95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
HB5302

 

Introduced , by Rep. Sara Feigenholtz

 

SYNOPSIS AS INTRODUCED:
 
See Index

    Amends the State Employees Group Insurance Act of 1971, the Illinois Insurance Code, and the Health Maintenance Organization Act. Provides that a health insurer that bases payment for benefits upon a usual or customary charge or other similar reimbursement methodology must disclose certain information. Replaces references to "customary fee" with "customary charge or other similar methodology" throughout the provision. Provides that under no circumstances shall rates paid by Medicaid or Medicare, or rates negotiated or set by the insurer or any other insurer in conjunction with their contracted providers, be used to determine usual and customary charges. Provides that no health insurer shall deny reimbursement for an otherwise covered expense incurred for any drug, device, medical treatment, or procedure, including organ transplantation, solely on the basis that such procedure is deemed experimental or investigational unless certain conditions are present. Makes a corresponding change in the Health Maintenance Organization Act. Adds a new provision requiring a system of health claims appeals and external independent review. Adds a new provision authorizing coverage for wellness coverage. Requires wellness coverage under the State Employees Group Insurance Act of 1971. Repeals a provision concerning the coverage of organ transplantation procedures. In a provision concerning the continuation coverage of health benefits after termination of employment or membership, provides that in the event the employer fails or refuses to provide notice of continuation rights to the employee or member, the insurer is required to mail notice of the continuation rights to the employee or member at the last known address of the employee. Makes other changes.


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FISCAL NOTE ACT MAY APPLY
STATE MANDATES ACT MAY REQUIRE REIMBURSEMENT

 

 

A BILL FOR

 

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1     AN ACT concerning regulation.
 
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 1971
5 is amended by changing Section 6.11 as follows:
 
6     (5 ILCS 375/6.11)
7     Sec. 6.11. Required health benefits; Illinois Insurance
8 Code requirements. The program of health benefits shall provide
9 the post-mastectomy care benefits required to be covered by a
10 policy of accident and health insurance under Section 356t of
11 the Illinois Insurance Code. The program of health benefits
12 shall provide the coverage required under Sections 356g.5,
13 356u, 356w, 356x, 356z.2, 356z.4, 356z.6, and 356z.9, 356z.10,
14 and 356z.12 and 356z.9 of the Illinois Insurance Code. The
15 program of health benefits must comply with Section 155.37 of
16 the Illinois Insurance Code.
17 (Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
18 95-520, eff. 8-28-07; revised 12-4-07.)
 
19     Section 10. The Illinois Insurance Code is amended by
20 changing Sections 355.2, 356K, 357.9, 357.9a, 367, and 367e and
21 by adding Sections 356z.11 and 356z.12 as follows:
 

 

 

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1     (215 ILCS 5/355.2)  (from Ch. 73, par. 967.2)
2     Sec. 355.2. Reimbursement Dental coverage reimbursement
3 rates.
4     (a) A Every company that issues, delivers, amends, or
5 renews any individual or group policy of accident and health
6 insurance on or after the effective date of this amendatory Act
7 of the 95th General Assembly 1991 that provides dental
8 insurance and bases payment for those benefits upon a usual and
9 customary charge or other similar reimbursement methodology
10 fee charged by licensed dentists must disclose all of the
11 following:
12         (1) The frequency of the determination of the usual and
13     customary charge or other similar methodology fee.
14         (2) A general description of the methodology used to
15     determine the usual and customary charge or other similar
16     methodology fees.
17         (3) The percentile of the usual and customary charge or
18     other similar methodology that determines the maximum
19     allowable charge upon which the benefit is based benefit
20     that the company will pay for any dental procedure, if the
21     usual and customary fee is determined by taking a sample of
22     fees submitted on actual claims from licensed dentists and
23     then determining the benefit by selecting a percentile of
24     those fees.
25     (b) The disclosure must be provided upon request to all
26 group and individual policy holders and group certificate

 

 

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1 holders. All proposals for accident and health dental insurance
2 must notify the prospective policy holder that information
3 regarding the usual and customary or other similar methodology
4 fee determinations is available from the insurer. All employee
5 benefit descriptions or supplemental documents must notify the
6 employee that information regarding reimbursement rates is
7 available from the employer.
8     (c) Under no circumstances shall rates paid by Medicaid or
9 Medicare, or rates negotiated or set by the insurer or any
10 other insurer in conjunction with their contracted providers,
11 be used to determine usual and customary charges.
12     (d) For purposes of this Section, the usual and customary
13 charge is the charge for health care that is consistent with
14 the average rate or charge for similar services furnished by
15 similar providers in the geographic area in which services were
16 provided.
17     (e) Under no circumstances shall the amount of
18 reimbursement for covered expenses be less than 50% of the
19 usual and customary charge, or similar reasonable charge when
20 the usual and customary charge can not be calculated, for the
21 services provided.
22     (f) Companies shall make their methodology for determining
23 usual and customary charges available to the Department upon
24 request. Such information shall be held confidential by the
25 Department.
26 (Source: P.A. 87-587.)
 

 

 

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1     (215 ILCS 5/356K)  (from Ch. 73, par. 968K)
2     Sec. 356K. Coverage for Experimental and Investigational
3 Organ Transplantation Procedures.
4     (a) No individual or group policy of accident or and health
5 insurance issued or amended in this state after the effective
6 date of this amendatory Act insurer providing coverage under
7 this Act for hospital or medical expenses shall deny
8 reimbursement for an otherwise covered expense incurred for any
9 drug, device, medical treatment, or procedure, including organ
10 transplantation, procedure solely on the basis that such
11 procedure is deemed experimental or investigational unless:
12         (1) the drug, device, medical treatment, or procedure
13     has not been given approval for marketing by the United
14     States Food and Drug Administration at the time it is
15     furnished and such approval is required by law;
16         (2) except as provided by Section 356y, reliable
17     evidence shows the drug, device, medical treatment, or
18     procedure is the subject of ongoing phase I, II, or III
19     clinical trial or under study to determine its maximum
20     tolerated dose, its toxicity, its safety, its efficacy, or
21     its efficacy as compared with the standard means of
22     treatment or diagnosis; or
23         (3) Reliable evidence shows that the consensus of
24     opinion among experts is that further studies or clinical
25     trials are necessary to determine its maximum tolerated

 

 

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1     dose, its toxicity, its safety, its efficacy, or its
2     efficacy as compared with the standard means of treatment
3     or diagnosis.
4     (b) For the purpose of this Section, "reliable evidence"
5 means published reports and articles and authoritative medical
6 and scientific literature; written protocol or protocols by the
7 treating facility or other facility studying substantially the
8 same drug, device or medical treatment or procedure; or the
9 written informed consent used by the treating facility or other
10 facilities studying substantially the same drug, device, or
11 medical treatment or procedure.
12     (c) This Section does not apply to policies that cover
13 dental care only, short-term travel, accident-only, limited or
14 specified disease policies, or to policies or contracts
15 designed for issuance to persons eligible for coverage under
16 Title XVIII of the Social Security Act, known as Medicare, or
17 any other similar coverage under State or federal governmental
18 plans. supported by the determination of the Office of Health
19 Care Technology Assessment within the Agency for Health Care
20 Policy and Research within the federal Department of Health and
21 Human Services that such procedure is either experimental or
22 investigational or that there is insufficient data or
23 experience to determine whether an organ transplantation
24 procedure is clinically acceptable. If an accident and health
25 insurer has made written request, or had one made on its behalf
26 by a national organization, for determination by the Office of

 

 

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1 Health Care Technology Assessment within the Agency for Health
2 Care Policy and Research within the federal Department of
3 Health and Human Services as to whether a specific organ
4 transplantation procedure is clinically acceptable and said
5 organization fails to respond to such a request within a period
6 of 90 days, the failure to act may be deemed a determination
7 that the procedure is deemed to be experimental or
8 investigational.
9 (Source: P.A. 87-218.)
 
10     (215 ILCS 5/356z.11 new)
11     Sec. 356z.11. Health claims appeals and external
12 independent reviews.
13     (a) No individual or group policy of accident and health
14 insurance, including short-term and long-term disability
15 policies, may be issued, amended, delivered, or renewed in this
16 State after the effective date of this amendatory Act of the
17 95th General Assembly unless the policy contains an appeals
18 procedure as outlined in this Act.
19     (b) When an appeal concerns a decision or action by an
20 insurance company, its employees or subcontractors that
21 relates to: (i) health care services, including, but not
22 limited to, procedures or treatments, for a covered individual
23 with an ongoing course of treatment ordered by a health care
24 provider, the denial of which could significantly increase the
25 risk to the covered individual's health, or (ii) a treatment

 

 

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1 referral, service, procedure, or other health care service, the
2 denial of which could significantly increase the risk to the
3 covered individual's health, the insurance company must allow
4 for the filing of an appeal either orally or in writing. Upon
5 submission of the appeal, the insurance company must notify the
6 party filing the appeal, as soon as possible, but in no event
7 more than 24 hours after the submission of the appeal, of all
8 information that the company requires to evaluate the appeal.
9 The insurance company shall render a decision on the appeal
10 within 24 hours after receipt of the required information. The
11 insurance company shall notify the party filing the appeal and
12 the covered individual and any health care provider who
13 recommended the health care service involved in the appeal of
14 its decision orally followed-up by a written notice of the
15 determination.
16     (c) For all appeals related to health care services
17 including, but not limited to, procedures or treatments for a
18 covered individual and not covered by subsection (b) of this
19 Section, the insurance company shall establish a procedure for
20 the filing of such appeals. Upon submission of an appeal under
21 this subsection, an insurance company must notify the party
22 filing an appeal, within 3 business days, of all information
23 that the plan requires to evaluate the appeal. The insurance
24 company shall render a decision on the appeal within 15
25 business days after receipt of the required information. The
26 insurance company shall notify the party filing the appeal, the

 

 

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1 covered individual, and any health care provider who
2 recommended the health care service involved in the appeal
3 orally of its decision followed-up by a written notice of the
4 determination.
5     (d) An appeal under subsection (b) or (c) of this Section
6 may be filed by the covered individual, the covered
7 individual's designee or guardian, or the covered individual's
8 health care provider. An insurance company shall designate a
9 clinical peer to review appeals, because these appeals pertain
10 to medical or clinical matters and such an appeal must be
11 reviewed by an appropriate health care professional. No one
12 reviewing an appeal may have had any involvement in the initial
13 determination that is the subject of the appeal. The written
14 notice of determination required under subsections (b) and (c)
15 of this Section shall include: (i) clear and detailed reasons
16 for the determination, (ii) the medical or clinical criteria
17 for the determination, which shall be based upon sound clinical
18 evidence and reviewed on a periodic basis, and (iii) in the
19 case of an adverse determination, the procedures for requesting
20 an external independent review under subsection (f) of this
21 Section.
22     (e) If an appeal filed under subsection (b) or (c) of this
23 Section is denied for a reason including, but not limited to,
24 the service, procedure, or treatment is not viewed as medically
25 necessary, denial of specific tests or procedures, denial of
26 referral to specialist physicians or denial of hospitalization

 

 

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1 requests or length of stay requests, any involved party may
2 request an external independent review under subsection (f) of
3 the adverse determination.
4     (f) The party seeking an external independent review shall
5 so notify the insurance company. The insurance company shall
6 seek to resolve all external independent reviews in the most
7 expeditious manner and shall make a determination and provide
8 notice of the determination no more than 24 hours after the
9 receipt of all necessary information when a delay would
10 significantly increase the risk to a covered individual's
11 health or when extended health care services for a covered
12 individual undergoing a course of treatment prescribed by a
13 health care provider are at issue.
14     Within 30 days after the covered individual receives
15 written notice of an adverse determination, if the covered
16 individual decides to initiate an external independent review,
17 the covered individual shall send to the insurance company a
18 written request for an external independent review, including
19 any information or documentation to support the covered
20 individual's request for the covered service or claim for a
21 covered service.
22     Within 30 days after the insurance company receives a
23 request for an external independent review from a covered
24 individual, the health care plan shall:
25         (1) provide a mechanism for joint selection of an
26     external independent reviewer by the covered individual

 

 

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1     and the insurance company; and
2         (2) forward to the independent reviewer all medical
3     records and supporting documentation pertaining to the
4     case, a summary description of the applicable issues
5     including a statement of the insurance company's decision,
6     the criteria used, and the medical and clinical reasons for
7     that decision.
8     Within 5 days after receipt of all necessary information,
9 the independent reviewer shall evaluate and analyze the case
10 and render a decision that is based on whether or not the
11 health care service or claim for the health care service is
12 medically appropriate. The decision by the independent
13 reviewer is final. If the external independent reviewer
14 determines the health care service to be medically appropriate,
15 the insurance company shall pay for the health care service.
16     The health care plan shall be solely responsible for paying
17 the fees of the external independent reviewer who is selected
18 to perform the review.
19     An external independent reviewer who acts in good faith
20 shall have immunity from any civil or criminal liability or
21 professional discipline as a result of acts or omissions with
22 respect to any external independent review, unless the acts or
23 omissions constitute willful or wanton misconduct. For
24 purposes of any proceeding, the good faith of the person
25 participating shall be presumed.
26     Future contractual or employment action by the health care

 

 

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1 plan regarding the patient's physician or other health care
2 provider shall not be based solely on the physician's or other
3 health care provider's participation in this procedure.
4     For the purposes of this Section, an external independent
5 reviewer shall: (i) be a clinical peer; (ii) have no direct
6 financial interest in connection with the case; and (iii) have
7 not been informed of the specific identity of the enrollee.
8     (g) Nothing in this Section shall be construed to require a
9 health care plan to pay for a health care service not covered
10 under the enrollee's certificate of coverage or policy.
11     (h) Nothing in this Section precludes a covered individual,
12 insured, or health care provider from filing a formal complaint
13 with the Department of Insurance in accordance with Section
14 926.40 of Chapter 50 of the Illinois Administrative Code,
15 except that if the claim has been reviewed and a determination
16 has been made by an external independent reviewer as set forth
17 in subsection (f) of this Section, that decision is binding.
 
18     (215 ILCS 5/356z.12 new)
19     Sec. 356z.12. Wellness coverage.
20     (a) A group or individual policy of accident and health
21 insurance or managed care plan amended, delivered, issued, or
22 renewed after the effective date of this amendatory Act of the
23 95th General Assembly, that provides coverage for hospital or
24 medical treatment on an expense incurred basis, may offer a
25 reasonably designed program for wellness coverage. Such

 

 

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1 program may include incentives that allow for a reduction in
2 premiums or for reduced medical, prescription drug or equipment
3 copayments, coinsurance, or deductibles, or a combination of
4 these incentives, for participation in any health behavior
5 wellness, maintenance, or improvement program approved or
6 offered by the insurer or managed care plan. The insured or
7 enrollee may be required to provide evidence of participation
8 in a program.
9     (b) For the purposes of this Section, "reasonably designed
10 program" means a program of wellness coverage that has: (i) a
11 reasonable chance of improving health or preventing disease;
12 (ii) is not overly burdensome; (iii) does not discriminate
13 based on health factors; and (iv) is not otherwise contrary to
14 law.
15     (c) For the purposes of this Section, "wellness coverage"
16 means health care coverage whose primary purpose is to engage
17 and motivate the insured or enrollee through incentives;
18 provision of health education, counseling, and self-management
19 skills; identification of modifiable health risks; and other
20 activities to influence health behavior changes.
21     (d) Incentives as outlined within this Section are specific
22 and unique to the offering of wellness coverage and have no
23 application to any other required or optional health care
24 benefit.
25     (e) A plan offering wellness coverage must give
26 participants the opportunity to qualify for offered incentives

 

 

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1 at least once a year.
2     (f) A plan offering wellness coverage must allow a
3 reasonable alternative to any individual for whom it is
4 unreasonably difficult, due to a medical condition to satisfy
5 otherwise applicable wellness program standards. Plans may
6 seek physician verification that health factors make it
7 unreasonably difficult or medically inadvisable for the
8 participant to satisfy such standards.
9     (g) The total incentive under a wellness program shall not
10 exceed 20% of the cost of employee-only coverage. The cost of
11 employee-only coverage includes both employer and employee
12 contributions. For plans offering family coverage, the 20%
13 limitation applies to the cost of family coverage and applies
14 to the entire family.
 
15     (215 ILCS 5/357.9)  (from Ch. 73, par. 969.9)
16     Sec. 357.9. "TIME OF PAYMENT OF CLAIMS: Indemnities payable
17 under this policy for any loss other than loss for which this
18 policy provides any periodic payment will be paid immediately
19 upon receipt of due written proof of such loss. Subject to due
20 written proof of loss, all accrued indemnities for loss for
21 which this policy provides periodic payment will be paid ....
22 (insert period for payment which must not be less frequently
23 than monthly) and any balance remaining unpaid upon the
24 termination of liability, will be paid immediately upon receipt
25 of due written proof."

 

 

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1     All claims and indemnities payable under the terms of a an
2 individual or group policy of accident and health insurance
3 shall be paid within 30 days following receipt by the insurer
4 of due proof of loss. Failure to pay within such period shall
5 entitle the insured to interest at the rate of 9 per cent per
6 annum from the 30th day after receipt of such proof of loss to
7 the date of late payment, provided that interest amounting to
8 less than one dollar need not be paid. An insured or an
9 insured's assignee shall be notified by the insurer, health
10 maintenance organization, managed care plan, health care plan,
11 preferred provider organization, or third party administrator
12 of any known failure to provide sufficient documentation for a
13 due proof of loss within 30 days after receipt of the claim.
14 Any required interest payments shall be made within 30 days
15 after the payment.
16     The requirements of this Section shall apply to any policy
17 of accident and health insurance delivered, issued for
18 delivery, renewed or amended on or after 180 days following the
19 effective date of this amendatory Act of 1985. The requirements
20 of this Section also shall specifically apply to any group
21 policy of dental insurance only, delivered, issued for
22 delivery, renewed or amended on or after 180 days following the
23 effective date of this amendatory Act of 1987.
24 (Source: P.A. 91-605, eff. 12-14-99.)
 
25     (215 ILCS 5/357.9a)  (from Ch. 73, par. 969.9a)

 

 

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1     Sec. 357.9a. Delay in payment of claims. Periodic payments
2 of accrued indemnities for loss-of-time coverage under
3 individual and group accident and health policies shall
4 commence not later than 30 days after the receipt by the
5 company of the required written proofs of loss. An insurer
6 which violates this Section if liable under said policy, shall
7 pay to the insured, in addition to any other penalty provided
8 for in this Code, interest at the rate of 9% per annum from the
9 30th day after receipt of such proofs of loss to the date of
10 late payment of the accrued indemnities, provided that interest
11 amounting to less than one dollar need not be paid.
12 (Source: P.A. 92-139, eff. 7-24-01.)
 
13     (215 ILCS 5/367)  (from Ch. 73, par. 979)
14     Sec. 367. Group accident and health insurance.
15     (1) Group accident and health insurance is hereby declared
16 to be that form of accident and health insurance covering not
17 less than 2 employees, members, or employees of members,
18 written under a master policy issued to any governmental
19 corporation, unit, agency or department thereof, or to any
20 corporation, copartnership, individual employer, or to any
21 association upon application of an executive officer or trustee
22 of such association having a constitution or bylaws and formed
23 in good faith for purposes other than that of obtaining
24 insurance, where officers, members, employees, employees of
25 members or classes or department thereof, may be insured for

 

 

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1 their individual benefit. In addition a group accident and
2 health policy may be written to insure any group which may be
3 insured under a group life insurance policy. The term
4 "employees" shall include the officers, managers and employees
5 of subsidiary or affiliated corporations, and the individual
6 proprietors, partners and employees of affiliated individuals
7 and firms, when the business of such subsidiary or affiliated
8 corporations, firms or individuals, is controlled by a common
9 employer through stock ownership, contract or otherwise.
10     (2) Any insurance company authorized to write accident and
11 health insurance in this State shall have power to issue group
12 accident and health policies. No policy of group accident and
13 health insurance may be issued or delivered in this State
14 unless a copy of the form thereof shall have been filed with
15 the department and approved by it in accordance with Section
16 355, and it contains in substance those provisions contained in
17 Sections 357.1 through 357.30 as may be applicable to group
18 accident and health insurance and the following provisions:
19         (a) A provision that the policy, the application of the
20     employer, or executive officer or trustee of any
21     association, and the individual applications, if any, of
22     the employees, members or employees of members insured
23     shall constitute the entire contract between the parties,
24     and that all statements made by the employer, or the
25     executive officer or trustee, or by the individual
26     employees, members or employees of members shall (in the

 

 

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1     absence of fraud) be deemed representations and not
2     warranties, and that no such statement shall be used in
3     defense to a claim under the policy, unless it is contained
4     in a written application.
5         (b) A provision that the insurer will issue to the
6     employer, or to the executive officer or trustee of the
7     association, for delivery to the employee, member or
8     employee of a member, who is insured under such policy, an
9     individual certificate setting forth a statement as to the
10     insurance protection to which he is entitled and to whom
11     payable.
12         (c) A provision that to the group or class thereof
13     originally insured shall be added from time to time all new
14     employees of the employer, members of the association or
15     employees of members eligible to and applying for insurance
16     in such group or class.
17     (3) Anything in this code to the contrary notwithstanding,
18 any group accident and health policy may provide that all or
19 any portion of any indemnities provided by any such policy on
20 account of hospital, nursing, medical or surgical services,
21 may, at the insurer's option, be paid directly to the hospital
22 or person rendering such services; but the policy may not
23 require that the service be rendered by a particular hospital
24 or person. Payment so made shall discharge the insurer's
25 obligation with respect to the amount of insurance so paid.
26 Nothing in this subsection (3) shall prohibit an insurer from

 

 

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1 providing incentives for insureds to utilize the services of a
2 particular hospital or person.
3     (4) Special group policies may be issued to school
4 districts providing medical or hospital service, or both, for
5 pupils of the district injured while participating in any
6 athletic activity under the jurisdiction of or sponsored or
7 controlled by the district or the authorities of any school
8 thereof. The provisions of this Section governing the issuance
9 of group accident and health insurance shall, insofar as
10 applicable, control the issuance of such policies issued to
11 schools.
12     (5) No policy of group accident and health insurance may be
13 issued or delivered in this State unless it provides that upon
14 the death of the insured employee or group member the
15 dependents' coverage, if any, continues for a period of at
16 least 90 days subject to any other policy provisions relating
17 to termination of dependents' coverage.
18     (6) No group hospital policy covering miscellaneous
19 hospital expenses issued or delivered in this State shall
20 contain any exception or exclusion from coverage which would
21 preclude the payment of expenses incurred for the processing
22 and administration of blood and its components.
23     (7) No policy of group accident and health insurance,
24 delivered in this State more than 120 days after the effective
25 day of the Section, which provides inpatient hospital coverage
26 for sicknesses shall exclude from such coverage the treatment

 

 

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1 of alcoholism. This subsection shall not apply to a policy
2 which covers only specified sicknesses.
3     (8) No policy of group accident and health insurance, which
4 provides benefits for hospital or medical expenses based upon
5 the actual expenses incurred, issued or delivered in this State
6 shall contain any specific exception to coverage which would
7 preclude the payment of actual expenses incurred in the
8 examination and testing of a victim of an offense defined in
9 Sections 12-13 through 12-16 of the Criminal Code of 1961, or
10 an attempt to commit such offense, to establish that sexual
11 contact did occur or did not occur, and to establish the
12 presence or absence of sexually transmitted disease or
13 infection, and examination and treatment of injuries and trauma
14 sustained by the victim of such offense, arising out of the
15 offense. Every group policy of accident and health insurance
16 which specifically provides benefits for routine physical
17 examinations shall provide full coverage for expenses incurred
18 in the examination and testing of a victim of an offense
19 defined in Sections 12-13 through 12-16 of the Criminal Code of
20 1961, or an attempt to commit such offense, as set forth in
21 this Section. This subsection shall not apply to a policy which
22 covers hospital and medical expenses for specified illnesses
23 and injuries only.
24     (9) For purposes of enabling the recovery of State funds,
25 any insurance carrier subject to this Section shall upon
26 reasonable demand by the Department of Public Health disclose

 

 

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1 the names and identities of its insureds entitled to benefits
2 under this provision to the Department of Public Health
3 whenever the Department of Public Health has determined that it
4 has paid, or is about to pay, hospital or medical expenses for
5 which an insurance carrier is liable under this Section. All
6 information received by the Department of Public Health under
7 this provision shall be held on a confidential basis and shall
8 not be subject to subpoena and shall not be made public by the
9 Department of Public Health or used for any purpose other than
10 that authorized by this Section.
11     (10) Whenever the Department of Public Health finds that it
12 has paid all or part of any hospital or medical expenses which
13 an insurance carrier is obligated to pay under this Section,
14 the Department of Public Health shall be entitled to receive
15 reimbursement for its payments from such insurance carrier
16 provided that the Department of Public Health has notified the
17 insurance carrier of its claim before the carrier has paid the
18 benefits to its insureds or the insureds' assignees.
19     (11) (a) No group hospital, medical or surgical expense
20     policy shall contain any provision whereby benefits
21     otherwise payable thereunder are subject to reduction
22     solely on account of the existence of similar benefits
23     provided under other group or group-type accident and
24     sickness insurance policies where such reduction would
25     operate to reduce total benefits payable under these
26     policies below an amount equal to 100% of total allowable

 

 

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1     expenses provided under these policies.
2         (b) When dependents of insureds are covered under 2
3     policies, both of which contain coordination of benefits
4     provisions, benefits of the policy of the insured whose
5     birthday falls earlier in the year are determined before
6     those of the policy of the insured whose birthday falls
7     later in the year. Birthday, as used herein, refers only to
8     the month and day in a calendar year, not the year in which
9     the person was born. The Department of Insurance shall
10     promulgate rules defining the order of benefit
11     determination pursuant to this paragraph (b).
12     (12) Every group policy under this Section shall be subject
13 to the provisions of Sections 356g and 356n of this Code.
14     (13) (Blank). No accident and health insurer providing
15 coverage for hospital or medical expenses on an expense
16 incurred basis shall deny reimbursement for an otherwise
17 covered expense incurred for any organ transplantation
18 procedure solely on the basis that such procedure is deemed
19 experimental or investigational unless supported by the
20 determination of the Office of Health Care Technology
21 Assessment within the Agency for Health Care Policy and
22 Research within the federal Department of Health and Human
23 Services that such procedure is either experimental or
24 investigational or that there is insufficient data or
25 experience to determine whether an organ transplantation
26 procedure is clinically acceptable. If an accident and health

 

 

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1 insurer has made written request, or had one made on its behalf
2 by a national organization, for determination by the Office of
3 Health Care Technology Assessment within the Agency for Health
4 Care Policy and Research within the federal Department of
5 Health and Human Services as to whether a specific organ
6 transplantation procedure is clinically acceptable and said
7 organization fails to respond to such a request within a period
8 of 90 days, the failure to act may be deemed a determination
9 that the procedure is deemed to be experimental or
10 investigational.
11     (14) Whenever a claim for benefits by an insured under a
12 dental prepayment program is denied or reduced, based on the
13 review of x-ray films, such review must be performed by a
14 dentist.
15 (Source: P.A. 91-549, eff. 8-14-99.)
 
16     (215 ILCS 5/367e)  (from Ch. 73, par. 979e)
17     Sec. 367e. Continuation of Group Hospital, Surgical and
18 Major Medical Coverage After Termination of Employment or
19 Membership. A group policy delivered, issued for delivery,
20 renewed or amended in this state which insures employees or
21 members for hospital, surgical or major medical insurance on an
22 expense incurred or service basis, other than for specific
23 diseases or for accidental injuries only, shall provide that
24 employees or members whose insurance under the group policy
25 would otherwise terminate because of termination of employment

 

 

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1 or membership or because of a reduction in hours below the
2 minimum required by the group plan shall be entitled to
3 continue their hospital, surgical and major medical insurance
4 under that group policy, for themselves and their eligible
5 dependents, subject to all of the group policy's terms and
6 conditions applicable to those forms of insurance and to the
7 following conditions:
8         1. Continuation shall only be available to an employee
9     or member who has been continuously insured under the group
10     policy (and for similar benefits under any group policy
11     which it replaced) during the entire 3 months period ending
12     with such termination or reduction in hours below the
13     minimum required by the group plan.
14         2. Continuation shall not be available for any person
15     who is covered by Medicare, except for those individuals
16     who have been covered under a group Medicare supplement
17     policy. Neither shall continuation be available for any
18     person who is covered by any other insured or uninsured
19     plan which provides hospital, surgical or medical coverage
20     for individuals in a group and under which the person was
21     not covered immediately prior to such termination or
22     reduction in hours below the minimum required by the group
23     plan or who exercises his conversion privilege under the
24     group policy.
25         3. Continuation need not include dental, vision care,
26     prescription drug benefits, disability income, specified

 

 

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1     disease, or similar supplementary benefits which are
2     provided under the group policy in addition to its
3     hospital, surgical or major medical benefits.
4         4. Upon termination or reduction in hours below the
5     minimum required by the group plan written notice of
6     continuation shall be presented to the employee or member
7     and the insurer by the employer or mailed by the employer
8     to the last known address of the employee. An employee or
9     member who wishes continuation of coverage must request
10     such continuation in writing within the ten-day period
11     following the later of: (i) the date of such termination or
12     reduction in hours below the minimum required by the group
13     plan, or (ii) the date the employee is given written notice
14     of the right of continuation by either the employer or the
15     group policyholder. In no event, however, may the employee
16     or member elect continuation more than 60 days after the
17     date of such termination or reduction in hours below the
18     minimum required by the group plan. Written notice of
19     continuation presented to the employee or member by the
20     policyholder, or mailed by the policyholder to the last
21     known address of the employee, shall constitute the giving
22     of notice for the purpose of this provision. In the event
23     the employer fails or refuses to provide notice of
24     continuation rights to the employee or member, the insurer
25     is required to mail notice of the continuation rights to
26     the employee or member at the last known address of the

 

 

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1     employee. In the event the employee or member contacts the
2     insurer regarding continuation rights and advises that
3     notice has not been provided by the employer or group
4     policyholder, the insurer shall mail out notice to that
5     individual.
6         5. An employee or member electing continuation must pay
7     to the group policyholder or his employer, on a monthly
8     basis in advance, the total amount of premium required by
9     the insurer, including that portion of the premium
10     contributed by the policyholder or employer, if any, but
11     not more than the group rate for the insurance being
12     continued with appropriate reduction in premium for any
13     supplementary benefits which have been discontinued under
14     paragraph (3) of this Section. The premium rate required by
15     the insurer shall be the applicable premium required on the
16     due date of each payment.
17         6. Continuation of insurance under the group policy for
18     any person shall terminate when he becomes eligible for
19     Medicare or is covered by any other insured or uninsured
20     plan which provides hospital, surgical or medical coverage
21     for individuals in a group and under which the person was
22     not covered immediately prior to such termination or
23     reduction in hours below the minimum required by the group
24     plan as provided in condition 2 above or, if earlier, at
25     the first to occur of the following:
26             (a) The date 9 months after the date the employee's

 

 

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1         or member's insurance under the policy would otherwise
2         have terminated because of termination of employment
3         or membership or reduction in hours below the minimum
4         required by the group plan.
5             (b) If the employee or member fails to make timely
6         payment of a required contribution, the end of the
7         period for which contributions were made.
8             (c) The date on which the group policy is
9         terminated or, in the case of an employee, the date his
10         employer terminates participation under the group
11         policy. However, if this (c) applies and the coverage
12         ceasing by reason of such termination is replaced by
13         similar coverage under another group policy, the
14         following shall apply:
15                 (i) The employee or member shall have the right
16             to become covered under that other group policy,
17             for the balance of the period that he would have
18             remained covered under the prior group policy in
19             accordance with condition 6 had a termination
20             described in this (c) not occurred.
21                 (ii) The prior group policy shall continue to
22             provide benefits to the extent of its accrued
23             liabilities and extensions of benefits as if the
24             replacement had not occurred.
25         7. A notification of the continuation privilege shall
26     be included in each certificate of coverage.

 

 

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1         8. Continuation shall not be available for any employee
2     who was discharged because of the commission of a felony in
3     connection with his work, or because of theft in connection
4     with his work, for which the employer was in no way
5     responsible; provided the employee admitted his commission
6     of the felony or theft or such act has resulted in a
7     conviction or order of supervision by a court of competent
8     jurisdiction.
9     The requirements of this amendatory Act of 1983 shall apply
10 to any group policy as defined in this Section, delivered or
11 issued for delivery on or after 180 days following the
12 effective date of this amendatory Act of 1983.
13     The requirements of this amendatory Act of 1985 shall apply
14 to any group policy as defined in this Section, delivered,
15 issued for delivery, renewed or amended on or after 180 days
16 following the effective date of this amendatory Act of 1985.
17 (Source: P.A. 93-477, eff. 1-1-04.)
 
18     Section 15. The Health Maintenance Organization Act is
19 amended by changing Section 5-3 as follows:
 
20     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
21     Sec. 5-3. Insurance Code provisions.
22     (a) Health Maintenance Organizations shall be subject to
23 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
24 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,

 

 

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1 154.6, 154.7, 154.8, 155.04, 355.2, 356k, 356m, 356v, 356w,
2 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
3 356z.10, 356z.12 356z.9, 364.01, 367.2, 367.2-5, 367i, 368a,
4 368b, 368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408,
5 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection
6 (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2,
7 XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
8     (b) For purposes of the Illinois Insurance Code, except for
9 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
10 Maintenance Organizations in the following categories are
11 deemed to be "domestic companies":
12         (1) a corporation authorized under the Dental Service
13     Plan Act or the Voluntary Health Services Plans Act;
14         (2) a corporation organized under the laws of this
15     State; or
16         (3) a corporation organized under the laws of another
17     state, 30% or more of the enrollees of which are residents
18     of this State, except a corporation subject to
19     substantially the same requirements in its state of
20     organization as is a "domestic company" under Article VIII
21     1/2 of the Illinois Insurance Code.
22     (c) In considering the merger, consolidation, or other
23 acquisition of control of a Health Maintenance Organization
24 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
25         (1) the Director shall give primary consideration to
26     the continuation of benefits to enrollees and the financial

 

 

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1     conditions of the acquired Health Maintenance Organization
2     after the merger, consolidation, or other acquisition of
3     control takes effect;
4         (2)(i) the criteria specified in subsection (1)(b) of
5     Section 131.8 of the Illinois Insurance Code shall not
6     apply and (ii) the Director, in making his determination
7     with respect to the merger, consolidation, or other
8     acquisition of control, need not take into account the
9     effect on competition of the merger, consolidation, or
10     other acquisition of control;
11         (3) the Director shall have the power to require the
12     following information:
13             (A) certification by an independent actuary of the
14         adequacy of the reserves of the Health Maintenance
15         Organization sought to be acquired;
16             (B) pro forma financial statements reflecting the
17         combined balance sheets of the acquiring company and
18         the Health Maintenance Organization sought to be
19         acquired as of the end of the preceding year and as of
20         a date 90 days prior to the acquisition, as well as pro
21         forma financial statements reflecting projected
22         combined operation for a period of 2 years;
23             (C) a pro forma business plan detailing an
24         acquiring party's plans with respect to the operation
25         of the Health Maintenance Organization sought to be
26         acquired for a period of not less than 3 years; and

 

 

HB5302 - 30 - LRB095 19109 KBJ 45318 b

1             (D) such other information as the Director shall
2         require.
3     (d) The provisions of Article VIII 1/2 of the Illinois
4 Insurance Code and this Section 5-3 shall apply to the sale by
5 any health maintenance organization of greater than 10% of its
6 enrollee population (including without limitation the health
7 maintenance organization's right, title, and interest in and to
8 its health care certificates).
9     (e) In considering any management contract or service
10 agreement subject to Section 141.1 of the Illinois Insurance
11 Code, the Director (i) shall, in addition to the criteria
12 specified in Section 141.2 of the Illinois Insurance Code, take
13 into account the effect of the management contract or service
14 agreement on the continuation of benefits to enrollees and the
15 financial condition of the health maintenance organization to
16 be managed or serviced, and (ii) need not take into account the
17 effect of the management contract or service agreement on
18 competition.
19     (f) Except for small employer groups as defined in the
20 Small Employer Rating, Renewability and Portability Health
21 Insurance Act and except for medicare supplement policies as
22 defined in Section 363 of the Illinois Insurance Code, a Health
23 Maintenance Organization may by contract agree with a group or
24 other enrollment unit to effect refunds or charge additional
25 premiums under the following terms and conditions:
26         (i) the amount of, and other terms and conditions with

 

 

HB5302 - 31 - LRB095 19109 KBJ 45318 b

1     respect to, the refund or additional premium are set forth
2     in the group or enrollment unit contract agreed in advance
3     of the period for which a refund is to be paid or
4     additional premium is to be charged (which period shall not
5     be less than one year); and
6         (ii) the amount of the refund or additional premium
7     shall not exceed 20% of the Health Maintenance
8     Organization's profitable or unprofitable experience with
9     respect to the group or other enrollment unit for the
10     period (and, for purposes of a refund or additional
11     premium, the profitable or unprofitable experience shall
12     be calculated taking into account a pro rata share of the
13     Health Maintenance Organization's administrative and
14     marketing expenses, but shall not include any refund to be
15     made or additional premium to be paid pursuant to this
16     subsection (f)). The Health Maintenance Organization and
17     the group or enrollment unit may agree that the profitable
18     or unprofitable experience may be calculated taking into
19     account the refund period and the immediately preceding 2
20     plan years.
21     The Health Maintenance Organization shall include a
22 statement in the evidence of coverage issued to each enrollee
23 describing the possibility of a refund or additional premium,
24 and upon request of any group or enrollment unit, provide to
25 the group or enrollment unit a description of the method used
26 to calculate (1) the Health Maintenance Organization's

 

 

HB5302 - 32 - LRB095 19109 KBJ 45318 b

1 profitable experience with respect to the group or enrollment
2 unit and the resulting refund to the group or enrollment unit
3 or (2) the Health Maintenance Organization's unprofitable
4 experience with respect to the group or enrollment unit and the
5 resulting additional premium to be paid by the group or
6 enrollment unit.
7     In no event shall the Illinois Health Maintenance
8 Organization Guaranty Association be liable to pay any
9 contractual obligation of an insolvent organization to pay any
10 refund authorized under this Section.
11 (Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
12 95-422, eff. 8-24-07; 95-520, eff. 8-28-07; revised 12-4-07.)
 
13     (215 ILCS 125/4-5 rep.)
14     Section 20. The Health Maintenance Organization Act is
15 amended by repealing Section 4-5.

 

 

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1 INDEX
2 Statutes amended in order of appearance
3     5 ILCS 375/6.11
4     215 ILCS 5/355.2 from Ch. 73, par. 967.2
5     215 ILCS 5/356K from Ch. 73, par. 968K
6     215 ILCS 5/356z.11 new
7     215 ILCS 5/356z.12 new
8     215 ILCS 5/357.9 from Ch. 73, par. 969.9
9     215 ILCS 5/357.9a from Ch. 73, par. 969.9a
10     215 ILCS 5/367 from Ch. 73, par. 979
11     215 ILCS 5/367e from Ch. 73, par. 979e
12     215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
13     215 ILCS 125/4-5 rep.