. Application of Insurance Code provisions. 6 Health services plan corporations and all persons interested 7 therein or dealing therewith shall be subject to the 8 provisions of Articles IIA and XII 1/2 and Sections 3.1, 133, 9 140, 143, 143c, 149, 354, 355.2, 356a, 356r, 356t, 356u, 10 356v, 356w, 356x, 356y, 367.2, 368a, 401, 401.1, 402, 403, 11 403A, 408, 408.2, and 412, and paragraphs (7) and (15) of 12 Section 367 of the Illinois Insurance Code. 13 (Source: P.A. 90-7, eff. 6-10-97; 90-25, eff. 1-1-98; 90-655, 14 eff. 7-30-98; 90-741, eff. 1-1-99; 91-406, eff. 1-1-00; 15 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff. 16 6-9-00.)