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| | 103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024 SB0092 Introduced 1/20/2023, by Sen. Laura Fine SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/355a | from Ch. 73, par. 967a |
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Amends the Illinois Insurance Code. Provides that the Director of Insurance shall issue rules to establish specific standards which may cover, but shall not be limited to, alignment of an accident and health insurance policy's coverage year and deductible year for the purpose of determining patient out-of-pocket cost-sharing limits. Defines "coverage year" and "deductible year".
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| | A BILL FOR |
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1 | | AN ACT concerning regulation.
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2 | | Be it enacted by the People of the State of Illinois,
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3 | | represented in the General Assembly:
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4 | | Section 5. The Illinois Insurance Code is amended by |
5 | | changing Section 355a as follows:
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6 | | (215 ILCS 5/355a) (from Ch. 73, par. 967a)
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7 | | Sec. 355a. Standardization of terms and coverage.
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8 | | (1) The purposes of this Section shall be (a) to provide
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9 | | reasonable standardization and simplification of terms and |
10 | | coverages of
individual accident and health insurance policies |
11 | | to facilitate public
understanding and comparisons; (b) to |
12 | | eliminate provisions contained in
individual accident and |
13 | | health insurance policies which may be
misleading or |
14 | | unreasonably confusing in connection either with the
purchase |
15 | | of such coverages or with the settlement of claims; and (c) to
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16 | | provide for reasonable disclosure in the sale of accident and |
17 | | health
coverages.
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18 | | (2) Definitions applicable to this Section are as follows:
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19 | | (a) "Policy" means all or any part of the forms |
20 | | constituting the
contract between the insurer and the |
21 | | insured, including the policy,
certificate, subscriber |
22 | | contract, riders, endorsements, and the
application if |
23 | | attached, which are subject to filing with and approval
by |
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1 | | the Director.
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2 | | (b) "Service corporations" means
voluntary health and |
3 | | dental
corporations organized and operating respectively |
4 | | under
the Voluntary Health Services Plans Act and
the |
5 | | Dental Service Plan Act.
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6 | | (c) "Accident and health insurance" means insurance |
7 | | written under
Article XX of this Code, other than credit |
8 | | accident and health
insurance, and coverages provided in |
9 | | subscriber contracts issued by
service corporations. For |
10 | | purposes of this Section such service
corporations shall |
11 | | be deemed to be insurers engaged in the business of
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12 | | insurance.
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13 | | (d) "Coverage year" means the 12-month period during |
14 | | which coverage is provided by an accident and health |
15 | | insurance policy. |
16 | | (e) "Deductible year" means the 12-month period used |
17 | | for the purpose of determining the accrual of deductibles |
18 | | and out-of-pocket cost-sharing limits under an accident |
19 | | and health insurance policy. |
20 | | (3) The Director shall issue such rules as he shall deem |
21 | | necessary
or desirable to establish specific standards, |
22 | | including standards of
full and fair disclosure that set forth |
23 | | the form and content and
required disclosure for sale, of |
24 | | individual policies of accident and
health insurance, which |
25 | | rules and regulations shall be in addition to
and in |
26 | | accordance with the applicable laws of this State, and which |
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1 | | may
cover but shall not be limited to: (a) terms of |
2 | | renewability; (b)
initial and subsequent conditions of |
3 | | eligibility; (c) non-duplication of
coverage provisions; (d) |
4 | | coverage of dependents; (e) pre-existing
conditions; (f) |
5 | | termination of insurance; (g) probationary periods; (h)
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6 | | limitation, exceptions, and reductions; (i) elimination |
7 | | periods; (j)
requirements regarding replacements; (k) |
8 | | recurrent conditions; and (l)
the definition of terms, |
9 | | including, but not limited to, the following:
hospital, |
10 | | accident, sickness, injury, physician, accidental means, total
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11 | | disability, partial disability, nervous disorder, guaranteed |
12 | | renewable,
and non-cancellable ; and (m) alignment of an |
13 | | accident and health insurance policy's coverage year and |
14 | | deductible year for the purpose of determining patient |
15 | | out-of-pocket cost-sharing limits .
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16 | | The Director may issue rules that specify prohibited |
17 | | policy
provisions not otherwise specifically authorized by |
18 | | statute which in the
opinion of the Director are unjust, |
19 | | unfair or unfairly discriminatory to
the policyholder, any |
20 | | person insured under the policy, or beneficiary.
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21 | | (4) The Director shall issue such rules as he shall deem |
22 | | necessary
or desirable to establish minimum standards for |
23 | | benefits under each
category of coverage in individual |
24 | | accident and health policies, other
than conversion policies |
25 | | issued pursuant to a contractual conversion
privilege under a |
26 | | group policy, including but not limited to the
following |
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1 | | categories: (a) basic hospital expense coverage; (b) basic
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2 | | medical-surgical expense coverage; (c) hospital confinement |
3 | | indemnity
coverage; (d) major medical expense coverage; (e) |
4 | | disability income
protection coverage; (f) accident only |
5 | | coverage; and (g) specified
disease or specified accident |
6 | | coverage.
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7 | | Nothing in this subsection (4) shall preclude the issuance |
8 | | of any
policy which combines two or more of the categories of |
9 | | coverage
enumerated in subparagraphs (a) through (f) of this |
10 | | subsection.
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11 | | No policy shall be delivered or issued for delivery in |
12 | | this State
which does not meet the prescribed minimum |
13 | | standards for the categories
of coverage listed in this |
14 | | subsection unless the Director finds that
such policy is |
15 | | necessary to meet specific needs of individuals or groups
and |
16 | | such individuals or groups will be adequately informed that |
17 | | such
policy does not meet the prescribed minimum standards, |
18 | | and such policy
meets the requirement that the benefits |
19 | | provided therein are reasonable
in relation to the premium |
20 | | charged. The standards and criteria to be
used by the Director |
21 | | in approving such policies shall be included in the
rules |
22 | | required under this Section with as much specificity as
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23 | | practicable.
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24 | | The Director shall prescribe by rule the method of |
25 | | identification of
policies based upon coverages provided.
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26 | | (5) (a) In order to provide for full and fair disclosure in |
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1 | | the
sale of individual accident and health insurance policies, |
2 | | no such
policy shall be delivered or issued for delivery in |
3 | | this State unless
the outline of coverage described in |
4 | | paragraph (b) of this subsection
either accompanies the |
5 | | policy, or is delivered to the applicant at the
time the |
6 | | application is made, and an acknowledgment signed by the
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7 | | insured, of receipt of delivery of such outline, is provided |
8 | | to the
insurer. In the event the policy is issued on a basis |
9 | | other than that
applied for, the outline of coverage properly |
10 | | describing the policy must
accompany the policy when it is |
11 | | delivered and such outline shall clearly
state that the policy |
12 | | differs, and to what extent, from that for which
application |
13 | | was originally made. All policies, except single premium
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14 | | nonrenewal policies, shall have a notice prominently printed |
15 | | on the
first page of the policy or attached thereto stating in |
16 | | substance, that
the policyholder shall have the right to |
17 | | return the policy within 10 days of its delivery and to have |
18 | | the premium refunded if after
examination of the policy the |
19 | | policyholder is not satisfied for any
reason.
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20 | | (b) The Director shall issue such rules as he shall deem |
21 | | necessary
or desirable to prescribe the format and content of |
22 | | the outline of
coverage required by paragraph (a) of this |
23 | | subsection. "Format" means
style, arrangement, and overall |
24 | | appearance, including such items as the
size, color, and |
25 | | prominence of type and the arrangement of text and
captions. |
26 | | "Content" shall include without limitation thereto,
statements |
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1 | | relating to the particular policy as to the applicable
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2 | | category of coverage prescribed under subsection (4); |
3 | | principal benefits;
exceptions, reductions and limitations; |
4 | | and renewal provisions,
including any reservation by the |
5 | | insurer of a right to change premiums.
Such outline of |
6 | | coverage shall clearly state that it constitutes a
summary of |
7 | | the policy issued or applied for and that the policy should
be |
8 | | consulted to determine governing contractual provisions.
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9 | | (c) (Blank). |
10 | | (d) (Blank). |
11 | | (e) (Blank). |
12 | | (f) (Blank). |
13 | | (6) Prior to the issuance of rules pursuant to this |
14 | | Section, the
Director shall afford the public, including the |
15 | | companies affected
thereby, reasonable opportunity for |
16 | | comment. Such rulemaking is subject
to the provisions of the |
17 | | Illinois Administrative Procedure Act.
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18 | | (7) When a rule has been adopted, pursuant to this |
19 | | Section, all
policies of insurance or subscriber contracts |
20 | | which are not in
compliance with such rule shall, when so |
21 | | provided in such rule, be
deemed to be disapproved as of a date |
22 | | specified in such rule not less
than 120 days following its |
23 | | effective date, without any further or
additional notice other |
24 | | than the adoption of the rule.
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25 | | (8) When a rule adopted pursuant to this Section so |
26 | | provides, a
policy of insurance or subscriber contract which |
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1 | | does not comply with
the rule shall, not less than 120 days |
2 | | from the effective date of such
rule, be construed, and the |
3 | | insurer or service corporation shall be
liable, as if the |
4 | | policy or contract did comply with the rule.
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5 | | (9) Violation of any rule adopted pursuant to this Section |
6 | | shall be
a violation of the insurance law for purposes of |
7 | | Sections 370 and 446 of this
Code.
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8 | | (Source: P.A. 102-775, eff. 5-13-22.)
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