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1    AN ACT concerning regulation.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 356z.16 and adding Section 356z.19 as follows:
 
6    (215 ILCS 5/356z.16)
7    Sec. 356z.16. Applicability of mandated benefits to
8supplemental policies. Unless specified otherwise, the
9following Sections of the Illinois Insurance Code do not apply
10to short-term travel, disability income, long-term care,
11accident only, or limited or specified disease policies: 356b,
12356c, 356d, 356g, 356k, 356m, 356n, 356p, 356q, 356r, 356t,
13356u, 356w, 356x, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6,
14356z.8, 356z.12, 356z.19, 367.2-5, and 367e.
15(Source: P.A. 96-180, eff. 1-1-10; 96-1000, eff. 7-2-10;
1696-1034, eff. 1-1-11.)
 
17    (215 ILCS 5/356z.19 new)
18    Sec. 356z.19. Tobacco use cessation programs; coverage
19offer.
20    (a) Tobacco use is the number one cause of preventable
21disease and death in Illinois, costing $4.1 billion annually in
22direct health care costs and an additional $4.35 billion in

 

 

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1lost productivity. In Illinois, the smoking rates are highest
2among African Americans (25.8%). Smoking rates among lesbian,
3gay, and bisexual adults range from 25% to 44%. The U.S. Public
4Health Service Clinical Practice Guideline 2008 Update found
5that tobacco dependence treatments are both clinically
6effective and highly cost effective. A study in the Journal of
7Preventive Medicine concluded that comprehensive smoking
8cessation treatment is one of the 3 most important and cost
9effective preventive services that can be provided in medical
10practice. Greater efforts are needed to achieve more of this
11potential value by increasing current low levels of
12performance.
13    (b) In this Section, "tobacco use cessation program" means
14a program recommended by a physician that follows
15evidence-based treatment, such as is outlined in the United
16States Public Health Service guidelines for tobacco use
17cessation. "Tobacco use cessation program" includes education
18and medical treatment components designed to assist a person in
19ceasing the use of tobacco products. "Tobacco use cessation
20program" includes education and counseling by physicians or
21associated medical personnel and all FDA approved medications
22for the treatment of tobacco dependence irrespective of whether
23they are available only over the counter, only by prescription,
24or both over the counter and by prescription.
25    (c) On or after the effective date of this amendatory Act
26of the 97th General Assembly, every insurer that amends,

 

 

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1delivers, issues, or renews group accident and health policies
2providing coverage for hospital or medical treatment or
3services on an expense-incurred basis shall offer, for an
4additional premium and subject to the insurer's standard of
5insurability, optional coverage or optional reimbursement of
6up to $500 annually for a tobacco use cessation program for a
7person enrolled in the plan who is 18 years of age or older.
8    (d) The coverage required by this Section shall be subject
9to other general exclusions and limitations of the policy,
10including coordination of benefits, participating provider
11requirements, restrictions on services provided by family or
12household members, utilization review of health care services,
13including review of medical necessity, case management,
14experimental and investigational treatments, and other managed
15care provisions.
16    (e) For the coverage provided under this Section, an
17insurer may not penalize or reduce or limit the reimbursement
18of an attending provider or provide incentives, monetary or
19otherwise, to an attending provider to induce the provider to
20provide care to an insured in a manner inconsistent with the
21coverage under this Section.
 
22    Section 10. The Health Maintenance Organization Act is
23amended by changing Section 5-3 as follows:
 
24    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)

 

 

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1    Sec. 5-3. Insurance Code provisions.
2    (a) Health Maintenance Organizations shall be subject to
3the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
4141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
5154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
6356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
7356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
8356z.18, 356z.19, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
9368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
10409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
11Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
12XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
13    (b) For purposes of the Illinois Insurance Code, except for
14Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
15Maintenance Organizations in the following categories are
16deemed to be "domestic companies":
17        (1) a corporation authorized under the Dental Service
18    Plan Act or the Voluntary Health Services Plans Act;
19        (2) a corporation organized under the laws of this
20    State; or
21        (3) a corporation organized under the laws of another
22    state, 30% or more of the enrollees of which are residents
23    of this State, except a corporation subject to
24    substantially the same requirements in its state of
25    organization as is a "domestic company" under Article VIII
26    1/2 of the Illinois Insurance Code.

 

 

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

 

 

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1        combined operation for a period of 2 years;
2            (C) a pro forma business plan detailing an
3        acquiring party's plans with respect to the operation
4        of the Health Maintenance Organization sought to be
5        acquired for a period of not less than 3 years; and
6            (D) such other information as the Director shall
7        require.
8    (d) The provisions of Article VIII 1/2 of the Illinois
9Insurance Code and this Section 5-3 shall apply to the sale by
10any health maintenance organization of greater than 10% of its
11enrollee population (including without limitation the health
12maintenance organization's right, title, and interest in and to
13its health care certificates).
14    (e) In considering any management contract or service
15agreement subject to Section 141.1 of the Illinois Insurance
16Code, the Director (i) shall, in addition to the criteria
17specified in Section 141.2 of the Illinois Insurance Code, take
18into account the effect of the management contract or service
19agreement on the continuation of benefits to enrollees and the
20financial condition of the health maintenance organization to
21be managed or serviced, and (ii) need not take into account the
22effect of the management contract or service agreement on
23competition.
24    (f) Except for small employer groups as defined in the
25Small Employer Rating, Renewability and Portability Health
26Insurance Act and except for medicare supplement policies as

 

 

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1defined in Section 363 of the Illinois Insurance Code, a Health
2Maintenance Organization may by contract agree with a group or
3other enrollment unit to effect refunds or charge additional
4premiums under the following terms and conditions:
5        (i) the amount of, and other terms and conditions with
6    respect to, the refund or additional premium are set forth
7    in the group or enrollment unit contract agreed in advance
8    of the period for which a refund is to be paid or
9    additional premium is to be charged (which period shall not
10    be less than one year); and
11        (ii) the amount of the refund or additional premium
12    shall not exceed 20% of the Health Maintenance
13    Organization's profitable or unprofitable experience with
14    respect to the group or other enrollment unit for the
15    period (and, for purposes of a refund or additional
16    premium, the profitable or unprofitable experience shall
17    be calculated taking into account a pro rata share of the
18    Health Maintenance Organization's administrative and
19    marketing expenses, but shall not include any refund to be
20    made or additional premium to be paid pursuant to this
21    subsection (f)). The Health Maintenance Organization and
22    the group or enrollment unit may agree that the profitable
23    or unprofitable experience may be calculated taking into
24    account the refund period and the immediately preceding 2
25    plan years.
26    The Health Maintenance Organization shall include a

 

 

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1statement in the evidence of coverage issued to each enrollee
2describing the possibility of a refund or additional premium,
3and upon request of any group or enrollment unit, provide to
4the group or enrollment unit a description of the method used
5to calculate (1) the Health Maintenance Organization's
6profitable experience with respect to the group or enrollment
7unit and the resulting refund to the group or enrollment unit
8or (2) the Health Maintenance Organization's unprofitable
9experience with respect to the group or enrollment unit and the
10resulting additional premium to be paid by the group or
11enrollment unit.
12    In no event shall the Illinois Health Maintenance
13Organization Guaranty Association be liable to pay any
14contractual obligation of an insolvent organization to pay any
15refund authorized under this Section.
16    (g) Rulemaking authority to implement Public Act 95-1045,
17if any, is conditioned on the rules being adopted in accordance
18with all provisions of the Illinois Administrative Procedure
19Act and all rules and procedures of the Joint Committee on
20Administrative Rules; any purported rule not so adopted, for
21whatever reason, is unauthorized.
22(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
2395-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
2495-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
251-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
266-1-10; 96-1000, eff. 7-2-10.)
 

 

 

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1    Section 15. The Limited Health Service Organization Act is
2amended by changing Section 4003 as follows:
 
3    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
4    Sec. 4003. Illinois Insurance Code provisions. Limited
5health service organizations shall be subject to the provisions
6of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c,
7147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8,
8155.04, 155.37, 355.2, 356v, 356z.10, 356z.19, 368a, 401,
9401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
10Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
11XXVI of the Illinois Insurance Code. For purposes of the
12Illinois Insurance Code, except for Sections 444 and 444.1 and
13Articles XIII and XIII 1/2, limited health service
14organizations in the following categories are deemed to be
15domestic companies:
16        (1) a corporation under the laws of this State; or
17        (2) a corporation organized under the laws of another
18    state, 30% of more of the enrollees of which are residents
19    of this State, except a corporation subject to
20    substantially the same requirements in its state of
21    organization as is a domestic company under Article VIII
22    1/2 of the Illinois Insurance Code.
23(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)
 

 

 

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1    Section 20. The Voluntary Health Services Plans Act is
2amended by changing Section 10 as follows:
 
3    (215 ILCS 165/10)  (from Ch. 32, par. 604)
4    Sec. 10. Application of Insurance Code provisions. Health
5services plan corporations and all persons interested therein
6or dealing therewith shall be subject to the provisions of
7Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
8149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1, 356r, 356t,
9356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5,
10356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13,
11356z.14, 356z.15, 356z.18, 356z.19, 364.01, 367.2, 368a, 401,
12401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)
13and (15) of Section 367 of the Illinois Insurance Code.
14    Rulemaking authority to implement Public Act 95-1045, if
15any, is conditioned on the rules being adopted in accordance
16with all provisions of the Illinois Administrative Procedure
17Act and all rules and procedures of the Joint Committee on
18Administrative Rules; any purported rule not so adopted, for
19whatever reason, is unauthorized.
20(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
2195-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
228-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
23eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
2496-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
257-2-10.)