State of Illinois
91st General Assembly
Legislation

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91_HB0140

 
                                               LRB9100795JSpc

 1        AN  ACT  concerning  insurance   coverage   for   certain
 2    conditions.

 3        Be  it  enacted  by  the People of the State of Illinois,
 4    represented in the General Assembly:

 5        Section 5.  The Illinois Insurance  Code  is  amended  by
 6    adding Section 356y as follows:

 7        (215 ILCS 5/356y new)
 8        Sec. 356y.  Treatment of certain metabolic diseases.
 9        (a)  An individual or group policy of accident and health
10    insurance  that  is issued, delivered, amended, or renewed in
11    this State on or after January  1,  2000  shall  include  the
12    following:
13             (1)  Coverage  for  prescription  enteral  and  oral
14        formulas for home use, for which a physician has issued a
15        written  order  and which are medically necessary for the
16        treatment or management of inherited  diseases  involving
17        amino  acids or organic acids (including, but not limited
18        to, phenylketonuria).
19             (2)  Coverage for up to $2,500  per  year  worth  of
20        food  products modified to be low in protein, for which a
21        physician has  issued  a  written  order  and  which  are
22        medically necessary for the management of phenylketonuria
23        or  other  inherited  diseases  involving  amino acids or
24        other organic acids.
25        (b)  The coverage required  under  subsection  (a)  shall
26    also be provided by health maintenance organizations, limited
27    health  service  organizations, and voluntary health services
28    plans.

29        Section 10.  The Health Maintenance Organization  Act  is
30    amended by changing Section 5-3 as follows:
 
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 1        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
 2        Sec. 5-3.  Insurance Code provisions.
 3        (a)  Health Maintenance Organizations shall be subject to
 4    the  provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
 5    141.3, 143, 143c, 147, 148, 149, 151, 152, 153,  154,  154.5,
 6    154.6,  154.7,  154.8, 155.04, 355.2, 356m, 356t, 356w, 356x,
 7    356y, 367i, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,
 8    444, and 444.1, paragraph (c) of subsection  (2)  of  Section
 9    367,  and  Articles  VIII  1/2, XII, XII 1/2, XIII, XIII 1/2,
10    XXV, and XXVI of the Illinois Insurance Code.
11        (b)  For purposes of the Illinois Insurance Code,  except
12    for  Sections  444  and 444.1 and Articles XIII and XIII 1/2,
13    Health Maintenance Organizations in the following  categories
14    are deemed to be "domestic companies":
15             (1)  a   corporation  authorized  under  the  Dental
16        Service Plan Act or the Voluntary Health  Services  Plans
17        Act;
18             (2)  a  corporation organized under the laws of this
19        State; or
20             (3)  a  corporation  organized  under  the  laws  of
21        another state, 30% or more of the enrollees of which  are
22        residents  of this State, except a corporation subject to
23        substantially the  same  requirements  in  its  state  of
24        organization  as  is  a  "domestic company" under Article
25        VIII 1/2 of the Illinois Insurance Code.
26        (c)  In considering the merger, consolidation,  or  other
27    acquisition  of  control of a Health Maintenance Organization
28    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
29             (1)  the Director shall give  primary  consideration
30        to  the  continuation  of  benefits  to enrollees and the
31        financial conditions of the acquired  Health  Maintenance
32        Organization  after  the  merger, consolidation, or other
33        acquisition of control takes effect;
34             (2)(i)  the criteria specified in subsection  (1)(b)
 
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 1        of Section 131.8 of the Illinois Insurance Code shall not
 2        apply  and (ii) the Director, in making his determination
 3        with respect  to  the  merger,  consolidation,  or  other
 4        acquisition  of  control,  need not take into account the
 5        effect on competition of the  merger,  consolidation,  or
 6        other acquisition of control;
 7             (3)  the  Director  shall  have the power to require
 8        the following information:
 9                  (A)  certification by an independent actuary of
10             the  adequacy  of  the  reserves   of   the   Health
11             Maintenance Organization sought to be acquired;
12                  (B)  pro  forma financial statements reflecting
13             the combined balance sheets of the acquiring company
14             and the Health Maintenance Organization sought to be
15             acquired as of the end of the preceding year and  as
16             of  a date 90 days prior to the acquisition, as well
17             as  pro  forma   financial   statements   reflecting
18             projected  combined  operation  for  a  period  of 2
19             years;
20                  (C)  a pro forma  business  plan  detailing  an
21             acquiring   party's   plans   with  respect  to  the
22             operation of  the  Health  Maintenance  Organization
23             sought  to be acquired for a period of not less than
24             3 years; and
25                  (D)  such other  information  as  the  Director
26             shall require.
27        (d)  The  provisions  of Article VIII 1/2 of the Illinois
28    Insurance Code and this Section 5-3 shall apply to  the  sale
29    by any health maintenance organization of greater than 10% of
30    its  enrollee  population  (including  without limitation the
31    health maintenance organization's right, title, and  interest
32    in and to its health care certificates).
33        (e)  In  considering  any  management contract or service
34    agreement subject to Section 141.1 of the Illinois  Insurance
 
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 1    Code,  the  Director  (i)  shall, in addition to the criteria
 2    specified in Section 141.2 of the  Illinois  Insurance  Code,
 3    take  into  account  the effect of the management contract or
 4    service  agreement  on  the  continuation  of   benefits   to
 5    enrollees   and   the   financial  condition  of  the  health
 6    maintenance organization to be managed or serviced, and  (ii)
 7    need  not  take  into  account  the  effect of the management
 8    contract or service agreement on competition.
 9        (f)  Except for small employer groups as defined  in  the
10    Small  Employer  Rating,  Renewability and Portability Health
11    Insurance Act and except for medicare supplement policies  as
12    defined  in  Section  363  of  the Illinois Insurance Code, a
13    Health Maintenance Organization may by contract agree with  a
14    group  or  other  enrollment unit to effect refunds or charge
15    additional premiums under the following terms and conditions:
16             (i)  the amount of, and other terms  and  conditions
17        with respect to, the refund or additional premium are set
18        forth  in the group or enrollment unit contract agreed in
19        advance of the period for which a refund is to be paid or
20        additional premium is to be charged (which  period  shall
21        not be less than one year); and
22             (ii)  the amount of the refund or additional premium
23        shall   not   exceed   20%   of  the  Health  Maintenance
24        Organization's profitable or unprofitable experience with
25        respect to the group or other  enrollment  unit  for  the
26        period  (and,  for  purposes  of  a  refund or additional
27        premium, the profitable or unprofitable experience  shall
28        be calculated taking into account a pro rata share of the
29        Health   Maintenance  Organization's  administrative  and
30        marketing expenses, but shall not include any  refund  to
31        be made or additional premium to be paid pursuant to this
32        subsection (f)).  The Health Maintenance Organization and
33        the   group   or  enrollment  unit  may  agree  that  the
34        profitable or unprofitable experience may  be  calculated
 
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 1        taking into account the refund period and the immediately
 2        preceding 2 plan years.
 3        The  Health  Maintenance  Organization  shall  include  a
 4    statement in the evidence of coverage issued to each enrollee
 5    describing the possibility of a refund or additional premium,
 6    and  upon request of any group or enrollment unit, provide to
 7    the group or enrollment unit a description of the method used
 8    to  calculate  (1)  the  Health  Maintenance   Organization's
 9    profitable experience with respect to the group or enrollment
10    unit and the resulting refund to the group or enrollment unit
11    or  (2)  the  Health  Maintenance Organization's unprofitable
12    experience with respect to the group or enrollment  unit  and
13    the  resulting  additional premium to be paid by the group or
14    enrollment unit.
15        In  no  event  shall  the  Illinois  Health   Maintenance
16    Organization  Guaranty  Association  be  liable  to  pay  any
17    contractual  obligation  of  an insolvent organization to pay
18    any refund authorized under this Section.
19    (Source: P.A.  89-90,  eff.  6-30-95;  90-25,  eff.   1-1-98;
20    90-177,  eff.  7-23-97;  90-372,  eff.  7-1-98;  90-583, eff.
21    5-29-98; 90-655, eff. 7-30-98; 90-741, eff.  1-1-99;  revised
22    9-8-98.)

23        Section  15.  The  Voluntary Health Services Plans Act is
24    amended by changing Section 10 as follows:

25        (215 ILCS 165/10) (from Ch. 32, par. 604)
26        Sec.  10.  Application  of  Insurance  Code   provisions.
27    Health  services plan corporations and all persons interested
28    therein  or  dealing  therewith  shall  be  subject  to   the
29    provisions  of  Article  XII  1/2 and Sections 3.1, 133, 140,
30    143, 143c, 149, 354, 355.2, 356r,  356t,  356u,  356v,  356w,
31    356x,  356y,  367.2,  401, 401.1, 402, 403, 403A, 408, 408.2,
32    and 412, and paragraphs (7) and (15) of Section  367  of  the
 
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 1    Illinois Insurance Code.
 2    (Source: P.A.  89-514,  eff.  7-17-96;  90-7,  eff.  6-10-97;
 3    90-25,  eff.  1-1-98;  90-655,  eff.  7-30-98;  90-741,  eff.
 4    1-1-99.)

 5        Section  99.  Effective date.  This Act takes effect upon
 6    becoming law.

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