Public Act 097-0437
 
HB1530 EnrolledLRB097 09356 RPM 49491 b

    AN ACT concerning insurance.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 370c and by adding Section 370c.1 as follows:
 
    (215 ILCS 5/370c)  (from Ch. 73, par. 982c)
    Sec. 370c. Mental and emotional disorders.
    (a) (1) On and after the effective date of this amendatory
Act of the 97th General Assembly Section, every insurer which
amends, delivers, issues, or renews delivers, issues for
delivery or renews or modifies group accident and health A&H
policies providing coverage for hospital or medical treatment
or services for illness on an expense-incurred basis shall
offer to the applicant or group policyholder subject to the
insurer's insurers standards of insurability, coverage for
reasonable and necessary treatment and services for mental,
emotional or nervous disorders or conditions, other than
serious mental illnesses as defined in item (2) of subsection
(b), consistent with the parity requirements of Section 370c.1
of this Code up to the limits provided in the policy for other
disorders or conditions, except (i) the insured may be required
to pay up to 50% of expenses incurred as a result of the
treatment or services, and (ii) the annual benefit limit may be
limited to the lesser of $10,000 or 25% of the lifetime policy
limit.
    (2) Each insured that is covered for mental, emotional, or
nervous, or substance use disorders or conditions shall be free
to select the physician licensed to practice medicine in all
its branches, licensed clinical psychologist, licensed
clinical social worker, licensed clinical professional
counselor, or licensed marriage and family therapist, licensed
speech-language pathologist, or other licensed or certified
professional at a program licensed pursuant to the Illinois
Alcoholism and Other Drug Abuse and Dependency Act of his
choice to treat such disorders, and the insurer shall pay the
covered charges of such physician licensed to practice medicine
in all its branches, licensed clinical psychologist, licensed
clinical social worker, licensed clinical professional
counselor, or licensed marriage and family therapist, licensed
speech-language pathologist, or other licensed or certified
professional at a program licensed pursuant to the Illinois
Alcoholism and Other Drug Abuse and Dependency Act up to the
limits of coverage, provided (i) the disorder or condition
treated is covered by the policy, and (ii) the physician,
licensed psychologist, licensed clinical social worker,
licensed clinical professional counselor, or licensed marriage
and family therapist, licensed speech-language pathologist, or
other licensed or certified professional at a program licensed
pursuant to the Illinois Alcoholism and Other Drug Abuse and
Dependency Act is authorized to provide said services under the
statutes of this State and in accordance with accepted
principles of his profession.
    (3) Insofar as this Section applies solely to licensed
clinical social workers, licensed clinical professional
counselors, and licensed marriage and family therapists,
licensed speech-language pathologists, and other licensed or
certified professionals at programs licensed pursuant to the
Illinois Alcoholism and Other Drug Abuse and Dependency Act,
those persons who may provide services to individuals shall do
so after the licensed clinical social worker, licensed clinical
professional counselor, or licensed marriage and family
therapist, licensed speech-language pathologist, or other
licensed or certified professional at a program licensed
pursuant to the Illinois Alcoholism and Other Drug Abuse and
Dependency Act has informed the patient of the desirability of
the patient conferring with the patient's primary care
physician and the licensed clinical social worker, licensed
clinical professional counselor, or licensed marriage and
family therapist, licensed speech-language pathologist, or
other licensed or certified professional at a program licensed
pursuant to the Illinois Alcoholism and Other Drug Abuse and
Dependency Act has provided written notification to the
patient's primary care physician, if any, that services are
being provided to the patient. That notification may, however,
be waived by the patient on a written form. Those forms shall
be retained by the licensed clinical social worker, licensed
clinical professional counselor, or licensed marriage and
family therapist, licensed speech-language pathologist, or
other licensed or certified professional at a program licensed
pursuant to the Illinois Alcoholism and Other Drug Abuse and
Dependency Act for a period of not less than 5 years.
    (b) (1) An insurer that provides coverage for hospital or
medical expenses under a group policy of accident and health
insurance or health care plan amended, delivered, issued, or
renewed on or after the effective date of this amendatory Act
of the 97th 92nd General Assembly shall provide coverage under
the policy for treatment of serious mental illness and
substance use disorders consistent with the parity
requirements of Section 370c.1 of this Code under the same
terms and conditions as coverage for hospital or medical
expenses related to other illnesses and diseases. The coverage
required under this Section must provide for same durational
limits, amount limits, deductibles, and co-insurance
requirements for serious mental illness as are provided for
other illnesses and diseases. This subsection does not apply to
any group policy of accident and health insurance or health
care plan for any plan year of a small employer as defined in
Section 5 of the Illinois Health Insurance Portability and
Accountability Act coverage provided to employees by employers
who have 50 or fewer employees.
    (2) "Serious mental illness" means the following
psychiatric illnesses as defined in the most current edition of
the Diagnostic and Statistical Manual (DSM) published by the
American Psychiatric Association:
        (A) schizophrenia;
        (B) paranoid and other psychotic disorders;
        (C) bipolar disorders (hypomanic, manic, depressive,
    and mixed);
        (D) major depressive disorders (single episode or
    recurrent);
        (E) schizoaffective disorders (bipolar or depressive);
        (F) pervasive developmental disorders;
        (G) obsessive-compulsive disorders;
        (H) depression in childhood and adolescence;
        (I) panic disorder;
        (J) post-traumatic stress disorders (acute, chronic,
    or with delayed onset); and
        (K) anorexia nervosa and bulimia nervosa.
    (2.5) "Substance use disorder" means the following mental
disorders as defined in the most current edition of the
Diagnostic and Statistical Manual (DSM) published by the
American Psychiatric Association:
        (A) substance abuse disorders;
        (B) substance dependence disorders; and
        (C) substance induced disorders.
    (3) Unless otherwise prohibited by federal law and
consistent with the parity requirements of Section 370c.1 of
this Code, Upon request of the reimbursing insurer, a provider
of treatment of serious mental illness or substance use
disorder shall furnish medical records or other necessary data
that substantiate that initial or continued treatment is at all
times medically necessary. An insurer shall provide a mechanism
for the timely review by a provider holding the same license
and practicing in the same specialty as the patient's provider,
who is unaffiliated with the insurer, jointly selected by the
patient (or the patient's next of kin or legal representative
if the patient is unable to act for himself or herself), the
patient's provider, and the insurer in the event of a dispute
between the insurer and patient's provider regarding the
medical necessity of a treatment proposed by a patient's
provider. If the reviewing provider determines the treatment to
be medically necessary, the insurer shall provide
reimbursement for the treatment. Future contractual or
employment actions by the insurer regarding the patient's
provider may not be based on the provider's participation in
this procedure. Nothing prevents the insured from agreeing in
writing to continue treatment at his or her expense. When
making a determination of the medical necessity for a treatment
modality for serious serous mental illness or substance use
disorder, an insurer must make the determination in a manner
that is consistent with the manner used to make that
determination with respect to other diseases or illnesses
covered under the policy, including an appeals process. Medical
necessity determinations for substance use disorders shall be
made in accordance with appropriate patient placement criteria
established by the American Society of Addiction Medicine.
    (4) A group health benefit plan amended, delivered, issued,
or renewed on or after the effective date of this amendatory
Act of the 97th General Assembly:
        (A) shall provide coverage based upon medical
    necessity for the following treatment of mental illness and
    substance use disorders consistent with the parity
    requirements of Section 370c.1 of this Code; provided,
    however, that in each calendar year coverage shall not be
    less than the following:
            (i) 45 days of inpatient treatment; and
            (ii) beginning on June 26, 2006 (the effective date
        of Public Act 94-921), 60 visits for outpatient
        treatment including group and individual outpatient
        treatment; and
            (iii) for plans or policies delivered, issued for
        delivery, renewed, or modified after January 1, 2007
        (the effective date of Public Act 94-906), 20
        additional outpatient visits for speech therapy for
        treatment of pervasive developmental disorders that
        will be in addition to speech therapy provided pursuant
        to item (ii) of this subparagraph (A); and
        (B) may not include a lifetime limit on the number of
    days of inpatient treatment or the number of outpatient
    visits covered under the plan. ; and
        (C) (Blank). shall include the same amount limits,
    deductibles, copayments, and coinsurance factors for
    serious mental illness as for physical illness.
    (5) An issuer of a group health benefit plan may not count
toward the number of outpatient visits required to be covered
under this Section an outpatient visit for the purpose of
medication management and shall cover the outpatient visits
under the same terms and conditions as it covers outpatient
visits for the treatment of physical illness.
    (6) An issuer of a group health benefit plan may provide or
offer coverage required under this Section through a managed
care plan.
    (7) (Blank). This Section shall not be interpreted to
require a group health benefit plan to provide coverage for
treatment of:
        (A) an addiction to a controlled substance or cannabis
    that is used in violation of law; or
        (B) mental illness resulting from the use of a
    controlled substance or cannabis in violation of law.
    (8) (Blank).
    (9) With respect to substance use disorders, coverage for
inpatient treatment shall include coverage for treatment in a
residential treatment center licensed by the Department of
Public Health or the Department of Human Services, Division of
Alcoholism and Substance Abuse.
    (c) This Section shall not be interpreted to require
coverage for speech therapy or other habilitative services for
those individuals covered under Section 356z.15 of this Code.
(Source: P.A. 95-331, eff. 8-21-07; 95-972, eff. 9-22-08;
95-973, eff. 1-1-09; 95-1049, eff. 1-1-10; 96-328, eff.
8-11-09; 96-1000, eff. 7-2-10.)
 
    (215 ILCS 5/370c.1 new)
    Sec. 370c.1. Mental health parity.
    (a) On and after the effective date of this amendatory Act
of the 97th General Assembly, every insurer that amends,
delivers, issues, or renews a group policy of accident and
health insurance in this State providing coverage for hospital
or medical treatment and for the treatment of mental,
emotional, nervous, or substance use disorders or conditions
shall ensure that:
        (1) the financial requirements applicable to such
    mental, emotional, nervous, or substance use disorder or
    condition benefits are no more restrictive than the
    predominant financial requirements applied to
    substantially all hospital and medical benefits covered by
    the policy and that there are no separate cost-sharing
    requirements that are applicable only with respect to
    mental, emotional, nervous, or substance use disorder or
    condition benefits; and
        (2) the treatment limitations applicable to such
    mental, emotional, nervous, or substance use disorder or
    condition benefits are no more restrictive than the
    predominant treatment limitations applied to substantially
    all hospital and medical benefits covered by the policy and
    that there are no separate treatment limitations that are
    applicable only with respect to mental, emotional,
    nervous, or substance use disorder or condition benefits.
    (b) The following provisions shall apply concerning
aggregate lifetime limits:
        (1) In the case of a group policy of accident and
    health insurance amended, delivered, issued, or renewed in
    this State on or after the effective date of this
    amendatory Act of the 97th General Assembly that provides
    coverage for hospital or medical treatment and for the
    treatment of mental, emotional, nervous, or substance use
    disorders or conditions the following provisions shall
    apply:
            (A) if the policy does not include an aggregate
        lifetime limit on substantially all hospital and
        medical benefits, then the policy may not impose any
        aggregate lifetime limit on mental, emotional,
        nervous, or substance use disorder or condition
        benefits; or
            (B) if the policy includes an aggregate lifetime
        limit on substantially all hospital and medical
        benefits (in this subsection referred to as the
        "applicable lifetime limit"), then the policy shall
        either:
                (i) apply the applicable lifetime limit both
            to the hospital and medical benefits to which it
            otherwise would apply and to mental, emotional,
            nervous, or substance use disorder or condition
            benefits and not distinguish in the application of
            the limit between the hospital and medical
            benefits and mental, emotional, nervous, or
            substance use disorder or condition benefits; or
                (ii) not include any aggregate lifetime limit
            on mental, emotional, nervous, or substance use
            disorder or condition benefits that is less than
            the applicable lifetime limit.
        (2) In the case of a policy that is not described in
    paragraph (1) of subsection (b) of this Section and that
    includes no or different aggregate lifetime limits on
    different categories of hospital and medical benefits, the
    Director shall establish rules under which subparagraph
    (B) of paragraph (1) of subsection (b) of this Section is
    applied to such policy with respect to mental, emotional,
    nervous, or substance use disorder or condition benefits by
    substituting for the applicable lifetime limit an average
    aggregate lifetime limit that is computed taking into
    account the weighted average of the aggregate lifetime
    limits applicable to such categories.
    (c) The following provisions shall apply concerning annual
limits:
        (1) In the case of a group policy of accident and
    health insurance amended, delivered, issued, or renewed in
    this State on or after the effective date of this
    amendatory Act of the 97th General Assembly that provides
    coverage for hospital or medical treatment and for the
    treatment of mental, emotional, nervous, or substance use
    disorders or conditions the following provisions shall
    apply:
            (A) if the policy does not include an annual limit
        on substantially all hospital and medical benefits,
        then the policy may not impose any annual limits on
        mental, emotional, nervous, or substance use disorder
        or condition benefits; or
            (B) if the policy includes an annual limit on
        substantially all hospital and medical benefits (in
        this subsection referred to as the "applicable annual
        limit"), then the policy shall either:
                (i) apply the applicable annual limit both to
            the hospital and medical benefits to which it
            otherwise would apply and to mental, emotional,
            nervous, or substance use disorder or condition
            benefits and not distinguish in the application of
            the limit between the hospital and medical
            benefits and mental, emotional, nervous, or
            substance use disorder or condition benefits; or
                (ii) not include any annual limit on mental,
            emotional, nervous, or substance use disorder or
            condition benefits that is less than the
            applicable annual limit.
        (2) In the case of a policy that is not described in
    paragraph (1) of subsection (c) of this Section and that
    includes no or different annual limits on different
    categories of hospital and medical benefits, the Director
    shall establish rules under which subparagraph (B) of
    paragraph (1) of subsection (c) of this Section is applied
    to such policy with respect to mental, emotional, nervous,
    or substance use disorder or condition benefits by
    substituting for the applicable annual limit an average
    annual limit that is computed taking into account the
    weighted average of the annual limits applicable to such
    categories.
    (d) This Section shall be interpreted in a manner
consistent with the interim final regulations promulgated by
the U.S. Department of Health and Human Services at 75 FR 5410,
including the prohibition against applying a cumulative
financial requirement or cumulative quantitative treatment
limitation for mental, emotional, nervous, or substance use
disorder benefits that accumulates separately from any
cumulative financial requirement or cumulative quantitative
treatment limitation established for hospital and medical
benefits in the same classification.
    (e) The provisions of subsections (b) and (c) of this
Section shall not be interpreted to allow the use of lifetime
or annual limits otherwise prohibited by State or federal law.
    (f) This Section shall not apply to individual health
insurance coverage as defined in Section 5 of the Illinois
Health Insurance Portability and Accountability Act.
    (g) As used in this Section:
    "Financial requirement" includes deductibles, copayments,
coinsurance, and out-of-pocket maximums, but does not include
an aggregate lifetime limit or an annual limit subject to
subsections (b) and (c).
    "Treatment limitation" includes limits on benefits based
on the frequency of treatment, number of visits, days of
coverage, days in a waiting period, or other similar limits on
the scope or duration of treatment. "Treatment limitation"
includes both quantitative treatment limitations, which are
expressed numerically (such as 50 outpatient visits per year),
and nonquantitative treatment limitations, which otherwise
limit the scope or duration of treatment. A permanent exclusion
of all benefits for a particular condition or disorder shall
not be considered a treatment limitation.
 
    Section 10. The Health Maintenance Organization Act is
amended by changing Section 5-3 as follows:
 
    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
    Sec. 5-3. Insurance Code provisions.
    (a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d,
368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2,
409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
    (b) For purposes of the Illinois Insurance Code, except for
Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
Maintenance Organizations in the following categories are
deemed to be "domestic companies":
        (1) a corporation authorized under the Dental Service
    Plan Act or the Voluntary Health Services Plans Act;
        (2) a corporation organized under the laws of this
    State; or
        (3) a corporation organized under the laws of another
    state, 30% or more of the enrollees of which are residents
    of this State, except a corporation subject to
    substantially the same requirements in its state of
    organization as is a "domestic company" under Article VIII
    1/2 of the Illinois Insurance Code.
    (c) In considering the merger, consolidation, or other
acquisition of control of a Health Maintenance Organization
pursuant to Article VIII 1/2 of the Illinois Insurance Code,
        (1) the Director shall give primary consideration to
    the continuation of benefits to enrollees and the financial
    conditions of the acquired Health Maintenance Organization
    after the merger, consolidation, or other acquisition of
    control takes effect;
        (2)(i) the criteria specified in subsection (1)(b) of
    Section 131.8 of the Illinois Insurance Code shall not
    apply and (ii) the Director, in making his determination
    with respect to the merger, consolidation, or other
    acquisition of control, need not take into account the
    effect on competition of the merger, consolidation, or
    other acquisition of control;
        (3) the Director shall have the power to require the
    following information:
            (A) certification by an independent actuary of the
        adequacy of the reserves of the Health Maintenance
        Organization sought to be acquired;
            (B) pro forma financial statements reflecting the
        combined balance sheets of the acquiring company and
        the Health Maintenance Organization sought to be
        acquired as of the end of the preceding year and as of
        a date 90 days prior to the acquisition, as well as pro
        forma financial statements reflecting projected
        combined operation for a period of 2 years;
            (C) a pro forma business plan detailing an
        acquiring party's plans with respect to the operation
        of the Health Maintenance Organization sought to be
        acquired for a period of not less than 3 years; and
            (D) such other information as the Director shall
        require.
    (d) The provisions of Article VIII 1/2 of the Illinois
Insurance Code and this Section 5-3 shall apply to the sale by
any health maintenance organization of greater than 10% of its
enrollee population (including without limitation the health
maintenance organization's right, title, and interest in and to
its health care certificates).
    (e) In considering any management contract or service
agreement subject to Section 141.1 of the Illinois Insurance
Code, the Director (i) shall, in addition to the criteria
specified in Section 141.2 of the Illinois Insurance Code, take
into account the effect of the management contract or service
agreement on the continuation of benefits to enrollees and the
financial condition of the health maintenance organization to
be managed or serviced, and (ii) need not take into account the
effect of the management contract or service agreement on
competition.
    (f) Except for small employer groups as defined in the
Small Employer Rating, Renewability and Portability Health
Insurance Act and except for medicare supplement policies as
defined in Section 363 of the Illinois Insurance Code, a Health
Maintenance Organization may by contract agree with a group or
other enrollment unit to effect refunds or charge additional
premiums under the following terms and conditions:
        (i) the amount of, and other terms and conditions with
    respect to, the refund or additional premium are set forth
    in the group or enrollment unit contract agreed in advance
    of the period for which a refund is to be paid or
    additional premium is to be charged (which period shall not
    be less than one year); and
        (ii) the amount of the refund or additional premium
    shall not exceed 20% of the Health Maintenance
    Organization's profitable or unprofitable experience with
    respect to the group or other enrollment unit for the
    period (and, for purposes of a refund or additional
    premium, the profitable or unprofitable experience shall
    be calculated taking into account a pro rata share of the
    Health Maintenance Organization's administrative and
    marketing expenses, but shall not include any refund to be
    made or additional premium to be paid pursuant to this
    subsection (f)). The Health Maintenance Organization and
    the group or enrollment unit may agree that the profitable
    or unprofitable experience may be calculated taking into
    account the refund period and the immediately preceding 2
    plan years.
    The Health Maintenance Organization shall include a
statement in the evidence of coverage issued to each enrollee
describing the possibility of a refund or additional premium,
and upon request of any group or enrollment unit, provide to
the group or enrollment unit a description of the method used
to calculate (1) the Health Maintenance Organization's
profitable experience with respect to the group or enrollment
unit and the resulting refund to the group or enrollment unit
or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and the
resulting additional premium to be paid by the group or
enrollment unit.
    In no event shall the Illinois Health Maintenance
Organization Guaranty Association be liable to pay any
contractual obligation of an insolvent organization to pay any
refund authorized under this Section.
    (g) Rulemaking authority to implement Public Act 95-1045,
if any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
6-1-10; 96-1000, eff. 7-2-10.)
 
    Section 99. Effective date. This Act takes effect upon
becoming law.