093_HB3580

 
                                     LRB093 02404 JLS 02412 b

 1        AN ACT concerning small employer health insurance.

 2        Be it enacted by the People of  the  State  of  Illinois,
 3    represented in the General Assembly:

 4        Section  5.  The  Small  Employer Health Insurance Rating
 5    Act is amended by changing Section 25 as follows:

 6        (215 ILCS 93/25)
 7        Sec. 25.  Premium Rates.  (a)  Premium rates  for  health
 8    benefit plans subject to this Act shall be established on the
 9    basis  of  community-based  rates  and  not  on  the basis of
10    experience-based rates.  The  Department  shall  issue  rules
11    necessary  to  implement  this Section. subject to all of the
12    following provisions:
13             (1)  The index rate for  a  rating  period  for  any
14        class of business shall not exceed the index rate for any
15        other class of business by more than 20%.
16             (2)  For  a  class  of  business,  the premium rates
17        charged during a rating period to  small  employers  with
18        similar  case  characteristics  for  the  same or similar
19        coverage, or the rates that  could  be  charged  to  such
20        employers  under  the  rating  system  for  that class of
21        business, shall not vary from the index rate by more than
22        25% of the index rate.
23             (3)  The percentage increase  in  the  premium  rate
24        charged to a small employer for a new rating period shall
25        not exceed the sum of the following:
26                  (A)  the  percentage change in the new business
27             premium rate measured from  the  first  day  of  the
28             prior  rating  period  to  the  first day of the new
29             rating period.  In the case of a health benefit plan
30             into which the small employer carrier is  no  longer
31             enrolling  new  small  employers, the small employer
 
                            -2-      LRB093 02404 JLS 02412 b
 1             carrier shall use the percentage change in the  base
 2             premium rate;
 3                  (B)  an  adjustment, not to exceed 15% annually
 4             and adjusted pro rata for  rating  periods  of  less
 5             than  one  year,  due  to  claim  experience, health
 6             status, or duration of coverage of the employees  or
 7             dependents  of the small employer as determined from
 8             the small employer carrier's  rate  manual  for  the
 9             class of business; and
10                  (C)  any  adjustment  due to change in coverage
11             or change in the case characteristics of  the  small
12             employer  as  determined  from  the  small  employer
13             carrier's rate manual for the class of business.
14             (4)  Adjustments  in  rates  for a new rating period
15        due to claim experience, health status  and  duration  of
16        coverage  shall not be charged to individual employees or
17        dependents.   Any  such  adjustment  shall   be   applied
18        uniformly  to  the  rates  charged  for all employees and
19        dependents of the small employer.
20             (5)  In the case of health benefit  plans  delivered
21        or  issued  for  delivery  prior to the effective date of
22        this Act, a premium rate for a rating period  may  exceed
23        the  ranges  set forth in items (1) and (2) of subsection
24        (a) for a period of 3 years following the effective  date
25        of  this  Act.   In such case, the percentage increase in
26        the premium rate charged to a small employer  for  a  new
27        rating period shall not exceed the sum of the following:
28                  (A)  the  percentage change in the new business
29             premium rate measured from  the  first  day  of  the
30             prior  rating  period  to  the  first day of the new
31             rating period; in the case of a  class  of  business
32             into  which  the small employer carrier is no longer
33             enrolling new small  employes,  the  small  employer
34             carrier  shall use the percentage change in the base
 
                            -3-      LRB093 02404 JLS 02412 b
 1             premium rate, provided that  such  change  does  not
 2             exceed, on a percentage basis, the change in the new
 3             business  premium rate for the most similar class of
 4             business into which the small  employer  carrier  is
 5             actively enrolling new small employers; and
 6                  (B)  any  adjustment  due to change in coverage
 7             or change in the case characteristics of  the  small
 8             employer  as  determined  from  the  carrier's  rate
 9             manual for the class of business.
10             (6)  Small  employer  carriers  shall  apply  rating
11        factors,  including  case  characteristics,  consistently
12        with  respect  to  all  small  employers  in  a  class of
13        business. A small employer carrier shall treat all health
14        benefit plans issued or  renewed  in  the  same  calendar
15        month as having the same rating period.
16             (7)  For  the  purposes of this subsection, a health
17        benefit plan that contains a restricted network provision
18        shall not be considered  similar  coverage  to  a  health
19        benefit  plan  that  does  not  contain such a provision,
20        provided that the  restriction  of  benefits  to  network
21        providers  results  in  substantial  differences in claim
22        costs.
23        (b)  A small employer carrier shall not transfer a  small
24    employer involuntarily into or out of a class of business.  A
25    small  employer  carrier  shall not offer to transfer a small
26    employer into or out of a class of business unless such offer
27    is made to transfer all  small  employers  in  the  class  of
28    business   without  regard  to  case  characteristics,  claim
29    experience, health  status  or  duration  of  coverage  since
30    issue.
31    (Source: P.A. 91-510, eff. 1-1-00.)