SB3004 Enrolled LRB096 20066 RPM 35579 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 Section 367e as follows:
 
6     (215 ILCS 5/367e)  (from Ch. 73, par. 979e)
7     Sec. 367e. Continuation of Group Hospital, Surgical and
8 Major Medical Coverage After Termination of Employment or
9 Membership. A group policy delivered, issued for delivery,
10 renewed or amended in this state which insures employees or
11 members for hospital, surgical or major medical insurance on an
12 expense incurred or service basis, other than for specific
13 diseases or for accidental injuries only, shall provide that
14 employees or members whose insurance under the group policy
15 would otherwise terminate because of termination of employment
16 or membership or because of a reduction in hours below the
17 minimum required by the group plan shall be entitled to
18 continue their hospital, surgical and major medical insurance
19 under that group policy, for themselves and their eligible
20 dependents, subject to all of the group policy's terms and
21 conditions applicable to those forms of insurance and to the
22 following conditions:
23         1. Continuation shall only be available to an employee

 

 

SB3004 Enrolled - 2 - LRB096 20066 RPM 35579 b

1     or member who has been continuously insured under the group
2     policy (and for similar benefits under any group policy
3     which it replaced) during the entire 3 months period ending
4     with such termination or reduction in hours below the
5     minimum required by the group plan. With respect to an
6     employee or member who is involuntarily terminated between
7     September 1, 2008 and the end of the period set forth in
8     Section 3001(a)(3)(A) of Title III of Division B of the
9     federal American Recovery and Reinvestment Act of 2009, as
10     now or hereafter amended December 31, 2009, continuation
11     shall be available if the employee or member was insured
12     under the group policy on the day prior to the termination.
13         2. Continuation shall not be available for any person
14     who is covered by Medicare, except for those individuals
15     who have been covered under a group Medicare supplement
16     policy. Neither shall continuation be available for any
17     person who is covered by any other insured or uninsured
18     plan which provides hospital, surgical or medical coverage
19     for individuals in a group and under which the person was
20     not covered immediately prior to such termination or
21     reduction in hours below the minimum required by the group
22     plan or who exercises his conversion privilege under the
23     group policy.
24         3. Continuation need not include dental, vision care,
25     prescription drug benefits, disability income, specified
26     disease, or similar supplementary benefits which are

 

 

SB3004 Enrolled - 3 - LRB096 20066 RPM 35579 b

1     provided under the group policy in addition to its
2     hospital, surgical or major medical benefits.
3         4. Within 10 days after the employee's or member's
4     termination or reduction in hours below the minimum
5     required by the group plan written notice of continuation
6     shall be presented to the employee or member by the
7     employer. If the employee or member is unavailable, written
8     notice shall be mailed by the employer to the last known
9     address of the employee or member within 10 days after the
10     employee's or member's termination or reduction in hours
11     below the minimum required by the group plan. The employer
12     shall also send a copy of the notice to the insurer. An
13     employee or member who wishes continuation of coverage must
14     request such continuation in writing within the 30 day
15     period following the later of: (i) the date of such
16     termination or reduction in hours below the minimum
17     required by the group plan, or (ii) the date the employee
18     is presented or mailed written notice of the right of
19     continuation by either the employer or the group
20     policyholder. In no event, however, may the employee or
21     member elect continuation more than 60 days after the date
22     of such termination or reduction in hours below the minimum
23     required by the group plan. Written notice of continuation
24     presented to the employee or member by the policyholder, or
25     mailed by the policyholder to the last known address of the
26     employee, shall constitute the giving of notice for the

 

 

SB3004 Enrolled - 4 - LRB096 20066 RPM 35579 b

1     purpose of this provision.
2         The insurer shall not deny coverage to the employee or
3     member due to the employer's failure to provide notice
4     pursuant to this Section to the employee or member. Until
5     the end of the period set forth in Section 3001(a)(3)(A) of
6     Title III of Division B of the federal American Recovery
7     and Reinvestment Act of 2009, as now or hereafter amended
8     January 1, 2010, in the event the employee or member
9     contacts the insurer regarding continuation rights and
10     advises that notice has not been provided by the employer
11     or group policyholder, the insurer shall provide a written
12     explanation to the employee or member of the employee's or
13     member's continuation rights pursuant to this Section.
14         4a. Unless contrary to the provisions of, or any rules
15     promulgated pursuant to, Section 3001(a)(7) of Title III of
16     Division B of the federal American Recovery and
17     Reinvestment Act of 2009, with respect to employees or
18     members of health plans that are subject solely to State
19     continuation coverage and who are terminated or whose
20     reduction in hours below the minimum required by the group
21     occurs between the effective date of this amendatory Act of
22     the 96th General Assembly and the end of the period set
23     forth in Section 3001(a)(3)(A) of Title III of Division B
24     of the federal American Recovery and Reinvestment Act of
25     2009, as now or hereafter amended December 31, 2009, the
26     notice requirements of this Section are not satisfied

 

 

SB3004 Enrolled - 5 - LRB096 20066 RPM 35579 b

1     unless notice is presented or mailed to the employee or
2     member by the insurer informing the employee or member of
3     the availability of premium reduction with respect to such
4     coverage under the American Recovery and Reinvestment Act
5     of 2009. Such written notice shall conform to all
6     applicable requirements set forth in Section 3001(a)(7) of
7     Title III of Division B of the federal American Recovery
8     and Reinvestment Act of 2009. The Department shall publish
9     models for the notification that shall be provided by
10     insurers pursuant to this paragraph 4a.
11         4b. Unless contrary to the provisions of, or any rules
12     promulgated pursuant to, Section 3001(a)(7) of Title III of
13     Division B of the federal American Recovery and
14     Reinvestment Act of 2009, with respect to employees or
15     members of health plans that are subject solely to State
16     continuation coverage who were terminated or whose
17     reduction in hours below the minimum required by the group
18     occurred between September 1, 2008 and the effective date
19     of this amendatory Act of the 96th General Assembly and who
20     have an election of continuation of coverage pursuant to
21     this Section in effect, notice shall be presented or mailed
22     to the employee or member by the insurer informing the
23     employee or member of the availability of premium reduction
24     with respect to such coverage under the federal American
25     Recovery and Reinvestment Act of 2009. Such written notice
26     shall conform to all applicable requirements set forth in

 

 

SB3004 Enrolled - 6 - LRB096 20066 RPM 35579 b

1     Section 3001(a)(7) of Title III of Division B of the
2     federal American Recovery and Reinvestment Act of 2009 and
3     shall be presented or mailed to the employee or member
4     within 14 days of the effective date of this amendatory Act
5     of the 96th General Assembly. The Department shall publish
6     models for the notification that shall be provided by
7     insurers pursuant to this paragraph 4b.
8         5. An employee or member electing continuation must pay
9     to the group policyholder or his employer, on a monthly
10     basis in advance, the total amount of premium required by
11     the insurer, including that portion of the premium
12     contributed by the policyholder or employer, if any, but
13     not more than the group rate for the insurance being
14     continued with appropriate reduction in premium for any
15     supplementary benefits which have been discontinued under
16     paragraph (3) of this Section. The premium rate required by
17     the insurer shall be the applicable premium required on the
18     due date of each payment.
19         6. Continuation of insurance under the group policy for
20     any person shall terminate when he becomes eligible for
21     Medicare or is covered by any other insured or uninsured
22     plan which provides hospital, surgical or medical coverage
23     for individuals in a group and under which the person was
24     not covered immediately prior to such termination or
25     reduction in hours below the minimum required by the group
26     plan as provided in condition 2 above or, if earlier, at

 

 

SB3004 Enrolled - 7 - LRB096 20066 RPM 35579 b

1     the first to occur of the following:
2             (a) The date 12 months after the date the
3         employee's or member's insurance under the policy
4         would otherwise have terminated because of termination
5         of employment or membership or reduction in hours below
6         the minimum required by the group plan or, with respect
7         to an employee or member who is an assistance eligible
8         individual as defined in Section 3001(a)(3) of Title
9         III of Division B of the federal American Recovery and
10         Reinvestment Act of 2009, the date that the individual
11         ceases to be eligible for premium assistance under
12         Section 3001(a)(2)(A)(ii)(I) of Title III of Division
13         B of the federal American Recovery and Reinvestment Act
14         of 2009, as now or hereafter amended.
15             (b) If the employee or member fails to make timely
16         payment of a required contribution, the end of the
17         period for which contributions were made.
18             (c) The date on which the group policy is
19         terminated or, in the case of an employee, the date his
20         employer terminates participation under the group
21         policy. However, if this (c) applies and the coverage
22         ceasing by reason of such termination is replaced by
23         similar coverage under another group policy, the
24         following shall apply:
25                 (i) The employee or member shall have the right
26             to become covered under that other group policy,

 

 

SB3004 Enrolled - 8 - LRB096 20066 RPM 35579 b

1             for the balance of the period that he would have
2             remained covered under the prior group policy in
3             accordance with condition 6 had a termination
4             described in this (c) not occurred.
5                 (ii) The prior group policy shall continue to
6             provide benefits to the extent of its accrued
7             liabilities and extensions of benefits as if the
8             replacement had not occurred.
9         7. A notification of the continuation privilege shall
10     be included in each certificate of coverage.
11         8. Continuation shall not be available for any employee
12     who was discharged because of the commission of a felony in
13     connection with his work, or because of theft in connection
14     with his work, for which the employer was in no way
15     responsible; provided the employee admitted his commission
16     of the felony or theft or such act has resulted in a
17     conviction or order of supervision by a court of competent
18     jurisdiction.
19         9. An employee or member without an election of
20     continuation of coverage pursuant to this Section in effect
21     on the effective date of this amendatory Act of the 96th
22     General Assembly may elect continuation pursuant to this
23     paragraph 9 if the employee or member: (i) would be an
24     assistance eligible individual as defined in Section
25     3001(a)(3) of Title III of Division B of the federal
26     American Recovery and Reinvestment Act of 2009, if such an

 

 

SB3004 Enrolled - 9 - LRB096 20066 RPM 35579 b

1     election were in effect and (ii) at the time of termination
2     was eligible for continuation pursuant to paragraphs 1 and
3     2 of this Section.
4         Unless contrary to the provisions of, or any rules
5     promulgated pursuant to, Section 3001(a)(7) of Title III of
6     Division B of the federal American Recovery and
7     Reinvestment Act of 2009, written notice of continuation
8     pursuant to this paragraph 9 shall be presented to the
9     employee or member by the insurer or mailed by the insurer
10     to the last known address of the employee or member within
11     30 days after the effective date of this amendatory Act of
12     the 96th General Assembly. Such written notice shall
13     conform to all applicable requirements set forth in Section
14     3001(a)(7) of Title III of Division B of the federal
15     American Recovery and Reinvestment Act of 2009. The
16     Department shall publish models for the notification that
17     shall be provided by insurers pursuant to this paragraph 9.
18         An employee or member electing continuation of
19     coverage under this paragraph 9 must request such
20     continuation in writing within 60 days after the date the
21     employee or member receives written notice of the right of
22     continuation by the insurer.
23         Continuation of coverage elected pursuant to this
24     paragraph 9 shall commence with the first period of
25     coverage beginning on or after February 17, 2009, the
26     effective date of the federal American Recovery and

 

 

SB3004 Enrolled - 10 - LRB096 20066 RPM 35579 b

1     Reinvestment Act of 2009, and shall not extend beyond the
2     period of continuation that would have been required if the
3     coverage had been elected pursuant to paragraph 4 of this
4     Section.
5         With respect to an employee or member who elects
6     continuation of coverage under this paragraph 9, the period
7     beginning on the date of the employee's or member's
8     involuntary termination of employment and ending on the
9     date of the first period of coverage on or after February
10     17, 2009 shall be disregarded for purposes of determining
11     the 63-day period referred to in Section 20 of the Illinois
12     Health Insurance Portability and Accountability Act.
13     The requirements of this amendatory Act of 1983 shall apply
14 to any group policy as defined in this Section, delivered or
15 issued for delivery on or after 180 days following the
16 effective date of this amendatory Act of 1983.
17     The requirements of this amendatory Act of 1985 shall apply
18 to any group policy as defined in this Section, delivered,
19 issued for delivery, renewed or amended on or after 180 days
20 following the effective date of this amendatory Act of 1985.
21 (Source: P.A. 96-13, eff. 6-18-09.)
 
22     Section 10. The Health Maintenance Organization Act is
23 amended by changing Section 4-9.2 as follows:
 
24     (215 ILCS 125/4-9.2)  (from Ch. 111 1/2, par. 1409.2-2)

 

 

SB3004 Enrolled - 11 - LRB096 20066 RPM 35579 b

1     Sec. 4-9.2. Continuation of group HMO coverage after
2 termination of employee or membership. A group contract
3 delivered, issued for delivery, renewed, or amended in this
4 State that covers employees or members for health care services
5 shall provide that employees or members whose coverage under
6 the group contract would otherwise terminate because of
7 termination of employment or membership or because of a
8 reduction in hours below the minimum required by the group
9 contract shall be entitled to continue their coverage under
10 that group contract, for themselves and their eligible
11 dependents, subject to all of the group contract's terms and
12 conditions applicable to those forms of coverage and to the
13 following conditions:
14         (1) Continuation shall only be available to an employee
15     or member who has been continuously covered under the group
16     contract (and for similar benefits under any group contract
17     that it replaced) during the entire 3 month period ending
18     with the termination of employment or membership or
19     reduction in hours below the minimum required by the group
20     contract. With respect to an employee or member who is
21     involuntarily terminated between September 1, 2008 and the
22     end of the period set forth in Section 3001(a)(3)(A) of
23     Title III of Division B of the federal American Recovery
24     and Reinvestment Act of 2009, as now or hereafter amended
25     December 31, 2009, continuation shall be available if the
26     employee or member was covered under the group contract the

 

 

SB3004 Enrolled - 12 - LRB096 20066 RPM 35579 b

1     day prior to such termination.
2         (2) Continuation shall not be available for any
3     enrollee who is covered by Medicare, except for those
4     individuals who have been covered under a group Medicare
5     supplement policy. Continuation shall not be available for
6     any enrollee who is covered by any other insured or
7     uninsured plan that provides hospital, surgical, or
8     medical coverage for individuals in a group and under which
9     the enrollee was not covered immediately before
10     termination or reduction in hours below the minimum
11     required by the group contract or who exercises his or her
12     conversion privilege under the group policy.
13         (3) Continuation need not include dental, vision care,
14     prescription drug, or similar supplementary benefits that
15     are provided under the group contract in addition to its
16     basic health care services.
17         (4) Within 10 days after the employee's or member's
18     termination or reduction in hours below the minimum
19     required by the group contract, written notice of
20     continuation shall be presented to the employee or member
21     by the employer. If the employee or member is unavailable,
22     written notice shall be mailed by the employer to the last
23     known address of the employee or member within 10 days
24     after the employee's or member's termination or reduction
25     in hours below the minimum required by the group plan. The
26     employer shall also send a copy of the notice to the HMO.

 

 

SB3004 Enrolled - 13 - LRB096 20066 RPM 35579 b

1     An employee or member who wishes continuation of coverage
2     must request continuation in writing within the 30 day
3     period following the later of (i) the date of termination
4     or reduction in hours below the minimum required by the
5     group contract or (ii) the date the employee is presented
6     or mailed written notice of the right of continuation by
7     either the employer or the group policyholder. In no event,
8     however, shall the employee or member elect continuation
9     more than 60 days after the date of termination or
10     reduction in hours below the minimum required by the group
11     contract. Written notice of continuation presented to the
12     employee or member by the policyholder, or mailed by the
13     policyholder to the last known address of the employee,
14     shall constitute the giving of notice for the purpose of
15     this paragraph.
16         The HMO shall not deny coverage to the employee or
17     member due to the employer's failure to provide notice
18     pursuant to this Section to the employee or member. Until
19     the end of the period set forth in Section 3001(a)(3)(A) of
20     Title III of Division B of the federal American Recovery
21     and Reinvestment Act of 2009, as now or hereafter amended
22     January 1, 2010, in the event the employee or member
23     contacts the HMO regarding continuation rights and advises
24     that notice has not been provided by the employer or group
25     policyholder, the HMO shall provide a written explanation
26     to the employee or member of the employee's or member's

 

 

SB3004 Enrolled - 14 - LRB096 20066 RPM 35579 b

1     continuation rights pursuant to this Section.
2         (4a) Unless contrary to the provisions of, or any rules
3     promulgated pursuant to, Section 3001(a)(7) of Title III of
4     Division B of the federal American Recovery and
5     Reinvestment Act of 2009, with respect to employees or
6     members of health plans that are subject solely to State
7     continuation coverage and who are terminated or whose
8     reduction in hours below the minimum required by the group
9     occurs between the effective date of this amendatory Act of
10     the 96th General Assembly and the end of the period set
11     forth in Section 3001(a)(3)(A) of Title III of Division B
12     of the federal American Recovery and Reinvestment Act of
13     2009, as now or hereafter amended December 31, 2009, the
14     notice requirements of this Section are not satisfied
15     unless notice is presented or mailed to the employee or
16     member by the HMO informing the employee or member of the
17     availability of premium reduction with respect to such
18     coverage under the federal American Recovery and
19     Reinvestment Act of 2009. Such written notice shall conform
20     to all applicable requirements set forth in Section
21     3001(a)(7) of Title III of Division B of the federal
22     American Recovery and Reinvestment Act of 2009. The
23     Department shall publish models for the notification that
24     shall be provided by HMOs pursuant to this paragraph (4a).
25         (4b) Unless contrary to the provisions of, or any rules
26     promulgated pursuant to, Section 3001(a)(7) of Title III of

 

 

SB3004 Enrolled - 15 - LRB096 20066 RPM 35579 b

1     Division B of the federal American Recovery and
2     Reinvestment Act of 2009, with respect to employees or
3     members of health plans that are subject solely to State
4     continuation coverage who were terminated or whose
5     reduction in hours below the minimum required by the group
6     occurred between September 1, 2008, and the effective date
7     of this amendatory Act of the 96th General Assembly and who
8     have an election of continuation of coverage pursuant to
9     this Section in effect, notice shall be presented or mailed
10     to the employee or member by the HMO informing the employee
11     or member of the availability of premium reduction with
12     respect to such coverage under the federal American
13     Recovery and Reinvestment Act of 2009. Such written notice
14     shall conform to all applicable requirements set forth in
15     Section 3001(a)(7) of Title III of Division B of the
16     federal American Recovery and Reinvestment Act of 2009 and
17     shall be presented or mailed to the employee or member
18     within 14 days of the effective date of this amendatory Act
19     of the 96th General Assembly. The Department shall publish
20     models for the notification that shall be provided by HMOs
21     pursuant to this paragraph (4b).
22         (5) An employee or member electing continuation must
23     pay to the group policyholder or his employer, on a monthly
24     basis in advance, the total amount of premium required by
25     the HMO, including that portion of the premium contributed
26     by the policyholder or employer, if any, but not more than

 

 

SB3004 Enrolled - 16 - LRB096 20066 RPM 35579 b

1     the group rate for the coverage being continued with
2     appropriate reduction in premium for any supplementary
3     benefits that have been discontinued under paragraph (3) of
4     this Section. The premium rate required by the HMO shall be
5     the applicable premium required on the due date of each
6     payment.
7         (6) Continuation of coverage under the group contract
8     for any person shall terminate when the person becomes
9     eligible for Medicare or is covered by any other insured or
10     uninsured plan that provides hospital, surgical, or
11     medical coverage for individuals in a group and under which
12     the person was not covered immediately before termination
13     or reduction in hours below the minimum required by the
14     group contract as provided in paragraph (2) of this Section
15     or, if earlier, at the first to occur of the following:
16             (a) The expiration of 12 months after the
17         employee's or member's coverage because of termination
18         of employment or membership or reduction in hours below
19         the minimum required by the group contract.
20             (b) If the employee or member fails to make timely
21         payment of a required contribution, the end of the
22         period for which contributions were made or, with
23         respect to an employee or member who is an assistance
24         eligible individual as defined in Section 3001(a)(3)
25         of Title III of Division B of the federal American
26         Recovery and Reinvestment Act of 2009, the date that

 

 

SB3004 Enrolled - 17 - LRB096 20066 RPM 35579 b

1         the individual ceases to be eligible for premium
2         assistance under Section 3001(a)(2)(A)(ii)(I) of Title
3         III of Division B of the federal American Recovery and
4         Reinvestment Act of 2009, as now or hereafter amended.
5             (c) The date on which the group contract is
6         terminated or, in the case of an employee, the date his
7         or her employer terminates participation under the
8         group contract. If, however, this paragraph applies
9         and the coverage ceasing by reason of termination is
10         replaced by similar coverage under another group
11         contract, then (i) the employee or member shall have
12         the right to become covered under the replacement group
13         contract for the balance of the period that he or she
14         would have remained covered under the prior group
15         contract in accordance with paragraph (6) had a
16         termination described in this item (c) not occurred and
17         (ii) the prior group contract shall continue to provide
18         benefits to the extent of its accrued liabilities and
19         extensions of benefits as if the replacement had not
20         occurred.
21         (7) A notification of the continuation privilege shall
22     be included in each evidence of coverage.
23         (8) Continuation shall not be available for any
24     employee who was discharged because of the commission of a
25     felony in connection with his or her work, or because of
26     theft in connection with his or her work, for which the

 

 

SB3004 Enrolled - 18 - LRB096 20066 RPM 35579 b

1     employer was in no way responsible if the employee (i)
2     admitted to committing the felony or theft or (ii) was
3     convicted or placed under supervision by a court of
4     competent jurisdiction.
5         (9) An employee or member without an election of
6     continuation of coverage pursuant to this Section in effect
7     on the effective date of this amendatory Act of the 96th
8     General Assembly may elect continuation pursuant to this
9     paragraph (9) if the employee or member: (i) would be an
10     assistance eligible individual as defined in Section
11     3001(a)(3) of Title III of Division B of the federal
12     American Recovery and Reinvestment Act of 2009 if such an
13     election were in effect and (ii) at the time of termination
14     was eligible for continuation pursuant to paragraphs (1)
15     and (2) of this Section.
16         Unless contrary to the provisions of, or any rules
17     promulgated pursuant to, Section 3001(a)(7) of Title III of
18     Division B of the federal American Recovery and
19     Reinvestment Act of 2009, written notice of continuation
20     pursuant to this paragraph (9) shall be presented to the
21     employee or member by the HMO or mailed by the HMO to the
22     last known address of the employee or member within 30 days
23     after the effective date of this amendatory Act of the 96th
24     General Assembly. The written notice shall conform to all
25     applicable requirements set forth in Section 3001(a)(7) of
26     Title III of Division B of the federal American Recovery

 

 

SB3004 Enrolled - 19 - LRB096 20066 RPM 35579 b

1     and Reinvestment Act of 2009. The Department shall publish
2     models for the notification that shall be provided by HMOs
3     pursuant to this paragraph (9).
4         An employee or member electing continuation of
5     coverage under this paragraph (9) must request such
6     continuation in writing within 60 days after the date the
7     employee or member receives written notice of the right of
8     continuation by the HMO.
9         Continuation of coverage elected pursuant to this
10     paragraph (9) shall commence with the first period of
11     coverage beginning on or after February 17, 2009, the
12     effective date of the federal American Recovery and
13     Reinvestment Act of 2009, and shall not extend beyond the
14     period of continuation that would have been required if the
15     coverage had been elected pursuant to paragraph (4) of this
16     Section.
17         With respect to an employee or member who elects
18     continuation of coverage under this paragraph (9), the
19     period beginning on the date of the employee or member's
20     involuntary termination of employment and ending on the
21     date of the first period of coverage on or after February
22     17, 2009 shall be disregarded for purposes of determining
23     the 63-day period referred to in Section 20 of the Illinois
24     Health Insurance Portability and Accountability Act.
25     The requirements of this amendatory Act of 1992 shall apply
26 to any group contract, as defined in this Section, delivered or

 

 

SB3004 Enrolled - 20 - LRB096 20066 RPM 35579 b

1 issued for delivery on or after 180 days following the
2 effective date of this amendatory Act of 1992.
3 (Source: P.A. 96-13, eff. 6-18-09.)
 
4     Section 99. Effective date. This Act takes effect upon
5 becoming law.