97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
SB1618

 

Introduced 2/9/2011, by Sen. Heather A. Steans

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/356Z.26 new

    Amends the Illinois Insurance Code. Provides that a health insurance issuer offering group or individual health insurance coverage shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, if the medical loss ratio for the plan year meets specified criteria. Sets forth guidelines for calculating the medical loss ratio. Effective immediately.


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A BILL FOR

 

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1    AN ACT concerning insurance.
 
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 adding
5Section 356Z.26 as follows:
 
6    (215 ILCS 5/356Z.26 new)
7    Sec. 356Z.26. Requirement to provide value for premium
8payments.
9    (a) Beginning January 1, 2011, except as provided in
10subsection (c) of this Section, a health insurance issuer
11offering group or individual health insurance coverage shall,
12with respect to each plan year, provide an annual rebate to
13each enrollee under such coverage, on a pro rata basis, if the
14medical loss ratio for the plan year is:
15        (1) with respect to a health insurance issuer offering
16    coverage in the large group market, less than 85% or such
17    higher percentage as established by the Department; or
18        (2) with respect to a health insurance issuer offering
19    coverage in the small group market or in the individual
20    market, less than 80% or such higher percentage as
21    established by the Department. The Director may request an
22    adjustment to the 80% standard in this paragraph (2) from
23    the Secretary of the U.S. Department of Health and Human

 

 

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1    Services if the Director determines that requiring
2    insurers to meet the 80% standard has a likelihood of
3    destabilizing the individual market and could result in
4    fewer choices for consumers.
5    (b) The total amount of an annual rebate required under
6this Section shall be in an amount equal to the product of the
7amount by which the percentage described in paragraph (1) or
8(2) of subsection (a) of this Section exceeds the ratio
9described in such paragraph and the total amount of premium
10revenue for such plan year.
11    (c) Beginning on January 1, 2014, the determination made
12under subsection (a) of this Section for the year involved
13shall be based on the averages of the premiums expended on the
14costs described in such subsection and total premium revenue
15for each of the previous 3 years for the plan.
16    (d) In determining the percentages under subsection (a) of
17this Section, the Department shall seek to ensure adequate
18participation by health insurance issuers, competition in the
19Illinois health insurance market, and value for consumers so
20that premiums are used for clinical services and quality
21improvements.
22    (e) The medical loss ratio described in subsection (a) of
23this Section shall be calculated pursuant to the NAIC Patient
24Protection and Affordable Care Act Medical Loss Ratio
25Regulation as certified by the Secretary of the U.S. Department
26of Health and Human Services under subsection (c) of Section

 

 

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12718 of the federal Public Health Service Act, as amended by
2the Patient Protection and Affordable Care Act.
3    (f) A health insurance issuer offering group or individual
4health insurance coverage shall provide to the Department any
5information required to be submitted to the Secretary of the
6U.S. Department of Health and Human Services under Section 2718
7of the Public Health Service Act, as amended by the Patient
8Protection and Affordable Care Act, or under regulations
9promulgated pursuant thereto.
10    (g) As used in this Section "health insurance issuer",
11"health insurance coverage", "group health insurance", and
12"individual health insurance" shall have the same meaning given
13those terms in the Illinois Health Insurance Portability and
14Accountability Act.
 
15    Section 99. Effective date. This Act takes effect upon
16becoming law.