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|[ Introduced ]||[ Engrossed ]||[ Senate Amendment 001 ]|
90_SB0802enr New Act 215 ILCS 5/155.31 new 215 ILCS 105/1.1 from Ch. 73, par. 1301.1 215 ILCS 105/2 from Ch. 73, par. 1302 215 ILCS 105/3 from Ch. 73, par. 1303 215 ILCS 105/4 from Ch. 73, par. 1304 215 ILCS 105/5 from Ch. 73, par. 1305 215 ILCS 105/7 from Ch. 73, par. 1307 215 ILCS 105/7.1 new 215 ILCS 105/8 from Ch. 73, par. 1308 215 ILCS 105/10 from Ch. 73, par. 1310 215 ILCS 105/12 from Ch. 73, par. 1312 215 ILCS 105/14 from Ch. 73, par. 1314 215 ILCS 105/15 new 215 ILCS 125/5-3.5 new 215 ILCS 130/4002.5 new 215 ILCS 165/15.25 new Creates the Illinois Health Insurance Portability and Accountability Act. Sets forth State provisions for portability of coverage in accordance with federal law. Amends the Comprehensive Health Insurance Plan Act. Provides for the Plan to extend coverage to individuals in conformance with the portability requirements of the federal Health Insurance Portability and Accountability Act of 1996. Authorizes the use of management programs for cost effective provision of health care services. Increases the lifetime benefit under the Plan to $1,000,000. Authorizes the Board to assess insurers in this State to pay costs not covered by appropriation with respect to federally eligible individuals. 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 is subject to the Illinois Health Insurance Portability and Accountability Act. Effective July 1, 1997. LRB9002422JSdvA SB802 Enrolled LRB9002422JSdvA 1 AN ACT concerning health insurance, amending named Acts. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 1. Short title. This Act may be cited as the 5 Illinois Health Insurance Portability and Accountability Act. 6 Section 5. Definitions. 7 "Beneficiary" has the meaning given such term under 8 Section 3(8) of the Employee Retirement Income Security Act 9 of 1974. 10 "Bona fide association" means, with respect to health 11 insurance coverage offered in a State, an association which: 12 (1) has been actively in existence for at least 5 years; 13 (2) has been formed and maintained in good faith for 14 purposes other than obtaining insurance; 15 (3) does not condition membership in the association on 16 any health status-related factor relating to an individual 17 (including an employee of an employer or a dependent of an 18 employee); 19 (4) makes health insurance coverage offered through the 20 association available to all members regardless of any health 21 status-related factor relating to such members (or 22 individuals eligible for coverage through a member); 23 (5) does not make health insurance coverage offered 24 through the association available other than in connection 25 with a member of the association; and 26 (6) meets such additional requirements as may be imposed 27 under State law. 28 "Church plan" has the meaning given that term under 29 Section 3(33) of the Employee Retirement Income Security Act 30 of 1974. 31 "COBRA continuation provision" means any of the SB802 Enrolled -2- LRB9002422JSdvA 1 following: 2 (1) Section 4980B of the Internal Revenue Code of 3 1986, other than subsection (f)(1) of that Section 4 insofar as it relates to pediatric vaccines. 5 (2) Part 6 of subtitle B of title I of the Employee 6 Retirement Income Security Act of 1974, other than 7 Section 609 of that Act. 8 (3) Title XXII of federal Public Health Service 9 Act. 10 "Department" means the Department of Insurance. 11 "Employee" has the meaning given that term under Section 12 3(6) of the Employee Retirement Income Security Act of 1974. 13 "Employer" has the meaning given that term under Section 14 3(5) of the Employee Retirement Income Security Act of 1974, 15 except that the term shall include only employers of 2 or 16 more employees. 17 "Enrollment date" means, with respect to an individual 18 covered under a group health plan or group health insurance 19 coverage, the date of enrollment of the individual in the 20 plan or coverage, or if earlier, the first day of the waiting 21 period for enrollment. 22 "Federal governmental plan" means a governmental plan 23 established or maintained for its employees by the government 24 of the United States or by any agency or instrumentality of 25 that government. 26 "Governmental plan" has the meaning given that term under 27 Section 3(32) of the Employee Retirement Income Security Act 28 of 1974 and any federal governmental plan. 29 "Group health insurance coverage" means, in connection 30 with a group health plan, health insurance coverage offered 31 in connection with the plan. 32 "Group health plan" means an employee welfare benefit 33 plan (as defined in Section 3(1) of the Employee Retirement 34 Income Security Act of 1974) to the extent that the plan SB802 Enrolled -3- LRB9002422JSdvA 1 provides medical care (as defined in paragraph (2) of that 2 Section and including items and services paid for as medical 3 care) to employees or their dependents (as defined under the 4 terms of the plan) directly or through insurance, 5 reimbursement, or otherwise. 6 "Health insurance coverage" means benefits consisting of 7 medical care (provided directly, through insurance or 8 reimbursement, or otherwise and including items and services 9 paid for as medical care) under any hospital or medical 10 service policy or certificate, hospital or medical service 11 plan contract, or health maintenance organization contract 12 offered by a health insurance issuer. 13 "Health insurance issuer" means an insurance company, 14 insurance service, or insurance organization (including a 15 health maintenance organization, as defined herein) which is 16 licensed to engage in the business of insurance in a state 17 and which is subject to Illinois law which regulates 18 insurance (within the meaning of Section 514(b)(2) of the 19 Employee Retirement Income Security Act of 1974). The term 20 does not include a group health plan. 21 "Health maintenance organization (HMO)" means: 22 (1) a Federally qualified health maintenance 23 organization (as defined in Section 1301(a) of the Public 24 Health Service Act.); 25 (2) an organization recognized under State law as a 26 health maintenance organization; or 27 (3) a similar organization regulated under State 28 law for solvency in the same manner and to the same 29 extent as such a health maintenance organization. 30 "Individual health insurance coverage" means health 31 insurance coverage offered to individuals in the individual 32 market, but does not include short-term limited duration 33 insurance. 34 "Individual market" means the market for health insurance SB802 Enrolled -4- LRB9002422JSdvA 1 coverage offered to individuals other than in connection with 2 a group health plan. 3 "Large employer" means, in connection with a group health 4 plan with respect to a calendar year and a plan year, an 5 employer who employed an average of at least 51 employees on 6 business days during the preceding calendar year and who 7 employs at least 2 employees on the first day of the plan 8 year. 9 (1) Application of aggregation rule for large 10 employers. All persons treated as a single employer 11 under subsection (b), (c), (m), or (o) of Section 414 of 12 the Internal Revenue Code of 1986 shall be treated as one 13 employer. 14 (2) Employers not in existence in preceding year. 15 In the case of an employer which was not in existence 16 throughout the preceding calendar year, the determination 17 of whether the employer is a large employer shall be 18 based on the average number of employees that it is 19 reasonably expected the employer will employ on business 20 days in the current calendar year. 21 (3) Predecessors. Any reference in this Act to an 22 employer shall include a reference to any predecessor of 23 such employer. 24 "Large group market" means the health insurance market 25 under which individuals obtain health insurance coverage 26 (directly or through any arrangement) on behalf of themselves 27 (and their dependents) through a group health plan maintained 28 by a large employer. 29 "Late enrollee" means with respect to coverage under a 30 group health plan, a participant or beneficiary who enrolls 31 under the plan other than during: 32 (1) the first period in which the individual is 33 eligible to enroll under the plan; or 34 (2) a special enrollment period under subsection SB802 Enrolled -5- LRB9002422JSdvA 1 (F) of Section 20. 2 "Medical care" means amounts paid for: 3 (1) the diagnosis, cure, mitigation, treatment, or 4 prevention of disease, or amounts paid for the purpose of 5 affecting any structure or function of the body; 6 (2) amounts paid for transportation primarily for 7 and essential to medical care referred to in item (1); 8 and 9 (3) amounts paid for insurance covering medical 10 care referred to in items (1) and (2). 11 "Nonfederal governmental plan" means a governmental plan 12 that is not a federal governmental plan. 13 "Network plan" means health insurance coverage of a 14 health insurance issuer under which the financing and 15 delivery of medical care (including items and services paid 16 for as medical care) are provided, in whole or in part, 17 through a defined set of providers under contract with the 18 issuer. 19 "Participant" has the meaning given that term under 20 Section 3(7) of the Employee Retirement Income Security Act 21 of 1974. 22 "Placement" or being "placed" for adoption, in connection 23 with any placement for adoption of a child with any person, 24 means the assumption and retention by the person of a legal 25 obligation for total or partial support of the child in 26 anticipation of adoption of the child. The child's placement 27 with the person terminates upon the termination of the legal 28 obligation. 29 "Plan sponsor" has the meaning given that term under 30 Section 3(16)(B) of the Employee Retirement Income Security 31 Act of 1974. 32 "Preexisting condition exclusion" means, with respect to 33 coverage, a limitation or exclusion of benefits relating to a 34 condition based on the fact that the condition was present SB802 Enrolled -6- LRB9002422JSdvA 1 before the date of enrollment for such coverage, whether or 2 not any medical advice, diagnosis, care, or treatment was 3 recommended or received before such date. 4 "Small employer" means, in connection with a group health 5 plan with respect to a calendar year and a plan year, an 6 employer who employed an average of at least 2 but not more 7 than 50 employees on business days during the preceding 8 calendar year and who employs at least 2 employees on the 9 first day of the plan year. 10 (1) Application of aggregation rule for small 11 employers. All persons treated as a single employer 12 under subsection (b), (c), (m), or (o) of Section 414 of 13 the Internal Revenue Code of 1986 shall be treated as one 14 employer. 15 (2) Employers not in existence in preceding year. 16 In the case of an employer which was not in existence 17 throughout the preceding calendar year, the determination 18 of whether the employer is a small employer shall be 19 based on the average number of employees that it is 20 reasonably expected the employer will employ on business 21 days in the current calendar year. 22 (3) Predecessors. Any reference in this Act to a 23 small employer shall include a reference to any 24 predecessor of that employer. 25 "Small group market" means the health insurance market 26 under which individuals obtain health insurance coverage 27 (directly or through any arrangement) on behalf of themselves 28 (and their dependents) through a group health plan maintained 29 by a small employer. 30 "State" means each of the several States, the District of 31 Columbia, Puerto Rico, the Virgin Islands, Guam, American 32 Samoa, and the Northern Mariana Islands. 33 "Waiting period" means with respect to a group health 34 plan and an individual who is a potential participant or SB802 Enrolled -7- LRB9002422JSdvA 1 beneficiary in the plan, the period of time that must pass 2 with respect to the individual before the individual is 3 eligible to be covered for benefits under the terms of the 4 plan. 5 Section 15. Applicability and scope. This Act applies to 6 all health insurance policies and all health service 7 contracts issued, renewed, or delivered for issuance or 8 renewal in this State by a health insurance issuer after the 9 effective date of this Act. Unless otherwise specifically 10 provided by this Act, the standards and requirements imposed 11 by this Act shall supersede and replace any and all 12 conflicting, inconsistent or less restrictive standards or 13 requirements contained in the Illinois Insurance Code, the 14 Health Maintenance Organization Act, the Limited Health 15 Service Organization Act, and the Voluntary Health Services 16 Plans Act. 17 Section 20. Increased portability through limitation on 18 preexisting condition exclusions. 19 (A) Limitation of preexisting condition exclusion 20 period; crediting for periods of previous coverage. Subject 21 to subsection (D), a group health plan, and a health 22 insurance issuer offering group health insurance coverage, 23 may, with respect to a participant or beneficiary, impose a 24 preexisting condition exclusion only if: 25 (1) the exclusion relates to a condition (whether 26 physical or mental), regardless of the cause of the 27 condition, for which medical advice, diagnosis, care, or 28 treatment was recommended or received within the 6-month 29 period ending on the enrollment date; 30 (2) the exclusion extends for a period of not more 31 than 12 months (or 18 months in the case of a late 32 enrollee) after the enrollment date; and SB802 Enrolled -8- LRB9002422JSdvA 1 (3) the period of any such preexisting condition 2 exclusion is reduced by the aggregate of the periods of 3 creditable coverage (if any, as defined in subsection 4 (C)(1)) applicable to the participant or beneficiary as 5 of the enrollment date. 6 (B) Preexisting condition exclusion. A group health 7 plan, and health insurance issuer offering group health 8 insurance coverage, may not impose any preexisting condition 9 exclusion relating to pregnancy as a preexisting condition. 10 Genetic information shall not be treated as a condition 11 described in subsection (A)(1) in the absence of a diagnosis 12 of the condition related to such information. 13 (C) Rules relating to crediting previous coverage. 14 (1) Creditable coverage defined. For purposes of this 15 Act, the term "creditable coverage" means, with respect 16 to an individual, coverage of the individual under any of 17 the following: 18 (a) A group health plan. 19 (b) Health insurance coverage. 20 (c) Part A or part B of title XVIII of the Social 21 Security Act. 22 (d) Title XIX of the Social Security Act, other 23 than coverage consisting solely of benefits under Section 24 1928. 25 (e) Chapter 55 of title 10, United States Code. 26 (f) A medical care program of the Indian Health 27 Service or of a tribal organization. 28 (g) A State health benefits risk pool. 29 (h) A health plan offered under chapter 89 of title 30 5, United States Code. 31 (i) A public health plan (as defined in 32 regulations). 33 (j) A health benefit plan under Section 5(e) of the 34 Peace Corps Act (22 U.S.C. 2504(e)). SB802 Enrolled -9- LRB9002422JSdvA 1 Such term does not include coverage consisting solely of 2 coverage of excepted benefits. 3 (2) Excepted benefits. For purposes of this Act, the 4 term "excepted benefits" means benefits under one or more of 5 the following: 6 (a) Benefits not subject to requirements: 7 (i) Coverage only for accident, or disability 8 income insurance, or any combination thereof. 9 (ii) Coverage issued as a supplement to 10 liability insurance. 11 (iii) Liability insurance, including general 12 liability insurance and automobile liability 13 insurance. 14 (iv) Workers' compensation or similar 15 insurance. 16 (v) Automobile medical payment insurance. 17 (vi) Credit-only insurance. 18 (vii) Coverage for on-site medical clinics. 19 (viii) Other similar insurance coverage, 20 specified in regulations, under which benefits for 21 medical care are secondary or incidental to other 22 insurance benefits. 23 (b) Benefits not subject to requirements if offered 24 separately: 25 (i) Limited scope dental or vision benefits. 26 (ii) Benefits for long-term care, nursing home 27 care, home health care, community-based care, or any 28 combination thereof. 29 (iii) Such other similar, limited benefits as 30 are specified in rules. 31 (c) Benefits not subject to requirements if 32 offered, as independent, noncoordinated benefits: 33 (i) Coverage only for a specified disease or 34 illness. SB802 Enrolled -10- LRB9002422JSdvA 1 (ii) Hospital indemnity or other fixed 2 indemnity insurance. 3 (d) Benefits not subject to requirements if offered 4 as separate insurance policy. Medicare supplemental 5 health insurance (as defined under Section 1882(g)(1) of 6 the Social Security Act), coverage supplemental to the 7 coverage provided under chapter 55 of title 10, United 8 States Code, and similar supplemental coverage provided 9 to coverage under a group health plan. 10 (3) Not counting periods before significant breaks in 11 coverage. 12 (a) In general. A period of creditable coverage 13 shall not be counted, with respect to enrollment of an 14 individual under a group health plan, if, after such 15 period and before the enrollment date, there was a 63- 16 day period during all of which the individual was not 17 covered under any creditable coverage. 18 (b) Waiting period not treated as a break in 19 coverage. For purposes of subparagraph (a) and 20 subsection (D)(3), any period that an individual is in a 21 waiting period for any coverage under a group health plan 22 (or for group health insurance coverage) or is in an 23 affiliation period (as defined in subsection (G)(2)) 24 shall not be taken into account in determining the 25 continuous period under subparagraph (a). 26 (4) Method of crediting coverage. 27 (a) Standard method. Except as otherwise provided 28 under subparagraph (b), for purposes of applying 29 subsection (A)(3), a group health plan, and a health 30 insurance issuer offering group health insurance 31 coverage, shall count a period of creditable coverage 32 without regard to the specific benefits covered during 33 the period. 34 (b) Election of alternative method. A group health SB802 Enrolled -11- LRB9002422JSdvA 1 plan, or a health insurance issuer offering group health 2 insurance, may elect to apply subsection (A)(3) based on 3 coverage of benefits within each of several classes or 4 categories of benefits specified in regulations rather 5 than as provided under subparagraph (a). Such election 6 shall be made on a uniform basis for all participants and 7 beneficiaries. Under such election a group health plan 8 or issuer shall count a period of creditable coverage 9 with respect to any class or category of benefits if any 10 level of benefits is covered within such class or 11 category. 12 (c) Plan notice. In the case of an election with 13 respect to a group health plan under subparagraph (b) 14 (whether or not health insurance coverage is provided in 15 connection with such plan), the plan shall: 16 (i) prominently state in any disclosure 17 statements concerning the plan, and state to each 18 enrollee at the time of enrollment under the plan, 19 that the plan has made such election; and 20 (ii) include in such statements a description 21 of the effect of this election. 22 (d) Issuer notice. In the case of an election 23 under subparagraph (b) with respect to health insurance 24 coverage offered by an issuer in the small or large group 25 market, the issuer: 26 (i) shall prominently state in any disclosure 27 statements concerning the coverage, and to each 28 employer at the time of the offer or sale of the 29 coverage, that the issuer has made such election; 30 and 31 (ii) shall include in such statements a 32 description of the effect of such election. 33 (5) Establishment of period. Periods of creditable 34 coverage with respect to an individual shall be established SB802 Enrolled -12- LRB9002422JSdvA 1 through presentation or certifications described in 2 subsection (E) or in such other manner as may be specified in 3 regulations. 4 (D) Exceptions: 5 (1) Exclusion not applicable to certain newborns. 6 Subject to paragraph (3), a group health plan, and a health 7 insurance issuer offering group health insurance coverage, 8 may not impose any preexisting condition exclusion in the 9 case of an individual who, as of the last day of the 30-day 10 period beginning with the date of birth, is covered under 11 creditable coverage. 12 (2) Exclusion not applicable to certain adopted 13 children. Subject to paragraph (3), a group health plan, and 14 a health insurance issuer offering group health insurance 15 coverage, may not impose any preexisting condition exclusion 16 in the case of a child who is adopted or placed for adoption 17 before attaining 18 years of age and who, as of the last day 18 of the 30-day period beginning on the date of the adoption or 19 placement for adoption, is covered under creditable coverage. 20 The previous sentence shall not apply to coverage before 21 the date of such adoption or placement for adoption. 22 (3) Loss if break in coverage. Paragraphs (1) and (2) 23 shall no longer apply to an individual after the end of the 24 first 63-day period during all of which the individual was 25 not covered under any creditable coverage. 26 (E) Certifications and disclosure of coverage. 27 (1) Requirement for Certification of Period of 28 Creditable Coverage. 29 (a) A group health plan, and a health insurance 30 issuer offering group health insurance coverage, shall 31 provide the certification described in subparagraph (b): 32 (i) at the time an individual ceases to be 33 covered under the plan or otherwise becomes covered 34 under a COBRA continuation provision; SB802 Enrolled -13- LRB9002422JSdvA 1 (ii) in the case of an individual becoming 2 covered under such a provision, at the time the 3 individual ceases to be covered under such 4 provision; and 5 (iii) on the request on behalf of an 6 individual made not later than 24 months after the 7 date of cessation of the coverage described in 8 clause (i) or (ii), whichever is later. 9 The certification under clause (i) may be provided, to 10 the extent practicable, at a time consistent with notices 11 required under any applicable COBRA continuation 12 provision. 13 (b) The certification described in this 14 subparagraph is a written certification of: 15 (i) the period of creditable coverage of the 16 individual under such plan and the coverage (if any) 17 under such COBRA continuation provision; and 18 (ii) the waiting period (if any) (and 19 affiliation period, if applicable) imposed with 20 respect to the individual for any coverage under 21 such plan. 22 (c) To the extent that medical care under a group 23 health plan consists of group health insurance coverage, 24 the plan is deemed to have satisfied the certification 25 requirement under this paragraph if the health insurance 26 issuer offering the coverage provides for such 27 certification in accordance with this paragraph. 28 (2) Disclosure of information on previous benefits. In 29 the case of an election described in subsection (C)(4)(b) by 30 a group health plan or health insurance issuer, if the plan 31 or issuer enrolls an individual for coverage under the plan 32 and the individual provides a certification of coverage of 33 the individual under paragraph (1): 34 (a) upon request of such plan or issuer, the entity SB802 Enrolled -14- LRB9002422JSdvA 1 which issued the certification provided by the individual 2 shall promptly disclose to such requesting plan or issuer 3 information on coverage of classes and categories of 4 health benefits available under such entity's plan or 5 coverage; and 6 (b) such entity may charge the requesting plan or 7 issuer for the reasonable cost of disclosing such 8 information. 9 (3) Rules. The Department shall establish rules to 10 prevent an entity's failure to provide information under 11 paragraph (1) or (2) with respect to previous coverage of an 12 individual from adversely affecting any subsequent coverage 13 of the individual under another group health plan or health 14 insurance coverage. 15 (4) Treatment of certain plans as group health plan for 16 notice provision. A program under which creditable coverage 17 described in subparagraph (c), (d), (e), or (f) of Section 18 20(C)(1) is provided shall be treated as a group health plan 19 for purposes of this Section. 20 (F) Special enrollment periods. 21 (1) Individuals losing other coverage. A group health 22 plan, and a health insurance issuer offering group health 23 insurance coverage in connection with a group health plan, 24 shall permit an employee who is eligible, but not enrolled, 25 for coverage under the terms of the plan (or a dependent of 26 such an employee if the dependent is eligible, but not 27 enrolled, for coverage under such terms) to enroll for 28 coverage under the terms of the plan if each of the following 29 conditions is met: 30 (a) The employee or dependent was covered under a 31 group health plan or had health insurance coverage at the 32 time coverage was previously offered to the employee or 33 dependent. 34 (b) The employee stated in writing at such time SB802 Enrolled -15- LRB9002422JSdvA 1 that coverage under a group health plan or health 2 insurance coverage was the reason for declining 3 enrollment, but only if the plan sponsor or issuer (if 4 applicable) required such a statement at such time and 5 provided the employee with notice of such requirement 6 (and the consequences of such requirement) at such time. 7 (c) The employee's or dependent's coverage 8 described in subparagraph (a): 9 (i) was under a COBRA continuation provision 10 and the coverage under such provision was exhausted; 11 or 12 (ii) was not under such a provision and either 13 the coverage was terminated as a result of loss of 14 eligibility for the coverage (including as a result 15 of legal separation, divorce, death, termination of 16 employment, or reduction in the number of hours of 17 employment) or employer contributions towards such 18 coverage were terminated. 19 (d) Under the terms of the plan, the employee 20 requests such enrollment not later than 30 days after the 21 date of exhaustion of coverage described in subparagraph 22 (c)(i) or termination of coverage or employer 23 contributions described in subparagraph (c)(ii). 24 (2) For dependent beneficiaries. 25 (a) In general. If: 26 (i) a group health plan makes coverage 27 available with respect to a dependent of an 28 individual, 29 (ii) the individual is a participant under the 30 plan (or has met any waiting period applicable to 31 becoming a participant under the plan and is 32 eligible to be enrolled under the plan but for a 33 failure to enroll during a previous enrollment 34 period), and SB802 Enrolled -16- LRB9002422JSdvA 1 (iii) a person becomes such a dependent of the 2 individual through marriage, birth, or adoption or 3 placement for adoption, 4 then the group health plan shall provide for a dependent 5 special enrollment period described in subparagraph (b) 6 during which the person (or, if not otherwise enrolled, 7 the individual) may be enrolled under the plan as a 8 dependent of the individual, and in the case of the birth 9 or adoption of a child, the spouse of the individual may 10 be enrolled as a dependent of the individual if such 11 spouse is otherwise eligible for coverage. 12 (b) Dependent special enrollment period. A 13 dependent special enrollment period under this 14 subparagraph shall be a period of not less than 30 days 15 and shall begin on the later of: 16 (i) the date dependent coverage is made 17 available; or 18 (ii) the date of the marriage, birth, or 19 adoption or placement for adoption (as the case may 20 be) described in subparagraph (a)(iii). 21 (c) No waiting period. If an individual seeks to 22 enroll a dependent during the first 30 days of such a 23 dependent special enrollment period, the coverage of the 24 dependent shall become effective: 25 (i) in the case of marriage, not later than 26 the first day of the first month beginning after the 27 date the completed request for enrollment is 28 received; 29 (ii) in the case of a dependent's birth, as of 30 the date of such birth; or 31 (iii) in the case of a dependent's adoption or 32 placement for adoption, the date of such adoption or 33 placement for adoption. 34 (G) Use of affiliation period by HMOs as alternative to SB802 Enrolled -17- LRB9002422JSdvA 1 preexisting condition exclusion. 2 (1) In general. A health maintenance organization which 3 offers health insurance coverage in connection with a group 4 health plan and which does not impose any pre-existing 5 condition exclusion allowed under subsection (A) with respect 6 to any particular coverage option may impose an affiliation 7 period for such coverage option, but only if: 8 (a) such period is applied uniformly without regard 9 to any health status-related factors; and 10 (b) such period does not exceed 2 months (or 3 11 months in the case of a late enrollee). 12 (2) Affiliation period. 13 (a) Defined. For purposes of this Act, the term 14 "affiliation period" means a period which, under the 15 terms of the health insurance coverage offered by the 16 health maintenance organization, must expire before the 17 health insurance coverage becomes effective. The 18 organization is not required to provide health care 19 services or benefits during such period and no premium 20 shall be charged to the participant or beneficiary for 21 any coverage during the period. 22 (b) Beginning. Such period shall begin on the 23 enrollment date. 24 (c) Runs concurrently with waiting periods. An 25 affiliation period under a plan shall run concurrently 26 with any waiting period under the plan. 27 (3) Alternative methods. A health maintenance 28 organization described in paragraph (1) may use alternative 29 methods, from those described in such paragraph, to address 30 adverse selection as approved by the Department. 31 Section 25. Prohibiting discrimination against 32 individual participants. 33 (A) In eligibility to enroll. SB802 Enrolled -18- LRB9002422JSdvA 1 (1) In general. Subject to paragraph (2), a group 2 health plan, and a health insurance issuer offering group 3 health insurance coverage in connection with a group health 4 plan, may not establish rules for eligibility (including 5 continued eligibility) of any individual to enroll under the 6 terms of the plan based on any of the following health 7 status-related factors in relation to the individual or a 8 dependent of the individual: 9 (a) Health status. 10 (b) Medical condition (including both physical and 11 mental illnesses). 12 (c) Claims experience. 13 (d) Receipt of health care. 14 (e) Medical history. 15 (f) Genetic information. 16 (g) Evidence of insurability (including conditions 17 arising out of acts of domestic violence). 18 (h) Disability. 19 (2) No application to benefits or exclusions. To the 20 extent consistent with Section 20, the provisions of 21 paragraph (1) shall not be construed: 22 (a) to require a group health plan, or group health 23 insurance coverage, to provide particular benefits other 24 than those provided under the terms of such plan or 25 coverage; or 26 (b) to prevent such a plan or coverage from 27 establishing limitations or restrictions on the amount, 28 level, extent, or nature of the benefits or coverage for 29 similarly situated individuals enrolled in the plan or 30 coverage. 31 (3) Construction. For purposes of paragraph (1), rules 32 for eligibility to enroll under a plan include rules defining 33 any applicable waiting periods for such enrollment. 34 (B) In premium contributions. SB802 Enrolled -19- LRB9002422JSdvA 1 (1) In general. A group health plan, and a health 2 insurance issuer offering health insurance coverage in 3 connection with a group health plan, may not require any 4 individual (as a condition of enrollment or continued 5 enrollment under the plan) to pay a premium or contribution 6 which is greater than such premium or contribution for a 7 similarly situated individual enrolled in the plan on the 8 basis of any health status-related factor in relation to the 9 individual or to an individual enrolled under the plan as a 10 dependent of the individual. 11 (2) Construction. Nothing in paragraph (1) shall be 12 construed: 13 (a) to restrict the amount that an employer may be 14 charged for coverage under a group health plan; or 15 (b) to prevent a group health plan, and a health 16 insurance issuer offering group health insurance 17 coverage, from establishing premium discounts or rebates 18 or modifying otherwise applicable copayments or 19 deductibles in return for adherence to programs of health 20 promotion and disease prevention. 21 Section 30. Guaranteed renewability of coverage for 22 employers in the group market. 23 (A) In general. Except as provided in this Section, if 24 a health insurance issuer offers health insurance coverage in 25 the small or large group market in connection with a group 26 health plan, the issuer must renew or continue in force such 27 coverage at the option of the plan sponsor of the plan. 28 (B) General exceptions. A health insurance issuer may 29 nonrenew or discontinue health insurance coverage offered in 30 connection with a group health plan in the small or large 31 group market based only on one or more of the following: 32 (1) Nonpayment of premiums. The plan sponsor has failed 33 to pay premiums or contributions in accordance with the terms SB802 Enrolled -20- LRB9002422JSdvA 1 of the health insurance coverage or the issuer has not 2 received timely premium payments. 3 (2) Fraud. The plan sponsor has performed an act or 4 practice that constitutes fraud or made an intentional 5 misrepresentation of material fact under the terms of the 6 coverage. 7 (3) Violation of participation or contribution rules. 8 The plan sponsor has failed to comply with a material plan 9 provision relating to employer contribution or group 10 participation rules, as permitted under Section 40(D) in the 11 case of the small group market or pursuant to applicable 12 State law in the case of the large group market. 13 (4) Termination of coverage. The issuer is ceasing to 14 offer coverage in such market in accordance with subsection 15 (C) and applicable State law. 16 (5) Movement outside service area. In the case of a 17 health insurance issuer that offers health insurance coverage 18 in the market through a network plan, there is no longer any 19 enrollee in connection with such plan who lives, resides, or 20 works in the service area of the issuer (or in the area for 21 which the issuer is authorized to do business) and, in the 22 case of the small group market, the issuer would deny 23 enrollment with respect to such plan under Section 24 40(C)(1)(a). 25 (6) Association membership ceases. In the case of 26 health insurance coverage that is made available in the small 27 or large group market (as the case may be) only through one 28 or more bona fide association, the membership of an employer 29 in the association (on the basis of which the coverage is 30 provided) ceases but only if such coverage is terminated 31 under this paragraph uniformly without regard to any health 32 status-related factor relating to any covered individual. 33 (C) Requirements for uniform termination of coverage. 34 (1) Particular type of coverage not offered. In any SB802 Enrolled -21- LRB9002422JSdvA 1 case in which an issuer decides to discontinue offering a 2 particular type of group health insurance coverage offered in 3 the small or large group market, coverage of such type may be 4 discontinued by the issuer in accordance with applicable 5 State law in such market only if: 6 (a) the issuer provides notice to each plan sponsor 7 provided coverage of this type in such market (and 8 participants and beneficiaries covered under such 9 coverage) of such discontinuation at least 90 days prior 10 to the date of the discontinuation of such coverage; 11 (b) the issuer offers to each plan sponsor provided 12 coverage of this type in such market, the option to 13 purchase all (or, in the case of the large group market, 14 any) other health insurance coverage currently being 15 offered by the issuer to a group health plan in such 16 market; and 17 (c) in exercising the option to discontinue 18 coverage of this type and in offering the option of 19 coverage under subparagraph (b), the issuer acts 20 uniformly without regard to the claims experience of 21 those sponsors or any health status-related factor 22 relating to any participants or beneficiaries who may 23 become eligible for such coverage. 24 (2) Discontinuance of all coverage. 25 (a) In general. In any case in which a health 26 insurance issuer elects to discontinue offering all 27 health insurance coverage in the small group market or 28 the large group market, or both markets, in Illinois, 29 health insurance coverage may be discontinued by the 30 issuer only in accordance with Illinois law and if: 31 (i) the issuer provides notice to the 32 Department and to each plan sponsor (and 33 participants and beneficiaries covered under such 34 coverage) of such discontinuation at least 180 days SB802 Enrolled -22- LRB9002422JSdvA 1 prior to the date of the discontinuation of such 2 coverage; and 3 (ii) all health insurance issued or delivered 4 for issuance in Illinois in such market (or markets) 5 are discontinued and coverage under such health 6 insurance coverage in such market (or markets) is 7 not renewed. 8 (b) Prohibition on market reentry. In the case of a 9 discontinuation under subparagraph (a) in a market, the 10 issuer may not provide for the issuance of any health 11 insurance coverage in the Illinois market involved during the 12 5-year period beginning on the date of the discontinuation of 13 the last health insurance coverage not so renewed. 14 (D) Exception for uniform modification of coverage. At 15 the time of coverage renewal, a health insurance issuer may 16 modify the health insurance coverage for a product offered to 17 a group health plan: 18 (1) in the large group market; or 19 (2) in the small group market if, for coverage that is 20 available in such market other than only through one or more 21 bona fide associations, such modification is consistent with 22 State law and effective on a uniform basis among group health 23 plans with that product. 24 (E) Application to coverage offered only through 25 associations. In applying this Section in the case of health 26 insurance coverage that is made available by a health 27 insurance issuer in the small or large group market to 28 employers only through one or more associations, a reference 29 to "plan sponsor" is deemed, with respect to coverage 30 provided to an employer member of the association, to include 31 a reference to such employer. 32 Section 35. Disclosure of Information. 33 (A) Disclosure of information by health plan issuers. SB802 Enrolled -23- LRB9002422JSdvA 1 In connection with the offering of any health insurance 2 coverage to a small employer, a health insurance issuer: 3 (1) shall make a reasonable disclosure to such employer, 4 as part of its solicitation and sales materials, of the 5 availability of information described in subsection (B), and 6 (2) upon request of such a small employer, provide such 7 information. 8 (B) Information described. 9 (1) In general. Subject to paragraph (3), with respect 10 to a health insurance issuer offering health insurance 11 coverage to a small employer, information described in this 12 subsection is information concerning: 13 (a) the provisions of such coverage concerning 14 issuer's right to change premium rates and the factors 15 that may affect changes in premium rates; 16 (b) the provisions of such coverage relating to 17 renewability of coverage; 18 (c) the provisions of such coverage relating to any 19 pre-existing condition exclusion; and 20 (d) the benefits and premiums available under all 21 health insurance coverage for which the employer is 22 qualified. 23 (2) Form of information. Information under this 24 subsection shall be provided to small employers in a manner 25 determined to be understandable by the average small 26 employer, and shall be sufficient to reasonably inform small 27 employers of their rights and obligations under the health 28 insurance coverage. 29 (3) Exception. An issuer is not required under this 30 Section to disclose any information that is proprietary and 31 trade secret information under applicable law. 32 Section 40. Guaranteed availability of coverage for 33 employers in the group market. SB802 Enrolled -24- LRB9002422JSdvA 1 (A) Issuance of coverage in the small group market. 2 (1) In general. Subject to subsections (C) through (F), 3 each health insurance issuer that offers health insurance 4 coverage in the small group market in a State: 5 (a) must accept every small employer (as defined in 6 Section 10) in the State that applies for such coverage; 7 and 8 (b) must accept for enrollment under such coverage 9 every eligible individual (as defined in paragraph (2)) 10 who applies for enrollment during the period in which the 11 individual first becomes eligible to enroll under the 12 terms of the group health plan and may not place any 13 restriction which is inconsistent with Section 25 on an 14 eligible individual being a participant or beneficiary. 15 (2) Eligible individual defined. For purposes of this 16 Section, the term "eligible individual" means, with respect 17 to a health insurance issuer that offers health insurance 18 coverage to a small employer in connection with a group 19 health plan in the small group market, such an individual in 20 relation to the employer as shall be determined: 21 (a) in accordance with the terms of such plan; 22 (b) as provided by the issuer under rules of the 23 issuer which are uniformly applicable in a State to small 24 employers in the small group market; and 25 (c) in accordance with all applicable State laws 26 governing such issuer and such market. 27 (B) Special rules for network plans. 28 (1) In general. In the case of a health insurance 29 issuer that offers health insurance coverage in the small 30 group market through a network plan, the issuer may: 31 (a) limit the employers that may apply for such 32 coverage to those with eligible individuals who live, 33 work, or reside in the service area for such network 34 plan; and SB802 Enrolled -25- LRB9002422JSdvA 1 (b) within the service area of such plan, deny such 2 coverage to such employers if the issuer has 3 demonstrated, if required, to the Department that: 4 (i) it will not have the capacity to deliver 5 services adequately to enrollees of any additional 6 groups because of its obligations to existing group 7 contract holders and enrollees; and 8 (ii) it is applying this paragraph uniformly to 9 all employers without regard to the claims 10 experience of those employers and their employees 11 (and their dependents) or any health status-related 12 factor relating to such employees and dependents. 13 (2) 180-day suspension upon denial of coverage. An 14 issuer, upon denying health insurance coverage in any service 15 area in accordance with paragraph (1)(b), may not offer 16 coverage in the small group market within such service area 17 for a period of 180 days after the date such coverage is 18 denied. 19 (C) Application of financial capacity limits. 20 (1) In general. A health insurance issuer may deny 21 health insurance coverage in the small group market if the 22 issuer has demonstrated, if required, to the Department: 23 (a) it does not have the financial capacity 24 necessary to underwrite additional coverage; and 25 (b) it is applying this paragraph uniformly to all 26 employers in the small group market in the State and 27 without regard to the claims experience of those 28 employers and their employees (and their dependents) or 29 any health status-related factor relating to such 30 employees and dependents. 31 (2) 180-day suspension upon denial of coverage. A 32 health insurance issuer upon denying health insurance 33 coverage in connection with group health plans in accordance 34 with paragraph (1) may not offer coverage in connection with SB802 Enrolled -26- LRB9002422JSdvA 1 group health plans in the small group market for a period of 2 180 days after the date such coverage is denied or until the 3 issuer has demonstrated to the Department that the issuer has 4 sufficient financial capacity to underwrite additional 5 coverage, whichever is later. The Department may provide for 6 the application of this subsection on a service-area-specific 7 basis. 8 (D) Exception to requirement for failure to meet certain 9 minimum participation or contribution rules. 10 (1) In general. Subsection (A) shall not be construed 11 to preclude a health insurance issuer from establishing 12 employer contribution rules or group participation rules for 13 the offering of health insurance coverage in connection with 14 a group health plan in the small group market. 15 (2) Rules defined. For purposes of paragraph (1): 16 (a) the term "employer contribution rule" means a 17 requirement relating to the minimum level or amount of 18 employer contribution toward the premium for enrollment 19 of participants and beneficiaries; and 20 (b) the term "group participation rule" means a 21 requirement relating to the minimum number of 22 participants or beneficiaries that must be enrolled in 23 relation to a specified percentage or number of eligible 24 individuals or employees of an employer. 25 (E) Exception for coverage offered only to bona fide 26 association members. Subsection (A) shall not apply to 27 health insurance coverage offered by a health insurance 28 issuer if such coverage is made available in the small group 29 market only through one or more bona fide associations (as 30 defined in Section 10). 31 Section 45. Exclusion of certain plans. 32 (A) Exception for certain small group health plans. The 33 requirements of this Act shall not apply to any group health SB802 Enrolled -27- LRB9002422JSdvA 1 plan (and health insurance coverage offered in connection 2 with a group health plan) for any plan year if, on the first 3 day of such plan year, such plan has less than 2 participants 4 who are current employees. 5 (B) Limitation on application of provisions relating to 6 group health plans. 7 (1) In general. The requirements of this Act shall 8 apply with respect to group health plans only: 9 (a) subject to paragraph (2), in the case of a plan 10 that is a nonfederal governmental plan; and 11 (b) with respect to health insurance coverage 12 offered in connection with a group health plan (including 13 such a plan that is a church plan or a governmental 14 plan). 15 (2) Treatment of nonfederal governmental plans. 16 (a) Election to be excluded. If the plan sponsor 17 of a nonfederal governmental plan which is a group health 18 plan to which the provisions of this Act otherwise apply 19 makes an election under this subparagraph (in such form 20 and manner as may be prescribed by rule), then the 21 requirements of this Act insofar as they apply directly 22 to group health plans (and not merely to group health 23 insurance coverage) shall not apply to such governmental 24 plans for such period except as provided in this 25 paragraph. 26 (b) Period of election. An election under 27 subparagraph (a) shall apply: 28 (i) for a single specified plan year; or 29 (ii) in the case of a plan provided pursuant to 30 a collective bargaining agreement, for the term of 31 such agreement. 32 An election under clause (i) may be extended through 33 subsequent elections under this paragraph. 34 (c) Notice to enrollees. Under such an election, SB802 Enrolled -28- LRB9002422JSdvA 1 the plan shall provide for: 2 (i) notice to enrollees (on an annual basis 3 and at the time of enrollment under the plan) of the 4 fact and consequences of such election; and 5 (ii) certification and disclosure of creditable 6 coverage under the plan with respect to enrollees in 7 accordance with Section 20(E). 8 (C) Exception for certain benefits. The requirements of 9 this Act shall not apply to any group health plan (or group 10 health insurance coverage) in relation to its provision of 11 excepted benefits described in Section 20(C)(2)(a). 12 (D) Exception for certain benefits if certain conditions 13 met. 14 (1) Limited, excepted benefits. The requirements of 15 this Act shall not apply to any group health plan (and group 16 health insurance coverage offered in connection with a group 17 health plan) in relation to its provision of excepted 18 benefits described in Section 20(C)(2)(b) if the benefits: 19 (a) are provided under a separate policy, 20 certificate, or contract of insurance; or 21 (b) are otherwise not an integral part of the plan. 22 (2) Noncoordinated, excepted benefits. The requirements 23 of this Act shall not apply to any group health plan (and 24 group health insurance coverage offered in connection with a 25 group health plan) in relation to its provision of excepted 26 benefits described in Section 20(C)(2)(c) if all of the 27 following conditions are met: 28 (a) The benefits are provided under a separate 29 policy, certificate, or contract of insurance. 30 (b) There is no coordination between the provision 31 of such benefits and any exclusion of benefits under any 32 group health plan maintained by the same plan sponsor. 33 (c) Such benefits are paid with respect to an event 34 without regard to whether benefits are provided with SB802 Enrolled -29- LRB9002422JSdvA 1 respect to such an event under any group health plan 2 maintained by the same plan sponsor. 3 (3) Supplemental excepted benefits. The requirements of 4 this Act shall not apply to any group health plan (and group 5 health insurance coverage) in relation to its provision of 6 excepted benefits described in Section 20(C)(2)(d) if the 7 benefits are provided under a separate policy, certificate, 8 or contract of insurance. 9 (E) Treatment of partnerships. For purposes of this 10 Act: 11 (1) Treatment as a group health plan. Any plan, fund, 12 or program which would not be (but for this subsection) an 13 employee welfare benefit plan and which is established or 14 maintained by a partnership, to the extent that such plan, 15 fund, or program provides medical care (including items and 16 services paid for as medical care) to present or former 17 partners in the partnership or to their dependents (as 18 defined under the terms of the plan, fund, or program), 19 directly or through insurance, reimbursement, or otherwise, 20 shall be treated (subject to paragraph (2)) as an employee 21 welfare benefit plan which is a group health plan. 22 (2) Employer. In the case of a group health plan, the 23 term "employer" also includes the partnership in relation to 24 any partner. 25 (3) Partnerships of group health plans. In the case of 26 a group health plan, the term "participant" also includes: 27 (a) in connection with a group health plan 28 maintained by a partnership, an individual who is a 29 partner in relation to the partnership, or 30 (b) in connection with a group health plan 31 maintained by a self-employed individual (under which one 32 or more employees are participants), the self-employed 33 individual, if such individual is or may become eligible 34 to receive a benefit under the plan or the individual's SB802 Enrolled -30- LRB9002422JSdvA 1 beneficiaries may be eligible for any benefit. 2 Section 85. The Illinois Insurance Code is amended by 3 adding Section 155.31 as follows: 4 (215 ILCS 5/155.31 new) 5 Sec. 155.31. Illinois Health Insurance Portability and 6 Accountability Act. The provisions of this Code are subject 7 to the Illinois Health Insurance Portability and 8 Accountability Act as provided in Section 15 of that Act. 9 (215 ILCS 95/1 rep.) 10 (215 ILCS 95/5 rep.) 11 (215 ILCS 95/10 rep.) 12 (215 ILCS 95/15 rep.) 13 (215 ILCS 95/20 rep.) 14 (215 ILCS 95/55 rep.) 15 Section 86. The Small Employer Rating, Renewability and 16 Portability Health Insurance Act is amended by repealing 17 Sections 1, 5, 10, 15, 20, and 55 on July 1, 1998. 18 (215 ILCS 95/25 rep.) 19 (215 ILCS 95/30 rep.) 20 (215 ILCS 95/35 rep.) 21 (215 ILCS 95/40 rep.) 22 (215 ILCS 95/45 rep.) 23 (215 ILCS 95/50 rep.) 24 Section 87. The Small Employer Rating, Renewability and 25 Portability Health Insurance Act is amended by repealing 26 Sections 25, 30, 35, 40, 45, and 50. 27 Section 92. The Comprehensive Health Insurance Plan Act 28 is amended by changing Sections 1.1, 2, 3, 4, 5, 7, 8, 10, 29 12, and 14 and adding Sections 7.1 and 15 as follows: SB802 Enrolled -31- LRB9002422JSdvA 1 (215 ILCS 105/1.1) (from Ch. 73, par. 1301.1) 2 Sec. 1.1. The General Assembly hereby makes the 3 following findings and declarations: 4 (a) The Comprehensive Health Insurance Plan is 5 established as a State program that is intended to provide an 6 alternate market for health insurance for certain uninsurable 7
eligibleIllinois residents, such insurance being funded8 primarily by premiums paid by eligible resident policyholders9 and further is intended to provide an acceptable alternative 10 mechanism as described in the federal Health Insurance 11 Portability and Accountability Act of 1996 for providing 12 portable and accessible individual health insurance coverage 13 for federally eligible individuals as defined in this Act. ;14 (b) The State of Illinois may subsidize the cost of 15 health insurance coverage policiesoffered by the Plan. 16 However, since the State has only a limited amount of 17 resources, the General Assembly declares that it intends for 18 this program to provide portable and accessible individual 19 health insurance coverage for every federally eligible 20 individual who qualifies for coverage in accordance with 21 Section 15 of this Act, but does not intend for every 22 eligible person who qualifies for Plan coverage in accordance 23 with Section 7 of this Act residentto be guaranteed a right 24 to be issued a policy under this Plan as a matter of 25 entitlement. ; and26 (c) The Comprehensive Health Insurance Plan Board shall 27 operate the Plan in a manner so that the estimated cost of 28 the program providing health insuranceduring any fiscal year 29 will not exceed the total income it expects to receive from 30 policy premiums, investment income, assessments, or fees 31 collected or received by the Board and other andfunds which 32 are made available from appropriations for the Plan by the 33 General Assembly for that fiscal year. After determining the34 amount that it has had appropriated for the fiscal year, theSB802 Enrolled -32- LRB9002422JSdvA 1 Board shall estimate the number of new policies that it2 believes it has the financial capacity to issue during that3 year so that total costs do not exceed income. The Board4 shall take steps necessary to assure that plan enrollment5 does not exceed the number of residents it estimates it has6 the financial capacity to insure.7 (Source: P.A. 87-560.) 8 (215 ILCS 105/2) (from Ch. 73, par. 1302) 9 Sec. 2. Definitions. As used in this Act, unless the 10 context otherwise requires: 11 "Plan administrator" "Administering carrier"means the 12 insurer or third party administrator designated under Section 13 5 of this Act. 14 "Benefits plan" means the coverage to be offered by the 15 Plan to eligible persons and federally eligible individuals 16 pursuant to this Act. 17 "Board" means the Illinois Comprehensive Health Insurance 18 Board. 19 "Church plan" has the same meaning given that term in the 20 federal Health Insurance Portability and Accountability Act 21 of 1996. 22 "Continuation coverage" means continuation of coverage 23 under a group health plan or other health insurance coverage 24 for former employees or dependents of former employees that 25 would otherwise have terminated under the terms of that 26 coverage pursuant to any continuation provisions under 27 federal or State law, including the Consolidated Omnibus 28 Budget Reconciliation Act of 1985 (COBRA), as amended, 29 Sections 367.2 and 367e of the Illinois Insurance Code, or 30 any other similar requirement in another State. 31 "Covered person" means a person who is and continues to 32 remain eligible for Plan coverage and is covered under one of 33 the benefit plans offered by the Plan. SB802 Enrolled -33- LRB9002422JSdvA 1 "Creditable coverage" means, with respect to a federally 2 eligible individual, coverage of the individual under any of 3 the following: 4 (A) A group health plan. 5 (B) Health insurance coverage (including group health 6 insurance coverage). 7 (C) Medicare. 8 (D) Medical assistance. 9 (E) Chapter 55 of title 10, United States Code. 10 (F) A medical care program of the Indian Health Service 11 or of a tribal organization. 12 (G) A state health benefits risk pool. 13 (H) A health plan offered under Chapter 89 of title 5, 14 United States Code. 15 (I) A public health plan (as defined in regulations 16 consistent with Section 104 of the Health Care Portability 17 and Accountability Act of 1996 that may be promulgated by the 18 Secretary of the U.S. Department of Health and Human 19 Services). 20 (J) A health benefit plan under Section 5(e) of the 21 Peace Corps Act (22 U.S.C. 2504(e)). 22 (K) Any other qualifying coverage required by the 23 federal Health Insurance Portability and Accountability Act 24 of 1996, as it may be amended, or regulations under that Act. 25 "Creditable coverage" does not include coverage 26 consisting solely of coverage of excepted benefits (as 27 defined in Section 2791(c) of title XXVII of the Public 28 Health Service Act (42 U.S.C. 300 gg-91) nor does it include 29 any period of coverage under any of items (A) through (K) 30 that occurred before a break of more than 63 days during all 31 of which the individual was not covered under any of items 32 (A) through (K) above. Any period that an individual is in a 33 waiting period for any coverage under a group health plan (or 34 for group health insurance coverage) or is in an affiliation SB802 Enrolled -34- LRB9002422JSdvA 1 period under the terms of health insurance coverage offered 2 by a health maintenance organization shall not be taken into 3 account in determining if there has been a break of more than 4 63 days in any credible coverage. 5 "Department" means the Illinois Department of Insurance. 6 "Dependent" means an Illinois resident: who is a spouse; 7 or who is claimed as a dependent by the principal insured for 8 purposes of filing a federal income tax return and resides in 9 the principal insured's household, and is a resident 10 unmarried child under the age of 19 years; or who is an 11 unmarried child who also is a full-time student under the age 12 of 23 years and who is financially dependent upon the 13 principal insured; or who is a child of any age and who is 14 disabled and financially dependent upon the principal 15 insured. 16 "Direct Illinois premiums" means, for Illinois business, 17 an insurer's direct premium income for the kinds of business 18 described in clause (b) of Class 1 or clause (a) of Class 2 19 of Section 4 of the Illinois Insurance Code, and direct 20 premium income of a health maintenance organization or a 21 voluntary health services plan, except it shall not include 22 credit health insurance as defined in Article IX 1/2 of the 23 Illinois Insurance Code. 24 "Director" means the Director of the Illinois Department 25 of Insurance. 26 "Eligible person" means a resident of this State who 27 qualifies for Plan coverage under Section 7 of this Act. 28 "Employee" means a resident of this State who is employed 29 by an employer or has entered into the employment of or works 30 under contract or service of an employer including the 31 officers, managers and employees of subsidiary or affiliated 32 corporations and the individual proprietors, partners and 33 employees of affiliated individuals and firms when the 34 business of the subsidiary or affiliated corporations, firms SB802 Enrolled -35- LRB9002422JSdvA 1 or individuals is controlled by a common employer through 2 stock ownership, contract, or otherwise. 3 "Employer" means any individual, partnership, 4 association, corporation, business trust, or any person or 5 group of persons acting directly or indirectly in the 6 interest of an employer in relation to an employee, for which 7 one or more persons is gainfully employed. 8 "Family" coverage means the coverage provided by the Plan 9 for the covered eligibleperson and his or her eligible 10 dependents who also are covered persons legal spouse, the11 eligible person's dependent children under the age of 19, the12 eligible person's dependent children under the age of 23 who13 are full-time students, the eligible person's dependent14 disabled children of any age, or any other member of the15 eligible person's family who is claimed as a dependent for16 purposes of filing federal income tax returns and resides in17 the eligible person's household. 18 "Federally eligible individual" means an individual 19 resident of this State: 20 (1)(A) for whom, as of the date on which the individual 21 seeks Plan coverage under Section 15 of this Act, the 22 aggregate of the periods of creditable coverage is 18 or more 23 months, and (B) whose most recent prior creditable coverage 24 was under group health insurance coverage offered by a health 25 insurance issuer, a group health plan, a governmental plan, 26 or a church plan (or health insurance coverage offered in 27 connection with any such plans) or any other type of 28 creditable coverage that may be required by the federal 29 Health Insurance Portability and Accountability Act of 1996, 30 as it may be amended, or the regulations under that Act; 31 (2) who is not eligible for coverage under (A) a group 32 health plan, (B) part A or part B of Medicare, or (C) medical 33 assistance, and does not have other health insurance 34 coverage; SB802 Enrolled -36- LRB9002422JSdvA 1 (3) with respect to whom the most recent coverage within 2 the coverage period described in paragraph (1)(A) of this 3 definition was not terminated based upon a factor relating to 4 nonpayment of premiums or fraud; 5 (4) if the individual had been offered the option of 6 continuation coverage under a COBRA continuation provision or 7 under a similar State program, who elected such coverage; and 8 (5) who, if the individual elected such continuation 9 coverage, has exhausted such continuation coverage under such 10 provision or program. 11 "Group health plan" has the same meaning given that term 12 in the federal Health Insurance Portability and 13 Accountability Act of 1996. 14 "Governmental plan" has the same meaning given that term 15 in the federal Health Insurance Portability and 16 Accountability Act of 1996. 17 "Health insurance" means any hospital and , surgical, or18 medical coverage provided under anexpense-incurred policy, 19 certificate, or contract provided by an insurer, minimum20 premium plan, stop loss coverage ,non-profit health care 21 service plan contract, health maintenance organization or 22 other subscriber contract, or any other health care plan or 23 arrangement that pays for or furnishes medical or health care 24 services by a provider of these services,whether by 25 insurance or otherwise. Health insurance shall not include 26 short term, accident only, disability income, hospital 27 confinement or fixed indemnity, dental only, vision only, 28 limited benefit, or credit insurance, coverage issued as a 29 supplement to liability insurance, insurance arising out of a 30 workers' compensation or similar law, automobile 31 medical-payment insurance, or insurance under which benefits 32 are payable with or without regard to fault and which is 33 statutorily required to be contained in any liability 34 insurance policy or equivalent self-insurance. SB802 Enrolled -37- LRB9002422JSdvA 1 "Health insurance coverage" means benefits consisting of 2 medical care (provided directly, through insurance or 3 reimbursement, or otherwise and including items and services 4 paid for as medical care) under any hospital or medical 5 service policy or certificate, hospital or medical service 6 plan contract, or health maintenance organization contract 7 offered by a health insurance issuer. 8 "Health insurance issuer" means an insurance company, 9 insurance service, or insurance organization (including a 10 health maintenance organization and a voluntary health 11 services plan) that is authorized to transact health 12 insurance business in this State. Such term does not include 13 a group health plan. 14 "Health Maintenance Organization" means an organization 15 as defined in the Health Maintenance Organization Act. 16 "Hospice" means a program as defined in and licensed 17 under the Hospice Program Licensing Act. 18 "Hospital" means a duly licensed aninstitution as 19 defined in the Hospital Licensing Act, an institution that 20 meets all comparable conditions and requirements in effect in 21 the state in which it is located, or the University of 22 Illinois Hospital as defined in the University of Illinois 23 Hospital Act. 24 "Individual health insurance coverage" means health 25 insurance coverage offered to individuals in the individual 26 market, but does not include short-term, limited-duration 27 insurance. 28 "Insured" means any individual resident of this State who 29 is eligible to receive benefits from any insurer (including 30 health insurance coverage offered in connection with a group 31 health plan) or health insurance issuer arrangementas 32 defined in this Section. 33 "Insurer" means any insurance company authorized to 34 transact health insurance business in this State and any SB802 Enrolled -38- LRB9002422JSdvA 1 corporation that provides medical services and is organized 2 under the Voluntary Health Services Plans Act or the Health 3 Maintenance Organization Act. 4 "Medical assistance" means the State medical assistance 5 or medical assistance no grant (MANG) programs health care6 benefitsprovided under Title XIX of the Social Security Act 7 and Articles V (Medical Assistance) and VI (General 8 Assistance) of the Illinois Public Aid Code (or any successor 9 program) or under any similar program of health care benefits 10 in a state other than Illinois. 11 "Medically necessary" means that a service, drug, or 12 supply is necessary and appropriate for the diagnosis or 13 treatment of an illness or injury in accord with generally 14 accepted standards of medical practice at the time the 15 service, drug, or supply is provided. When specifically 16 applied to a confinement it further means that the diagnosis 17 or treatment of the covered insuredperson's medical symptoms 18 or condition cannot be safely provided to that person as an 19 outpatient. A service, drug, or supply shall not be medically 20 necessary if it: (i) is investigational, experimental, or for 21 research purposes; or (ii) is provided solely for the 22 convenience of the patient, the patient's family, physician, 23 hospital, or any other provider; or (iii) exceeds in scope, 24 duration, or intensity that level of care that is needed to 25 provide safe, adequate, and appropriate diagnosis or 26 treatment; or (iv) could have been omitted without adversely 27 affecting the covered insuredperson's condition or the 28 quality of medical care; or (v) involves the use of a medical 29 device, drug, or substance not formally approved by the 30 United States Food and Drug Administration. 31 "Medical care" means the ordinary and usual professional 32 services rendered by a physician or other specified provider 33 during a professional visit for treatment of an illness or 34 injury. SB802 Enrolled -39- LRB9002422JSdvA 1 "Medicare" means coverage under both Part A and Part B of 2 Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395, 3 et seq.. 4 "Minimum premium plan" means an arrangement whereby a 5 specified amount of health care claims is self-funded, but 6 the insurance company assumes the risk that claims will 7 exceed that amount. 8 "Participating transplant center" means a hospital 9 designated by the Board as a preferred or exclusive provider 10 of services for one or more specified human organ or tissue 11 transplants for which the hospital has signed an agreement 12 with the Board to accept a transplant payment allowance for 13 all expenses related to the transplant during a transplant 14 benefit period. 15 "Physician" means a person licensed to practice medicine 16 pursuant to the Medical Practice Act of 1987. 17 "Plan" means the Comprehensive Health Insurance Plan 18 established by this Act. 19 "Plan of operation" means the plan of operation of the 20 Plan, including articles, bylaws and operating rules, adopted 21 by the board pursuant to this Act. 22 "Provider" means any hospital, skilled nursing facility, 23 hospice, home health agency, physician, registered pharmacist 24 acting within the scope of that registration, or any other 25 person or entity licensed in Illinois to furnish medical 26 care. 27 "Qualified high risk pool" has the same meaning given 28 that term in the federal Health Insurance Portability and 29 Accountability Act of 1996. 30 "Resident eligible person" means a person who has been 31 legally domiciled in this State for a period of at least 180 32 days and continues to be domiciled in this State. 33 "Skilled nursing facility" means a facility or that 34 portion of a facility that is licensed by the Illinois SB802 Enrolled -40- LRB9002422JSdvA 1 Department of Public Health under the Nursing Home Care Act 2 or a comparable licensing authority in another state to 3 provide skilled nursing care. 4 "Stop-loss coverage" means an arrangement whereby an 5 insurer insures against the risk that any one claim will 6 exceed a specific dollar amount or that the entire loss of a 7 self-insurance plan will exceed a specific amount. 8 "Third party administrator" means an administrator as 9 defined in Section 511.101 of the Illinois Insurance Code who 10 is licensed under Article XXXI 1/4 of that Code. 11 (Source: P.A. 87-560; 88-364.) 12 (215 ILCS 105/3) (from Ch. 73, par. 1303) 13 Sec. 3. Operation of the Plan. 14 a. There is hereby created an Illinois Comprehensive 15 Health Insurance Plan. 16 b. The Plan shall operate subject to the supervision and 17 control of the board. The board is created as a political 18 subdivision and body politic and corporate and, as such, is 19 not a State agency. The board shall consist of 10 public 20 members, appointed by the Governor with the advice and 21 consent of the Senate. 22 Initial members shall be appointed to the Board by the 23 Governor as follows: 2 members to serve until July 1, 1988, 24 and until their successors are appointed and qualified; 2 25 members to serve until July 1, 1989, and until their 26 successors are appointed and qualified; 3 members to serve 27 until July 1, 1990, and until their successors are appointed 28 and qualified; and 3 members to serve until July 1, 1991, and 29 until their successors are appointed and qualified. As terms 30 of initial members expire, their successors shall be 31 appointed for terms to expire the first day in July 3 years 32 thereafter, and until their successors are appointed and 33 qualified. SB802 Enrolled -41- LRB9002422JSdvA 1 Any vacancy in the Board occurring for any reason other 2 than the expiration of a term shall be filled for the 3 unexpired term in the same manner as the original 4 appointment. 5 Any member of the Board may be removed by the Governor 6 for neglect of duty, misfeasance, malfeasance, or nonfeasance 7 in office. 8 In addition, a representative of the Illinois Health Care 9 Cost Containment Council, a representative of the Office of 10 the Attorney General and the Director or the Director's 11 designated representative shall be members of the board. 12 Four members of the General Assembly, one each appointed by 13 the President and Minority Leader of the Senate and by the 14 Speaker and Minority Leader of the House of Representatives, 15 shall serve as nonvoting members of the board. At least 2 of 16 the public members shall be individuals reasonably expected 17 to qualify for coverage under the Plan, the parent or spouse 18 of such an individual, or a surviving family member of an 19 individual who could have qualified for the plan during his 20 lifetime. The Director or Director's representative shall be 21 the chairperson of the board. Members of the board shall 22 receive no compensation, but shall be reimbursed for 23 reasonable expenses incurred in the necessary performance of 24 their duties. 25 c. The board shall make an annual report in September 26 and shall file the report with the Secretary of the Senate 27 and the Clerk of the House of Representatives. The report 28 shall summarize the activities of the Plan in the preceding 29 calendar year, including net written and earned premiums, the 30 expense of administration, the paid and incurred losses for 31 the year and other information as may be requested by the 32 General Assembly. The report shall also include analysis and 33 recommendations regarding utilization review, quality 34 assurance and access to cost effective quality health care. SB802 Enrolled -42- LRB9002422JSdvA 1 d. In its plan of operation the board shall: 2 (1) Establish procedures for selecting a plan 3 administrator an administering carrierin accordance with 4 Section 5 of this Act. 5 (2) Establish procedures for the operation of the 6 board. 7 (3) Create a Plan fund, under management of the 8 board, to fund administrative, claim, and other expenses 9 of the Plan. 10 (4) Establish procedures for the handling and 11 accounting of assets and monies of the Plan. 12 (5) Develop and implement a program to publicize 13 the existence of the Plan, the eligibility requirements 14 and procedures for enrollment and to maintain public 15 awareness of the Plan. 16 (6) Establish procedures under which applicants and 17 participants may have grievances reviewed by a grievance 18 committee appointed by the board. The grievances shall 19 be reported to the board immediately after completion of 20 the review. The Department and the board shall retain 21 all written complaints regarding the Plan for at least 3 22 years. Oral complaints shall be reduced to written form 23 and maintained for at least 3 years. 24 (7) Provide for other matters as may be necessary 25 and proper for the execution of its powers, duties and 26 obligations under the Plan. 27 e. No later than 5 years after the Plan is operative the 28 board and the Department shall conduct cooperatively a study 29 of the Plan and the persons insured by the Plan to determine: 30 (1) claims experience including a breakdown of medical 31 conditions for which claims were paid; (2) whether 32 availability of the Plan affected employment opportunities 33 for participants; (3) whether availability of the Plan 34 affected the receipt of medical assistance benefits by Plan SB802 Enrolled -43- LRB9002422JSdvA 1 participants; (4) whether a change occurred in the number of 2 personal bankruptcies due to medical or other health related 3 costs; (5) data regarding all complaints received about the 4 Plan including its operation and services; (6) and any other 5 significant observations regarding utilization of the Plan. 6 The study shall culminate in a written report to be presented 7 to the Governor, the President of the Senate, the Speaker of 8 the House and the chairpersons of the House and Senate 9 Insurance Committees. The report shall be filed with the 10 Secretary of the Senate and the Clerk of the House of 11 Representatives. The report shall also be available to 12 members of the general public upon request. 13 f. The board may: 14 (1) Prepare and distribute certificate of 15 eligibility forms and enrollment instruction forms to 16 insurance producers and to the general public in this 17 State. 18 (2) Provide for reinsurance of risks incurred by 19 the Plan and enter into reinsurance agreements with 20 insurers to establish a reinsurance plan for risks of 21 coverage described in the Plan, or obtain commercial 22 reinsurance to reduce the risk of loss through the Plan. 23 (3) Issue additional types of health insurance 24 policies to provide optional coverages as are otherwise 25 permitted by this Act including a Medicare supplement 26 policy designed to supplement Medicare. 27 (4) Provide for and employ cost containment 28 measures and requirements including, but not limited to, 29 preadmission certification, second surgical opinion, 30 concurrent utilization review programs, and individual 31 case management for the purpose of making the pool more 32 cost effective. 33 (5) Design, utilize, orcontract, or otherwise 34 arrange for the delivery of cost effective health care SB802 Enrolled -44- LRB9002422JSdvA 1 services, including establishing or contracting with 2 preferred provider organizations, andhealth maintenance 3 organizations, and other limited network provider 4 arrangements otherwise arrange for the delivery of cost5 effective health care services. 6 (6) Adopt bylaws, rules, regulations, policies and 7 procedures as may be necessary or convenient for the 8 implementation of the Act and the operation of the Plan. 9 (7) Administer separate pools, separate accounts, 10 or other plans or arrangements as required by this Act to 11 separate federally eligible individuals or groups of 12 federally eligible individuals who qualify for plan 13 coverage under Section 15 of this Act from eligible 14 persons or groups of eligible persons who qualify for 15 plan coverage under Section 7 of this Act and apportion 16 the costs of the administration among such separate 17 pools, separate accounts, or other plans or arrangements. 18 g. The Director may, by rule, establish additional 19 powers and duties of the board and may adopt rules for any 20 other purposes, including the operation of the Plan, as are 21 necessary or proper to implement this Act. 22 h. The board is not liable for any obligation of the 23 Plan. There is no liability on the part of any member or 24 employee of the board or the Department, and no cause of 25 action of any nature may arise against them, for any action 26 taken or omission made by them in the performance of their 27 powers and duties under this Act, unless the action or 28 omission constitutes willful or wanton misconduct. The board 29 may provide in its bylaws or rules for indemnification of, 30 and legal representation for, its members and employees. 31 i. There is no liability on the part of any insurance 32 producer for the failure of any applicant to be accepted by 33 the Plan unless the failure of the applicant to be accepted 34 by the Plan is due to an act or omission by the insurance SB802 Enrolled -45- LRB9002422JSdvA 1 producer which constitutes willful or wanton misconduct. 2 (Source: P.A. 86-547; 86-1322; 87-560.) 3 (215 ILCS 105/4) (from Ch. 73, par. 1304) 4 Sec. 4. Powers and authority of the board. The board 5 shall have the general powers and authority granted under the 6 laws of this State to insurance companies licensed to 7 transact health and accident insurance and in addition 8 thereto, the specific authority to: 9 a. Enter into contracts as are necessary or proper to 10 carry out the provisions and purposes of this Act, including 11 the authority, with the approval of the Director, to enter 12 into contracts with similar plans of other states for the 13 joint performance of common administrative functions, or with 14 persons or other organizations for the performance of 15 administrative functions including, without limitation, 16 utilization review and quality assurance programs, or with 17 health maintenance organizations or preferred provider 18 organizations for the provision of health care services. 19 b. Sue or be sued, including taking any legal actions 20 necessary or proper. 21 c. Take such legal action as necessary to: 22 (1) avoid the payment of improper claims against 23 the plan or the coverage provided by or through the plan; 24 (2) to recover any amounts erroneously or 25 improperly paid by the plan; or 26 (3) to recover any amounts paid by the plan as a 27 result of a mistake of fact or law; or .28 (4) to recover or collect any other amounts, 29 including assessments, that are due or owed the Plan or 30 have been billed on its or the Plan's behalf. 31 d. Establish appropriate rates, rate schedules, rate 32 adjustments, expense allowances, agents' referral fees, claim 33 reserves, and formulas and any other actuarial function SB802 Enrolled -46- LRB9002422JSdvA 1 appropriate to the operation of the plan. Rates shall not be2 unreasonable in relation to the coverage provided, the risk3 experience and expenses of providing the coverage.Rates and 4 rate schedules may be adjusted for appropriate risk factors 5 such as age and area variation in claim costs and shall take 6 into consideration appropriate risk factors in accordance 7 with established actuarial and underwriting practices. 8 e. Issue policies of insurance in accordance with the 9 requirements of this Act. 10 f. Appoint appropriate legal, actuarial and other 11 committees as necessary to provide technical assistance in 12 the operation of the plan, policy and other contract design, 13 and any other function within the authority of the plan. 14 g. Borrow money to effect the purposes of the Illinois 15 Comprehensive Health Insurance Plan. Any notes or other 16 evidence of indebtedness of the plan not in default shall be 17 legal investments for insurers and may be carried as admitted 18 assets. 19 h. Establish rules, conditions and procedures for 20 reinsuring risks under this Act. 21 i. Employ and fix the compensation of employees. Such 22 employees may be paid on a warrant issued by the State 23 Treasurer pursuant to a payroll voucher certified by the 24 Board and drawn by the Comptroller against appropriations or 25 trust funds held by the State Treasurer. 26 j. Enter into intergovernmental cooperation agreements 27 with other agencies or entities of State government for the 28 purpose of sharing the cost of providing health care services 29 that are otherwise authorized by this Act for children who 30 are both plan participants and eligible for financial 31 assistance from the Division of Specialized Care for Children 32 of the University of Illinois. 33 k. Establish conditions and procedures under which the 34 plan may, if funds permit, discount or subsidize premium SB802 Enrolled -47- LRB9002422JSdvA 1 rates that are paid directly by senior citizens, as defined 2 by the Board, and other plan participants, who are retired or 3 unemployed and meet other qualifications. 4 l. Establish and maintain the Plan Fund authorized in 5 Section 3 of this Act, which shall be divided into separate 6 accounts, as follows: 7 (1) accounts to fund the administrative, claim, and 8 other expenses of the Plan associated with eligible 9 persons who qualify for Plan coverage under Section 7 of 10 this Act, which shall consist of: 11 (A) premiums paid on behalf of covered 12 persons; 13 (B) appropriated funds and other revenues 14 collected or received by the Board; 15 (C) reserves for future losses maintained by 16 the Board; and 17 (D) interest earnings from investment of the 18 funds in the Plan Fund or any of its accounts other 19 than the funds in the account established under item 20 2 of this subsection. 21 (2) an account, to be denominated the federally 22 eligible individuals account, to fund the administrative, 23 claim, and other expenses of the Plan associated with 24 federally eligible individuals who qualify for Plan 25 coverage under Section 15 of this Act, which shall 26 consist of: 27 (A) premiums paid on behalf of covered 28 persons; 29 (B) assessments and other revenues collected 30 or received by the Board; 31 (C) reserves for future losses maintained by 32 the Board; and 33 (D) interest earnings from investment of the 34 federally eligible individuals account funds; and SB802 Enrolled -48- LRB9002422JSdvA 1 (3) such other accounts as may be appropriate. 2 m. Charge and collect assessments paid by insurers 3 pursuant to Section 12 of this Act and recover any 4 assessments for, on behalf of, or against those insurers. 5 (Source: P.A. 88-625, eff. 9-9-94; 89-628, eff. 8-9-96.) 6 (215 ILCS 105/5) (from Ch. 73, par. 1305) 7 Sec. 5. Plan administrator Administering Carrier. 8 a. The board shall select a plan administrator an9 administering carrierthrough a competitive bidding process 10 to administer the plan. The board shall evaluate bids 11 submitted under this Section based on criteria established by 12 the board which shall include: 13 (1) The plan administrator's carrier'sproven ability to 14 handle other large group accident and health benefit plans. 15 (2) The efficiency and timeliness of the plan 16 administrator's carrier'sclaim processing payingprocedures. 17 (3) An estimate of total charges for administering the 18 plan. 19 (4) The plan administrator's ability to apply effective 20 cost containment programs and procedures and of the carrier21 to administer the plan in a cost-efficient manner. 22 (5) The financial condition and stability of the plan 23 administrator carrier. 24 b. The plan administrator administering carriershall 25 serve for a period of 5 years subject to removal for cause 26 and subject to the terms, conditions and limitations of the 27 contract between the board and the plan administrator 28 administering carrier. At least one year prior to the 29 expiration of each 5 year period of service by the current 30 plan administrator an administering carrier, the board shall 31 advertise for and accept bids to serve as the plan 32 administrator administering carrierfor the succeeding 5 year 33 period. Selection of the plan administrator administeringSB802 Enrolled -49- LRB9002422JSdvA 1 carrierfor the succeeding period shall be made at least 6 2 months prior to the end of the current 5 year period. 3 c. The plan administrator administering carriershall 4 perform such eligibility and administrative claims payment5 functions relating to the plan as may be assigned to it 6 including: 7 (1) establishment of the administering carrier shall8 establisha premium billing procedure for collection of 9 premiums from plan participants. Billings shall be made on a 10 periodic basis as determined by the board; .11 (2) payment and processing of claims; and 12 (3) (2)other The administering carrier shall perform13 all necessaryfunctions to assure timely payment of benefits 14 to participants under the plan, including: 15 (a) Making available information relating to the proper 16 manner of submitting a claim for benefits under the plan and 17 distributing forms upon which submissions shall be made. 18 (b) Evaluating the eligibility of each claim for payment 19 under the plan. 20 (c) The plan administrator administering carriershall 21 be governed by the requirements of Part 919 of Title 50 of 22 the Illinois Administrative Code, promulgated by the 23 Department of Insurance, regarding the handling of claims 24 under this Act. 25 d. The plan administrator administering carriershall 26 submit regular reports to the board regarding the operation 27 of the plan. The frequency, content and form of the report 28 shall be as determined by the board. 29 e. The plan administrator administering carriershall 30 pay claims expenses from the premium payments received from 31 or on behalf of plan participants. If the plan 32 administrator's administering carrier'spayments for claims 33 expenses exceed the portion of premiums allocated by the 34 board for payment of claims expenses, the board shall provide SB802 Enrolled -50- LRB9002422JSdvA 1 to the administering carrieradditional funds to the plan 2 administrator for payment of claims expenses. 3 f. The plan administrator administering carriershall be 4 paid as provided in the board'scontract between the Board 5 and the plan administrator with the administering carrier for6 expenses incurred in the performance of its services. 7 (Source: P.A. 85-1013.) 8 (215 ILCS 105/7) (from Ch. 73, par. 1307) 9 Sec. 7. Eligibility. 10 a. Except as provided in subsection (e) of this Section 11 or in Section 15 of this Act, any individual person who is 12 either a citizen of the United States or an alien lawfully 13 admitted for permanent residence and continues to be a 14 resident of this State shall be eligible for Plan coverage if 15 evidence is provided of: 16 (1) A notice of rejection or refusal to issue 17 substantially similar individual health insurance 18 coverage for health reasons by a health insurance issuer 19 one insurer; or 20 (2) A refusal by a health insurance issuer to issue 21 individual health theinsurance coverage except at a rate 22 exceeding the applicable Plan rate for which the person 23 is responsible. 24 A rejection or refusal by a group health plan or health 25 insurance issuer an insureroffering only stop-loss or excess 26 of loss insurance or contracts, agreements, or other 27 arrangements for reinsurance coverage with respect to the 28 applicant shall not be sufficient evidence under this 29 subsection. 30 b. The board shall promulgate a list of medical or 31 health conditions for which a person who is either a citizen 32 of the United States or an alien lawfully admitted for 33 permanent residence and a resident of this State would be SB802 Enrolled -51- LRB9002422JSdvA 1 eligible for Plan coverage without applying for health 2 insurance coverage pursuant to subsection a. of this Section. 3 Persons who can demonstrate the existence or history of any 4 medical or health conditions on the list promulgated by the 5 board shall not be required to provide the evidence specified 6 in subsection a. of this Section. The list shall be 7 effective on the first day of the operation of the Plan and 8 may be amended from time to time as appropriate. 9 c. ResidentFamily members of the same household who 10 each are covered persons meet the eligibility criteria set11 forth in this Sectionare eligible for optional family 12 coverage under the Plan. 13 d. For persons qualifying for coverage in accordance 14 with Section 7 of this Act, the board shall, if it determines 15 that such appropriations as are made pursuant to Section 12 16 of this Act are insufficient to allow the board to accept all 17 of the eligible persons which it projects will apply for 18 enrollment under the Plan, limit or close enrollment to 19 ensure that the Plan is not over-subscribed and that it has 20 sufficient resources to meet its obligations to existing 21 enrollees. The board shall not limit or close enrollment for 22 federally eligible individuals. 23 e. A person shall not be eligible for coverage under the 24 Plan if: 25 (1) He or she has or obtains other coverage under a 26 group health plan or health insurance coverage 27 substantially similar to or better than a Plan policy as 28 an insured or covered dependent or would be eligible to 29 have that coverage if he or she elected to obtain it. 30 Persons otherwise eligible for Plan coverage may, 31 however, solely for the purpose of having coverage for a 32 pre-existing condition, maintain other coverage only 33 while satisfying any pre-existing condition waiting 34 period under a Plan policy or a subsequent replacement SB802 Enrolled -52- LRB9002422JSdvA 1 policy of a Plan policy. 2 (1.1) His or her prior coverage under a group 3 health plan or health insurance coverage, provided or 4 arranged by under a group policy or plan ofan employer 5 of more than 10 employees was discontinued for any reason 6 without the entire group or plan being discontinued and 7 not replaced, provided he or she remains an employee, or 8 dependent thereof, of the same employer. 9 (2) He or she is a recipient of or is approved to 10 receive medical assistance, except that a person may 11 continue to receive medical assistance through the 12 medical assistance no grant program, but only while 13 satisfying the requirements for a preexisting condition 14 under Section 8, subsection f. of this Act. Payment of 15 premiums pursuant to this Act shall be allocable to the 16 person's spenddown for purposes of the medical assistance 17 no grant program, but that person shall not be eligible 18 for any Plan benefits while that person remains eligible 19 for medical assistance. If the person continues to 20 receive or be approved to receive medical assistance 21 through the medical assistance no grant program at or 22 after the time that requirements for a preexisting 23 condition are satisfied, the person shall not be eligible 24 for coverage under the Plan. In that circumstance, 25 coverage under the plan shall terminate as of the 26 expiration of the preexisting condition limitation 27 period. Under all other circumstances, coverage under 28 the Plan shall automatically terminate as of the 29 effective date of any medical assistance. 30 (3) Except as provided in Section 15, the person 31 has previously participated in the Plan and voluntarily 32 terminated Plan terminatescoverage, unless 12 months 33 have elapsed since the person's latest voluntary 34 termination of coverage. SB802 Enrolled -53- LRB9002422JSdvA 1 (4) The person fails to pay the required premium 2 under the covered person's insured'sterms of enrollment 3 and participation, in which event the liability of the 4 Plan shall be limited to benefits incurred under the Plan 5 for the time period for which premiums had been paid and 6 the covered person remained eligible for Plan coverage. 7 (5) The Plan has paid a total of $1,000,000 8 $500,000in benefits on behalf of the covered person. 9 (6) The person is a resident of a public 10 institution. 11 (7) The person's premium is paid for or reimbursed 12 under any government sponsored program or by any 13 government agency or health care provider, except as an 14 otherwise qualifying full-time employee, or dependent of 15 such employee, of a government agency or health care 16 provider. 17 (8) The person has or later receives other benefits 18 or funds from any settlement, judgement, or award 19 resulting from any accident or injury, regardless of the 20 date of the accident or injury, or any other 21 circumstances creating a legal liability for damages due 22 that person by a third party, whether the settlement, 23 judgment, or award is in the form of a contract, 24 agreement, or trust on behalf of a minor or otherwise and 25 whether the settlement, judgment, or award is payable to 26 the person, his or her dependent, estate, personal 27 representative, or guardian in a lump sum or over time, 28 so long as there continues to be benefits or assets 29 remaining from those sources in an amount in excess of 30 $100,000. 31 f. The board or the administrator shall require 32 verification of residency and may require any additional 33 information or documentation, or statements under oath, when 34 necessary to determine residency upon initial application and SB802 Enrolled -54- LRB9002422JSdvA 1 for the entire term of the policy. 2 g. Coverage shall cease (i) on the date a person is no 3 longer a resident of Illinois, (ii) on the date a person 4 requests coverage to end, (iii) upon the death of the covered 5 person, (iv) on the date State law requires cancellation of 6 the policy, or (v) at the Plan's option, 30 days after the 7 Plan makes any inquiry concerning a person's eligibility or 8 place of residence to which the person does not reply. 9 h. Except under the conditions set forth in subsection g 10 of this Section, the coverage of any person who ceases to 11 meet the eligibility requirements of this Section shall be 12 terminated at the end of the current policy period for which 13 the necessary premiums have been paid. 14 (Source: P.A. 88-364; 89-486, eff. 6-21-96.) 15 (215 ILCS 105/7.1 new) 16 Sec. 7.1. Premiums. 17 (a) The Board shall establish premium rates for coverage 18 as provided in subsection (d) of this Section. 19 (b) Separate schedules of premium rates based on sex, 20 age, geographical location, and benefit plan shall apply for 21 individual risks. 22 (c) The Board may provide for separate premium rates for 23 optional family coverage for the spouse or one or more 24 dependents who reside together in any eligible individual's 25 or eligible person's household. The rates for each spouse or 26 dependent who qualifies to be covered under this optional 27 family coverage shall be such percentage of the applicable 28 individual Plan rate as the Board, in accordance with 29 appropriate actuarial principles, shall establish. 30 (d) The Board, with the assistance of the Director and 31 in accordance with appropriate actuarial principles, shall 32 determine a standard risk rate by using the average rates 33 that individual standard risks in this State are charged by SB802 Enrolled -55- LRB9002422JSdvA 1 at least 5 of the largest health insurance issuers providing 2 individual health insurance coverage to residents of Illinois 3 that is substantially similar to the coverage offered by the 4 Plan. In determining the average rate or charges of those 5 health insurance issuers, the rates charged by those issuers 6 shall be actuarially adjusted to determine the rate or charge 7 that would have been charged for benefits similar to those 8 provided by the Plan. The standard risk rates shall be 9 established using reasonable actuarial techniques and shall 10 reflect anticipated claims experience, expenses, and other 11 appropriate risk factors for such coverage. 12 (e) Rates for Plan coverage shall not be less than 125% 13 nor more than 150% of rates established as applicable for 14 individual standard risks pursuant to subsection (d). 15 (215 ILCS 105/8) (from Ch. 73, par. 1308) 16 Sec. 8. Minimum benefits. 17 a. Availability. The Plan shall offer in an annually 18 renewable policy major medical expense coverage to every 19 eligible person who is not eligible for Medicare. Major 20 medical expense coverage offered by the Plan shall pay an 21 eligible person's covered expenses, subject to limit on the 22 deductible and coinsurance payments authorized under 23 paragraph (4) of subsection d of this Section, up to a 24 lifetime benefit limit of $1,000,000 $500,000per covered 25 individual. The maximum limit under this subsection shall 26 not be altered by the Board, and no actuarial equivalent 27 benefit may be substituted by the Board. Any person who 28 otherwise would qualify for coverage under the Plan, but is 29 excluded because he or she is eligible for Medicare, shall be 30 eligible for any separate Medicare supplement policy or 31 policies which the Board may offer. 32 b. Outline of benefits Covered expenses. Covered 33 expenses shall be limited to the usual reasonableand SB802 Enrolled -56- LRB9002422JSdvA 1 customary charge, including negotiated fees, in the locality 2 for the following services and articles when prescribed by a 3 physician and determined by the Plan to be medically 4 necessary for the following areas of services, subject to 5 such separate deductibles, co-payments, exclusions, and other 6 limitations on benefits as the Board shall establish and 7 approve, and the other provisions of this Section and8 prescribed by a person licensed and practicing within the9 scope of his or her profession as authorized by State law: 10 (1) Hospital services room and board and any other11 hospital services, except that inpatient hospitalization12 for the treatment of mental and emotional disorders shall13 only be covered for a maximum of 45 days in a calendar14 year. 15 (2) Professional services for the diagnosis or 16 treatment of injuries, illnesses or conditions, other 17 than dental and , or outpatientmental and nervous 18 disorders as described in paragraph (17), which are 19 rendered by a physician or chiropractor, or by other 20 licensed professionals at the physician's or21 chiropractor'sdirection. 22 (3) (Blank). If surgery has been recommended, a23 second opinion may be required. The charge for a second24 opinion as to whether the surgery is required will be25 paid in full without regard to deductible or co-payment26 requirements. If the second opinion differs from the27 first, the charge for a third opinion, if desired, will28 also be paid in full without regard to deductible or29 co-payment requirements. Regardless of whether the30 second opinion or third opinion confirms the original31 recommendation, it is the patient's decision whether to32 undergo surgery.33 (4) Drugs requiring a physician's or other legally34 authorizedprescription. SB802 Enrolled -57- LRB9002422JSdvA 1 (5) Skilled nursing services of care provided ina 2 licensed skilled nursing facility for not more than 120 3 days during ina policy calendaryear , provided the4 service commences within 14 days following a confinement5 of at least 3 consecutive days in a hospital for the same6 condition. 7 (6) Services of a home health agency in accord with 8 a home health care plan, up to a maximum of 270 visits 9 per year. 10 (7) Services of a licensed hospice for not more 11 than 180 days during a policy year. 12 (8) Use of radium or other radioactive materials. 13 (9) Oxygen. 14 (10) Anesthetics. 15 (11) Orthoses and prostheses other than dental. 16 (12) Rental or purchase in accordance with Board 17 policies or procedures of durable medical equipment, 18 other than eyeglasses or hearing aids, for which there is 19 no personal use in the absence of the condition for which 20 it is prescribed. 21 (13) Diagnostic x-rays and laboratory tests. 22 (14) Oral surgery for excision of partially or 23 completely unerupted impacted teeth or the gums and 24 tissues of the mouth, when not performed in connection 25 with the routine extraction or repair of teeth, and oral 26 surgery and procedures, including orthodontics and 27 prosthetics necessary for craniofacial or maxillofacial 28 conditions and to correct congenital defects or injuries 29 due to accident. 30 (15) Physical, speech, and functional occupational 31 therapy as medically necessary and provided by 32 appropriate licensed professionals. 33 (16) Emergency and other medically necessary 34 transportation provided by a licensed ambulance service SB802 Enrolled -58- LRB9002422JSdvA 1 to the nearest health care facility qualified to treat a 2 covered theillness, injury, or condition, subject to the 3 provisions of the Emergency Medical Systems (EMS) Act. 4 (17) The first 50 professionalOutpatient services 5 visitsfor diagnosis and treatment of mental and nervous 6 emotionaldisorders provided that a covered person shall 7 be required to make a copayment not to exceed 50% and 8 that the Plan's payment shall not exceed such amounts as 9 are established by the Board rendered during the year, up10 to a maximum of $80 per visit. 11 (18) Human organ or tissue transplants specified by 12 the Board that are performed at a hospital designated by 13 the Board as a participating transplant center for that 14 specific organ or tissue transplant. 15 c. Exclusions Exclusion. Covered expenses of the Plan 16 shall not include the following: 17 (1) Any charge for treatment for cosmetic purposes 18 other than for reconstructive surgery when the service is 19 incidental to or follows surgery resulting from injury, 20 sickness or other diseases of the involved part or 21 surgery for the repair or treatment of a congenital 22 bodily defect to restore normal bodily functions. 23 (2) Any charge for care that is primarily for rest, 24 custodial, educational, or domiciliary purposes. 25 (3) Any charge for services in a private room to 26 the extent it is in excess of the institution's charge 27 for its most common semiprivate room, unless a private 28 room is prescribed as medically necessary by a physician. 29 (4) That part of any charge for room and board or 30 for services rendered or articles prescribed by a 31 physician, dentist, or other health care personnel that 32 exceeds the reasonable and customary charge in the 33 locality or for any services or supplies not medically 34 necessary for the diagnosed injury or illness. SB802 Enrolled -59- LRB9002422JSdvA 1 (5) Any charge for services or articles the 2 provision of which is not within the scope of licensure 3 of the institution or individual providing the services 4 or articles. 5 (6) Any expense incurred prior to the effective 6 date of coverage by the Plan for the person on whose 7 behalf the expense is incurred. 8 (7) Dental care, dental surgery, dental treatment 9 or dental appliances, except as provided in paragraph 10 (14) of subsection b of this Section. 11 (8) Eyeglasses, contact lenses, hearing aids or 12 their fitting. 13 (9) Illness or injury due to (A) war or anyacts of 14 war ; (B) commission of, or attempt to commit, a felony;15 or (C) aviation activities, except when traveling as a16 fare-paying passenger on a commercial airline. 17 (10) Services of blood donors and any fee for 18 failure to replace the first 3 pints of blood provided to 19 a covered an eligibleperson each policy year. 20 (11) Personal supplies or services provided by a 21 hospital or nursing home, or any other nonmedical or 22 nonprescribed supply or service. 23 (12) Routine maternity charges for a pregnancy, 24 except where added as optional coverage with payment of 25 an additional premium for pregnancy resulting from 26 conception occurring after the effective date of the 27 optional coverage. 28 (13) (Blank). Expenses of obtaining an abortion,29 induced miscarriage or induced premature birth unless, in30 the opinion of a physician, those procedures are31 necessary for the preservation of life of the woman32 seeking such treatment, or except an induced premature33 birth intended to produce a live viable child and the34 procedure is necessary for the health of the mother orSB802 Enrolled -60- LRB9002422JSdvA 1 unborn child.2 (14) Any expense or charge for services, drugs, or 3 supplies that are: (i) not provided in accord with 4 generally accepted standards of current medical practice; 5 (ii) for procedures, treatments, equipment, transplants, 6 or implants, any of which are investigational, 7 experimental, or for research purposes; (iii) 8 investigative and not proven safe and effective; or (iv) 9 for, or resulting from, a gender transformation 10 operation. 11 (15) Any expense or charge for routine physical 12 examinations or tests. 13 (16) Any expense for which a charge is not made in 14 the absence of insurance or for which there is no legal 15 obligation on the part of the patient to pay. 16 (17) Any expense incurred for benefits provided 17 under the laws of the United States and this State, 18 including Medicare and Medicaid and other medical 19 assistance, military service-connected disability 20 payments, medical services provided for members of the 21 armed forces and their dependents or employees of the 22 armed forces of the United States, and medical services 23 financed on behalf of all citizens by the United States. 24 (18) Any expense or charge for in vitro 25 fertilization, artificial insemination, or any other 26 artificial means used to cause pregnancy. 27 (19) Any expense or charge for oral contraceptives 28 used for birth control or any other temporary birth 29 control measures. 30 (20) Any expense or charge for sterilization or 31 sterilization reversals. 32 (21) Any expense or charge for weight loss 33 programs, exercise equipment, or treatment of obesity, 34 except when certified by a physician as morbid obesity SB802 Enrolled -61- LRB9002422JSdvA 1 (at least 2 times normal body weight). 2 (22) Any expense or charge for acupuncture 3 treatment unless used as an anesthetic agent for a 4 covered surgery. 5 (23) Any expense or charge for or related to organ 6 or tissue transplants other than those performed at a 7 hospital with a Board approved organ transplant program 8 that has been designated by the Board as a preferred or 9 exclusive provider organization for that specific organ 10 or tissue transplant. 11 (24) Any expense or charge for procedures, 12 treatments, equipment, or services that are provided in 13 special settings for research purposes or in a controlled 14 environment, are being studied for safety, efficiency, 15 and effectiveness, and are awaiting endorsement by the 16 appropriate national medical speciality college for 17 general use within the medical community. 18 d. Premiums,Deductibles ,and coinsurance. (1) Premiums19 charged for coverage issued by the Plan may not be20 unreasonable in relation to the benefits provided, the risk21 experience and the reasonable expenses of providing the22 coverage.23 (2) Separate schedules of premium rates based on sex,24 age and geographical location shall apply for individual25 risks.26 (3) The Plan may provide for separate premium rates for27 optional family coverage for the spouse or one or more28 dependents of any person eligible to be insured under the29 Plan who is also the oldest adult member of the family and30 remains continuously enrolled in the Plan as the primary31 enrollee. The rates shall be such percentage of the32 applicable individual Plan rate as the Board, in accordance33 with appropriate actuarial principles, shall establish for34 each spouse or dependent.SB802 Enrolled -62- LRB9002422JSdvA 1 (4) The Board shall determine, in accordance with2 appropriate actuarial principles, the average rates that3 individual standard risks in this State are charged by at4 least 5 of the largest insurers providing coverage to5 residents of Illinois that is substantially similar to the6 Plan coverage. In the event at least 5 insurers do not offer7 substantially similar coverage, the rates shall be8 established using reasonable actuarial techniques and shall9 reflect anticipated claims experience, expenses, and other10 appropriate risk factors relating to the Plan. Rates for11 Plan coverage shall be 135% of rates so established as12 applicable for individual standard risks; provided, however,13 if after determining that the appropriations made pursuant to14 Section 12 of this Act are insufficient to ensure that total15 income from all sources will equal or exceed the total16 incurred costs and expenses for the current number of17 enrollees, the board shall raise premium rates above this18 135% standard to the level it deems necessary to ensure the19 financial solvency of the Plan for enrollees already in the20 Plan. All rates and rate schedules shall be submitted to the21 board for approval.22 (5)The Plan coverage defined in Section 6 shall provide 23 for a choice of deductibles per individual as authorized by 24 the Board per individual per annum. If 2 individual members 25 of the same afamily household, who are both covered persons 26 under the Plan, satisfy the same applicable deductibles, no 27 other member of that family who is also a covered person 28 eligible for coverageunder the Plan shall be required to 29 meet any deductibles for the balance of that calendar year. 30 The deductibles must be applied first to the authorized 31 amount of covered expenses incurred by the covered person. A 32 mandatory coinsurance requirement shall be imposed at the 33 rate authorized by the Board in excess of the mandatory 34 deductible, the coinsurance in the aggregate not to exceed SB802 Enrolled -63- LRB9002422JSdvA 1 such amounts as are authorized by the Board per annum. At 2 its discretion the Board may, however, offer catastrophic 3 coverages or other policies that provide for larger 4 deductibles with or without coinsurance requirements. The 5 deductibles and coinsurance factors may be adjusted annually 6 according to the Medical Component of the Consumer Price 7 Index. 8 (6) The Plan may provide for and employ cost containment9 measures and requirements including, but not limited to,10 preadmission certification, second surgical opinion,11 concurrent utilization review programs, individual case12 management, preferred provider organizations, and other cost13 effective arrangements for paying for covered expenses.14 e. Scope of coverage. 15 (1) In approving any of the benefit plans to be offered 16 by the Plan, the Board shall establish such benefit levels, 17 deductibles, coinsurance factors, exclusions, and limitations 18 as it may deem appropriate and that it believes to be 19 generally reflective of and commensurate with health 20 insurance coverage that is provided in the individual market 21 in this State. 22 (2) The benefit plans approved by the Board may also 23 provide for and employ various cost containment measures and 24 other requirements including, but not limited to, 25 preadmission certification, prior approval, second surgical 26 opinions, concurrent utilization review programs, individual 27 case management, preferred provider organizations, health 28 maintenance organizations, and other cost effective 29 arrangements for paying for covered expenses. Except as30 provided in subsection c of this Section, if the covered31 expenses incurred by the eligible person exceed the32 deductible for major medical expense coverage in a calendar33 year, the Plan shall pay at least 80% of any additional34 covered expenses incurred by the person during the calendarSB802 Enrolled -64- LRB9002422JSdvA 1 year.2 f. Preexisting conditions. 3 (1) Except for federally eligible individuals 4 qualifying for Plan coverage under Section 15 of this Act 5 or eligible persons who qualify for and elect to purchase 6 the waiver authorized in paragraph (3) of this 7 subsection, Six months:plan coverage shall exclude 8 charges or expenses incurred during the first 6 months 9 following the effective date of coverage as to any 10 condition if: (a) the condition had manifested itself 11 within the 6 month period immediately preceding the 12 effective date of coverage in such a manner as would 13 cause an ordinarily prudent person to seek diagnosis, 14 care or treatment; or (b) medical advice, care or 15 treatment was recommended or received within the 6 month 16 period immediately preceding the effective date of 17 coverage. 18 (2) (Blank). 19 (3) Waiver: The preexisting condition exclusions as 20 set forth in paragraph (1) of this subsection shall be 21 waived to the extent to which the eligible person: (a) 22 has satisfied similar exclusions under any prior health 23 insurance coverage policyor group health plan that was 24 involuntarily terminated; (b) is ineligible for any 25 continuation coverage or conversion rightsthat would 26 continue or provide substantially similar coverage 27 following that termination; and (c) has applied for Plan 28 coverage not later than 30 days following the involuntary 29 termination. No policy or plan shall be deemed to have 30 been involuntarily terminated if the master policyholder 31 or other controlling party elected to change insurance 32 coverage from one health insurance issuer companyor 33 group health plan to another even if that decision 34 resulted in a discontinuation of coverage for any SB802 Enrolled -65- LRB9002422JSdvA 1 individual under the plan, either totally or for any 2 medical condition. For each eligible person who qualifies 3 for and elects this waiver, there shall be added to each 4 payment of premium, on a prorated basis, a surcharge of 5 up to 10% of the otherwise applicable annual premium for 6 as long as that individual's coverage under the Plan 7 remains in effect or 60 months, whichever is less. 8 g. Other sources primary; nonduplication of benefits. 9 (1) The Plan shall be the last payor of benefits 10 whenever any other benefit or source of third party 11 payment is available. Subject to the provisions of 12 subsection e of Section 7, benefits otherwise payable 13 under Plan coverage shall be reduced by all amounts paid 14 or payable by Medicare or any other government program or 15 through any health insurance or group otherhealth 16 benefitplan, whether by insurance, reimbursement, 17 insuredor otherwise, or through any third party 18 liability, settlement, judgment, or award, regardless of 19 the date of the settlement, judgment, or award, whether 20 the settlement, judgment, or award is in the form of a 21 contract, agreement, or trust on behalf of a minor or 22 otherwise and whether the settlement, judgment, or award 23 is payable to the covered person, his or her dependent, 24 estate, personal representative, or guardian in a lump 25 sum or over time, and by all hospital or medical expense 26 benefits paid or payable under any worker's compensation 27 coverage, automobile medical payment, or liability 28 insurance, whether provided on the basis of fault or 29 nonfault, and by any hospital or medical benefits paid or 30 payable under or provided pursuant to any State or 31 federal law or program. 32 (2) The Plan shall have a cause of action against 33 any covered person or any other person or entity for the 34 recovery of any amount paid to the extent the amount was SB802 Enrolled -66- LRB9002422JSdvA 1 for treatment, services, or supplies not covered in this 2 Section or in excess of benefits as set forth in this 3 Section. 4 (3) Whenever benefits are due from the Plan because 5 of sickness or an injury to a covered person resulting 6 from a third party's wrongful act or negligence and the 7 covered person has recovered or may recover damages from 8 a third party or its insurer, the Plan shall have the 9 right to reduce benefits or to refuse to pay benefits 10 that otherwise may be payable by the amount of damages 11 that the covered person has recovered or may recover 12 regardless of the date of the sickness or injury or the 13 date of any settlement, judgment, or award resulting from 14 that sickness or injury. 15 During the pendency of any action or claim that is 16 brought by or on behalf of a covered person against a 17 third party or its insurer, any benefits that would 18 otherwise be payable except for the provisions of this 19 paragraph (3) shall be paid if payment by or for the 20 third party has not yet been made and the covered person 21 or, if incapable, that person's legal representative 22 agrees in writing to pay back promptly the benefits paid 23 as a result of the sickness or injury to the extent of 24 any future payments made by or for the third party for 25 the sickness or injury. This agreement is to apply 26 whether or not liability for the payments is established 27 or admitted by the third party or whether those payments 28 are itemized. 29 Any amounts due the plan to repay benefits may be 30 deducted from other benefits payable by the Plan after 31 payments by or for the third party are made. 32 (4) Benefits due from the Plan may be reduced or 33 refused as an offset against any amount otherwise 34 recoverable under this Section. SB802 Enrolled -67- LRB9002422JSdvA 1 h. Right of subrogation; recoveries. 2 (1) Whenever the Plan has paid benefits because of 3 sickness or an injury to any covered person resulting 4 from a third party's wrongful act or negligence, or for 5 which an insurer is liable in accordance with the 6 provisions of any policy of insurance, and the covered 7 person has recovered or may recover damages from a third 8 party that is liable for the damages, the Plan shall have 9 the right to recover the benefits it paid from any 10 amounts that the covered person has received or may 11 receive regardless of the date of the sickness or injury 12 or the date of any settlement, judgment, or award 13 resulting from that sickness or injury. The Plan shall 14 be subrogated to any right of recovery the covered person 15 may have under the terms of any private or public health 16 care coverage or liability coverage, including coverage 17 under the Workers' Compensation Act or the Workers' 18 Occupational Diseases Act, without the necessity of 19 assignment of claim or other authorization to secure the 20 right of recovery. To enforce its subrogation right, the 21 Plan may (i) intervene or join in an action or proceeding 22 brought by the covered person or his personal 23 representative, including his guardian, conservator, 24 estate, dependents, or survivors, against any third party 25 or the third party's insurer that may be liable or (ii) 26 institute and prosecute legal proceedings against any 27 third party or the third party's insurer that may be 28 liable for the sickness or injury in an appropriate court 29 either in the name of the Plan or in the name of the 30 covered person or his personal representative, including 31 his guardian, conservator, estate, dependents, or 32 survivors. 33 (2) If any action or claim is brought by or on 34 behalf of a covered person against a third party or the SB802 Enrolled -68- LRB9002422JSdvA 1 third party's insurer, the covered person or his personal 2 representative, including his guardian, conservator, 3 estate, dependents, or survivors, shall notify the Plan 4 by personal service or registered mail of the action or 5 claim and of the name of the court in which the action or 6 claim is brought, filing proof thereof in the action or 7 claim. The Plan may, at any time thereafter, join in the 8 action or claim upon its motion so that all orders of 9 court after hearing and judgment shall be made for its 10 protection. No release or settlement of a claim for 11 damages and no satisfaction of judgment in the action 12 shall be valid without the written consent of the Plan to 13 the extent of its interest in the settlement or judgment 14 and of the covered person or his personal representative. 15 (3) In the event that the covered person or his 16 personal representative fails to institute a proceeding 17 against any appropriate third party before the fifth 18 month before the action would be barred, the Plan may, in 19 its own name or in the name of the covered person or 20 personal representative, commence a proceeding against 21 any appropriate third party for the recovery of damages 22 on account of any sickness, injury, or death to the 23 covered person. The covered person shall cooperate in 24 doing what is reasonably necessary to assist the Plan in 25 any recovery and shall not take any action that would 26 prejudice the Plan's right to recovery. The Plan shall 27 pay to the covered person or his personal representative 28 all sums collected from any third party by judgment or 29 otherwise in excess of amounts paid in benefits under the 30 Plan and amounts paid or to be paid as costs, attorneys 31 fees, and reasonable expenses incurred by the Plan in 32 making the collection or enforcing the judgment. 33 (4) In the event that a covered person or his 34 personal representative, including his guardian, SB802 Enrolled -69- LRB9002422JSdvA 1 conservator, estate, dependents, or survivors, recovers 2 damages from a third party for sickness or injury caused 3 to the covered person, the covered person or the personal 4 representative shall pay to the Plan from the damages 5 recovered the amount of benefits paid or to be paid on 6 behalf of the covered person. 7 (5) When the action or claim is brought by the 8 covered person alone and the covered person incurs a 9 personal liability to pay attorney's fees and costs of 10 litigation, the Plan's claim for reimbursement of the 11 benefits provided to the covered person shall be the full 12 amount of benefits paid to or on behalf of the covered 13 person under this Act less a pro rata share that 14 represents the Plan's reasonable share of attorney's fees 15 paid by the covered person and that portion of the cost 16 of litigation expenses determined by multiplying by the 17 ratio of the full amount of the expenditures to the full 18 amount of the judgement, award, or settlement. 19 (6) In the event of judgment or award in a suit or 20 claim against a third party or insurer, the court shall 21 first order paid from any judgement or award the 22 reasonable litigation expenses incurred in preparation 23 and prosecution of the action or claim, together with 24 reasonable attorney's fees. After payment of those 25 expenses and attorney's fees, the court shall apply out 26 of the balance of the judgment or award an amount 27 sufficient to reimburse the Plan the full amount of 28 benefits paid on behalf of the covered person under this 29 Act, provided the court may reduce and apportion the 30 Plan's portion of the judgement proportionate to the 31 recovery of the covered person. The burden of producing 32 evidence sufficient to support the exercise by the court 33 of its discretion to reduce the amount of a proven charge 34 sought to be enforced against the recovery shall rest SB802 Enrolled -70- LRB9002422JSdvA 1 with the party seeking the reduction. The court may 2 consider the nature and extent of the injury, economic 3 and non-economic loss, settlement offers, comparative 4 negligence as it applies to the case at hand, hospital 5 costs, physician costs, and all other appropriate costs. 6 The Plan shall pay its pro rata share of the attorney 7 fees based on the Plan's recovery as it compares to the 8 total judgment. Any reimbursement rights of the Plan 9 shall take priority over all other liens and charges 10 existing under the laws of this State with the exception 11 of any attorney liens filed under the Attorneys Lien Act. 12 (7) The Plan may compromise or settle and release 13 any claim for benefits provided under this Act or waive 14 any claims for benefits, in whole or in part, for the 15 convenience of the Plan or if the Plan determines that 16 collection would result in undue hardship upon the 17 covered person. 18 (Source: P.A. 89-486, eff. 6-21-96.) 19 (215 ILCS 105/10) (from Ch. 73, par. 1310) 20 Sec. 10. Collective action. Participation in the 21 operation of the Plan, the establishment of rates, forms or 22 procedures, or any other joint or collective action required 23 by this Act shall not be the basis of any legal action, 24 criminal or civil liability or penalty against the Plan, the 25 plan administrator, the board or any of its members, 26 employees, contractors, or consultants. 27 (Source: P.A. 85-702; 86-1322.) 28 (215 ILCS 105/12) (from Ch. 73, par. 1312) 29 Sec. 12. Deficit or surplus. 30 a. If premiums or other receipts by the Director,Board ,31 or administering carrierexceed the amount required for the 32 operation of the Plan, including actual losses and SB802 Enrolled -71- LRB9002422JSdvA 1 administrative expenses of the Plan, the Board shall direct 2 that the excess be held at interest, in a bank designated by 3 the Board, or used to offset future losses or to reduce Plan 4 premiums. In this subsection, the term "future losses" 5 includes reserves for incurred but not reported claims. 6 b. Any deficit incurred or expected to be incurred on 7 behalf of eligible persons who qualify for plan coverage 8 under Section 7 of this Act the Planshall be recouped by an 9 appropriation made by the General Assembly. 10 c. For the purposes of this Section, a deficit shall be 11 incurred when anticipated losses and incurred but not 12 reported claims expenses exceed anticipated income from 13 earned premiums net of administrative expenses. 14 d. Any deficit incurred or expected to be incurred on 15 behalf of federally eligible individuals who qualify for Plan 16 coverage under Section 15 of this Act shall be recouped by an 17 assessment of all insurers made in accordance with the 18 provisions of this Section. The Board shall within 90 days 19 of the effective date of this amendatory Act of 1997 and 20 within the first quarter of each fiscal year thereafter 21 assess all insurers for the anticipated deficit in accordance 22 with the provisions of this Section. The board may also make 23 additional assessments no more than 4 times a year to fund 24 unanticipated deficits, implementation expenses, and cash 25 flow needs. 26 e. An insurer's assessment shall be determined by 27 multiplying the total assessment, as determined in subsection 28 d. of this Section, by a fraction, the numerator of which 29 equals that insurer's direct Illinois premiums during the 30 preceding calendar year and the denominator of which equals 31 the total of all insurers' direct Illinois premiums. The 32 Board may exempt those insurers whose share as determined 33 under this subsection would be so minimal as to not exceed 34 the estimated cost of levying the assessment. SB802 Enrolled -72- LRB9002422JSdvA 1 f. The Board shall charge and collect from each insurer 2 the amounts determined to be due under this Section. The 3 assessment shall be billed by Board invoice based upon the 4 insurer's direct Illinois premium income as shown in its 5 annual statement for the preceding calendar year as filed 6 with the Director. The invoice shall be due upon receipt and 7 must be paid no later than 30 days after receipt by the 8 insurer. 9 g. When an insurer fails to pay the full amount of any 10 assessment of $100 or more due under this Section there shall 11 be added to the amount due as a penalty the greater of $50 or 12 an amount equal to 5% of the deficiency for each month or 13 part of a month that the deficiency remains unpaid. 14 h. Amounts collected under this Section shall be paid to 15 the Board for deposit into the Plan Fund authorized by 16 Section 3 of this Act. 17 i. An insurer may petition the Director for an abatement 18 or deferment of all or part of an assessment imposed by the 19 Board. The Director may abate or defer, in whole or in part, 20 the assessment if, in the opinion of the Director, payment of 21 the assessment would endanger the ability of the insurer to 22 fulfill its contractual obligations. In the event an 23 assessment against an insurer is abated or deferred in whole 24 or in part, the amount by which the assessment is abated or 25 deferred shall be assessed against the other insurers in a 26 manner consistent with the basis for assessments set forth in 27 this subsection. The insurer receiving a deferment shall 28 remain liable to the plan for the deficiency for 4 years. 29 (Source: P.A. 85-702; 86-1322.) 30 (215 ILCS 105/14) (from Ch. 73, par. 1314) 31 Sec. 14. Confidentiality. 32 (a) All steps necessary under State and Federal law to 33 protect insuredconfidentiality of applicants and covered SB802 Enrolled -73- LRB9002422JSdvA 1 persons shall be undertaken by the board to prevent the 2 identification of individual records of persons covered 3 insuredunder the Plan, rejected by the Plan, or who become 4 ineligible for further participation in the Plan. Procedures 5 shall Regulations are tobe written by the board to assure 6 the confidentiality of records of persons covered insured7 under, rejected by, or who become ineligible for further 8 participation in, the Plan when gathering and submitting data 9 to the board or any other entity. 10 (b) The information submitted to the board by hospitals 11 pursuant to this Act shall be privileged and confidential, 12 and shall not be disclosed in any manner. The foregoing 13 includes, but shall not be limited to, disclosure, inspection 14 or copying under The Freedom of Information Act, The State 15 Records Act, and paragraph (1) of Section 404 of the Illinois 16 Insurance Code. However, the prohibitions stated in this 17 subsection shall not apply to the compilations of information 18 assembled by the board pursuant to subsections c. and e. of 19 Section 3 of this Act. 20 (Source: P.A. 85-702; 86-1322.) 21 (215 ILCS 105/15 new) 22 Sec. 15. Alternative portable coverage for federally 23 eligible individuals. 24 (a) Notwithstanding the requirements of subsection a. of 25 Section 7, any federally eligible individual for whom a Plan 26 application, and such enclosures and supporting documentation 27 as the Board may require, is received by the Board within 63 28 days after the termination of prior creditable coverage shall 29 qualify to enroll in the Plan under the portability 30 provisions of this Section. 31 (b) Any federally eligible individual seeking Plan 32 coverage under this Section must submit with his or her 33 application evidence, including acceptable written SB802 Enrolled -74- LRB9002422JSdvA 1 certification of previous creditable coverage, that will 2 establish to the Board's satisfaction, that he or she meets 3 all of the requirements to be a federally eligible individual 4 and is currently and permanently residing in this State (as 5 of the date his or her application was received by the 6 Board). 7 (c) A period of creditable coverage shall not be 8 counted, with respect to qualifying an applicant for Plan 9 coverage as a federally eligible individual under this 10 Section, if after such period and before the application for 11 Plan coverage was received by the Board, there was at least a 12 63 day period during all of which the individual was not 13 covered under any creditable coverage. 14 (d) Any federally eligible individual who the Board 15 determines qualifies for Plan coverage under this Section 16 shall be offered his or her choice of enrolling in one of 17 alternative portability health benefit plans which the Board 18 is authorized under this Section to establish for these 19 federally eligible individuals and their dependents. 20 (e) The Board shall offer a choice of health care 21 coverages consistent with major medical coverage under the 22 alternative health benefit plans authorized by this Section 23 to every federally eligible individual. The coverages to be 24 offered under the plans, the schedule of benefits, 25 deductibles, co-payments, exclusions, and other limitations 26 shall be approved by the Board. One optional form of 27 coverage shall be comparable to comprehensive health 28 insurance coverage offered in the individual market in this 29 State or a standard option of coverage available under the 30 group or individual health insurance laws of the State. The 31 standard benefit plan that is authorized by Section 8 of this 32 Act may be used for this purpose. The Board may also offer a 33 preferred provider option and such other options as the Board 34 determines may be appropriate for these federally eligible SB802 Enrolled -75- LRB9002422JSdvA 1 individuals who qualify for Plan coverage pursuant to this 2 Section. 3 (f) Notwithstanding the requirements of subsection f. of 4 Section 8, any plan coverage that is issued to federally 5 eligible individuals who qualify for the Plan pursuant to the 6 portability provisions of this Section shall not be subject 7 to any preexisting conditions exclusion, waiting period, or 8 other similar limitation on coverage. 9 (g) Federally eligible individuals who qualify and 10 enroll in the Plan pursuant to this Section shall be required 11 to pay such premium rates as the Board shall establish and 12 approve in accordance with the requirements of Section 7.1 of 13 this Act. 14 (h) A federally eligible individual who qualifies and 15 enrolls in the Plan pursuant to this Section must satisfy on 16 an ongoing basis all of the other eligibility requirements of 17 this Act to the extent not inconsistent with the federal 18 Health Insurance Portability and Accountability Act of 1996 19 in order to maintain continued eligibility for coverage under 20 the Plan. 21 Section 94. The Health Maintenance Organization Act is 22 amended by adding Section 5-3.5 as follows: 23 (215 ILCS 125/5-3.5 new) 24 Sec. 5-3.5. Illinois Health Insurance Portability and 25 Accountability Act. The provisions of this Act are subject 26 to the Illinois Health Insurance Portability and 27 Accountability Act as provided in Section 15 of that Act. 28 Section 96. The Limited Health Service Organization Act 29 is amended by adding Section 4002.5 as follows: 30 (215 ILCS 130/4002.5 new) SB802 Enrolled -76- LRB9002422JSdvA 1 Sec. 4002.5. Illinois Health Insurance Portability and 2 Accountability Act. The provisions of this Act are subject 3 to the Illinois Health Insurance Portability and 4 Accountability Act as provided in Section 15 of that Act. 5 Section 98. The Voluntary Health Services Plans Act is 6 amended by adding Section 15.25 as follows: 7 (215 ILCS 165/15.25 new) 8 Sec. 15.25. Illinois Health Insurance Portability and 9 Accountability Act. The provisions of this Act are subject to 10 the Illinois Health Insurance Portability and Accountability 11 Act as provided in Section 15 of that Act. 12 Section 99. Effective date. This Act takes effect on 13 July 1, 1997.
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