State of Illinois
91st General Assembly
Legislation

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91_SB0195

 
                                               LRB9101725JSpc

 1        AN ACT concerning  substance  abuse  treatment,  amending
 2    named Acts.

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

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

 7        (215 ILCS 5/356y new)
 8        Sec.  356y.  Substance abuse treatment.  An individual or
 9    group policy of accident and health insurance and  a  managed
10    care  plan,  as defined in Section 356r of this Code, that is
11    amended, delivered, issued, or renewed  after  the  effective
12    date  of  this  amendatory  Act  of the 91st General Assembly
13    shall provide coverage for substance abuse treatment that  is
14    both medically necessary and court-ordered.

15        Section  10.  The  Health Maintenance Organization Act is
16    amended by changing Section 5-3 as follows:

17        (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
18        Sec. 5-3.  Insurance Code provisions.
19        (a)  Health Maintenance Organizations shall be subject to
20    the provisions of Sections 133, 134, 137, 140, 141.1,  141.2,
21    141.3,  143,  143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
22    154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v,  356w,  356x,
23    356y, 367i, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,
24    444,  and  444.1,  paragraph (c) of subsection (2) of Section
25    367, and Articles VIII 1/2, XII, XII  1/2,  XIII,  XIII  1/2,
26    XXV, and XXVI of the Illinois Insurance Code.
27        (b)  For  purposes of the Illinois Insurance Code, except
28    for Sections 444 and 444.1 and Articles XIII  and  XIII  1/2,
29    Health  Maintenance Organizations in the following categories
 
                            -2-                LRB9101725JSpc
 1    are deemed to be "domestic companies":
 2             (1)  a  corporation  authorized  under  the   Dental
 3        Service  Plan  Act or the Voluntary Health Services Plans
 4        Act;
 5             (2)  a corporation organized under the laws of  this
 6        State; or
 7             (3)  a  corporation  organized  under  the  laws  of
 8        another  state, 30% or more of the enrollees of which are
 9        residents of this State, except a corporation subject  to
10        substantially  the  same  requirements  in  its  state of
11        organization as is a  "domestic  company"  under  Article
12        VIII 1/2 of the Illinois Insurance Code.
13        (c)  In  considering  the merger, consolidation, or other
14    acquisition of control of a Health  Maintenance  Organization
15    pursuant to Article VIII 1/2 of the Illinois Insurance Code,
16             (1)  the  Director  shall give primary consideration
17        to the continuation of  benefits  to  enrollees  and  the
18        financial  conditions  of the acquired Health Maintenance
19        Organization after the merger,  consolidation,  or  other
20        acquisition of control takes effect;
21             (2)(i)  the  criteria specified in subsection (1)(b)
22        of Section 131.8 of the Illinois Insurance Code shall not
23        apply and (ii) the Director, in making his  determination
24        with  respect  to  the  merger,  consolidation,  or other
25        acquisition of control, need not take  into  account  the
26        effect  on  competition  of the merger, consolidation, or
27        other acquisition of control;
28             (3)  the Director shall have the  power  to  require
29        the following information:
30                  (A)  certification by an independent actuary of
31             the   adequacy   of   the  reserves  of  the  Health
32             Maintenance Organization sought to be acquired;
33                  (B)  pro forma financial statements  reflecting
34             the combined balance sheets of the acquiring company
 
                            -3-                LRB9101725JSpc
 1             and the Health Maintenance Organization sought to be
 2             acquired  as of the end of the preceding year and as
 3             of a date 90 days prior to the acquisition, as  well
 4             as   pro   forma   financial  statements  reflecting
 5             projected combined  operation  for  a  period  of  2
 6             years;
 7                  (C)  a  pro  forma  business  plan detailing an
 8             acquiring  party's  plans  with   respect   to   the
 9             operation  of  the  Health  Maintenance Organization
10             sought to be acquired for a period of not less  than
11             3 years; and
12                  (D)  such  other  information  as  the Director
13             shall require.
14        (d)  The provisions of Article VIII 1/2 of  the  Illinois
15    Insurance  Code  and this Section 5-3 shall apply to the sale
16    by any health maintenance organization of greater than 10% of
17    its enrollee population  (including  without  limitation  the
18    health  maintenance organization's right, title, and interest
19    in and to its health care certificates).
20        (e)  In considering any management  contract  or  service
21    agreement  subject to Section 141.1 of the Illinois Insurance
22    Code, the Director (i) shall, in  addition  to  the  criteria
23    specified  in  Section  141.2 of the Illinois Insurance Code,
24    take into account the effect of the  management  contract  or
25    service   agreement   on  the  continuation  of  benefits  to
26    enrollees  and  the  financial  condition   of   the   health
27    maintenance  organization to be managed or serviced, and (ii)
28    need not take into  account  the  effect  of  the  management
29    contract or service agreement on competition.
30        (f)  Except  for  small employer groups as defined in the
31    Small Employer Rating, Renewability  and  Portability  Health
32    Insurance  Act and except for medicare supplement policies as
33    defined in Section 363 of  the  Illinois  Insurance  Code,  a
34    Health  Maintenance Organization may by contract agree with a
 
                            -4-                LRB9101725JSpc
 1    group or other enrollment unit to effect  refunds  or  charge
 2    additional premiums under the following terms and conditions:
 3             (i)  the  amount  of, and other terms and conditions
 4        with respect to, the refund or additional premium are set
 5        forth in the group or enrollment unit contract agreed  in
 6        advance of the period for which a refund is to be paid or
 7        additional  premium  is to be charged (which period shall
 8        not be less than one year); and
 9             (ii)  the amount of the refund or additional premium
10        shall  not  exceed  20%   of   the   Health   Maintenance
11        Organization's profitable or unprofitable experience with
12        respect  to  the  group  or other enrollment unit for the
13        period (and, for  purposes  of  a  refund  or  additional
14        premium,  the profitable or unprofitable experience shall
15        be calculated taking into account a pro rata share of the
16        Health  Maintenance  Organization's  administrative   and
17        marketing  expenses,  but shall not include any refund to
18        be made or additional premium to be paid pursuant to this
19        subsection (f)).  The Health Maintenance Organization and
20        the  group  or  enrollment  unit  may  agree   that   the
21        profitable  or  unprofitable experience may be calculated
22        taking into account the refund period and the immediately
23        preceding 2 plan years.
24        The  Health  Maintenance  Organization  shall  include  a
25    statement in the evidence of coverage issued to each enrollee
26    describing the possibility of a refund or additional premium,
27    and upon request of any group or enrollment unit, provide  to
28    the group or enrollment unit a description of the method used
29    to   calculate  (1)  the  Health  Maintenance  Organization's
30    profitable experience with respect to the group or enrollment
31    unit and the resulting refund to the group or enrollment unit
32    or (2) the  Health  Maintenance  Organization's  unprofitable
33    experience  with  respect to the group or enrollment unit and
34    the resulting additional premium to be paid by the  group  or
 
                            -5-                LRB9101725JSpc
 1    enrollment unit.
 2        In   no  event  shall  the  Illinois  Health  Maintenance
 3    Organization  Guaranty  Association  be  liable  to  pay  any
 4    contractual obligation of an insolvent  organization  to  pay
 5    any refund authorized under this Section.
 6    (Source: P.A.   89-90,  eff.  6-30-95;  90-25,  eff.  1-1-98;
 7    90-177, eff.  7-23-97;  90-372,  eff.  7-1-98;  90-583,  eff.
 8    5-29-98;  90-655,  eff. 7-30-98; 90-741, eff. 1-1-99; revised
 9    9-8-98.)

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

12        (215 ILCS 165/10) (from Ch. 32, par. 604)
13        Sec.   10.  Application  of  Insurance  Code  provisions.
14    Health services plan corporations and all persons  interested
15    therein   or  dealing  therewith  shall  be  subject  to  the
16    provisions of Article XII 1/2 and  Sections  3.1,  133,  140,
17    143,  143c,  149,  354,  355.2, 356r, 356t, 356u, 356v, 356w,
18    356x, 356y, 367.2, 401, 401.1, 402, 403,  403A,  408,  408.2,
19    and  412,  and  paragraphs (7) and (15) of Section 367 of the
20    Illinois Insurance Code.
21    (Source: P.A.  89-514,  eff.  7-17-96;  90-7,  eff.  6-10-97;
22    90-25,  eff.  1-1-98;  90-655,  eff.  7-30-98;  90-741,  eff.
23    1-1-99.)

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