093_HB3880

 
                                     LRB093 13159 AMC 18422 b

 1        AN ACT concerning insurance.

 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 6 as follows:

 6        (5 ILCS 375/6) (from Ch. 127, par. 526)
 7        Sec. 6.  Program of health benefits.
 8        (a)  The program of health  benefits  shall  provide  for
 9    protection   against  the  financial  costs  of  health  care
10    expenses incurred in and  out  of  hospital  including  basic
11    hospital-surgical-medical   coverages.   The   program  shall
12    include coverage for hearing evaluations, hearing  aids,  and
13    the  dispensing  and fitting of hearing aids. The program may
14    include, but shall  not  be  limited  to,  such  supplemental
15    coverages  as  out-patient  diagnostic  X-ray  and laboratory
16    expenses,  prescription  drugs,  dental   services,   hearing
17    evaluations,  hearing  aids,  the  dispensing  and fitting of
18    hearing aids, and similar group benefits as are  now  or  may
19    become  available.    However,  nothing  in this Act shall be
20    construed  to  permit,  on  or  after  July  1,   1980,   the
21    non-contributory  portion  of any such program to include the
22    expenses of obtaining an  abortion,  induced  miscarriage  or
23    induced   premature   birth  unless,  in  the  opinion  of  a
24    physician, such procedures are necessary for the preservation
25    of the life of the woman seeking such treatment, or except an
26    induced premature birth intended to  produce  a  live  viable
27    child  and  such procedure is necessary for the health of the
28    mother or the unborn child.  The  program  may  also  include
29    coverage  for  those  who  rely  on  treatment  by  prayer or
30    spiritual means alone for  healing  in  accordance  with  the
31    tenets and practice of a recognized religious denomination.
 
                            -2-      LRB093 13159 AMC 18422 b
 1        The  program  of health benefits shall be designed by the
 2    Director (1) to provide a reasonable relationship between the
 3    benefits to be included  and  the  expected  distribution  of
 4    expenses  of  each  such  type  to be incurred by the covered
 5    members and dependents, (2) to specify, as  covered  benefits
 6    and   as   optional   benefits,   the   medical  services  of
 7    practitioners in all categories licensed  under  the  Medical
 8    Practice  Act  of  1987,  (3) to include reasonable controls,
 9    which may include  deductible  and  co-insurance  provisions,
10    applicable  to some or all of the benefits, or a coordination
11    of benefits provision, to  prevent  or  minimize  unnecessary
12    utilization  of  the  various  hospital, surgical and medical
13    expenses to be provided and to provide  reasonable  assurance
14    of  stability  of the program, and (4) to provide benefits to
15    the extent possible to members throughout the State, wherever
16    located, on an equitable  basis.  Notwithstanding  any  other
17    provision  of  this  Section  or  Act,  for  all  members  or
18    dependents   who  are  eligible  for  benefits  under  Social
19    Security  or  the  Railroad  Retirement  system  or  who  had
20    sufficient  Medicare-covered   government   employment,   the
21    Department  shall  reduce  benefits  which would otherwise be
22    paid by Medicare, by the amount of  benefits  for  which  the
23    member or dependents are eligible under Medicare, except that
24    such  reduction in benefits shall apply only to those members
25    or dependents who (1) first become eligible for such medicare
26    coverage on or after the effective date  of  this  amendatory
27    Act   of  1992;  or  (2)  are  Medicare-eligible  members  or
28    dependents  of  a   local   government   unit   which   began
29    participation in the program on or after July 1, 1992; or (3)
30    remain  eligible  for but no longer receive Medicare coverage
31    which they had been receiving on or after the effective  date
32    of this amendatory Act of 1992.
33        Notwithstanding any other provisions of this Act, where a
34    covered  member or dependents are eligible for benefits under
 
                            -3-      LRB093 13159 AMC 18422 b
 1    the federal Medicare health insurance program (Title XVIII of
 2    the Social Security Act as added by Public  Law  89-97,  89th
 3    Congress),  benefits paid under the State of Illinois program
 4    or plan will be reduced by the amount  of  benefits  paid  by
 5    Medicare.    For  members  or dependents who are eligible for
 6    benefits under Social Security  or  the  Railroad  Retirement
 7    system  or  who  had  sufficient  Medicare-covered government
 8    employment, benefits shall be reduced by the amount for which
 9    the member or dependent is eligible  under  Medicare,  except
10    that  such  reduction  in  benefits shall apply only to those
11    members or dependents who (1) first become eligible for  such
12    Medicare  coverage  on  or  after  the effective date of this
13    amendatory Act of 1992; or (2) are Medicare-eligible  members
14    or   dependents  of  a  local  government  unit  which  began
15    participation in the program on or after July 1, 1992; or (3)
16    remain eligible for, but no longer receive Medicare  coverage
17    which  they had been receiving on or after the effective date
18    of this amendatory Act of 1992.  Premiums  may  be  adjusted,
19    where  applicable,  to an amount deemed by the Director to be
20    reasonably consistent with any reduction of benefits.
21        (b)  A member, not otherwise covered by this Act, who has
22    retired as a participating member  under  Article  2  of  the
23    Illinois  Pension  Code  but is ineligible for the retirement
24    annuity under Section 2-119 of  the  Illinois  Pension  Code,
25    shall pay the premiums for coverage, not exceeding the amount
26    paid by the State for the non-contributory coverage for other
27    members,  under  the group health benefits program under this
28    Act.  The Director shall determine the premiums to be paid by
29    a member under this subsection (b).
30    (Source: P.A. 93-47, eff. 7-1-03.)

31        Section 10.  The Illinois Insurance Code  is  amended  by
32    adding Section 356z.6 as follows:
 
                            -4-      LRB093 13159 AMC 18422 b
 1        (215 ILCS 5/356z.6 new)
 2        Sec. 356z.6.  Coverage for hearing aids.
 3        (a)  An individual or group policy of accident and health
 4    insurance  or  managed  care plan that is amended, delivered,
 5    issued,  or  renewed  after  the  effective  date   of   this
 6    amendatory  Act  of  the  93rd  General Assembly must provide
 7    coverage for the practice of fitting, dispensing,  servicing,
 8    or  sale  of hearing instruments or hearing aids by a hearing
 9    instrument dispenser or other hearing care professional.
10        (b) As used in this Section:
11        "Hearing care professional"  means  a  person  who  is  a
12    licensed   audiologist,   a   licensed   hearing   instrument
13    dispenser, or a licensed physician.
14        "Hearing   instrument"   or   "hearing   aid"  means  any
15    instrument or device designed, intended, or offered  for  the
16    purpose  of  improving  a  person's  hearing  and  any parts,
17    attachments, or accessories, including earmold.    Batteries,
18    cords,  and individual or group auditory training devices and
19    any  instrument  or  device  used  by  a  public  utility  in
20    providing  telephone  or  other  communication  services  are
21    excluded.
22        "Hearing instrument dispenser" means a person  who  is  a
23    hearing  care  professional  that  engages  in  the  selling,
24    practice  of fitting, selecting, recommending, dispensing, or
25    servicing of hearing instruments or the testing for means  of
26    hearing  instrument selection or who advertises or displays a
27    sign or  represents  himself  or  herself  as  a  person  who
28    practices   the   testing,   fitting,  selecting,  servicing,
29    dispensing, or selling of hearing instruments.
30        "Practice of fitting, dispensing, servicing, or  sale  of
31    hearing  instruments"  means the measurement of human hearing
32    with  an  audiometer,  calibrated  to  the  current  American
33    National Standard Institute standards,  for  the  purpose  of
34    making  selections,  recommendations, adaptions, services, or
 
                            -5-      LRB093 13159 AMC 18422 b
 1    sales of hearing instruments including the making of earmolds
 2    as a part of the hearing instrument.
 3        "Sell" or "sale" means any transfer of title  or  of  the
 4    right  to  use  by  lease,  bailment,  or any other contract,
 5    excluding  wholesale  transactions   with   distributors   or
 6    dealers.
 7        (c)  Coverage  under  this  Section may be subject to the
 8    same deductibles or co-payments  generally  applicable  under
 9    the policy or plan.

10        Section  15.  The  Health Maintenance Organization Act is
11    amended by changing Section 5-3 as follows:

12        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
13        Sec. 5-3.  Insurance Code provisions.
14        (a)  Health Maintenance Organizations shall be subject to
15    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
16    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
17    154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v,  356w,  356x,
18    356y,  356z.2,  356z.4, 356z.5, 356z.6, 367.2, 367.2-5, 367i,
19    368a, 368b, 368c, 368d, 368e, 401,  401.1,  402,  403,  403A,
20    408,  408.2,  409,  412,  444,  and  444.1,  paragraph (c) of
21    subsection (2) of Section 367, and Articles  IIA,  VIII  1/2,
22    XII,  XII  1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
23    Insurance Code.
24        (b)  For purposes of the Illinois Insurance Code,  except
25    for  Sections  444  and 444.1 and Articles XIII and XIII 1/2,
26    Health Maintenance Organizations in the following  categories
27    are deemed to be "domestic companies":
28             (1)  a   corporation  authorized  under  the  Dental
29        Service Plan Act or the Voluntary Health  Services  Plans
30        Act;
31             (2)  a  corporation organized under the laws of this
32        State; or
 
                            -6-      LRB093 13159 AMC 18422 b
 1             (3)  a  corporation  organized  under  the  laws  of
 2        another state, 30% or more of the enrollees of which  are
 3        residents  of this State, except a corporation subject to
 4        substantially the  same  requirements  in  its  state  of
 5        organization  as  is  a  "domestic company" under Article
 6        VIII 1/2 of the Illinois Insurance Code.
 7        (c)  In considering the merger, consolidation,  or  other
 8    acquisition  of  control of a Health Maintenance Organization
 9    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
10             (1)  the Director shall give  primary  consideration
11        to  the  continuation  of  benefits  to enrollees and the
12        financial conditions of the acquired  Health  Maintenance
13        Organization  after  the  merger, consolidation, or other
14        acquisition of control takes effect;
15             (2)(i)  the criteria specified in subsection  (1)(b)
16        of Section 131.8 of the Illinois Insurance Code shall not
17        apply  and (ii) the Director, in making his determination
18        with respect  to  the  merger,  consolidation,  or  other
19        acquisition  of  control,  need not take into account the
20        effect on competition of the  merger,  consolidation,  or
21        other acquisition of control;
22             (3)  the  Director  shall  have the power to require
23        the following information:
24                  (A)  certification by an independent actuary of
25             the  adequacy  of  the  reserves   of   the   Health
26             Maintenance Organization sought to be acquired;
27                  (B)  pro  forma financial statements reflecting
28             the combined balance sheets of the acquiring company
29             and the Health Maintenance Organization sought to be
30             acquired as of the end of the preceding year and  as
31             of  a date 90 days prior to the acquisition, as well
32             as  pro  forma   financial   statements   reflecting
33             projected  combined  operation  for  a  period  of 2
34             years;
 
                            -7-      LRB093 13159 AMC 18422 b
 1                  (C)  a pro forma  business  plan  detailing  an
 2             acquiring   party's   plans   with  respect  to  the
 3             operation of  the  Health  Maintenance  Organization
 4             sought  to be acquired for a period of not less than
 5             3 years; and
 6                  (D)  such other  information  as  the  Director
 7             shall require.
 8        (d)  The  provisions  of Article VIII 1/2 of the Illinois
 9    Insurance Code and this Section 5-3 shall apply to  the  sale
10    by any health maintenance organization of greater than 10% of
11    its  enrollee  population  (including  without limitation the
12    health maintenance organization's right, title, and  interest
13    in and to its health care certificates).
14        (e)  In  considering  any  management contract or service
15    agreement subject to Section 141.1 of the Illinois  Insurance
16    Code,  the  Director  (i)  shall, in addition to the criteria
17    specified in Section 141.2 of the  Illinois  Insurance  Code,
18    take  into  account  the effect of the management contract or
19    service  agreement  on  the  continuation  of   benefits   to
20    enrollees   and   the   financial  condition  of  the  health
21    maintenance organization to be managed or serviced, and  (ii)
22    need  not  take  into  account  the  effect of the management
23    contract or service agreement on competition.
24        (f)  Except for small employer groups as defined  in  the
25    Small  Employer  Rating,  Renewability and Portability Health
26    Insurance Act and except for medicare supplement policies  as
27    defined  in  Section  363  of  the Illinois Insurance Code, a
28    Health Maintenance Organization may by contract agree with  a
29    group  or  other  enrollment unit to effect refunds or charge
30    additional premiums under the following terms and conditions:
31             (i)  the amount of, and other terms  and  conditions
32        with respect to, the refund or additional premium are set
33        forth  in the group or enrollment unit contract agreed in
34        advance of the period for which a refund is to be paid or
 
                            -8-      LRB093 13159 AMC 18422 b
 1        additional premium is to be charged (which  period  shall
 2        not be less than one year); and
 3             (ii)  the amount of the refund or additional premium
 4        shall   not   exceed   20%   of  the  Health  Maintenance
 5        Organization's profitable or unprofitable experience with
 6        respect to the group or other  enrollment  unit  for  the
 7        period  (and,  for  purposes  of  a  refund or additional
 8        premium, the profitable or unprofitable experience  shall
 9        be calculated taking into account a pro rata share of the
10        Health   Maintenance  Organization's  administrative  and
11        marketing expenses, but shall not include any  refund  to
12        be made or additional premium to be paid pursuant to this
13        subsection (f)).  The Health Maintenance Organization and
14        the   group   or  enrollment  unit  may  agree  that  the
15        profitable or unprofitable experience may  be  calculated
16        taking into account the refund period and the immediately
17        preceding 2 plan years.
18        The  Health  Maintenance  Organization  shall  include  a
19    statement in the evidence of coverage issued to each enrollee
20    describing the possibility of a refund or additional premium,
21    and  upon request of any group or enrollment unit, provide to
22    the group or enrollment unit a description of the method used
23    to  calculate  (1)  the  Health  Maintenance   Organization's
24    profitable experience with respect to the group or enrollment
25    unit and the resulting refund to the group or enrollment unit
26    or  (2)  the  Health  Maintenance Organization's unprofitable
27    experience with respect to the group or enrollment  unit  and
28    the  resulting  additional premium to be paid by the group or
29    enrollment unit.
30        In  no  event  shall  the  Illinois  Health   Maintenance
31    Organization  Guaranty  Association  be  liable  to  pay  any
32    contractual  obligation  of  an insolvent organization to pay
33    any refund authorized under this Section.
34    (Source: P.A.  92-764,  eff.  1-1-03;  93-102,  eff.  1-1-04;
 
                            -9-      LRB093 13159 AMC 18422 b
 1    93-261,  eff.  1-1-04;  93-477,  eff.  8-8-03;  93-529,  eff.
 2    8-14-03; revised 9-25-03.)

 3        (215 ILCS 165/10) (from Ch. 32, par. 604)
 4        Sec.  10.  Application  of  Insurance  Code   provisions.
 5    Health  services plan corporations and all persons interested
 6    therein  or  dealing  therewith  shall  be  subject  to   the
 7    provisions of Articles IIA and XII 1/2 and Sections 3.1, 133,
 8    140,  143,  143c,  149, 155.37, 354, 355.2, 356r, 356t, 356u,
 9    356v, 356w,  356x,  356y,  356z.1,  356z.2,  356z.4,  356z.5,
10    356z.6,  367.2, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2,
11    and 412, and paragraphs (7) and (15) of Section  367  of  the
12    Illinois Insurance Code.
13    (Source: P.A.  92-130,  eff.  7-20-01;  92-440, eff. 8-17-01;
14    92-651, eff.  7-11-02;  92-764,  eff.  1-1-03;  93-102,  eff.
15    1-1-04; 93-529, eff. 8-14-03; revised 9-25-03.)