Public Act 90-0736
HB0705 Enrolled LRB9002464JScc
AN ACT regarding health insurance for children.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Children's Health Insurance Program Act.
Section 5. Legislative intent. The General Assembly
finds that, for the economic and social benefit of all
citizens of the State, it is important to enable low-income
children of this State, to the extent funding permits, to
access health benefits coverage, especially preventive health
care. The General Assembly recognizes that assistance to
help families purchase health benefits for low-income
children must be provided in a fair and equitable fashion and
must treat all children at the same income level in a similar
fashion. The State of Illinois should help low-income
families transition from a health care system where
government partners with families to provide health benefits
to low-income children to a system where families with higher
incomes eventually transition into private or employer based
health plans. This Act is not intended to create an
Section 10. Definitions. As used in this Act:
"Benchmarking" means health benefits coverage as defined
in Section 2103 of the Social Security Act.
"Child" means a person under the age of 19.
"Department" means the Department of Public Aid.
"Medical assistance" means health care benefits provided
under Article V of the Illinois Public Aid Code.
"Medical visit" means a hospital, dental, physician,
optical, or other health care visit where services are
provided pursuant to this Act.
"Program" means the Children's Health Insurance Program,
which includes subsidizing the cost of privately sponsored
health insurance and purchasing or providing health care
benefits for eligible children.
"Resident" means a person who meets the residency
requirements as defined in Section 5-3 of the Illinois Public
Section 15. Operation of the Program. There is hereby
created a Children's Health Insurance Program. The Program
shall operate subject to appropriation and shall be
administered by the Department of Public Aid. The Department
shall have the powers and authority granted to the Department
under the Illinois Public Aid Code. The Department may
contract with a Third Party Administrator or other entities
to administer and oversee any portion of this Program.
Section 20. Eligibility.
(a) To be eligible for this Program, a person must be a
person who has a child eligible under this Act and who is
eligible under a waiver of federal requirements pursuant to
an application made pursuant to subdivision (a)(1) of Section
40 of this Act or who is a child who:
(1) is a child who is not eligible for medical
(2) is a child whose annual household income, as
determined by the Department, is above 133% of the
federal poverty level and at or below 185% of the federal
(3) is a resident of the State of Illinois; and
(4) is a child who is either a United States
citizen or included in one of the following categories of
(A) unmarried dependent children of either a
United States Veteran honorably discharged or a
person on active military duty;
(B) refugees under Section 207 of the
Immigration and Nationality Act;
(C) asylees under Section 208 of the
Immigration and Nationality Act;
(D) persons for whom deportation has been
withheld under Section 243(h) of the Immigration
and Nationality Act;
(E) persons granted conditional entry under
Section 203(a)(7) of the Immigration and Nationality
Act as in effect prior to April 1, 1980;
(F) persons lawfully admitted for permanent
residence under the Immigration and Nationality Act;
(G) parolees, for at least one year, under
Section 212(d)(5) of the Immigration and Nationality
Those children who are in the categories set forth in
subdivisions (4)(F) and (4)(G) of this subsection, who enter
the United States on or after August 22, 1996, shall not be
eligible for 5 years beginning on the date the child entered
the United States.
(b) A child who is determined to be eligible for
assistance shall remain eligible for 12 months, provided the
child maintains his or her residence in the State, has not
yet attained 19 years of age, and is not excluded pursuant to
subsection (c). Eligibility shall be re-determined by the
Department at least annually.
(c) A child shall not be eligible for coverage under
this Program if:
(1) the premium required pursuant to Section 30 of
this Act has not been paid. If the required premiums are
not paid the liability of the Program shall be limited to
benefits incurred under the Program for the time period
for which premiums had been paid. If the required
monthly premium is not paid, the child shall be
ineligible for re-enrollment for a minimum period of 3
months. Re-enrollment shall be completed prior to the
next covered medical visit and the first month's required
premium shall be paid in advance of the next covered
medical visit. The Department shall promulgate rules
regarding grace periods, notice requirements, and hearing
procedures pursuant to this subsection;
(2) the child is an inmate of a public institution
or a patient in an institution for mental diseases; or
(3) the child is a member of a family that is
eligible for health benefits covered under the State of
Illinois health benefits plan on the basis of a member's
employment with a public agency.
Section 25. Health benefits for children.
(a) The Department shall, subject to appropriation,
provide health benefits coverage to eligible children by:
(1) Subsidizing the cost of privately sponsored
health insurance, including employer based health
insurance, to assist families to take advantage of
available privately sponsored health insurance for their
eligible children; and
(2) Purchasing or providing health care benefits
for eligible children. The health benefits provided
under this subdivision (a)(2) shall, subject to
appropriation and without regard to any applicable cost
sharing under Section 30, be identical to the benefits
provided for children under the State's approved plan
under Title XIX of the Social Security Act. Providers
under this subdivision (a)(2) shall be subject to
approval by the Department to provide health care under
the Illinois Public Aid Code and shall be reimbursed at
the same rate as providers under the State's approved
plan under Title XIX of the Social Security Act. In
addition, providers may retain co-payments when
determined appropriate by the Department.
(b) The subsidization provided pursuant to subdivision
(a)(1) shall be credited to the family of the eligible child.
(c) The Department is prohibited from denying coverage
to a child who is enrolled in a privately sponsored health
insurance plan pursuant to subdivision (a)(1) because the
plan does not meet federal benchmarking standards or cost
sharing and contribution requirements. To be eligible for
inclusion in the Program, the plan shall contain
comprehensive major medical coverage which shall consist of
physician and hospital inpatient services. The Department is
prohibited from denying coverage to a child who is enrolled
in a privately sponsored health insurance plan pursuant to
subdivision (a)(1) because the plan offers benefits in
addition to physician and hospital inpatient services.
(d) The total dollar amount of subsidizing coverage per
child per month pursuant to subdivision (a)(1) shall be equal
to the average dollar payments, less premiums incurred, per
child per month pursuant to subdivision (a)(2). The
Department shall set this amount prospectively based upon the
prior fiscal year's experience adjusted for incurred but not
reported claims and estimated increases or decreases in the
cost of medical care. Payments obligated before July 1,
1999, will be computed using State Fiscal Year 1996 payments
for children eligible for Medical Assistance and income
assistance under the Aid to Families with Dependent Children
Program, with appropriate adjustments for cost and
utilization changes through January 1, 1999. The Department
is prohibited from providing a subsidy pursuant to
subdivision (a)(1) that is more than the individual's monthly
portion of the premium.
(e) An eligible child may obtain immediate coverage
under this Program only once during a medical visit. If
coverage lapses, re-enrollment shall be completed in advance
of the next covered medical visit and the first month's
required premium shall be paid in advance of any covered
(f) In order to accelerate and facilitate the
development of networks to deliver services to children in
areas outside counties with populations in excess of
3,000,000, in the event less than 25% of the eligible
children in a county or contiguous counties has enrolled with
a Health Maintenance Organization pursuant to Section 5-11 of
the Illinois Public Aid Code, the Department may develop and
implement demonstration projects to create alternative
networks designed to enhance enrollment and participation in
the program. The Department shall prescribe by rule the
criteria, standards, and procedures for effecting
demonstration projects under this Section.
Section 30. Cost sharing.
(a) Children enrolled in a health benefits program
pursuant to subdivision (a)(2) of Section 25 shall be subject
to the following cost sharing requirements:
(1) There shall be no co-payment required for
well-baby or well-child care, including age-appropriate
immunizations as required under federal law.
(2) Health insurance premiums for children in
families whose household income is at or above 150% of
the federal poverty level shall be payable monthly,
subject to rules promulgated by the Department for grace
periods and advance payments, and shall be as follows:
(A) $15 per month for one child.
(B) $25 per month for 2 children.
(C) $30 per month for 3 or more children.
(3) Co-payments for children in families whose
income is below 150% of the federal poverty level, at a
minimum and to the extent permitted under federal law,
shall be $2 for all medical visits and prescriptions
provided under this Act.
(4) Co-payments for children in families whose
income is at or above 150% of the federal poverty level,
at a minimum and to the extent permitted under federal
law shall be as follows:
(A) $5 for medical visits.
(B) $3 for generic prescriptions and $5 for
brand name prescriptions.
(C) $25 for emergency room use for a
non-emergency situation as defined by the Department
(5) The maximum amount of out-of-pocket expenses
for co-payments shall be $100 per family per year.
(b) Individuals enrolled in a privately sponsored health
insurance plan pursuant to subdivision (a)(1) of Section 25
shall be subject to the cost sharing provisions as stated in
the privately sponsored health insurance plan.
Section 35. Funding.
(a) This Program is not an entitlement and shall not be
construed to create an entitlement. Eligibility for the
Program is subject to appropriation of funds by the State and
federal governments. Subdivision (a)(2) of Section 25 shall
operate and be funded only if subdivision (a)(1) of Section
25 is operational and funded. The estimated net State share
of appropriated funds for subdivision (a)(2) of Section 25
shall be equal to the estimated net State share of
appropriated funds for subdivision (a)(1) of Section 25.
(b) Any requirement imposed under this Act and any
implementation of this Act by the Department shall cease in
the event (1) continued receipt of federal funds for
implementation of this Act requires an amendment to this Act,
or (2) federal funds for implementation of the Act are not
(c) Payments under this Act shall be appropriated from
the General Revenue Fund.
(d) Benefits under this Act shall be available only as
long as the intergovernmental agreements made pursuant to
Section 12-4.7 and Article XV of the Illinois Public Aid Code
and entered into between the Department and the Cook County
Board of Commissioners continue to exist.
Section 40. Waivers.
(a) The Department shall request any necessary waivers
of federal requirements in order to allow receipt of federal
(1) the coverage of families with eligible children
under this Act; and
(2) for the coverage of children who would
otherwise be eligible under this Act, but who have health
(b) The failure of the responsible federal agency to
approve a waiver for children who would otherwise be eligible
under this Act but who have health insurance shall not
prevent the implementation of any Section of this Act
provided that there are sufficient appropriated funds.
Section 45. Study.
(a) The Department shall conduct a study which includes,
but is not limited to, the following:
(1) Establishes estimates, broken down by regions
of the State, of the number of children with health
insurance coverage and without health insurance coverage;
the number of children who are eligible for Medicaid, and
of that number, the number who are enrolled in Medicaid;
the number of children with access to dependent coverage
through an employer, and of that number, the number who
are enrolled in dependent coverage through an employer.
(2) Ascertains, for the population of children
potentially eligible for coverage under any component of
the Program, the extent of access to dependent coverage,
how many children are enrolled in dependent coverage, the
comprehensiveness of dependent coverage benefit packages
available, and the amount of cost sharing currently paid
by the employees.
(b) The Department shall submit the preliminary results
of the study to the Governor and the General Assembly by
December 1, 1998 and shall submit the final results to the
Governor and the General Assembly by May 1, 1999.
Section 50. Program evaluation. The Department shall
conduct 2 evaluations of the effectiveness of the program
implemented under this Act. The first evaluation shall be
for the first 6 full months of implementation, and the
evaluation shall be completed within 90 days after that
period. The second evaluation shall be for the first 12 full
months of implementation and shall be completed within 90
days after that period.
Section 55. Contracts with non-governmental bodies. All
contracts with non-governmental bodies that are determined by
the Department to be necessary for the implementation of this
Section are deemed to be purchase of care as defined in the
Illinois Procurement Code.
Section 60. Emergency rulemaking. Prior to June 30,
1999, the Department may adopt rules necessary to establish
and implement this Section through the use of emergency
rulemaking in accordance with Section 5-45 of the Illinois
Administrative Procedure Act. For purposes of that Act, the
General Assembly finds that the adoption of rules to
implement this Section is deemed an emergency and necessary
for the public interest, safety, and welfare.
Section 96. Inseverability. The provisions of this Act
are mutually dependent and inseverable. If any provision or
its application to any person or circumstance is held
invalid, then this entire Act is invalid.
Section 97. Repealer. This Act is repealed on June 30,
Section 98. The Illinois Health Insurance Portability
and Accountability Act is amended by changing Section 20 as
(215 ILCS 97/20)
Sec. 20. Increased portability through limitation on
preexisting condition exclusions.
(A) Limitation of preexisting condition exclusion
period; crediting for periods of previous coverage. Subject
to subsection (D), a group health plan, and a health
insurance issuer offering group health insurance coverage,
may, with respect to a participant or beneficiary, impose a
preexisting condition exclusion only if:
(1) the exclusion relates to a condition (whether
physical or mental), regardless of the cause of the
condition, for which medical advice, diagnosis, care, or
treatment was recommended or received within the 6-month
period ending on the enrollment date;
(2) the exclusion extends for a period of not more
than 12 months (or 18 months in the case of a late
enrollee) after the enrollment date; and
(3) the period of any such preexisting condition
exclusion is reduced by the aggregate of the periods of
creditable coverage (if any, as defined in subsection
(C)(1)) applicable to the participant or beneficiary as
of the enrollment date.
(B) Preexisting condition exclusion. A group health
plan, and health insurance issuer offering group health
insurance coverage, may not impose any preexisting condition
exclusion relating to pregnancy as a preexisting condition.
Genetic information shall not be treated as a condition
described in subsection (A)(1) in the absence of a diagnosis
of the condition related to such information.
(C) Rules relating to crediting previous coverage.
(1) Creditable coverage defined. For purposes of
this Act, the term "creditable coverage" means, with
respect to an individual, coverage of the individual
under any of the following:
(a) A group health plan.
(b) Health insurance coverage.
(c) Part A or part B of title XVIII of the
Social Security Act.
(d) Title XIX of the Social Security Act,
other than coverage consisting solely of benefits
under Section 1928.
(e) Chapter 55 of title 10, United States
(f) A medical care program of the Indian
Health Service or of a tribal organization.
(g) A State health benefits risk pool.
(h) A health plan offered under chapter 89 of
title 5, United States Code.
(i) A public health plan (as defined in
(j) A health benefit plan under Section 5(e)
of the Peace Corps Act (22 U.S.C. 2504(e)).
(k) Title XXI of the federal Social Security
Act, State Children's Health Insurance Program.
Such term does not include coverage consisting
solely of coverage of excepted benefits.
(2) Excepted benefits. For purposes of this Act,
the term "excepted benefits" means benefits under one or
more of the following:
(a) Benefits not subject to requirements:
(i) Coverage only for accident, or
disability income insurance, or any combination
(ii) Coverage issued as a supplement to
(iii) Liability insurance, including
general liability insurance and automobile
(iv) Workers' compensation or similar
(v) Automobile medical payment insurance.
(vi) Credit-only insurance.
(vii) Coverage for on-site medical
(viii) Other similar insurance coverage,
specified in regulations, under which benefits
for medical care are secondary or incidental to
other insurance benefits.
(b) Benefits not subject to requirements if
(i) Limited scope dental or vision
(ii) Benefits for long-term care, nursing
home care, home health care, community-based
care, or any combination thereof.
(iii) Such other similar, limited
benefits as are specified in rules.
(c) Benefits not subject to requirements if
offered, as independent, noncoordinated benefits:
(i) Coverage only for a specified disease
(ii) Hospital indemnity or other fixed
(d) Benefits not subject to requirements if
offered as separate insurance policy. Medicare
supplemental health insurance (as defined under
Section 1882(g)(1) of the Social Security Act),
coverage supplemental to the coverage provided under
chapter 55 of title 10, United States Code, and
similar supplemental coverage provided to coverage
under a group health plan.
(3) Not counting periods before significant breaks
(a) In general. A period of creditable
coverage shall not be counted, with respect to
enrollment of an individual under a group health
plan, if, after such period and before the
enrollment date, there was a 63- day period during
all of which the individual was not covered under
any creditable coverage.
(b) Waiting period not treated as a break in
coverage. For purposes of subparagraph (a) and
subsection (D)(3), any period that an individual is
in a waiting period for any coverage under a group
health plan (or for group health insurance coverage)
or is in an affiliation period (as defined in
subsection (G)(2)) shall not be taken into account
in determining the continuous period under
(4) Method of crediting coverage.
(a) Standard method. Except as otherwise
provided under subparagraph (b), for purposes of
applying subsection (A)(3), a group health plan, and
a health insurance issuer offering group health
insurance coverage, shall count a period of
creditable coverage without regard to the specific
benefits covered during the period.
(b) Election of alternative method. A group
health plan, or a health insurance issuer offering
group health insurance, may elect to apply
subsection (A)(3) based on coverage of benefits
within each of several classes or categories of
benefits specified in regulations rather than as
provided under subparagraph (a). Such election
shall be made on a uniform basis for all
participants and beneficiaries. Under such election
a group health plan or issuer shall count a period
of creditable coverage with respect to any class or
category of benefits if any level of benefits is
covered within such class or category.
(c) Plan notice. In the case of an election
with respect to a group health plan under
subparagraph (b) (whether or not health insurance
coverage is provided in connection with such plan),
the plan shall:
(i) prominently state in any disclosure
statements concerning the plan, and state to
each enrollee at the time of enrollment under
the plan, that the plan has made such election;
(ii) include in such statements a
description of the effect of this election.
(d) Issuer notice. In the case of an election
under subparagraph (b) with respect to health
insurance coverage offered by an issuer in the small
or large group market, the issuer:
(i) shall prominently state in any
disclosure statements concerning the coverage,
and to each employer at the time of the offer
or sale of the coverage, that the issuer has
made such election; and
(ii) shall include in such statements a
description of the effect of such election.
(5) Establishment of period. Periods of creditable
coverage with respect to an individual shall be
established through presentation or certifications
described in subsection (E) or in such other manner as
may be specified in regulations.
(1) Exclusion not applicable to certain newborns.
Subject to paragraph (3), a group health plan, and a
health insurance issuer offering group health insurance
coverage, may not impose any preexisting condition
exclusion in the case of an individual who, as of the
last day of the 30-day period beginning with the date of
birth, is covered under creditable coverage.
(2) Exclusion not applicable to certain adopted
children. Subject to paragraph (3), a group health plan,
and a health insurance issuer offering group health
insurance coverage, may not impose any preexisting
condition exclusion in the case of a child who is adopted
or placed for adoption before attaining 18 years of age
and who, as of the last day of the 30-day period
beginning on the date of the adoption or placement for
adoption, is covered under creditable coverage.
The previous sentence shall not apply to coverage
before the date of such adoption or placement for
(3) Loss if break in coverage. Paragraphs (1) and
(2) shall no longer apply to an individual after the end
of the first 63-day period during all of which the
individual was not covered under any creditable coverage.
(E) Certifications and disclosure of coverage.
(1) Requirement for Certification of Period of
(a) A group health plan, and a health
insurance issuer offering group health insurance
coverage, shall provide the certification described
in subparagraph (b):
(i) at the time an individual ceases to
be covered under the plan or otherwise becomes
covered under a COBRA continuation provision;
(ii) in the case of an individual
becoming covered under such a provision, at the
time the individual ceases to be covered under
such provision; and
(iii) on the request on behalf of an
individual made not later than 24 months after
the date of cessation of the coverage described
in clause (i) or (ii), whichever is later.
The certification under clause (i) may be provided,
to the extent practicable, at a time consistent with
notices required under any applicable COBRA
(b) The certification described in this
subparagraph is a written certification of:
(i) the period of creditable coverage of
the individual under such plan and the coverage
(if any) under such COBRA continuation
(ii) the waiting period (if any) (and
affiliation period, if applicable) imposed with
respect to the individual for any coverage
under such plan.
(c) To the extent that medical care under a
group health plan consists of group health insurance
coverage, the plan is deemed to have satisfied the
certification requirement under this paragraph if
the health insurance issuer offering the coverage
provides for such certification in accordance with
(2) Disclosure of information on previous benefits.
In the case of an election described in subsection
(C)(4)(b) by a group health plan or health insurance
issuer, if the plan or issuer enrolls an individual for
coverage under the plan and the individual provides a
certification of coverage of the individual under
(a) upon request of such plan or issuer, the
entity which issued the certification provided by
the individual shall promptly disclose to such
requesting plan or issuer information on coverage of
classes and categories of health benefits available
under such entity's plan or coverage; and
(b) such entity may charge the requesting plan
or issuer for the reasonable cost of disclosing such
(3) Rules. The Department shall establish rules to
prevent an entity's failure to provide information under
paragraph (1) or (2) with respect to previous coverage of
an individual from adversely affecting any subsequent
coverage of the individual under another group health
plan or health insurance coverage.
(4) Treatment of certain plans as group health plan
for notice provision. A program under which creditable
coverage described in subparagraph (c), (d), (e), or (f)
of Section 20(C)(1) is provided shall be treated as a
group health plan for purposes of this Section.
(F) Special enrollment periods.
(1) Individuals losing other coverage. A group
health plan, and a health insurance issuer offering group
health insurance coverage in connection with a group
health plan, shall permit an employee who is eligible,
but not enrolled, for coverage under the terms of the
plan (or a dependent of such an employee if the dependent
is eligible, but not enrolled, for coverage under such
terms) to enroll for coverage under the terms of the plan
if each of the following conditions is met:
(a) The employee or dependent was covered
under a group health plan or had health insurance
coverage at the time coverage was previously offered
to the employee or dependent.
(b) The employee stated in writing at such
time that coverage under a group health plan or
health insurance coverage was the reason for
declining enrollment, but only if the plan sponsor
or issuer (if applicable) required such a statement
at such time and provided the employee with notice
of such requirement (and the consequences of such
requirement) at such time.
(c) The employee's or dependent's coverage
described in subparagraph (a):
(i) was under a COBRA continuation
provision and the coverage under such provision
was exhausted; or
(ii) was not under such a provision and
either the coverage was terminated as a result
of loss of eligibility for the coverage
(including as a result of legal separation,
divorce, death, termination of employment, or
reduction in the number of hours of employment)
or employer contributions towards such coverage
(d) Under the terms of the plan, the employee
requests such enrollment not later than 30 days
after the date of exhaustion of coverage described
in subparagraph (c)(i) or termination of coverage or
employer contributions described in subparagraph
(2) For dependent beneficiaries.
(a) In general. If:
(i) a group health plan makes coverage
available with respect to a dependent of an
(ii) the individual is a participant
under the plan (or has met any waiting period
applicable to becoming a participant under the
plan and is eligible to be enrolled under the
plan but for a failure to enroll during a
previous enrollment period), and
(iii) a person becomes such a dependent
of the individual through marriage, birth, or
adoption or placement for adoption,
then the group health plan shall provide for a
dependent special enrollment period described in
subparagraph (b) during which the person (or, if not
otherwise enrolled, the individual) may be enrolled
under the plan as a dependent of the individual, and
in the case of the birth or adoption of a child, the
spouse of the individual may be enrolled as a
dependent of the individual if such spouse is
otherwise eligible for coverage.
(b) Dependent special enrollment period. A
dependent special enrollment period under this
subparagraph shall be a period of not less than 30
days and shall begin on the later of:
(i) the date dependent coverage is made
(ii) the date of the marriage, birth, or
adoption or placement for adoption (as the case
may be) described in subparagraph (a)(iii).
(c) No waiting period. If an individual seeks
to enroll a dependent during the first 30 days of
such a dependent special enrollment period, the
coverage of the dependent shall become effective:
(i) in the case of marriage, not later
than the first day of the first month beginning
after the date the completed request for
enrollment is received;
(ii) in the case of a dependent's birth,
as of the date of such birth; or
(iii) in the case of a dependent's
adoption or placement for adoption, the date of
such adoption or placement for adoption.
(G) Use of affiliation period by HMOs as alternative to
preexisting condition exclusion.
(1) In general. A health maintenance organization
which offers health insurance coverage in connection with
a group health plan and which does not impose any
pre-existing condition exclusion allowed under subsection
(A) with respect to any particular coverage option may
impose an affiliation period for such coverage option,
but only if:
(a) such period is applied uniformly without
regard to any health status-related factors; and
(b) such period does not exceed 2 months (or 3
months in the case of a late enrollee).
(2) Affiliation period.
(a) Defined. For purposes of this Act, the
term "affiliation period" means a period which,
under the terms of the health insurance coverage
offered by the health maintenance organization, must
expire before the health insurance coverage becomes
effective. The organization is not required to
provide health care services or benefits during such
period and no premium shall be charged to the
participant or beneficiary for any coverage during
(b) Beginning. Such period shall begin on the
(c) Runs concurrently with waiting periods.
An affiliation period under a plan shall run
concurrently with any waiting period under the plan.
(3) Alternative methods. A health maintenance
organization described in paragraph (1) may use
alternative methods, from those described in such
paragraph, to address adverse selection as approved by
(Source: P.A. 90-30, eff. 7-1-97.)
Section 99. Effective Date. This Act takes effect upon