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90_SB0033
215 ILCS 5/356h from Ch. 73, par. 968h
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003 from Ch. 73, par. 1504-3
215 ILCS 165/10 from Ch. 32, par. 604
Amends the Illinois Insurance Code, Health Maintenance
Organization Act, Limited Health Service Organization Act,
and Voluntary Health Services Plans Act. Provides that
coverage under those Acts may not disclaim or limit coverage
or the insurability of adopted children from and after the
time of adoption. Effective immediately.
LRB9000813JSgc
LRB9000813JSgc
1 AN ACT concerning insurance coverage for adopted
2 children, amending 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 Insurance Code is amended by
6 changing Section 356h as follows:
7 (215 ILCS 5/356h) (from Ch. 73, par. 968h)
8 Sec. 356h. Coverage for adopted children.
9 (a) No individual or group policy of accident and health
10 insurance amended, delivered, issued, or renewed in this
11 State after the effective date of this amendatory Act of 1997
12 that which covers the insured's immediate family or children,
13 as well as covering the insured, shall contain any
14 disclaimer, waiver, or other limitation of exclude a child
15 from coverage with respect to the hospital or medical or
16 limit coverage or insurability of an adopted for a child from
17 and after the time of adoption solely because the child is an
18 adopted child, or solely because the child does not reside
19 with the insured. For purposes of this Section, a child who
20 is in the custody of the insured, pursuant to an interim
21 court order of adoption vesting temporary care of the child
22 in the insured, is an adopted child, regardless of whether a
23 final order granting adoption is ultimately issued.
24 (b) Each such policy of accident and health insurance
25 shall contain a provision stating that the accident and
26 health insurance benefits applicable for children shall be
27 granted immediately with respect to an adopted child from the
28 time of adoption. The coverage for adopted children shall
29 include coverage of illness, injury, congenital defects, and
30 birth abnormalities.
31 (c) If payment of a specific premium is required to
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1 provide coverage for a child, the policy may require that
2 notification of the adoption of a child must be furnished to
3 the insurer within 31 days after the date of the adoption in
4 order to have the coverage continue beyond such 31 day period
5 and may require payment of the appropriate premium.
6 (d) If no other members of the insured's immediate
7 family are covered, immediate coverage for the first adopted
8 child shall be provided if the insured applies for
9 dependent's coverage within 31 days after the date of
10 adoption. The coverage shall be contingent upon payment of
11 the additional premium.
12 (Source: P.A. 86-649.)
13 Section 10. The Health Maintenance Organization Act is
14 amended by changing Section 5-3 as follows:
15 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
16 Sec. 5-3. Insurance Code provisions.
17 (a) Health Maintenance Organizations shall be subject to
18 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
19 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
20 154.6, 154.7, 154.8, 155.04, 355.2, 356h, 356m, 367i, 401,
21 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
22 subsection (2) of Section 367, and Articles VIII 1/2, XII,
23 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
24 Code.
25 (b) For purposes of the Illinois Insurance Code, except
26 for Articles XIII and XIII 1/2, Health Maintenance
27 Organizations in the following categories are deemed to be
28 "domestic companies":
29 (1) a corporation authorized under the Medical
30 Service Plan Act, the Dental Service Plan Act, the Vision
31 Service Plan Act, the Pharmaceutical Service Plan Act,
32 the Voluntary Health Services Plan Act, or the Nonprofit
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1 Health Care Service Plan Act;
2 (2) a corporation organized under the laws of this
3 State; or
4 (3) a corporation organized under the laws of
5 another state, 30% or more of the enrollees of which are
6 residents of this State, except a corporation subject to
7 substantially the same requirements in its state of
8 organization as is a "domestic company" under Article
9 VIII 1/2 of the Illinois Insurance Code.
10 (c) In considering the merger, consolidation, or other
11 acquisition of control of a Health Maintenance Organization
12 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
13 (1) the Director shall give primary consideration
14 to the continuation of benefits to enrollees and the
15 financial conditions of the acquired Health Maintenance
16 Organization after the merger, consolidation, or other
17 acquisition of control takes effect;
18 (2)(i) the criteria specified in subsection (1)(b)
19 of Section 131.8 of the Illinois Insurance Code shall not
20 apply and (ii) the Director, in making his determination
21 with respect to the merger, consolidation, or other
22 acquisition of control, need not take into account the
23 effect on competition of the merger, consolidation, or
24 other acquisition of control;
25 (3) the Director shall have the power to require
26 the following information:
27 (A) certification by an independent actuary of
28 the adequacy of the reserves of the Health
29 Maintenance Organization sought to be acquired;
30 (B) pro forma financial statements reflecting
31 the combined balance sheets of the acquiring company
32 and the Health Maintenance Organization sought to be
33 acquired as of the end of the preceding year and as
34 of a date 90 days prior to the acquisition, as well
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1 as pro forma financial statements reflecting
2 projected combined operation for a period of 2
3 years;
4 (C) a pro forma business plan detailing an
5 acquiring party's plans with respect to the
6 operation of the Health Maintenance Organization
7 sought to be acquired for a period of not less than
8 3 years; and
9 (D) such other information as the Director
10 shall require.
11 (d) The provisions of Article VIII 1/2 of the Illinois
12 Insurance Code and this Section 5-3 shall apply to the sale
13 by any health maintenance organization of greater than 10% of
14 its enrollee population (including without limitation the
15 health maintenance organization's right, title, and interest
16 in and to its health care certificates).
17 (e) In considering any management contract or service
18 agreement subject to Section 141.1 of the Illinois Insurance
19 Code, the Director (i) shall, in addition to the criteria
20 specified in Section 141.2 of the Illinois Insurance Code,
21 take into account the effect of the management contract or
22 service agreement on the continuation of benefits to
23 enrollees and the financial condition of the health
24 maintenance organization to be managed or serviced, and (ii)
25 need not take into account the effect of the management
26 contract or service agreement on competition.
27 (f) Except for small employer groups as defined in the
28 Small Employer Rating, Renewability and Portability Health
29 Insurance Act and except for medicare supplement policies as
30 defined in Section 363 of the Illinois Insurance Code, a
31 Health Maintenance Organization may by contract agree with a
32 group or other enrollment unit to effect refunds or charge
33 additional premiums under the following terms and conditions:
34 (i) the amount of, and other terms and conditions
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1 with respect to, the refund or additional premium are set
2 forth in the group or enrollment unit contract agreed in
3 advance of the period for which a refund is to be paid or
4 additional premium is to be charged (which period shall
5 not be less than one year); and
6 (ii) the amount of the refund or additional premium
7 shall not exceed 20% of the Health Maintenance
8 Organization's profitable or unprofitable experience with
9 respect to the group or other enrollment unit for the
10 period (and, for purposes of a refund or additional
11 premium, the profitable or unprofitable experience shall
12 be calculated taking into account a pro rata share of the
13 Health Maintenance Organization's administrative and
14 marketing expenses, but shall not include any refund to
15 be made or additional premium to be paid pursuant to this
16 subsection (f)). The Health Maintenance Organization and
17 the group or enrollment unit may agree that the
18 profitable or unprofitable experience may be calculated
19 taking into account the refund period and the immediately
20 preceding 2 plan years.
21 The Health Maintenance Organization shall include a
22 statement in the evidence of coverage issued to each enrollee
23 describing the possibility of a refund or additional premium,
24 and upon request of any group or enrollment unit, provide to
25 the group or enrollment unit a description of the method used
26 to calculate (1) the Health Maintenance Organization's
27 profitable experience with respect to the group or enrollment
28 unit and the resulting refund to the group or enrollment unit
29 or (2) the Health Maintenance Organization's unprofitable
30 experience with respect to the group or enrollment unit and
31 the resulting additional premium to be paid by the group or
32 enrollment unit.
33 In no event shall the Illinois Health Maintenance
34 Organization Guaranty Association be liable to pay any
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1 contractual obligation of an insolvent organization to pay
2 any refund authorized under this Section.
3 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
4 Section 15. The Limited Health Service Organization Act
5 is amended by changing Section 4003 as follows:
6 (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
7 Sec. 4003. Illinois Insurance Code provisions. Limited
8 health service organizations shall be subject to the
9 provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
10 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
11 154.6, 154.7, 154.8, 155.04, 355.2, 356h, 401, 401.1, 402,
12 403, 403A, 408, 408.2, and 412, and Articles VIII 1/2, XII,
13 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
14 Code. For purposes of the Illinois Insurance Code, except
15 for Articles XIII and XIII 1/2, limited health service
16 organizations in the following categories are deemed to be
17 domestic companies:
18 (1) a corporation under the laws of this State; or
19 (2) a corporation organized under the laws of
20 another state, 30% of more of the enrollees of which are
21 residents of this State, except a corporation subject to
22 substantially the same requirements in its state of
23 organization as is a domestic company under Article VIII
24 1/2 of the Illinois Insurance Code.
25 (Source: P.A. 86-600; 87-587; 87-1090.)
26 Section 20. The Voluntary Health Services Plans Act is
27 amended by changing Section 10 as follows:
28 (215 ILCS 165/10) (from Ch. 32, par. 604)
29 Sec. 10. Application of Insurance Code provisions.
30 Health services plan corporations and all persons interested
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1 therein or dealing therewith shall be subject to the
2 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
3 143, 143c, 149, 354, 355.2, 356h, 356r, 367.2, 401, 401.1,
4 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
5 (15) of Section 367 of the Illinois Insurance Code.
6 (Source: P.A. 89-514, eff. 7-17-96.)
7 Section 99. Effective date. This Act takes effect upon
8 becoming law.