96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
HB5142

 

Introduced 1/29/2010, by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/356z.14
215 ILCS 5/370c   from Ch. 73, par. 982c
215 ILCS 5/370c.1 new
215 ILCS 125/5-3   from Ch. 111 1/2, par. 1411.2

    Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that coverage for autism spectrum disorders shall be subject to the parity requirements of the provision concerning mental health parity. Provides that an accident and health policy or managed care plan must provide a minimum (instead of a maximum) benefit of $36,000 per year. Deletes language concerning copayments, deductibles, and limits. Provides that every insurer that issues an accident and health policy that provides coverage for hospital or medical treatment, and for the treatment of mental, emotional, nervous, or substance use disorders shall ensure that the financial requirements and treatment limitations for such coverage are no more restrictive than the requirements and limitations applied to substantially all hospital and medical benefits covered by the policy. Contains a nonacceleration clause. Makes other changes. Effective immediately.


LRB096 18809 RPM 34195 b

 

 

A BILL FOR

 

HB5142 LRB096 18809 RPM 34195 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 Illinois Insurance Code is amended by
5 changing Sections 356z.14 and 370c and by adding Sections
6 370c.1 and 370c as follows:
 
7     (215 ILCS 5/356z.14)
8     Sec. 356z.14. Autism spectrum disorders.
9     (a) A group or individual policy of accident and health
10 insurance or managed care plan amended, delivered, issued, or
11 renewed after the effective date of this amendatory Act of the
12 95th General Assembly must provide individuals under 21 years
13 of age coverage for the diagnosis of autism spectrum disorders
14 and for the treatment of autism spectrum disorders to the
15 extent that the diagnosis and treatment of autism spectrum
16 disorders are not already covered by the policy of accident and
17 health insurance or managed care plan.
18     (b) Coverage provided under this Section through a group or
19 individual policy of accident and health insurance or managed
20 care plan shall be subject to the parity requirements of
21 Section 370c.1 of this Code. A group or individual policy of
22 accident and health insurance or managed care plan amended,
23 delivered, issued, or renewed on or after the effective date of

 

 

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1 this amendatory Act of the 96th General Assembly must provide a
2 minimum maximum benefit of $36,000 per year, but shall not be
3 subject to any limits on the number of visits to a service
4 provider. After December 30, 2009, the Director of the
5 Department Division of Insurance shall, on an annual basis,
6 adjust the minimum maximum benefit for inflation using the
7 Medical Care Component of the United States Department of Labor
8 Consumer Price Index for All Urban Consumers. Payments made by
9 an insurer on behalf of a covered individual for any care,
10 treatment, intervention, service, or item, the provision of
11 which was for the treatment of a health condition not diagnosed
12 as an autism spectrum disorder, shall not be applied toward any
13 minimum maximum benefit established under this subsection.
14     (c) (Blank). Coverage under this Section shall be subject
15 to copayment, deductible, and coinsurance provisions of a
16 policy of accident and health insurance or managed care plan to
17 the extent that other medical services covered by the policy of
18 accident and health insurance or managed care plan are subject
19 to these provisions.
20     (d) This Section shall not be construed as limiting
21 benefits that are otherwise available to an individual under a
22 policy of accident and health insurance or managed care plan
23 and benefits provided under this Section may not be subject to
24 dollar limits, deductibles, copayments, or coinsurance
25 provisions that are less favorable to the insured than the
26 dollar limits, deductibles, or coinsurance provisions that

 

 

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1 apply to physical illness generally.
2     (e) An insurer may not deny or refuse to provide otherwise
3 covered services, or refuse to renew, refuse to reissue, or
4 otherwise terminate or restrict coverage under an individual
5 contract to provide services to an individual because the
6 individual or their dependent is diagnosed with an autism
7 spectrum disorder or due to the individual utilizing benefits
8 in this Section.
9     (f) Upon request of the reimbursing insurer, a provider of
10 treatment for autism spectrum disorders shall furnish medical
11 records, clinical notes, or other necessary data that
12 substantiate that initial or continued medical treatment is
13 medically necessary and is resulting in improved clinical
14 status. When treatment is anticipated to require continued
15 services to achieve demonstrable progress, the insurer may
16 request a treatment plan consisting of diagnosis, proposed
17 treatment by type, frequency, anticipated duration of
18 treatment, the anticipated outcomes stated as goals, and the
19 frequency by which the treatment plan will be updated.
20     (g) When making a determination of medical necessity for a
21 treatment modality for autism spectrum disorders, an insurer
22 must make the determination in a manner that is consistent with
23 the manner used to make that determination with respect to
24 other diseases or illnesses covered under the policy, including
25 an appeals process. During the appeals process, any challenge
26 to medical necessity must be viewed as reasonable only if the

 

 

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1 review includes a physician with expertise in the most current
2 and effective treatment modalities for autism spectrum
3 disorders.
4     (h) Coverage for medically necessary early intervention
5 services must be delivered by certified early intervention
6 specialists, as defined in 89 Ill. Admin. Code 500 and any
7 subsequent amendments thereto.
8     (i) As used in this Section:
9     "Autism spectrum disorders" means pervasive developmental
10 disorders as defined in the most recent edition of the
11 Diagnostic and Statistical Manual of Mental Disorders,
12 including autism, Asperger's disorder, and pervasive
13 developmental disorder not otherwise specified.
14     "Diagnosis of autism spectrum disorders" means one or more
15 tests, evaluations, or assessments to diagnose whether an
16 individual has autism spectrum disorder that is prescribed,
17 performed, or ordered by (A) a physician licensed to practice
18 medicine in all its branches or (B) a licensed clinical
19 psychologist with expertise in diagnosing autism spectrum
20 disorders.
21     "Medically necessary" means any care, treatment,
22 intervention, service or item which will or is reasonably
23 expected to do any of the following: (i) prevent the onset of
24 an illness, condition, injury, disease or disability; (ii)
25 reduce or ameliorate the physical, mental or developmental
26 effects of an illness, condition, injury, disease or

 

 

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1 disability; or (iii) assist to achieve or maintain maximum
2 functional activity in performing daily activities.
3     "Treatment for autism spectrum disorders" shall include
4 the following care prescribed, provided, or ordered for an
5 individual diagnosed with an autism spectrum disorder by (A) a
6 physician licensed to practice medicine in all its branches or
7 (B) a certified, registered, or licensed health care
8 professional with expertise in treating effects of autism
9 spectrum disorders when the care is determined to be medically
10 necessary and ordered by a physician licensed to practice
11 medicine in all its branches:
12         (1) Psychiatric care, meaning direct, consultative, or
13     diagnostic services provided by a licensed psychiatrist.
14         (2) Psychological care, meaning direct or consultative
15     services provided by a licensed psychologist.
16         (3) Habilitative or rehabilitative care, meaning
17     professional, counseling, and guidance services and
18     treatment programs, including applied behavior analysis,
19     that are intended to develop, maintain, and restore the
20     functioning of an individual. As used in this subsection
21     (i), "applied behavior analysis" means the design,
22     implementation, and evaluation of environmental
23     modifications using behavioral stimuli and consequences to
24     produce socially significant improvement in human
25     behavior, including the use of direct observation,
26     measurement, and functional analysis of the relations

 

 

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1     between environment and behavior.
2         (4) Therapeutic care, including behavioral, speech,
3     occupational, and physical therapies that provide
4     treatment in the following areas: (i) self care and
5     feeding, (ii) pragmatic, receptive, and expressive
6     language, (iii) cognitive functioning, (iv) applied
7     behavior analysis, intervention, and modification, (v)
8     motor planning, and (vi) sensory processing.
9     (j) Rulemaking authority to implement this amendatory Act
10 of the 95th General Assembly, if any, is conditioned on the
11 rules being adopted in accordance with all provisions of the
12 Illinois Administrative Procedure Act and all rules and
13 procedures of the Joint Committee on Administrative Rules; any
14 purported rule not so adopted, for whatever reason, is
15 unauthorized.
16 (Source: P.A. 95-1005, eff. 12-12-08.)
 
17     (215 ILCS 5/370c)  (from Ch. 73, par. 982c)
18     Sec. 370c. Mental and emotional disorders.
19     (a) (1) On and after the effective date of this amendatory
20 Act of the 96th General Assembly Section, every insurer which
21 amends, delivers, issues, or renews delivers, issues for
22 delivery or renews or modifies group accident and health A&H
23 policies providing coverage for hospital or medical treatment
24 or services for illness on an expense-incurred basis shall
25 offer to the applicant or group policyholder subject to the

 

 

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1 insurers standards of insurability, coverage for reasonable
2 and necessary treatment and services for mental, emotional or
3 nervous disorders or conditions, other than serious mental
4 illnesses as defined in item (2) of subsection (b) consistent
5 with the parity requirements of section 370c.1 , up to the
6 limits provided in the policy for other disorders or
7 conditions, except (i) the insured may be required to pay up to
8 50% of expenses incurred as a result of the treatment or
9 services, and (ii) the annual benefit limit may be limited to
10 the lesser of $10,000 or 25% of the lifetime policy limit.
11     (2) Each insured that is covered for mental, emotional or
12 nervous disorders or conditions shall be free to select the
13 physician licensed to practice medicine in all its branches,
14 licensed clinical psychologist, licensed clinical social
15 worker, licensed clinical professional counselor, or licensed
16 marriage and family therapist, or licensed speech therapist of
17 his choice to treat such disorders, and the insurer shall pay
18 the covered charges of such physician licensed to practice
19 medicine in all its branches, licensed clinical psychologist,
20 licensed clinical social worker, licensed clinical
21 professional counselor, or licensed marriage and family
22 therapist up to the limits of coverage, provided (i) the
23 disorder or condition treated is covered by the policy, and
24 (ii) the physician, licensed psychologist, licensed clinical
25 social worker, licensed clinical professional counselor, or
26 licensed marriage and family therapist is authorized to provide

 

 

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1 said services under the statutes of this State and in
2 accordance with accepted principles of his profession.
3     (3) Insofar as this Section applies solely to licensed
4 clinical social workers, licensed clinical professional
5 counselors, and licensed marriage and family therapists, those
6 persons who may provide services to individuals shall do so
7 after the licensed clinical social worker, licensed clinical
8 professional counselor, or licensed marriage and family
9 therapist has informed the patient of the desirability of the
10 patient conferring with the patient's primary care physician
11 and the licensed clinical social worker, licensed clinical
12 professional counselor, or licensed marriage and family
13 therapist has provided written notification to the patient's
14 primary care physician, if any, that services are being
15 provided to the patient. That notification may, however, be
16 waived by the patient on a written form. Those forms shall be
17 retained by the licensed clinical social worker, licensed
18 clinical professional counselor, or licensed marriage and
19 family therapist for a period of not less than 5 years.
20     (b) (1) An insurer that provides coverage for hospital or
21 medical expenses under a group policy of accident and health
22 insurance or health care plan amended, delivered, issued, or
23 renewed on or after the effective date of this amendatory Act
24 of the 96th 92nd General Assembly shall provide coverage under
25 the policy for treatment of serious mental illness consistent
26 with the parity requirements of Section 370c.1 of this Code

 

 

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1 under the same terms and conditions as coverage for hospital or
2 medical expenses related to other illnesses and diseases. The
3 coverage required under this Section must provide for same
4 durational limits, amount limits, deductibles, and
5 co-insurance requirements for serious mental illness as are
6 provided for other illnesses and diseases. This subsection does
7 not apply to any group policy of accident and health insurance
8 or health care plan for any plan year of a small employer as
9 defined in section 5 of the Illinois Health Insurance
10 Portability and Accountability Act coverage provided to
11 employees by employers who have 50 or fewer employees.
12     (2) "Serious mental illness" means the following
13 psychiatric illnesses as defined in the most current edition of
14 the Diagnostic and Statistical Manual (DSM) published by the
15 American Psychiatric Association:
16         (A) schizophrenia;
17         (B) paranoid and other psychotic disorders;
18         (C) bipolar disorders (hypomanic, manic, depressive,
19     and mixed);
20         (D) major depressive disorders (single episode or
21     recurrent);
22         (E) schizoaffective disorders (bipolar or depressive);
23         (F) pervasive developmental disorders;
24         (G) obsessive-compulsive disorders;
25         (H) depression in childhood and adolescence;
26         (I) panic disorder;

 

 

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1         (J) post-traumatic stress disorders (acute, chronic,
2     or with delayed onset); and
3         (K) anorexia nervosa and bulimia nervosa.
4     (3) Upon request of the reimbursing insurer, a provider of
5 treatment of serious mental illness shall furnish medical
6 records or other necessary data that substantiate that initial
7 or continued treatment is at all times medically necessary. An
8 insurer shall provide a mechanism for the timely review by a
9 provider holding the same license and practicing in the same
10 specialty as the patient's provider, who is unaffiliated with
11 the insurer, jointly selected by the patient (or the patient's
12 next of kin or legal representative if the patient is unable to
13 act for himself or herself), the patient's provider, and the
14 insurer in the event of a dispute between the insurer and
15 patient's provider regarding the medical necessity of a
16 treatment proposed by a patient's provider. If the reviewing
17 provider determines the treatment to be medically necessary,
18 the insurer shall provide reimbursement for the treatment.
19 Future contractual or employment actions by the insurer
20 regarding the patient's provider may not be based on the
21 provider's participation in this procedure. Nothing prevents
22 the insured from agreeing in writing to continue treatment at
23 his or her expense. When making a determination of the medical
24 necessity for a treatment modality for serous mental illness,
25 an insurer must make the determination in a manner that is
26 consistent with the manner used to make that determination with

 

 

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1 respect to other diseases or illnesses covered under the
2 policy, including an appeals process.
3     (4) A group health benefit plan amended, delivered, issued,
4 or renewed on or after the effective date of this amendatory
5 Act of the 96th General Assembly:
6         (A) shall provide coverage based upon medical
7     necessity for the following treatment of mental illness
8     consistent with the parity requirements of Section 370c.1
9     of this Code. In in each calendar year, coverage shall not
10     be less than the following:
11             (i) 45 days of inpatient treatment; and
12             (ii) beginning on June 26, 2006 (the effective date
13         of Public Act 94-921), 60 visits for outpatient
14         treatment including group and individual outpatient
15         treatment; and
16             (iii) for plans or policies delivered, issued for
17         delivery, renewed, or modified after January 1, 2007
18         (the effective date of Public Act 94-906), 20
19         additional outpatient visits for speech therapy for
20         treatment of pervasive developmental disorders that
21         will be in addition to speech therapy provided pursuant
22         to item (ii) of this subparagraph (A); and
23         (B) may not include a lifetime limit on the number of
24     days of inpatient treatment or the number of outpatient
25     visits covered under the plan. ; and
26         (C) shall include the same amount limits, deductibles,

 

 

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1     copayments, and coinsurance factors for serious mental
2     illness as for physical illness.
3     (5) An issuer of a group health benefit plan may not count
4 toward the number of outpatient visits required to be covered
5 under this Section an outpatient visit for the purpose of
6 medication management and shall cover the outpatient visits
7 under the same terms and conditions as it covers outpatient
8 visits for the treatment of physical illness.
9     (6) An issuer of a group health benefit plan may provide or
10 offer coverage required under this Section through a managed
11 care plan.
12     (7) This Section shall not be interpreted to require a
13 group health benefit plan to provide coverage for treatment of:
14         (A) an addiction to a controlled substance or cannabis
15     that is used in violation of law; or
16         (B) mental illness resulting from the use of a
17     controlled substance or cannabis in violation of law.
18     (8) (Blank).
19     (c) This Section shall not be interpreted to require
20 coverage for speech therapy or other habilitative services for
21 those individuals covered under Section 356z.15 356z.14 of this
22 Code.
23 (Source: P.A. 95-331, eff. 8-21-07; 95-972, eff. 9-22-08;
24 95-973, eff. 1-1-09; 95-1049, eff. 1-1-10; 96-328, eff.
25 8-11-09; revised 9-25-09.)
 

 

 

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1     (215 ILCS 5/370c.1 new)
2     Sec. 370c.1. Mental health parity.
3     (a) As used in this Section:
4     "Financial requirement" means deductibles, copayments,
5 coinsurance, and out-of-pocket expenses, but excludes an
6 aggregate lifetime limit and an annual limit subject to
7 subsections (c), (d), and (e) of this Section.
8     "Treatment limitation" means limits on the frequency of
9 treatment, number of visits, days of coverage, or other similar
10 limits on the scope or duration of treatment.
11     (b) Beginning on the effective date of this amendatory Act
12 of the 96th General Assembly, every insurer that amends,
13 delivers, issues, or renews a group policy of accident and
14 health insurance in this State providing coverage for hospital
15 or medical treatment and for the treatment of mental,
16 emotional, nervous, or substance use disorders or conditions
17 shall ensure that:
18         (1) the financial requirements applicable to such
19     mental, emotional, nervous, or substance use disorder or
20     condition benefits are no more restrictive than the
21     predominant financial requirements applied to
22     substantially all hospital and medical benefits covered by
23     the policy and that there are no separate cost-sharing
24     requirements that are applicable only with respect to
25     mental, emotional, nervous, or substance use disorder or
26     condition benefits; and

 

 

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1         (2) the treatment limitations applicable to such
2     mental, emotional, nervous, or substance use disorder or
3     condition benefits are no more restrictive than the
4     predominant treatment limitations applied to substantially
5     all hospital and medical benefits covered by the policy and
6     that there are no separate treatment limitations that are
7     applicable only with respect to mental, emotional,
8     nervous, or substance use disorder or condition benefits.
9     (c) In the case of a group policy of accident and health
10 insurance amended, delivered, issued, or renewed in this State
11 on and after the effective date of this amendatory Act of the
12 96th General Assembly that provides coverage for hospital or
13 medical treatment and for the treatment of mental, emotional,
14 nervous, or substance use disorders or conditions:
15         (1) if the policy does not include an aggregate
16     lifetime limit on substantially all hospital and medical
17     benefits, then the policy may not impose any aggregate
18     lifetime limit on mental, emotional, nervous, or substance
19     use disorder or condition benefits; or
20         (2) if the policy includes an aggregate lifetime limit
21     on substantially all hospital and medical benefits (in this
22     subsection (c), referred to as the "applicable lifetime
23     limit"), then the policy shall either:
24             (A) apply the applicable lifetime limit both to the
25         hospital and medical benefits to which it otherwise
26         would apply and to mental, emotional, nervous, or

 

 

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1         substance use disorder or condition benefits and not
2         distinguish in the application of such limit between
3         such hospital and medical benefits and mental,
4         emotional, nervous, or substance use disorder or
5         condition benefits; or
6             (B) not include any aggregate lifetime limit on
7         mental, emotional, nervous, or substance use disorder
8         or condition benefits that is less than the applicable
9         lifetime limit.
10     (d) In the case of a policy that is not described in items
11 (1) or (2) of subsection (c) of this Section and that includes
12 no or different aggregate lifetime limits on different
13 categories of hospital and medical benefits, the Director shall
14 establish rules under which item (2) of subsection (c) of this
15 Section is applied to such policy with respect to mental,
16 emotional, nervous, or substance use disorder or condition
17 benefits by substituting for the applicable lifetime limit an
18 average aggregate lifetime limit that is computed taking into
19 account the weighted average of the aggregate lifetime limits
20 applicable to such categories.
21     (e) In the case of a group policy of accident and health
22 insurance amended, delivered, issued, or renewed in this State
23 on or after the effective date of this amendatory Act of the
24 96th General Assembly that provides coverage for hospital or
25 medical treatment and for the treatment of mental, emotional,
26 nervous, or substance use disorders or conditions:

 

 

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1         (1) if the policy does not include an annual limit on
2     substantially all hospital and medical benefits, the
3     policy may not impose any annual limits on mental,
4     emotional, nervous, or substance use disorder or condition
5     benefits; or
6         (2) if the policy includes an annual limit on
7     substantially all hospital and medical benefits (in this
8     subsection, referred to as the "applicable annual limit"),
9     the policy shall either:
10             (A) apply the applicable annual limit both to the
11         hospital and medical benefits to which it otherwise
12         would apply and to mental, emotional, nervous, or
13         substance use disorder or condition benefits and not
14         distinguish in the application of such limit between
15         such hospital and medical benefits and mental,
16         emotional, nervous, or substance use disorder or
17         condition benefits; or
18             (B) not include any annual limit on mental,
19         emotional, nervous, or substance use disorder or
20         condition benefits that is less than the applicable
21         annual limit.
22     (f) In the case of a policy that is not described in items
23 (1) or (2) of subsection (e) of this Section and that includes
24 no or different annual limits on different categories of
25 hospital and medical benefits, the Director shall establish
26 rules under which item (2) of subsection (e) of this Section is

 

 

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1 applied to such policy with respect to mental, emotional,
2 nervous, or substance use disorder or condition benefits by
3 substituting for the applicable annual limit an average annual
4 limit that is computed taking into account the weighted average
5 of the annual limits applicable to such categories.
 
6     Section 10. The Health Maintenance Organization Act is
7 amended by changing Section 5-3 as follows:
 
8     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
9     (Text of Section before amendment by P.A. 96-833)
10     Sec. 5-3. Insurance Code provisions.
11     (a) Health Maintenance Organizations shall be subject to
12 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
13 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
14 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
15 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
16 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15 356z.14,
17 356z.17 356z.15, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
18 368c, 368d, 368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A,
19 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
20 subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII,
21 XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
22 Insurance Code.
23     (b) For purposes of the Illinois Insurance Code, except for
24 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health

 

 

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1 Maintenance Organizations in the following categories are
2 deemed to be "domestic companies":
3         (1) a corporation authorized under the Dental Service
4     Plan Act or the Voluntary Health Services Plans Act;
5         (2) a corporation organized under the laws of this
6     State; or
7         (3) a corporation organized under the laws of another
8     state, 30% or more of the enrollees of which are residents
9     of this State, except a corporation subject to
10     substantially the same requirements in its state of
11     organization as is a "domestic company" under Article VIII
12     1/2 of the Illinois Insurance Code.
13     (c) In considering the merger, consolidation, or other
14 acquisition of control of a Health Maintenance Organization
15 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
16         (1) the Director shall give primary consideration to
17     the continuation of benefits to enrollees and the financial
18     conditions of the acquired Health Maintenance Organization
19     after the merger, consolidation, or other acquisition of
20     control takes effect;
21         (2)(i) the criteria specified in subsection (1)(b) of
22     Section 131.8 of the Illinois Insurance Code shall not
23     apply and (ii) the Director, in making his determination
24     with respect to the merger, consolidation, or other
25     acquisition of control, need not take into account the
26     effect on competition of the merger, consolidation, or

 

 

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1     other acquisition of control;
2         (3) the Director shall have the power to require the
3     following information:
4             (A) certification by an independent actuary of the
5         adequacy of the reserves of the Health Maintenance
6         Organization sought to be acquired;
7             (B) pro forma financial statements reflecting the
8         combined balance sheets of the acquiring company and
9         the Health Maintenance Organization sought to be
10         acquired as of the end of the preceding year and as of
11         a date 90 days prior to the acquisition, as well as pro
12         forma financial statements reflecting projected
13         combined operation for a period of 2 years;
14             (C) a pro forma business plan detailing an
15         acquiring party's plans with respect to the operation
16         of the Health Maintenance Organization sought to be
17         acquired for a period of not less than 3 years; and
18             (D) such other information as the Director shall
19         require.
20     (d) The provisions of Article VIII 1/2 of the Illinois
21 Insurance Code and this Section 5-3 shall apply to the sale by
22 any health maintenance organization of greater than 10% of its
23 enrollee population (including without limitation the health
24 maintenance organization's right, title, and interest in and to
25 its health care certificates).
26     (e) In considering any management contract or service

 

 

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1 agreement subject to Section 141.1 of the Illinois Insurance
2 Code, the Director (i) shall, in addition to the criteria
3 specified in Section 141.2 of the Illinois Insurance Code, take
4 into account the effect of the management contract or service
5 agreement on the continuation of benefits to enrollees and the
6 financial condition of the health maintenance organization to
7 be managed or serviced, and (ii) need not take into account the
8 effect of the management contract or service agreement on
9 competition.
10     (f) Except for small employer groups as defined in the
11 Small Employer Rating, Renewability and Portability Health
12 Insurance Act and except for medicare supplement policies as
13 defined in Section 363 of the Illinois Insurance Code, a Health
14 Maintenance Organization may by contract agree with a group or
15 other enrollment unit to effect refunds or charge additional
16 premiums under the following terms and conditions:
17         (i) the amount of, and other terms and conditions with
18     respect to, the refund or additional premium are set forth
19     in the group or enrollment unit contract agreed in advance
20     of the period for which a refund is to be paid or
21     additional premium is to be charged (which period shall not
22     be less than one year); and
23         (ii) the amount of the refund or additional premium
24     shall not exceed 20% of the Health Maintenance
25     Organization's profitable or unprofitable experience with
26     respect to the group or other enrollment unit for the

 

 

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1     period (and, for purposes of a refund or additional
2     premium, the profitable or unprofitable experience shall
3     be calculated taking into account a pro rata share of the
4     Health Maintenance Organization's administrative and
5     marketing expenses, but shall not include any refund to be
6     made or additional premium to be paid pursuant to this
7     subsection (f)). The Health Maintenance Organization and
8     the group or enrollment unit may agree that the profitable
9     or unprofitable experience may be calculated taking into
10     account the refund period and the immediately preceding 2
11     plan years.
12     The Health Maintenance Organization shall include a
13 statement in the evidence of coverage issued to each enrollee
14 describing the possibility of a refund or additional premium,
15 and upon request of any group or enrollment unit, provide to
16 the group or enrollment unit a description of the method used
17 to calculate (1) the Health Maintenance Organization's
18 profitable experience with respect to the group or enrollment
19 unit and the resulting refund to the group or enrollment unit
20 or (2) the Health Maintenance Organization's unprofitable
21 experience with respect to the group or enrollment unit and the
22 resulting additional premium to be paid by the group or
23 enrollment unit.
24     In no event shall the Illinois Health Maintenance
25 Organization Guaranty Association be liable to pay any
26 contractual obligation of an insolvent organization to pay any

 

 

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1 refund authorized under this Section.
2     (g) Rulemaking authority to implement Public Act 95-1045
3 this amendatory Act of the 95th General Assembly, if any, is
4 conditioned on the rules being adopted in accordance with all
5 provisions of the Illinois Administrative Procedure Act and all
6 rules and procedures of the Joint Committee on Administrative
7 Rules; any purported rule not so adopted, for whatever reason,
8 is unauthorized.
9 (Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
10 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
11 95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
12 1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; revised
13 10-23-09.)
 
14     (Text of Section after amendment by P.A. 96-833)
15     Sec. 5-3. Insurance Code provisions.
16     (a) Health Maintenance Organizations shall be subject to
17 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
18 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
19 154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
20 356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
21 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
22 356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d,
23 368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2,
24 409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
25 Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,

 

 

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1 XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
2     (b) For purposes of the Illinois Insurance Code, except for
3 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
4 Maintenance Organizations in the following categories are
5 deemed to be "domestic companies":
6         (1) a corporation authorized under the Dental Service
7     Plan Act or the Voluntary Health Services Plans Act;
8         (2) a corporation organized under the laws of this
9     State; or
10         (3) a corporation organized under the laws of another
11     state, 30% or more of the enrollees of which are residents
12     of this State, except a corporation subject to
13     substantially the same requirements in its state of
14     organization as is a "domestic company" under Article VIII
15     1/2 of the Illinois Insurance Code.
16     (c) In considering the merger, consolidation, or other
17 acquisition of control of a Health Maintenance Organization
18 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
19         (1) the Director shall give primary consideration to
20     the continuation of benefits to enrollees and the financial
21     conditions of the acquired Health Maintenance Organization
22     after the merger, consolidation, or other acquisition of
23     control takes effect;
24         (2)(i) the criteria specified in subsection (1)(b) of
25     Section 131.8 of the Illinois Insurance Code shall not
26     apply and (ii) the Director, in making his determination

 

 

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1     with respect to the merger, consolidation, or other
2     acquisition of control, need not take into account the
3     effect on competition of the merger, consolidation, or
4     other acquisition of control;
5         (3) the Director shall have the power to require the
6     following information:
7             (A) certification by an independent actuary of the
8         adequacy of the reserves of the Health Maintenance
9         Organization sought to be acquired;
10             (B) pro forma financial statements reflecting the
11         combined balance sheets of the acquiring company and
12         the Health Maintenance Organization sought to be
13         acquired as of the end of the preceding year and as of
14         a date 90 days prior to the acquisition, as well as pro
15         forma financial statements reflecting projected
16         combined operation for a period of 2 years;
17             (C) a pro forma business plan detailing an
18         acquiring party's plans with respect to the operation
19         of the Health Maintenance Organization sought to be
20         acquired for a period of not less than 3 years; and
21             (D) such other information as the Director shall
22         require.
23     (d) The provisions of Article VIII 1/2 of the Illinois
24 Insurance Code and this Section 5-3 shall apply to the sale by
25 any health maintenance organization of greater than 10% of its
26 enrollee population (including without limitation the health

 

 

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1 maintenance organization's right, title, and interest in and to
2 its health care certificates).
3     (e) In considering any management contract or service
4 agreement subject to Section 141.1 of the Illinois Insurance
5 Code, the Director (i) shall, in addition to the criteria
6 specified in Section 141.2 of the Illinois Insurance Code, take
7 into account the effect of the management contract or service
8 agreement on the continuation of benefits to enrollees and the
9 financial condition of the health maintenance organization to
10 be managed or serviced, and (ii) need not take into account the
11 effect of the management contract or service agreement on
12 competition.
13     (f) Except for small employer groups as defined in the
14 Small Employer Rating, Renewability and Portability Health
15 Insurance Act and except for medicare supplement policies as
16 defined in Section 363 of the Illinois Insurance Code, a Health
17 Maintenance Organization may by contract agree with a group or
18 other enrollment unit to effect refunds or charge additional
19 premiums under the following terms and conditions:
20         (i) the amount of, and other terms and conditions with
21     respect to, the refund or additional premium are set forth
22     in the group or enrollment unit contract agreed in advance
23     of the period for which a refund is to be paid or
24     additional premium is to be charged (which period shall not
25     be less than one year); and
26         (ii) the amount of the refund or additional premium

 

 

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

 

 

HB5142 - 27 - LRB096 18809 RPM 34195 b

1     In no event shall the Illinois Health Maintenance
2 Organization Guaranty Association be liable to pay any
3 contractual obligation of an insolvent organization to pay any
4 refund authorized under this Section.
5     (g) Rulemaking authority to implement Public Act 95-1045,
6 if any, is conditioned on the rules being adopted in accordance
7 with all provisions of the Illinois Administrative Procedure
8 Act and all rules and procedures of the Joint Committee on
9 Administrative Rules; any purported rule not so adopted, for
10 whatever reason, is unauthorized.
11 (Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
12 95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
13 95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
14 1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
15 6-1-10.)
 
16     Section 97. No acceleration or delay. Where this Act makes
17 changes in a statute that is represented in this Act by text
18 that is not yet or no longer in effect (for example, a Section
19 represented by multiple versions), the use of that text does
20 not accelerate or delay the taking effect of (i) the changes
21 made by this Act or (ii) provisions derived from any other
22 Public Act.
 
23     Section 99. Effective date. This Act takes effect upon
24 becoming law.