Public Act 097-0592
 
SB0673 EnrolledLRB097 04436 RPM 44475 b

    AN ACT concerning regulation.
 
    Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
 
    Section 5. The Illinois Insurance Code is amended by
changing Section 356z.16 and adding Section 356z.19 as follows:
 
    (215 ILCS 5/356z.16)
    Sec. 356z.16. Applicability of mandated benefits to
supplemental policies. Unless specified otherwise, the
following Sections of the Illinois Insurance Code do not apply
to short-term travel, disability income, long-term care,
accident only, or limited or specified disease policies: 356b,
356c, 356d, 356g, 356k, 356m, 356n, 356p, 356q, 356r, 356t,
356u, 356w, 356x, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6,
356z.8, 356z.12, 356z.19, 367.2-5, and 367e.
(Source: P.A. 96-180, eff. 1-1-10; 96-1000, eff. 7-2-10;
96-1034, eff. 1-1-11.)
 
    (215 ILCS 5/356z.19 new)
    Sec. 356z.19. Tobacco use cessation programs; coverage
offer.
    (a) Tobacco use is the number one cause of preventable
disease and death in Illinois, costing $4.1 billion annually in
direct health care costs and an additional $4.35 billion in
lost productivity. In Illinois, the smoking rates are highest
among African Americans (25.8%). Smoking rates among lesbian,
gay, and bisexual adults range from 25% to 44%. The U.S. Public
Health Service Clinical Practice Guideline 2008 Update found
that tobacco dependence treatments are both clinically
effective and highly cost effective. A study in the Journal of
Preventive Medicine concluded that comprehensive smoking
cessation treatment is one of the 3 most important and cost
effective preventive services that can be provided in medical
practice. Greater efforts are needed to achieve more of this
potential value by increasing current low levels of
performance.
    (b) In this Section, "tobacco use cessation program" means
a program recommended by a physician that follows
evidence-based treatment, such as is outlined in the United
States Public Health Service guidelines for tobacco use
cessation. "Tobacco use cessation program" includes education
and medical treatment components designed to assist a person in
ceasing the use of tobacco products. "Tobacco use cessation
program" includes education and counseling by physicians or
associated medical personnel and all FDA approved medications
for the treatment of tobacco dependence irrespective of whether
they are available only over the counter, only by prescription,
or both over the counter and by prescription.
    (c) On or after the effective date of this amendatory Act
of the 97th General Assembly, every insurer that amends,
delivers, issues, or renews group accident and health policies
providing coverage for hospital or medical treatment or
services on an expense-incurred basis shall offer, for an
additional premium and subject to the insurer's standard of
insurability, optional coverage or optional reimbursement of
up to $500 annually for a tobacco use cessation program for a
person enrolled in the plan who is 18 years of age or older.
    (d) The coverage required by this Section shall be subject
to other general exclusions and limitations of the policy,
including coordination of benefits, participating provider
requirements, restrictions on services provided by family or
household members, utilization review of health care services,
including review of medical necessity, case management,
experimental and investigational treatments, and other managed
care provisions.
    (e) For the coverage provided under this Section, an
insurer may not penalize or reduce or limit the reimbursement
of an attending provider or provide incentives, monetary or
otherwise, to an attending provider to induce the provider to
provide care to an insured in a manner inconsistent with the
coverage under this Section.
 
    Section 10. The Health Maintenance Organization Act is
amended by changing Section 5-3 as follows:
 
    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
    Sec. 5-3. Insurance Code provisions.
    (a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
356z.18, 356z.19, 364.01, 367.2, 367.2-5, 367i, 368a, 368b,
368c, 368d, 368e, 370c, 401, 401.1, 402, 403, 403A, 408, 408.2,
409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
    (b) For purposes of the Illinois Insurance Code, except for
Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
Maintenance Organizations in the following categories are
deemed to be "domestic companies":
        (1) a corporation authorized under the Dental Service
    Plan Act or the Voluntary Health Services Plans Act;
        (2) a corporation organized under the laws of this
    State; or
        (3) a corporation organized under the laws of another
    state, 30% or more of the enrollees of which are residents
    of this State, except a corporation subject to
    substantially the same requirements in its state of
    organization as is a "domestic company" under Article VIII
    1/2 of the Illinois Insurance Code.
    (c) In considering the merger, consolidation, or other
acquisition of control of a Health Maintenance Organization
pursuant to Article VIII 1/2 of the Illinois Insurance Code,
        (1) the Director shall give primary consideration to
    the continuation of benefits to enrollees and the financial
    conditions of the acquired Health Maintenance Organization
    after the merger, consolidation, or other acquisition of
    control takes effect;
        (2)(i) the criteria specified in subsection (1)(b) of
    Section 131.8 of the Illinois Insurance Code shall not
    apply and (ii) the Director, in making his determination
    with respect to the merger, consolidation, or other
    acquisition of control, need not take into account the
    effect on competition of the merger, consolidation, or
    other acquisition of control;
        (3) the Director shall have the power to require the
    following information:
            (A) certification by an independent actuary of the
        adequacy of the reserves of the Health Maintenance
        Organization sought to be acquired;
            (B) pro forma financial statements reflecting the
        combined balance sheets of the acquiring company and
        the Health Maintenance Organization sought to be
        acquired as of the end of the preceding year and as of
        a date 90 days prior to the acquisition, as well as pro
        forma financial statements reflecting projected
        combined operation for a period of 2 years;
            (C) a pro forma business plan detailing an
        acquiring party's plans with respect to the operation
        of the Health Maintenance Organization sought to be
        acquired for a period of not less than 3 years; and
            (D) such other information as the Director shall
        require.
    (d) The provisions of Article VIII 1/2 of the Illinois
Insurance Code and this Section 5-3 shall apply to the sale by
any health maintenance organization of greater than 10% of its
enrollee population (including without limitation the health
maintenance organization's right, title, and interest in and to
its health care certificates).
    (e) In considering any management contract or service
agreement subject to Section 141.1 of the Illinois Insurance
Code, the Director (i) shall, in addition to the criteria
specified in Section 141.2 of the Illinois Insurance Code, take
into account the effect of the management contract or service
agreement on the continuation of benefits to enrollees and the
financial condition of the health maintenance organization to
be managed or serviced, and (ii) need not take into account the
effect of the management contract or service agreement on
competition.
    (f) Except for small employer groups as defined in the
Small Employer Rating, Renewability and Portability Health
Insurance Act and except for medicare supplement policies as
defined in Section 363 of the Illinois Insurance Code, a Health
Maintenance Organization may by contract agree with a group or
other enrollment unit to effect refunds or charge additional
premiums under the following terms and conditions:
        (i) the amount of, and other terms and conditions with
    respect to, the refund or additional premium are set forth
    in the group or enrollment unit contract agreed in advance
    of the period for which a refund is to be paid or
    additional premium is to be charged (which period shall not
    be less than one year); and
        (ii) the amount of the refund or additional premium
    shall not exceed 20% of the Health Maintenance
    Organization's profitable or unprofitable experience with
    respect to the group or other enrollment unit for the
    period (and, for purposes of a refund or additional
    premium, the profitable or unprofitable experience shall
    be calculated taking into account a pro rata share of the
    Health Maintenance Organization's administrative and
    marketing expenses, but shall not include any refund to be
    made or additional premium to be paid pursuant to this
    subsection (f)). The Health Maintenance Organization and
    the group or enrollment unit may agree that the profitable
    or unprofitable experience may be calculated taking into
    account the refund period and the immediately preceding 2
    plan years.
    The Health Maintenance Organization shall include a
statement in the evidence of coverage issued to each enrollee
describing the possibility of a refund or additional premium,
and upon request of any group or enrollment unit, provide to
the group or enrollment unit a description of the method used
to calculate (1) the Health Maintenance Organization's
profitable experience with respect to the group or enrollment
unit and the resulting refund to the group or enrollment unit
or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and the
resulting additional premium to be paid by the group or
enrollment unit.
    In no event shall the Illinois Health Maintenance
Organization Guaranty Association be liable to pay any
contractual obligation of an insolvent organization to pay any
refund authorized under this Section.
    (g) Rulemaking authority to implement Public Act 95-1045,
if any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
95-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
95-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
6-1-10; 96-1000, eff. 7-2-10.)
 
    Section 15. The Limited Health Service Organization Act is
amended by changing Section 4003 as follows:
 
    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
    Sec. 4003. Illinois Insurance Code provisions. Limited
health service organizations shall be subject to the provisions
of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c,
147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8,
155.04, 155.37, 355.2, 356v, 356z.10, 356z.19, 368a, 401,
401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and
Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and
XXVI of the Illinois Insurance Code. For purposes of the
Illinois Insurance Code, except for Sections 444 and 444.1 and
Articles XIII and XIII 1/2, limited health service
organizations in the following categories are deemed to be
domestic companies:
        (1) a corporation under the laws of this State; or
        (2) a corporation organized under the laws of another
    state, 30% of more of the enrollees of which are residents
    of this State, except a corporation subject to
    substantially the same requirements in its state of
    organization as is a domestic company under Article VIII
    1/2 of the Illinois Insurance Code.
(Source: P.A. 95-520, eff. 8-28-07; 95-876, eff. 8-21-08.)
 
    Section 20. The Voluntary Health Services Plans Act is
amended by changing Section 10 as follows:
 
    (215 ILCS 165/10)  (from Ch. 32, par. 604)
    Sec. 10. Application of Insurance Code provisions. Health
services plan corporations and all persons interested therein
or dealing therewith shall be subject to the provisions of
Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
149, 155.37, 354, 355.2, 356g, 356g.5, 356g.5-1, 356r, 356t,
356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5,
356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13,
356z.14, 356z.15, 356z.18, 356z.19, 364.01, 367.2, 368a, 401,
401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)
and (15) of Section 367 of the Illinois Insurance Code.
    Rulemaking authority to implement Public Act 95-1045, if
any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 95-189, eff. 8-16-07; 95-331, eff. 8-21-07;
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff. 1-1-10;
96-328, eff. 8-11-09; 96-833, eff. 6-1-10; 96-1000, eff.
7-2-10.)

Effective Date: 1/1/2012