215 ILCS 97/ Illinois Health Insurance Portability and Accountability Act.

(215 ILCS 97/1)

Sec. 1. Short title. This Act may be cited as the Illinois Health Insurance Portability and Accountability Act.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/5)

Sec. 5. Definitions.

"Affiliate" means a person that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the person specified.

"Beneficiary" has the meaning given such term under Section 3(8) of the Employee Retirement Income Security Act of 1974.

"Bona fide association" means, with respect to health insurance coverage offered in a State, an association which:

(1) has been actively in existence for at least 5 years;

(2) has been formed and maintained in good faith for purposes other than obtaining insurance;

(3) does not condition membership in the association on any health status-related factor relating to an individual (including an employee of an employer or a dependent of an employee);

(4) makes health insurance coverage offered through the association available to all members regardless of any health status-related factor relating to such members (or individuals eligible for coverage through a member);

(5) does not make health insurance coverage offered through the association available other than in connection with a member of the association; and

(6) meets such additional requirements as may be imposed under State law.

"Church plan" has the meaning given that term under Section 3(33) of the Employee Retirement Income Security Act of 1974.

"COBRA continuation provision" means any of the following:

(1) Section 4980B of the Internal Revenue Code of 1986, other than subsection (f)(1) of that Section insofar as it relates to pediatric vaccines.

(2) Part 6 of subtitle B of title I of the Employee Retirement Income Security Act of 1974, other than Section 609 of that Act.

(3) Title XXII of federal Public Health Service Act.

"Control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, the holding of policyholders' proxies by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is solely the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds shareholders' proxies representing 10% or more of the voting securities of any other person or holds or controls sufficient policyholders' proxies to elect the majority of the board of directors of the domestic company. This presumption may be rebutted by a showing made in a manner as the Secretary may provide by rule. The Secretary may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support such determination, that control exists in fact, notwithstanding the absence of a presumption to that effect.

"Department" means the Department of Insurance.

"Employee" has the meaning given that term under Section 3(6) of the Employee Retirement Income Security Act of 1974.

"Employer" has the meaning given that term under Section 3(5) of the Employee Retirement Income Security Act of 1974, except that the term shall include only employers of 2 or more employees.

"Enrollment date" means, with respect to an individual covered under a group health plan or group health insurance coverage, the date of enrollment of the individual in the plan or coverage, or if earlier, the first day of the waiting period for enrollment.

"Federal governmental plan" means a governmental plan established or maintained for its employees by the government of the United States or by any agency or instrumentality of that government.

"Governmental plan" has the meaning given that term under Section 3(32) of the Employee Retirement Income Security Act of 1974 and any federal governmental plan.

"Group health insurance coverage" means, in connection with a group health plan, health insurance coverage offered in connection with the plan.

"Group health plan" means an employee welfare benefit plan (as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974) to the extent that the plan provides medical care (as defined in paragraph (2) of that Section and including items and services paid for as medical care) to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise.

"Health insurance coverage" means benefits consisting of medical care (provided directly, through insurance or reimbursement, or otherwise and including items and services paid for as medical care) under any hospital or medical service policy or certificate, hospital or medical service plan contract, or health maintenance organization contract offered by a health insurance issuer.

"Health insurance issuer" means an insurance company, insurance service, or insurance organization (including a health maintenance organization, as defined herein) which is licensed to engage in the business of insurance in a state and which is subject to Illinois law which regulates insurance (within the meaning of Section 514(b)(2) of the Employee Retirement Income Security Act of 1974). The term does not include a group health plan.

"Health maintenance organization (HMO)" means:

(1) a Federally qualified health maintenance organization (as defined in Section 1301(a) of the Public Health Service Act.);

(2) an organization recognized under State law as a health maintenance organization; or

(3) a similar organization regulated under State law for solvency in the same manner and to the same extent as such a health maintenance organization.

"Individual health insurance coverage" means health insurance coverage offered to individuals in the individual market, but does not include short-term limited duration insurance.

"Individual market" means the market for health insurance coverage offered to individuals other than in connection with a group health plan.

"Large employer" means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 51 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year.

(1) Application of aggregation rule for large employers. All persons treated as a single employer under subsection (b), (c), (m), or (o) of Section 414 of the Internal Revenue Code of 1986 shall be treated as one employer.

(2) Employers not in existence in preceding year. In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether the employer is a large employer shall be based on the average number of employees that it is reasonably expected the employer will employ on business days in the current calendar year.

(3) Predecessors. Any reference in this Act to an employer shall include a reference to any predecessor of such employer.

"Large group market" means the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by a large employer.

"Late enrollee" means with respect to coverage under a group health plan, a participant or beneficiary who enrolls under the plan other than during:

(1) the first period in which the individual is eligible to enroll under the plan; or

(2) a special enrollment period under subsection (F) of Section 20.

"Medical care" means amounts paid for:

(1) the diagnosis, cure, mitigation, treatment, or prevention of disease, or amounts paid for the purpose of affecting any structure or function of the body;

(2) amounts paid for transportation primarily for and essential to medical care referred to in item (1); and

(3) amounts paid for insurance covering medical care referred to in items (1) and (2).

"Nonfederal governmental plan" means a governmental plan that is not a federal governmental plan.

"Network plan" means health insurance coverage of a health insurance issuer under which the financing and delivery of medical care (including items and services paid for as medical care) are provided, in whole or in part, through a defined set of providers under contract with the issuer.

"Participant" has the meaning given that term under Section 3(7) of the Employee Retirement Income Security Act of 1974.

"Person" means an individual, a corporation, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity, or any combination of the foregoing acting in concert, but does not include any securities broker performing no more than the usual and customary broker's function or joint venture partnership exclusively engaged in owning, managing, leasing, or developing real or tangible personal property other than capital stock.

"Placement" or being "placed" for adoption, in connection with any placement for adoption of a child with any person, means the assumption and retention by the person of a legal obligation for total or partial support of the child in anticipation of adoption of the child. The child's placement with the person terminates upon the termination of the legal obligation.

"Plan sponsor" has the meaning given that term under Section 3(16)(B) of the Employee Retirement Income Security Act of 1974.

"Preexisting condition exclusion" means, with respect to coverage, a limitation or exclusion of benefits relating to a condition based on the fact that the condition was present before the date of enrollment for such coverage, whether or not any medical advice, diagnosis, care, or treatment was recommended or received before such date.

"Small employer" means, in connection with a group health plan with respect to a calendar year and a plan year, an employer who employed an average of at least 2 but not more than 50 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year.

(1) Application of aggregation rule for small employers. All persons treated as a single employer under subsection (b), (c), (m), or (o) of Section 414 of the Internal Revenue Code of 1986 shall be treated as one employer.

(2) Employers not in existence in preceding year. In the case of an employer which was not in existence throughout the preceding calendar year, the determination of whether the employer is a small employer shall be based on the average number of employees that it is reasonably expected the employer will employ on business days in the current calendar year.

(3) Predecessors. Any reference in this Act to a small employer shall include a reference to any predecessor of that employer.

"Small group market" means the health insurance market under which individuals obtain health insurance coverage (directly or through any arrangement) on behalf of themselves (and their dependents) through a group health plan maintained by a small employer.

"State" means each of the several States, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands.

"Waiting period" means with respect to a group health plan and an individual who is a potential participant or beneficiary in the plan, the period of time that must pass with respect to the individual before the individual is eligible to be covered for benefits under the terms of the plan.

(Source: P.A. 94-502, eff. 8-8-05.)

(215 ILCS 97/15)

Sec. 15. Applicability and scope. This Act applies to all health insurance policies and all health service contracts issued, renewed, or delivered for issuance or renewal in this State by a health insurance issuer after the effective date of this Act. Unless otherwise specifically provided by this Act, the standards and requirements imposed by this Act shall supersede and replace any and all conflicting, inconsistent or less restrictive standards or requirements contained in the Illinois Insurance Code, the Health Maintenance Organization Act, the Limited Health Service Organization Act, and the Voluntary Health Services Plans Act.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/20)

Sec. 20. Increased portability through prohibition of preexisting condition exclusions.

(A) No health insurance coverage issued, amended, delivered, or renewed on or after the effective date of this amendatory Act of the 102nd General Assembly may impose any preexisting condition exclusion with respect to the plan or coverage. This provision does not apply to the provision of excepted benefits as described in paragraph (2) of subsection (C).

(B) (Blank).

(C) Rules relating to crediting previous coverage.

(1) Creditable coverage defined. For purposes of this Act, the term "creditable coverage" means, with respect to an individual, coverage of the individual under any of the following:

(a) A group health plan.

(b) Health insurance coverage.

(c) Part A or part B of title XVIII of the Social Security Act.

(d) Title XIX of the Social Security Act, other than coverage consisting solely of benefits under Section 1928.

(e) Chapter 55 of title 10, United States Code.

(f) A medical care program of the Indian Health Service or of a tribal organization.

(g) A State health benefits risk pool.

(h) A health plan offered under chapter 89 of title 5, United States Code.

(i) A public health plan (as defined in regulations).

(j) A health benefit plan under Section 5(e) of the Peace Corps Act (22 U.S.C. 2504(e)).

(k) Title XXI of the federal Social Security Act, State Children's Health Insurance Program.

Such term does not include coverage consisting solely of coverage of excepted benefits.

(2) Excepted benefits. For purposes of this Act, the term "excepted benefits" means benefits under one or more of the following:

(a) Benefits not subject to requirements:

(i) Coverage only for accident, or disability income insurance, or any combination thereof.

(ii) Coverage issued as a supplement to liability insurance.

(iii) Liability insurance, including general liability insurance and automobile liability insurance.

(iv) Workers' compensation or similar insurance.

(v) Automobile medical payment insurance.

(vi) Credit-only insurance.

(vii) Coverage for on-site medical clinics.

(viii) Other similar insurance coverage, specified in regulations, under which benefits for medical care are secondary or incidental to other insurance benefits.

(b) Benefits not subject to requirements if offered separately:

(i) Limited scope dental or vision benefits.

(ii) Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof.

(iii) Such other similar, limited benefits as are specified in rules.

(c) Benefits not subject to requirements if offered, as independent, noncoordinated benefits:

(i) Coverage only for a specified disease or illness.

(ii) Hospital indemnity or other fixed indemnity insurance.

(d) Benefits not subject to requirements if offered as separate insurance policy. Medicare supplemental health insurance (as defined under Section 1882(g)(1) of the Social Security Act), coverage supplemental to the coverage provided under chapter 55 of title 10, United States Code, and similar supplemental coverage provided to coverage under a group health plan.

(3) Not counting periods before significant breaks in coverage.

(a) In general. A period of creditable coverage shall not be counted, with respect to enrollment of an individual under a group health plan, if, after such period and before the enrollment date, there was a 63-day period during all of which the individual was not covered under any creditable coverage.

(b) Waiting period not treated as a break in coverage. For purposes of subparagraph (a) and subsection (D)(3), any period that an individual is in a waiting period for any coverage under a group health plan (or for group health insurance coverage) or is in an affiliation period (as defined in subsection (G)(2)) shall not be taken into account in determining the continuous period under subparagraph (a).

(4) (Blank).

(5) Establishment of period. Periods of creditable coverage with respect to an individual shall be established through presentation or certifications described in subsection (E) or in such other manner as may be specified in regulations.

(D) (Blank).

(E) Certifications and disclosure of coverage.

(1) Requirement for Certification of Period of Creditable Coverage.

(a) A group health plan, and a health insurance issuer offering group health insurance coverage, shall provide the certification described in subparagraph (b):

(i) at the time an individual ceases to be covered under the plan or otherwise becomes covered under a COBRA continuation provision;

(ii) in the case of an individual becoming covered under such a provision, at the time the individual ceases to be covered under such provision; and

(iii) on the request on behalf of an individual made not later than 24 months after the date of cessation of the coverage described in clause (i) or (ii), whichever is later.

The certification under clause (i) may be provided, to the extent practicable, at a time consistent with notices required under any applicable COBRA continuation provision.

(b) The certification described in this subparagraph is a written certification of:

(i) the period of creditable coverage of the individual under such plan and the coverage (if any) under such COBRA continuation provision; and

(ii) the waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage under such plan.

(c) To the extent that medical care under a group health plan consists of group health insurance coverage, the plan is deemed to have satisfied the certification requirement under this paragraph if the health insurance issuer offering the coverage provides for such certification in accordance with this paragraph.

(2) (Blank).

(3) Rules. The Department shall establish rules to prevent an entity's failure to provide information under paragraph (1) with respect to previous coverage of an individual from adversely affecting any subsequent coverage of the individual under another group health plan or health insurance coverage.

(4) Treatment of certain plans as group health plan for notice provision. A program under which creditable coverage described in subparagraph (c), (d), (e), or (f) of Section 20(C)(1) is provided shall be treated as a group health plan for purposes of this Section.

(F) Special enrollment periods.

(1) Individuals losing other coverage. A group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, shall permit an employee who is eligible, but not enrolled, for coverage under the terms of the plan (or a dependent of such an employee if the dependent is eligible, but not enrolled, for coverage under such terms) to enroll for coverage under the terms of the plan if each of the following conditions is met:

(a) The employee or dependent was covered under a group health plan or had health insurance coverage at the time coverage was previously offered to the employee or dependent.

(b) The employee stated in writing at such time that coverage under a group health plan or health insurance coverage was the reason for declining enrollment, but only if the plan sponsor or issuer (if applicable) required such a statement at such time and provided the employee with notice of such requirement (and the consequences of such requirement) at such time.

(c) The employee's or dependent's coverage described in subparagraph (a):

(i) was under a COBRA continuation provision and the coverage under such provision was exhausted; or

(ii) was not under such a provision and either the coverage was terminated as a result of loss of eligibility for the coverage (including as a result of legal separation, divorce, death, termination of employment, or reduction in the number of hours of employment) or employer contributions towards such coverage were terminated.

(d) Under the terms of the plan, the employee requests such enrollment not later than 30 days after the date of exhaustion of coverage described in subparagraph (c)(i) or termination of coverage or employer contributions described in subparagraph (c)(ii).

(2) For dependent beneficiaries.

(a) In general. If:

(i) a group health plan makes coverage available with respect to a dependent of an individual,

(ii) the individual is a participant under the plan (or has met any waiting period applicable to becoming a participant under the plan and is eligible to be enrolled under the plan but for a failure to enroll during a previous enrollment period), and

(iii) a person becomes such a dependent of the individual through marriage, birth, or adoption or placement for adoption,

then the group health plan shall provide for a dependent special enrollment period described in subparagraph (b) during which the person (or, if not otherwise enrolled, the individual) may be enrolled under the plan as a dependent of the individual, and in the case of the birth or adoption of a child, the spouse of the individual may be enrolled as a dependent of the individual if such spouse is otherwise eligible for coverage.

(b) Dependent special enrollment period. A dependent special enrollment period under this subparagraph shall be a period of not less than 30 days and shall begin on the later of:

(i) the date dependent coverage is made available; or

(ii) the date of the marriage, birth, or adoption or placement for adoption (as the case may be) described in subparagraph (a)(iii).

(c) No waiting period. If an individual seeks to enroll a dependent during the first 30 days of such a dependent special enrollment period, the coverage of the dependent shall become effective:

(i) in the case of marriage, not later than the first day of the first month beginning after the date the completed request for enrollment is received;

(ii) in the case of a dependent's birth, as of the date of such birth; or

(iii) in the case of a dependent's adoption or placement for adoption, the date of such adoption or placement for adoption.

(G) Use of affiliation period by HMOs as alternative to preexisting condition exclusion.

(1) In general. A health maintenance organization which offers health insurance coverage in connection with a group health plan and which does not impose any pre-existing condition exclusion with respect to any particular coverage option may impose an affiliation period for such coverage option, but only if:

(a) such period is applied uniformly without regard to any health status-related factors; and

(b) such period does not exceed 2 months (or 3 months in the case of a late enrollee).

(2) Affiliation period.

(a) Defined. For purposes of this Act, the term "affiliation period" means a period which, under the terms of the health insurance coverage offered by the health maintenance organization, must expire before the health insurance coverage becomes effective. The organization is not required to provide health care services or benefits during such period and no premium shall be charged to the participant or beneficiary for any coverage during the period.

(b) Beginning. Such period shall begin on the enrollment date.

(c) Runs concurrently with waiting periods. An affiliation period under a plan shall run concurrently with any waiting period under the plan.

(3) Alternative methods. A health maintenance organization described in paragraph (1) may use alternative methods, from those described in such paragraph, to address adverse selection as approved by the Department.

(Source: P.A. 102-775, eff. 5-13-22.)

(215 ILCS 97/25)

Sec. 25. Prohibiting discrimination against individual participants.

(A) In eligibility to enroll.

(1) In general. Subject to paragraph (2), a group health plan, and a health insurance issuer offering group health insurance coverage in connection with a group health plan, may not establish rules for eligibility (including continued eligibility) of any individual to enroll under the terms of the plan based on any of the following health status-related factors in relation to the individual or a dependent of the individual:

(a) Health status.

(b) Medical condition (including both physical and mental illnesses).

(c) Claims experience.

(d) Receipt of health care.

(e) Medical history.

(f) Genetic information.

(g) Evidence of insurability (including conditions arising out of acts of domestic violence).

(h) Disability.

(2) No application to benefits or exclusions. To the extent consistent with Section 20, the provisions of paragraph (1) shall not be construed:

(a) to require a group health plan, or group health insurance coverage, to provide particular benefits other than those provided under the terms of such plan or coverage; or

(b) to prevent such a plan or coverage from establishing limitations or restrictions on the amount, level, extent, or nature of the benefits or coverage for similarly situated individuals enrolled in the plan or coverage.

(3) Construction. For purposes of paragraph (1), rules for eligibility to enroll under a plan include rules defining any applicable waiting periods for such enrollment.

(B) In premium contributions.

(1) In general. A group health plan, and a health insurance issuer offering health insurance coverage in connection with a group health plan, may not require any individual (as a condition of enrollment or continued enrollment under the plan) to pay a premium or contribution which is greater than such premium or contribution for a similarly situated individual enrolled in the plan on the basis of any health status-related factor in relation to the individual or to an individual enrolled under the plan as a dependent of the individual.

(2) Construction. Nothing in paragraph (1) shall be construed:

(a) to restrict the amount that an employer may be charged for coverage under a group health plan; or

(b) to prevent a group health plan, and a health insurance issuer offering group health insurance coverage, from establishing premium discounts or rebates or modifying otherwise applicable copayments or deductibles in return for adherence to programs of health promotion and disease prevention.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/30)

Sec. 30. Guaranteed renewability of coverage for employers in the group market.

(A) In general. Except as provided in this Section, if a health insurance issuer offers health insurance coverage in the small or large group market in connection with a group health plan, the issuer must renew or continue in force such coverage at the option of the plan sponsor of the plan.

(B) General exceptions. A health insurance issuer may nonrenew or discontinue health insurance coverage offered in connection with a group health plan in the small or large group market based only on one or more of the following:

(1) Nonpayment of premiums. The plan sponsor has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments.

(2) Fraud. The plan sponsor has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage.

(3) Violation of participation or contribution rules. The plan sponsor has failed to comply with a material plan provision relating to employer contribution or group participation rules, as permitted under Section 40(D) in the case of the small group market or pursuant to applicable State law in the case of the large group market.

(4) Termination of coverage. The issuer is ceasing to offer coverage in such market in accordance with subsection (C) and applicable State law.

(5) Movement outside service area. In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, there is no longer any enrollee in connection with such plan who lives, resides, or works in the service area of the issuer (or in the area for which the issuer is authorized to do business) and, in the case of the small group market, the issuer would deny enrollment with respect to such plan under Section 40(C)(1)(a).

(6) Association membership ceases. In the case of health insurance coverage that is made available in the small or large group market (as the case may be) only through one or more bona fide association, the membership of an employer in the association (on the basis of which the coverage is provided) ceases but only if such coverage is terminated under this paragraph uniformly without regard to any health status-related factor relating to any covered individual.

(C) Requirements for uniform termination of coverage.

(1) Particular type of coverage not offered. In any case in which an issuer decides to discontinue offering a particular type of group health insurance coverage offered in the small or large group market, coverage of such type may be discontinued by the issuer in accordance with applicable State law in such market only if:

(a) the issuer provides notice to each plan sponsor provided coverage of this type in such market (and participants and beneficiaries covered under such coverage) of such discontinuation at least 90 days prior to the date of the discontinuation of such coverage;

(b) the issuer offers to each plan sponsor provided coverage of this type in such market, the option to purchase all (or, in the case of the large group market, any) other health insurance coverage currently being offered by the issuer to a group health plan in such market; and

(c) in exercising the option to discontinue coverage of this type and in offering the option of coverage under subparagraph (b), the issuer acts uniformly without regard to the claims experience of those sponsors or any health status-related factor relating to any participants or beneficiaries who may become eligible for such coverage.

(2) Discontinuance of all coverage.

(a) In general. In any case in which a health insurance issuer elects to discontinue offering all health insurance coverage in the small group market or the large group market, or both markets, in Illinois, health insurance coverage may be discontinued by the issuer only in accordance with Illinois law and if:

(i) the issuer provides notice to the Department and to each plan sponsor (and participants and beneficiaries covered under such coverage) of such discontinuation at least 180 days prior to the date of the discontinuation of such coverage; and

(ii) all health insurance issued or delivered for issuance in Illinois in such market (or markets) are discontinued and coverage under such health insurance coverage in such market (or markets) is not renewed.

(b) Prohibition on market reentry. In the case of a discontinuation under subparagraph (a) in a market, the issuer may not provide for the issuance of any health insurance coverage in the Illinois market involved during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.

(D) Exception for uniform modification of coverage. At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a product offered to a group health plan:

(1) in the large group market; or

(2) in the small group market if, for coverage that is available in such market other than only through one or more bona fide associations, such modification is consistent with State law and effective on a uniform basis among group health plans with that product.

(E) Application to coverage offered only through associations. In applying this Section in the case of health insurance coverage that is made available by a health insurance issuer in the small or large group market to employers only through one or more associations, a reference to "plan sponsor" is deemed, with respect to coverage provided to an employer member of the association, to include a reference to such employer.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/35)

Sec. 35. Disclosure of Information.

(A) Disclosure of information by health plan issuers. In connection with the offering of any health insurance coverage to a small employer, a health insurance issuer:

(1) shall make a reasonable disclosure to such employer, as part of its solicitation and sales materials, of the availability of information described in subsection (B), and

(2) shall, upon request of such a small employer, provide such information.

(B) Information described.

(1) In general. Subject to paragraph (3), with respect to a health insurance issuer offering health insurance coverage to a small employer, information described in this subsection is information concerning:

(a) the provisions of such coverage concerning issuer's right to change premium rates and the factors that may affect changes in premium rates;

(b) the provisions of such coverage relating to renewability of coverage;

(c) the provisions of such coverage relating to any pre-existing condition exclusion; and

(d) the benefits and premiums available under all health insurance coverage for which the employer is qualified.

(2) Form of information. Information under this subsection shall be provided to small employers in a manner determined to be understandable by the average small employer, and shall be sufficient to reasonably inform small employers of their rights and obligations under the health insurance coverage.

(3) Exception. An issuer is not required under this Section to disclose any information that is proprietary and trade secret information under applicable law.

(Source: P.A. 90-30, eff. 7-1-97; 91-357, eff. 7-29-99.)

(215 ILCS 97/40)

Sec. 40. Guaranteed availability of coverage for employers in the group market.

(A) Issuance of coverage in the small group market.

(1) In general. Subject to subsections (C) through (F), each health insurance issuer that offers health insurance coverage in the small group market in a State:

(a) must accept every small employer (as defined in Section 10) in the State that applies for such coverage; and

(b) must accept for enrollment under such coverage every eligible individual (as defined in paragraph (2)) who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan and may not place any restriction which is inconsistent with Section 25 on an eligible individual being a participant or beneficiary.

(2) Eligible individual defined. For purposes of this Section, the term "eligible individual" means, with respect to a health insurance issuer that offers health insurance coverage to a small employer in connection with a group health plan in the small group market, such an individual in relation to the employer as shall be determined:

(a) in accordance with the terms of such plan;

(b) as provided by the issuer under rules of the issuer which are uniformly applicable in a State to small employers in the small group market; and

(c) in accordance with all applicable State laws governing such issuer and such market.

(B) Special rules for network plans.

(1) In general. In the case of a health insurance issuer that offers health insurance coverage in the small group market through a network plan, the issuer may:

(a) limit the employers that may apply for such coverage to those with eligible individuals who live, work, or reside in the service area for such network plan; and

(b) within the service area of such plan, deny such coverage to such employers if the issuer has demonstrated, if required, to the Department that:

(i) it will not have the capacity to deliver services adequately to enrollees of any additional groups because of its obligations to existing group contract holders and enrollees; and

(ii) it is applying this paragraph uniformly to all employers without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to such employees and dependents.

(2) 180-day suspension upon denial of coverage. An issuer, upon denying health insurance coverage in any service area in accordance with paragraph (1)(b), may not offer coverage in the small group market within such service area for a period of 180 days after the date such coverage is denied.

(C) Application of financial capacity limits.

(1) In general. A health insurance issuer may deny health insurance coverage in the small group market if the issuer has demonstrated, if required, to the Department:

(a) it does not have the financial capacity necessary to underwrite additional coverage; and

(b) it is applying this paragraph uniformly to all employers in the small group market in the State and without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to such employees and dependents.

(2) 180-day suspension upon denial of coverage. A health insurance issuer upon denying health insurance coverage in connection with group health plans in accordance with paragraph (1) may not offer coverage in connection with group health plans in the small group market for a period of 180 days after the date such coverage is denied or until the issuer has demonstrated to the Department that the issuer has sufficient financial capacity to underwrite additional coverage, whichever is later. The Department may provide for the application of this subsection on a service-area-specific basis.

(D) Exception to requirement for failure to meet certain minimum participation or contribution rules.

(1) In general. Subsection (A) shall not be construed to preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a group health plan in the small group market.

(2) Rules defined. For purposes of paragraph (1):

(a) the term "employer contribution rule" means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and

(b) the term "group participation rule" means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer.

(E) Exception for coverage offered only to bona fide association members. Subsection (A) shall not apply to health insurance coverage offered by a health insurance issuer if such coverage is made available in the small group market only through one or more bona fide associations (as defined in Section 10).

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/45)

Sec. 45. Exclusion of certain plans.

(A) Exception for certain small group health plans. The requirements of this Act shall not apply to any group health plan (and health insurance coverage offered in connection with a group health plan) for any plan year if, on the first day of such plan year, such plan has less than 2 participants who are current employees.

(B) Limitation on application of provisions relating to group health plans.

(1) In general. The requirements of this Act shall apply with respect to group health plans only:

(a) subject to paragraph (2), in the case of a plan that is a nonfederal governmental plan; and

(b) with respect to health insurance coverage offered in connection with a group health plan (including such a plan that is a church plan or a governmental plan).

(2) Treatment of nonfederal governmental plans.

(a) Election to be excluded. If the plan sponsor of a nonfederal governmental plan which is a group health plan to which the provisions of this Act otherwise apply makes an election under this subparagraph (in such form and manner as may be prescribed by rule), then the requirements of this Act insofar as they apply directly to group health plans (and not merely to group health insurance coverage) shall not apply to such governmental plans for such period except as provided in this paragraph.

(b) Period of election. An election under subparagraph (a) shall apply:

(i) for a single specified plan year; or

(ii) in the case of a plan provided pursuant to a collective bargaining agreement, for the term of such agreement.

An election under clause (i) may be extended through subsequent elections under this paragraph.

(c) Notice to enrollees. Under such an election, the plan shall provide for:

(i) notice to enrollees (on an annual basis and at the time of enrollment under the plan) of the fact and consequences of such election; and

(ii) certification and disclosure of creditable coverage under the plan with respect to enrollees in accordance with Section 20(E).

(C) Exception for certain benefits. The requirements of this Act shall not apply to any group health plan (or group health insurance coverage) in relation to its provision of excepted benefits described in Section 20(C)(2)(a).

(D) Exception for certain benefits if certain conditions met.

(1) Limited, excepted benefits. The requirements of this Act shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) in relation to its provision of excepted benefits described in Section 20(C)(2)(b) if the benefits:

(a) are provided under a separate policy, certificate, or contract of insurance; or

(b) are otherwise not an integral part of the plan.

(2) Noncoordinated, excepted benefits. The requirements of this Act shall not apply to any group health plan (and group health insurance coverage offered in connection with a group health plan) in relation to its provision of excepted benefits described in Section 20(C)(2)(c) if all of the following conditions are met:

(a) The benefits are provided under a separate policy, certificate, or contract of insurance.

(b) There is no coordination between the provision of such benefits and any exclusion of benefits under any group health plan maintained by the same plan sponsor.

(c) Such benefits are paid with respect to an event without regard to whether benefits are provided with respect to such an event under any group health plan maintained by the same plan sponsor.

(3) Supplemental excepted benefits. The requirements of this Act shall not apply to any group health plan (and group health insurance coverage) in relation to its provision of excepted benefits described in Section 20(C)(2)(d) if the benefits are provided under a separate policy, certificate, or contract of insurance.

(E) Treatment of partnerships. For purposes of this Act:

(1) Treatment as a group health plan. Any plan, fund, or program which would not be (but for this subsection) an employee welfare benefit plan and which is established or maintained by a partnership, to the extent that such plan, fund, or program provides medical care (including items and services paid for as medical care) to present or former partners in the partnership or to their dependents (as defined under the terms of the plan, fund, or program), directly or through insurance, reimbursement, or otherwise, shall be treated (subject to paragraph (2)) as an employee welfare benefit plan which is a group health plan.

(2) Employer. In the case of a group health plan, the term "employer" also includes the partnership in relation to any partner.

(3) Partnerships of group health plans. In the case of a group health plan, the term "participant" also includes:

(a) in connection with a group health plan maintained by a partnership, an individual who is a partner in relation to the partnership, or

(b) in connection with a group health plan maintained by a self-employed individual (under which one or more employees are participants), the self-employed individual, if such individual is or may become eligible to receive a benefit under the plan or the individual's beneficiaries may be eligible for any benefit.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/50)

Sec. 50. Guaranteed renewability of individual health insurance coverage.

(A) In general. Except as provided in this Section, a health insurance issuer that provides individual health insurance coverage to an individual shall renew or continue in force such coverage at the option of the individual.

(B) General exceptions. A health insurance issuer may nonrenew or discontinue health insurance coverage of an individual in the individual market based only on one or more of the following:

(1) Nonpayment of premiums. The individual has failed to pay premiums or contributions in accordance with the terms of the health insurance coverage or the issuer has not received timely premium payments.

(2) Fraud. The individual has performed an act or practice that constitutes fraud or made an intentional misrepresentation of material fact under the terms of the coverage.

(3) Termination of plan. The issuer is ceasing to offer coverage in the individual market in accordance with subsection (C) of this Section and applicable Illinois law.

(4) Movement outside the service area. In the case of a health insurance issuer that offers health insurance coverage in the market through a network plan, the individual no longer resides, lives, or works in the service area (or in an area for which the issuer is authorized to do business), but only if such coverage is terminated under this paragraph uniformly without regard to any health status-related factor of covered individuals.

(5) Association membership ceases. In the case of health insurance coverage that is made available in the individual market only through one or more bona fide associations, the membership of the individual in the association (on the basis of which the coverage is provided) ceases, but only if such coverage is terminated under this paragraph uniformly without regard to any health status-related factor of covered individuals.

(C) Requirements for uniform termination of coverage.

(1) Particular type of coverage not offered. In any case in which an issuer decides to discontinue offering a particular type of health insurance coverage offered in the individual market, coverage of such type may be discontinued by the issuer only if:

(a) the issuer provides notice to each covered individual provided coverage of this type in such market of such discontinuation at least 90 days prior to the date of the discontinuation of such coverage;

(b) the issuer offers, to each individual in the individual market provided coverage of this type, the option to purchase any other individual health insurance coverage currently being offered by the issuer for individuals in such market; and

(c) in exercising the option to discontinue coverage of that type and in offering the option of coverage under subparagraph (b), the issuer acts uniformly without regard to any health status-related factor of enrolled individuals or individuals who may become eligible for such coverage.

(2) Discontinuance of all coverage.

(a) In general. Subject to subparagraph (c), in any case in which a health insurance issuer elects to discontinue offering all health insurance coverage in the individual market in Illinois, health insurance coverage may be discontinued by the issuer only if:

(i) the issuer provides notice to the Director and to each individual of the discontinuation at least 180 days prior to the date of the expiration of such coverage;

(ii) all health insurance issued or delivered for issuance in Illinois in such market is discontinued and coverage under such health insurance coverage in such market is not renewed; and

(iii) in the case where the issuer has affiliates in the individual market, the issuer gives notice to each affected individual at least 180 days prior to the date of the expiration of the coverage of the individual's option to purchase all other individual health benefit plans currently offered by any affiliate of the carrier.

(b) Prohibition on market reentry. In the case of a discontinuation under subparagraph (a) in the individual market, the issuer may not provide for the issuance of any health insurance coverage in Illinois involved during the 5-year period beginning on the date of the discontinuation of the last health insurance coverage not so renewed.

(c) If an issuer elects to discontinue offering all health insurance coverage in the individual market under subparagraph (a), its affiliates that offer health insurance coverage in the individual market in Illinois shall offer individual health insurance coverage to all individuals who were covered by the discontinued health insurance coverage on the date of the notice provided to affected individuals under subdivision (iii) of subparagraph (a) of this item (2) if the individual applies for coverage no later than 63 days after the discontinuation of coverage.

(d) Subject to subparagraph (e) of this item (2), an affiliate that issues coverage under subparagraph (c) shall waive the preexisting condition exclusion period to the extent that the individual has satisfied the preexisting condition exclusion period under the individual's prior contract or policy.

(e) An affiliate that issues coverage under subparagraph (c) may require the individual to satisfy the remaining part of the preexisting condition exclusion period, if any, under the individual's prior contract or policy that has not been satisfied, unless the coverage has a shorter preexisting condition exclusion period, and may include in any coverage issued under subparagraph (c) any waivers or limitations of coverage that were included in the individual's prior contract or policy.

(D) Exception for uniform modification of coverage. At the time of coverage renewal, a health insurance issuer may modify the health insurance coverage for a policy form offered to individuals in the individual market so long as the modification is consistent with Illinois law and effective on a uniform basis among all individuals with that policy form.

(E) Application to coverage offered only through associations. In applying this Section in the case of health insurance coverage that is made available by a health insurance issuer in the individual market to individuals only through one or more associations, a reference to an "individual" is deemed to include a reference to such an association (of which the individual is a member).

The changes to this Section made by this amendatory Act of the 94th General Assembly apply only to discontinuances of coverage occurring on or after the effective date of this amendatory Act of the 94th General Assembly.

(Source: P.A. 94-502, eff. 8-8-05.)

(215 ILCS 97/60)

Sec. 60. Notice requirement. In any case where a health insurance issuer elects to uniformly modify coverage, uniformly terminate coverage, or discontinue coverage in a marketplace in accordance with Sections 30 and 50 of this Act, the issuer shall provide notice to the Department prior to notifying the plan sponsors, participants, beneficiaries, and covered individuals. The notice shall be sent by certified mail to the Department 90 days in advance of any notification of the company's actions sent to plan sponsors, participants, beneficiaries, and covered individuals. The notice shall include: (i) a complete description of the action to be taken, (ii) a specific description of the type of coverage affected, (iii) the total number of covered lives affected, (iv) a sample draft of all letters being sent to the plan sponsors, participants, beneficiaries, or covered individuals, (v) time frames for the actions being taken, (vi) options the plans sponsors, participants, beneficiaries, or covered individuals may have available to them under this Act, and (vii) any other information as required by the Department.

This Section applies only to discontinuances of coverage occurring on or after the effective date of this amendatory Act of the 94th General Assembly.

(Source: P.A. 94-502, eff. 8-8-05.)

(215 ILCS 97/85)

Sec. 85. (Amendatory provisions; text omitted).

(Source: P.A. 90-30, eff. 7-1-97; text omitted.)

(215 ILCS 97/86)

Sec. 86. The Small Employer Rating, Renewability and Portability Health Insurance Act is amended by repealing Sections 1, 5, 10, 15, 20, and 55 on July 1, 1998.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/87)

Sec. 87. The Small Employer Rating, Renewability and Portability Health Insurance Act is amended by repealing Sections 25, 30, 35, 40, 45, and 50.

(Source: P.A. 90-30, eff. 7-1-97.)

(215 ILCS 97/92)

Sec. 92. (Amendatory provisions; text omitted).

(Source: P.A. 90-30, eff. 7-1-97; text omitted.)

(215 ILCS 97/94)

Sec. 94. (Amendatory provisions; text omitted).

(Source: P.A. 90-30, eff. 7-1-97; text omitted.)

(215 ILCS 97/96)

Sec. 96. (Amendatory provisions; text omitted).

(Source: P.A. 90-30, eff. 7-1-97; text omitted.)

(215 ILCS 97/98)

Sec. 98. (Amendatory provisions; text omitted).

(Source: P.A. 90-30, eff. 7-1-97; text omitted.)

(215 ILCS 97/99)

Sec. 99. Effective date. This Act takes effect on July 1, 1997.

(Source: P.A. 90-30, eff. 7-1-97.)