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|[ Introduced ]||[ Engrossed ]||[ Senate Amendment 001 ]|
|[ Conference Committee Report 001 ]|
90_HB1400enr 215 ILCS 105/5 from Ch. 73, par. 1305 Amends the Comprehensive Health Insurance Plan Act. Provides that the Plan shall be administered by a plan administrator rather than an administering carrier. Provides that criteria for bids to administer the Plan shall include disclosure of discounts or income that may be derived by the Plan and the timeliness of claim processing procedures. Effective July 1, 1997. LRB9002243JSgc HB1400 Enrolled LRB9002243JSgc 1 AN ACT concerning health insurance coverage, amending 2 named Acts. 3 Be it enacted by the People of the State of Illinois, 4 represented in the General Assembly: 5 Section 5. The Illinois Health Insurance Portability and 6 Accountability Act is amended by adding Section 50 as 7 follows: 8 (215 ILCS 97/50 new) 9 Sec. 50. Guaranteed renewability of individual health 10 insurance coverage. 11 (A) In general. Except as provided in this Section, a 12 health insurance issuer that provides individual health 13 insurance coverage to an individual shall renew or continue 14 in force such coverage at the option of the individual. 15 (B) General exceptions. A health insurance issuer may 16 nonrenew or discontinue health insurance coverage of an 17 individual in the individual market based only on one or more 18 of the following: 19 (1) Nonpayment of premiums. The individual has 20 failed to pay premiums or contributions in accordance 21 with the terms of the health insurance coverage or the 22 issuer has not received timely premium payments. 23 (2) Fraud. The individual has performed an act or 24 practice that constitutes fraud or made an intentional 25 misrepresentation of material fact under the terms of the 26 coverage. 27 (3) Termination of plan. The issuer is ceasing to 28 offer coverage in the individual market in accordance 29 with subsection (C) of this Section and applicable 30 Illinois law. 31 (4) Movement outside the service area. In the case HB1400 Enrolled -2- LRB9002243JSgc 1 of a health insurance issuer that offers health insurance 2 coverage in the market through a network plan, the 3 individual no longer resides, lives, or works in the 4 service area (or in an area for which the issuer is 5 authorized to do business), but only if such coverage is 6 terminated under this paragraph uniformly without regard 7 to any health status-related factor of covered 8 individuals. 9 (5) Association membership ceases. In the case of 10 health insurance coverage that is made available in the 11 individual market only through one or more bona fide 12 associations, the membership of the individual in the 13 association (on the basis of which the coverage is 14 provided) ceases, but only if such coverage is terminated 15 under this paragraph uniformly without regard to any 16 health status-related factor of covered individuals. 17 (C) Requirements for uniform termination of coverage. 18 (1) Particular type of coverage not offered. In 19 any case in which an issuer decides to discontinue 20 offering a particular type of health insurance coverage 21 offered in the individual market, coverage of such type 22 may be discontinued by the issuer only if: 23 (a) the issuer provides notice to each covered 24 individual provided coverage of this type in such 25 market of such discontinuation at least 90 days 26 prior to the date of the discontinuation of such 27 coverage; 28 (b) the issuer offers, to each individual in 29 the individual market provided coverage of this 30 type, the option to purchase any other individual 31 health insurance coverage currently being offered by 32 the issuer for individuals in such market; and 33 (c) in exercising the option to discontinue 34 coverage of that type and in offering the option of HB1400 Enrolled -3- LRB9002243JSgc 1 coverage under subparagraph (b), the issuer acts 2 uniformly without regard to any health 3 status-related factor of enrolled individuals or 4 individuals who may become eligible for such 5 coverage. 6 (2) Discontinuance of all coverage. 7 (a) In general. Subject to subparagraph (c), 8 in any case in which a health insurance issuer 9 elects to discontinue offering all health insurance 10 coverage in the individual market in Illinois, 11 health insurance coverage may be discontinued by the 12 issuer only if: 13 (i) the issuer provides notice to the 14 Director and to each individual of the 15 discontinuation at least 180 days prior to the 16 date of the expiration of such coverage; and 17 (ii) all health insurance issued or 18 delivered for issuance in Illinois in such 19 market is discontinued and coverage under such 20 health insurance coverage in such market is not 21 renewed. 22 (b) Prohibition on market reentry. In the 23 case of a discontinuation under subparagraph (a) in 24 the individual market, the issuer may not provide 25 for the issuance of any health insurance coverage in 26 Illinois involved during the 5-year period beginning 27 on the date of the discontinuation of the last 28 health insurance coverage not so renewed. 29 (D) Exception for uniform modification of coverage. At 30 the time of coverage renewal, a health insurance issuer may 31 modify the health insurance coverage for a policy form 32 offered to individuals in the individual market so long as 33 the modification is consistent with Illinois law and 34 effective on a uniform basis among all individuals with that HB1400 Enrolled -4- LRB9002243JSgc 1 policy form. 2 (E) Application to coverage offered only through 3 associations. In applying this Section in the case of health 4 insurance coverage that is made available by a health 5 insurance issuer in the individual market to individuals only 6 through one or more associations, a reference to an 7 "individual" is deemed to include a reference to such an 8 association (of which the individual is a member). 9 Section 10. The Comprehensive Health Insurance Plan Act 10 is amended by changing Sections 5 and 12 as follows: 11 (215 ILCS 105/5) (from Ch. 73, par. 1305) 12 Sec. 5. Plan administrator
Administering Carrier. 13 a. The board shall select a plan administrator an14 administering carrierthrough a competitive bidding process 15 to administer the plan. The board shall evaluate bids 16 submitted under this Section based on criteria established by 17 the board which shall include: 18 (1) The administrator's carrier'sproven ability to 19 handle other large group accident and health benefit plans. 20 (2) The efficiency and timeliness of the administrator's 21 carrier'sclaim processing payingprocedures. 22 (3) An estimate of total net cost chargesfor 23 administering the plan, including any discounts or income the 24 Plan could expect to receive or benefit from. 25 (4) The administrator's ability to apply effective cost 26 containment programs and procedures and of the carrierto 27 administer the plan in a cost-efficient manner. 28 (5) The financial condition and stability of the 29 administrator carrier. 30 b. The plan administrator administering carriershall 31 serve for a period of 5 years subject to removal for cause 32 and subject to the terms, conditions and limitations of the HB1400 Enrolled -5- LRB9002243JSgc 1 contract between the board and the plan administrator 2 administering carrier. At least one year prior to the 3 expiration of each 5 year period of service by the current 4 plan administrator an administering carrier, the board shall 5 begin to advertise for and acceptbids to serve as the plan 6 administrator administering carrierfor the succeeding 5 year 7 period. Selection of the plan administrator administering8 carrierfor the succeeding period shall be made at least 6 9 months prior to the end of the current 5 year period. 10 c. The plan administrator administering carriershall 11 perform such eligibility and administrative claims payment12 functions relating to the plan as may be assigned to it 13 including: 14 (1) The establishment of administering carrier shall15 establisha premium billing procedure for collection of 16 premiums from plan participants. Billings shall be made on a 17 periodic basis as determined by the board. 18 (2) Processing of claims and various cost containment 19 functions. 20 (3) (2)Other The administering carrier shall perform21 allnecessary functions to assure timely payment of benefits 22 to participants under the plan, including: 23 (a) Making available information relating to the proper 24 manner of submitting a claim for benefits under the plan and 25 distributing forms upon which submissions shall be made. 26 (b) Evaluating the eligibility of each claim for payment 27 under the plan. 28 (c) The administrator administering carriershall be 29 governed by the requirements of Part 919 of Title 50 of the 30 Illinois Administrative Code, promulgated by the Department 31 of Insurance, regarding the handling of claims under this 32 Act. 33 d. The administrator administering carriershall submit 34 regular reports to the board regarding the operation of the HB1400 Enrolled -6- LRB9002243JSgc 1 plan. The frequency, content and form of the report shall be 2 as determined by the board. 3 e. The administrator administering carriershall pay or 4 be reimbursed for claims expenses from the premium payments 5 received from or on behalf of plan participants. If the 6 administrator's administering carrier'spayments or 7 reimbursements for claims expenses exceed the portion of 8 premiums allocated by the board for payment of claims 9 expenses, the board shall provide to the administering10 carrieradditional funds to the administrator for payment or 11 reimbursement of such claims expenses. 12 f. The administrator administering carriershall be paid 13 as provided in the board'scontract between the Board and the 14 plan administrator with the administering carrier for15 expenses incurred in the performance of its services. 16 (Source: P.A. 85-1013.) 17 (215 ILCS 105/12) (from Ch. 73, par. 1312) 18 Sec. 12. Deficit or surplus. 19 a. If premiums or other receipts by the Board exceed the 20 amount required for the operation of the Plan, including 21 actual losses and administrative expenses of the Plan, the 22 Board shall direct that the excess be held at interest, in a 23 bank designated by the Board, or used to offset future losses 24 or to reduce Plan premiums. In this subsection, the term 25 "future losses" includes reserves for incurred but not 26 reported claims. 27 b. Any deficit incurred or expected to be incurred on 28 behalf of eligible persons who qualify for plan coverage 29 under Section 7 of this Act shall be recouped by an 30 appropriation made by the General Assembly. 31 c. For the purposes of this Section, a deficit shall be 32 incurred when anticipated losses and incurred but not 33 reported claims expenses exceed anticipated income from HB1400 Enrolled -7- LRB9002243JSgc 1 earned premiums net of administrative expenses. 2 d. Any deficit incurred or expected to be incurred on 3 behalf of federally eligible individuals who qualify for Plan 4 coverage under Section 15 of this Act shall be recouped by an 5 assessment of all insurers made in accordance with the 6 provisions of this Section. The Board shall within 90 days 7 of the effective date of this amendatory Act of 1997 and 8 within the first quarter of each fiscal year thereafter 9 assess all insurers for the anticipated deficit in accordance 10 with the provisions of this Section. The board may also make 11 additional assessments no more than 4 times a year to fund 12 unanticipated deficits, implementation expenses, and cash 13 flow needs. 14 e. An insurer's assessment shall be determined by 15 multiplying the total assessment, as determined in subsection 16 d. of this Section, by a fraction, the numerator of which 17 equals that insurer's direct Illinois premiums during the 18 preceding calendar year and the denominator of which equals 19 the total of all insurers' direct Illinois premiums. The 20 Board may exempt those insurers whose share as determined 21 under this subsection would be so minimal as to not exceed 22 the estimated cost of levying the assessment. 23 f. The Board shall charge and collect from each insurer 24 the amounts determined to be due under this Section. The 25 assessment shall be billed by Board invoice based upon the 26 insurer's direct Illinois premium income as shown in its 27 annual statement for the preceding calendar year as filed 28 with the Director. The invoice shall be due upon receipt and 29 must be paid no later than 30 days after receipt by the 30 insurer. 31 g. When an insurer fails to pay the full amount of any 32 assessment of $100 or more due under this Section there shall 33 be added to the amount due as a penalty the greater of $50 or 34 an amount equal to 5% of the deficiency for each month or HB1400 Enrolled -8- LRB9002243JSgc 1 part of a month that the deficiency remains unpaid. 2 h. Amounts collected under this Section shall be paid to 3 the Board for deposit into the Plan Fund authorized by 4 Section 3 of this Act. 5 i. An insurer may petition the Director for an abatement 6 or deferment of all or part of an assessment imposed by the 7 Board. The Director may abate or defer, in whole or in part, 8 the assessment if, in the opinion of the Director, payment of 9 the assessment would endanger the ability of the insurer to 10 fulfill its contractual obligations. In the event an 11 assessment against an insurer is abated or deferred in whole 12 or in part, the amount by which the assessment is abated or 13 deferred shall be assessed against the other insurers in a 14 manner consistent with the basis for assessments set forth in 15 this subsection. The insurer receiving a deferment shall 16 remain liable to the plan for the deficiency for 4 years. 17 j. The board shall establish procedures for appeal by 18 any insurer subject to assessment pursuant to this Section. 19 Such procedures shall require that: 20 (1) Any insurer that wishes to appeal all or any 21 part of an assessment made pursuant to this Section shall 22 first pay the amount of the assessment as set forth in 23 the invoice provided by the board within the time 24 provided in subsection f. of this Section. The board 25 shall hold such payments in a separate interest-bearing 26 account. The payments shall be accompanied by a statement 27 in writing that the payment is made under appeal. The 28 statement shall specify the grounds for the appeal. The 29 insurer may be represented in its appeal by counsel or 30 other representative of its choosing. 31 (2) Within 90 days following the payment of an 32 assessment under appeal by any insurer, the board shall 33 notify the insurer or representative designated by the 34 insurer in writing of its determination with respect to HB1400 Enrolled -9- LRB9002243JSgc 1 the appeal and the basis or bases for that determination 2 unless the Board notifies the insurer that a reasonable 3 amount of additional time is required to resolve the 4 issues raised by the appeal. 5 (3) The board shall refer to the Director any 6 question concerning the amount of direct Illinois premium 7 income as shown in an insurer's annual statement for the 8 preceding calendar year on file with the Director on the 9 invoice date of the assessment. Unless additional time 10 is required to resolve the question, the Director shall 11 within 60 days report to the board in writing his 12 determination respecting the amount of direct Illinois 13 premium income on file on the invoice date of the 14 assessment. 15 (4) In the event the board determines that the 16 insurer is entitled to a refund, the refund shall be paid 17 within 30 days following the date upon which the board 18 makes its determination, together with the accrued 19 interest. Interest on any refund due an insurer shall be 20 paid at the rate actually earned by the Board on the 21 separate account. 22 (5) The amount of any such refund shall then be 23 assessed against all insurers in a manner consistent with 24 the basis for assessment as otherwise authorized by this 25 Section. 26 (6) The board's determination with respect to any 27 appeal received pursuant to this subsection shall be a 28 final administrative decision as defined in Section 3-101 29 of the Code of Civil Procedure. The provisions of the 30 Administrative Review Law shall apply to and govern all 31 proceedings for the judicial review of final 32 administrative decisions of the board. 33 (7) If an insurer fails to appeal an assessment in 34 accordance with the provisions of this subsection, the HB1400 Enrolled -10- LRB9002243JSgc 1 insurer shall be deemed to have waived its right of 2 appeal. 3 The provisions of this subsection apply to all 4 assessments made in any calendar year ending on or after 5 December 31, 1997. 6 (Source: P.A. 90-30, eff. 7-1-97.) 7 Section 15. The Health Care Purchasing Group Act is 8 amended by changing Sections 5, 10, 35, 40, 45, and 65 as 9 follows: 10 (215 ILCS 123/5) 11 Sec. 5. Purpose; applicability of Illinois Health 12 Insurance Portability and Accountability Act. 13 (a) The purpose and intent of this Act is to authorize 14 the formation, operation, and regulation of health care 15 purchasing groups (referred to in this Act as "HPGs") as 16 described by this Act, to authorize the sale and regulation 17 of health insurance products for employers that are sold to 18 HPGs, and to encourage the development of financially secure 19 and cost effective markets for the basic health care needs of 20 employers, employees, and their dependents in this State. 21 Nothing in this Act authorizes an employer to join with other 22 employers to self-insure through risk pooling. 23 (b) All health insurance contracts issued under this Act 24 are subject to the Illinois Health Insurance Portability and 25 Accountability Act. 26 (Source: P.A. 90-337, eff. 1-1-98.) 27 (215 ILCS 123/10) 28 Sec. 10. Definitions. Words and phrases Asused in this 29 Act, unless defined in this Section, have the meanings 30 attributed to them in Section 5 of the Illinois Health 31 Insurance Portability and Accountability Act. :HB1400 Enrolled -11- LRB9002243JSgc 1 "Director" means the Director of Insurance. 2 "Employee" means a person who works on a full-time basis3 for the employer, with a normal week of 30 or more hours, and4 has satisfied any applicable waiting periods for insurance.5 "Employee" may also include a sole proprietor, a partner of a6 partnership, a retired employee, or an independent7 contractor, provided the sole proprietor, partner, retired8 employee, or independent contractor is included as an9 employee under a health benefit plan of the employer. It10 does not need to include an employee who works on a11 part-time, temporary, seasonal, or substitute basis.12 "Employer" may include any legal form of doing business13 or employing people, including a self-employed sole14 proprietor.15 "Health benefit plan" means any hospital or medical16 expense-incurred policy or certificate, hospital or medical17 service plan contract, or health maintenance organization18 subscriber contract. Health benefit plan shall not include a19 policy or certificate of individual, accident-only, credit,20 dental, vision, medicare supplement, hospital indemnity,21 specified disease, long term care or disability income22 insurance, coverage issued as a supplement to liability23 insurance, workers' compensation or similar insurance, or24 automobile medical payment insurance.25 "Health insurance contract", "group or master health 26 insurance contract" and "insurance" refer to the forms of 27 insurance obligations which a "risk-bearer" as defined in 28 this Section has been authorized to issue. 29 "Late enrollee" means an employee or dependent who30 requests enrollment in a health benefit plan of an employer31 following the initial enrollment period during which the32 individual is entitled to enroll under the terms of the33 health insurance contract, provided that the initial34 enrollment period is a period of at least 30 days. However,HB1400 Enrolled -12- LRB9002243JSgc 1 an employee or dependent shall not be considered a late2 enrollee if:3 (1) The individual meets each of the following:4 (A) the individual was covered under a prior5 employer based health benefit plan at the time of the6 initial enrollment;7 (B) the individual lost coverage under qualifying8 previous coverage as a result of termination of9 employment or eligibility, the involuntary termination of10 the qualifying previous coverage, death of a spouse or11 divorce; and12 (C) the individual requests enrollment within 3013 days after the termination of the qualifying previous14 coverage;15 (2) the individual is employed by an employer that16 offers multiple health insurance alternatives and the17 individual elects a different coverage during an open18 enrollment period; or19 (3) a court has ordered coverage be provided for a20 spouse or minor or dependent child under a covered employee's21 health insurance contract and request for enrollment is made22 within 30 days after issuance of the court order.23 "Preexisting condition" means a condition that, during a24 period of no more than 12 months immediately preceding the25 effective date of coverage, had manifested itself in a manner26 that would cause an ordinarily prudent person to seek medical27 advice, diagnosis, care, or treatment, or for which medical28 advice, diagnosis, care, or treatment was recommended or29 received.30 "Risk-bearer" means an insurance company licensed in this 31 State and authorized to transact the kinds of business 32 described in clause (b) of Class 1 and clause (a) of Class 2 33 of Section 4 of the Illinois Insurance Code and entities 34 authorized under the Health Maintenance Organization Act. HB1400 Enrolled -13- LRB9002243JSgc 1 (Source: P.A. 90-337, eff. 1-1-98.) 2 (215 ILCS 123/35) 3 Sec. 35. Underwriting provisions. All health insurance 4 contracts issued under this Act shall be subject to the 5 portability and preexisting condition provisions of the 6 Illinois Health Insurance Portability and Accountability Act. 7 following provisions, as applicable:8 (1) Preexisting condition limitation: No health9 insurance contract or certificate issued under the10 contract shall exclude or limit coverage for a11 preexisting condition for a period beyond 12 months from12 the effective date of a person's coverage.13 (2) Portability of coverage: Preexisting condition14 limitation periods shall be reduced to the extent a15 person was covered under a prior employer-based health16 benefit plan, notwithstanding the benefit levels of the17 prior plan, if:18 (A) the person is not a late enrollee; and19 (B) the prior coverage was continuous to a20 date not more than 30 days prior to the effective21 date of the new coverage, exclusive of any22 applicable waiting period.23 (3) If a risk-bearer offers coverage to an24 employer, the risk-bearer shall offer coverage to all of25 the employees of an employer and their dependents. A26 risk-bearer shall not offer coverage to only certain27 individuals of an employer group, except in the case of28 late enrollees.29 (4) As to employees to whom portability provisions30 do not apply, a risk-bearer shall not modify a health31 insurance contract or certificate thereunder with respect32 to an employer or any employee or dependent, except a33 risk-bearer may restrict or exclude coverage or benefitsHB1400 Enrolled -14- LRB9002243JSgc 1 for a specific condition for a maximum period of 122 months from the effective date of the employee's or3 dependant's coverage by way of rider or endorsement. As4 to employees to whom the portability of coverage5 provisions apply, no riders or endorsements may reduce or6 limit benefits to be provided under the portability of7 coverage provisions.8 (Source: P.A. 90-337, eff. 1-1-98.) 9 (215 ILCS 123/40) 10 Sec. 40. Renewability. All health insurance contracts 11 issued under this Act are subject to the renewability 12 provisions of the Illinois Health Insurance Portability and 13 Accountability Act. 14 (a) A health insurance contract subject to this Act15 shall be renewable with respect to all insured employees or16 dependents, at the option of the HPG or employer, whichever17 is a party to the master health insurance contract, except in18 any of the following cases:19 (1) nonpayment of required premiums;20 (2) fraud or misrepresentation of the employer or,21 with respect to coverage of individual insureds, the22 insureds or their representatives;23 (3) noncompliance with the risk-bearer's minimum24 participation requirements;25 (4) noncompliance with the risk-bearer's employer26 contribution requirements;27 (5) noncompliance with contract provisions;28 (6) repeated misuse of a provider network29 provision;30 (7) the risk-bearer elects to non-renew all of its31 health insurance contracts delivered or issued for32 delivery to HPGs or employers under this Act; or33 (8) the Director finds that the continuation of theHB1400 Enrolled -15- LRB9002243JSgc 1 coverage would:2 (A) Not be in the best interests of the policy3 holders or certificate holders; or4 (B) Impair the risk-bearer's ability to meet5 its contractual obligations.6 (b) A risk-bearer that elects not to renew a health7 insurance contract under item (7) of subsection (a) shall8 provide notice of the decision not to renew coverage to all9 affected employers and to the official in charge of insurance10 regulation in each state in which an affected insured11 individual is known to reside at least 180 days prior to the12 nonrenewal of any health insurance contract by the13 risk-bearer. Notice to an official in charge of insurance14 regulation under this subsection shall be provided at least15 3 working days before the notice to the affected employers.16 Further, the risk-bearer shall be prohibited from writing new17 business under this Act for a period of 5 years from the date18 of notice to the Director.19 (Source: P.A. 90-337, eff. 1-1-98.) 20 (215 ILCS 123/45) 21 Sec. 45. Disclosure requirements. In connection with the 22 offering for sale of any health insurance contract or 23 certificate under the contract to an HPG sponsor, HPG, 24 employer, and employee, a risk-bearer shall make a reasonable 25 disclosure, as part of its solicitation and sales materials 26 of all of the following: 27 (1) the provisions of the health insurance contracts 28 concerning the risk-bearer's right to change premium rates 29 and the factors, other than claim experience, that affect 30 changes in premium rates; 31 (2) that the rating restrictions contained in Section 3032 of the Small Employer Rating, Renewability and Portability33 Health Insurance Act are not applicable to the healthHB1400 Enrolled -16- LRB9002243JSgc 1 insurance contract being offered;2 (2) (3)the provisions relating to renewability of 3 policies and contracts; 4 (3) (4)the provisions relating to any preexisting 5 condition provision; and 6 (4) (5)the provisions relating to portability 7 provisions. 8 (Source: P.A. 90-337, eff. 1-1-98.) 9 (215 ILCS 123/65) 10 Sec. 65. Fees. 11 (a) The Director shall charge, collect, and give proper 12 acquittance for the payment all fees provided for by this 13 Act, except that any Illinois corporations licensed by the 14 Department of Insurance pursuant to the provisions of the 15 Illinois Insurance Code, the Dental Service Plan Act, the 16 Health Maintenance Organization Act, the Limited Health 17 Service Organization Act, the Vision Service Plan Act and the 18 Voluntary Health Services Plans Act or licensed as a third 19 party administrator or as a managing general agent is exempt 20 from the registration fee imposed under this Act. 21 (b) Any funds collected under provisions of this Act 22 shall be deposited in the Insurance Producer Administration 23 Fund treated in the manner provided in subsection (11) of24 Section 408 of the Illinois Insurance Code. 25 (Source: P.A. 90-337, eff. 1-1-98.) 26 (215 ILCS 123/50 rep.) 27 Section 20. The Health Care Purchasing Group Act is 28 amended by repealing Section 50. 29 Section 99. Effective date. This Act takes effect upon 30 becoming law.
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