Public Act 90-0030 of the 90th General Assembly
Public Act 90-0030
SB802 Enrolled LRB9002422JSdvA
AN ACT concerning health insurance, amending named Acts.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 1. Short title. This Act may be cited as the
Illinois Health Insurance Portability and Accountability Act.
Section 5. Definitions.
"Beneficiary" has the meaning given such term under
Section 3(8) of the Employee Retirement Income Security Act
of 1974.
"Bona fide association" means, with respect to health
insurance coverage offered in a State, an association which:
(1) has been actively in existence for at least 5 years;
(2) has been formed and maintained in good faith for
purposes other than obtaining insurance;
(3) does not condition membership in the association on
any health status-related factor relating to an individual
(including an employee of an employer or a dependent of an
employee);
(4) makes health insurance coverage offered through the
association available to all members regardless of any health
status-related factor relating to such members (or
individuals eligible for coverage through a member);
(5) does not make health insurance coverage offered
through the association available other than in connection
with a member of the association; and
(6) meets such additional requirements as may be imposed
under State law.
"Church plan" has the meaning given that term under
Section 3(33) of the Employee Retirement Income Security Act
of 1974.
"COBRA continuation provision" means any of the
following:
(1) Section 4980B of the Internal Revenue Code of
1986, other than subsection (f)(1) of that Section
insofar as it relates to pediatric vaccines.
(2) Part 6 of subtitle B of title I of the Employee
Retirement Income Security Act of 1974, other than
Section 609 of that Act.
(3) Title XXII of federal Public Health Service
Act.
"Department" means the Department of Insurance.
"Employee" has the meaning given that term under Section
3(6) of the Employee Retirement Income Security Act of 1974.
"Employer" has the meaning given that term under Section
3(5) of the Employee Retirement Income Security Act of 1974,
except that the term shall include only employers of 2 or
more employees.
"Enrollment date" means, with respect to an individual
covered under a group health plan or group health insurance
coverage, the date of enrollment of the individual in the
plan or coverage, or if earlier, the first day of the waiting
period for enrollment.
"Federal governmental plan" means a governmental plan
established or maintained for its employees by the government
of the United States or by any agency or instrumentality of
that government.
"Governmental plan" has the meaning given that term under
Section 3(32) of the Employee Retirement Income Security Act
of 1974 and any federal governmental plan.
"Group health insurance coverage" means, in connection
with a group health plan, health insurance coverage offered
in connection with the plan.
"Group health plan" means an employee welfare benefit
plan (as defined in Section 3(1) of the Employee Retirement
Income Security Act of 1974) to the extent that the plan
provides medical care (as defined in paragraph (2) of that
Section and including items and services paid for as medical
care) to employees or their dependents (as defined under the
terms of the plan) directly or through insurance,
reimbursement, or otherwise.
"Health insurance coverage" means benefits consisting of
medical care (provided directly, through insurance or
reimbursement, or otherwise and including items and services
paid for as medical care) under any hospital or medical
service policy or certificate, hospital or medical service
plan contract, or health maintenance organization contract
offered by a health insurance issuer.
"Health insurance issuer" means an insurance company,
insurance service, or insurance organization (including a
health maintenance organization, as defined herein) which is
licensed to engage in the business of insurance in a state
and which is subject to Illinois law which regulates
insurance (within the meaning of Section 514(b)(2) of the
Employee Retirement Income Security Act of 1974). The term
does not include a group health plan.
"Health maintenance organization (HMO)" means:
(1) a Federally qualified health maintenance
organization (as defined in Section 1301(a) of the Public
Health Service Act.);
(2) an organization recognized under State law as a
health maintenance organization; or
(3) a similar organization regulated under State
law for solvency in the same manner and to the same
extent as such a health maintenance organization.
"Individual health insurance coverage" means health
insurance coverage offered to individuals in the individual
market, but does not include short-term limited duration
insurance.
"Individual market" means the market for health insurance
coverage offered to individuals other than in connection with
a group health plan.
"Large employer" means, in connection with a group health
plan with respect to a calendar year and a plan year, an
employer who employed an average of at least 51 employees on
business days during the preceding calendar year and who
employs at least 2 employees on the first day of the plan
year.
(1) Application of aggregation rule for large
employers. All persons treated as a single employer
under subsection (b), (c), (m), or (o) of Section 414 of
the Internal Revenue Code of 1986 shall be treated as one
employer.
(2) Employers not in existence in preceding year.
In the case of an employer which was not in existence
throughout the preceding calendar year, the determination
of whether the employer is a large employer shall be
based on the average number of employees that it is
reasonably expected the employer will employ on business
days in the current calendar year.
(3) Predecessors. Any reference in this Act to an
employer shall include a reference to any predecessor of
such employer.
"Large group market" means the health insurance market
under which individuals obtain health insurance coverage
(directly or through any arrangement) on behalf of themselves
(and their dependents) through a group health plan maintained
by a large employer.
"Late enrollee" means with respect to coverage under a
group health plan, a participant or beneficiary who enrolls
under the plan other than during:
(1) the first period in which the individual is
eligible to enroll under the plan; or
(2) a special enrollment period under subsection
(F) of Section 20.
"Medical care" means amounts paid for:
(1) the diagnosis, cure, mitigation, treatment, or
prevention of disease, or amounts paid for the purpose of
affecting any structure or function of the body;
(2) amounts paid for transportation primarily for
and essential to medical care referred to in item (1);
and
(3) amounts paid for insurance covering medical
care referred to in items (1) and (2).
"Nonfederal governmental plan" means a governmental plan
that is not a federal governmental plan.
"Network plan" means health insurance coverage of a
health insurance issuer under which the financing and
delivery of medical care (including items and services paid
for as medical care) are provided, in whole or in part,
through a defined set of providers under contract with the
issuer.
"Participant" has the meaning given that term under
Section 3(7) of the Employee Retirement Income Security Act
of 1974.
"Placement" or being "placed" for adoption, in connection
with any placement for adoption of a child with any person,
means the assumption and retention by the person of a legal
obligation for total or partial support of the child in
anticipation of adoption of the child. The child's placement
with the person terminates upon the termination of the legal
obligation.
"Plan sponsor" has the meaning given that term under
Section 3(16)(B) of the Employee Retirement Income Security
Act of 1974.
"Preexisting condition exclusion" means, with respect to
coverage, a limitation or exclusion of benefits relating to a
condition based on the fact that the condition was present
before the date of enrollment for such coverage, whether or
not any medical advice, diagnosis, care, or treatment was
recommended or received before such date.
"Small employer" means, in connection with a group health
plan with respect to a calendar year and a plan year, an
employer who employed an average of at least 2 but not more
than 50 employees on business days during the preceding
calendar year and who employs at least 2 employees on the
first day of the plan year.
(1) Application of aggregation rule for small
employers. All persons treated as a single employer
under subsection (b), (c), (m), or (o) of Section 414 of
the Internal Revenue Code of 1986 shall be treated as one
employer.
(2) Employers not in existence in preceding year.
In the case of an employer which was not in existence
throughout the preceding calendar year, the determination
of whether the employer is a small employer shall be
based on the average number of employees that it is
reasonably expected the employer will employ on business
days in the current calendar year.
(3) Predecessors. Any reference in this Act to a
small employer shall include a reference to any
predecessor of that employer.
"Small group market" means the health insurance market
under which individuals obtain health insurance coverage
(directly or through any arrangement) on behalf of themselves
(and their dependents) through a group health plan maintained
by a small employer.
"State" means each of the several States, the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
"Waiting period" means with respect to a group health
plan and an individual who is a potential participant or
beneficiary in the plan, the period of time that must pass
with respect to the individual before the individual is
eligible to be covered for benefits under the terms of the
plan.
Section 15. Applicability and scope. This Act applies to
all health insurance policies and all health service
contracts issued, renewed, or delivered for issuance or
renewal in this State by a health insurance issuer after the
effective date of this Act. Unless otherwise specifically
provided by this Act, the standards and requirements imposed
by this Act shall supersede and replace any and all
conflicting, inconsistent or less restrictive standards or
requirements contained in the Illinois Insurance Code, the
Health Maintenance Organization Act, the Limited Health
Service Organization Act, and the Voluntary Health Services
Plans Act.
Section 20. Increased portability through limitation on
preexisting condition exclusions.
(A) Limitation of preexisting condition exclusion
period; crediting for periods of previous coverage. Subject
to subsection (D), a group health plan, and a health
insurance issuer offering group health insurance coverage,
may, with respect to a participant or beneficiary, impose a
preexisting condition exclusion only if:
(1) the exclusion relates to a condition (whether
physical or mental), regardless of the cause of the
condition, for which medical advice, diagnosis, care, or
treatment was recommended or received within the 6-month
period ending on the enrollment date;
(2) the exclusion extends for a period of not more
than 12 months (or 18 months in the case of a late
enrollee) after the enrollment date; and
(3) the period of any such preexisting condition
exclusion is reduced by the aggregate of the periods of
creditable coverage (if any, as defined in subsection
(C)(1)) applicable to the participant or beneficiary as
of the enrollment date.
(B) Preexisting condition exclusion. A group health
plan, and health insurance issuer offering group health
insurance coverage, may not impose any preexisting condition
exclusion relating to pregnancy as a preexisting condition.
Genetic information shall not be treated as a condition
described in subsection (A)(1) in the absence of a diagnosis
of the condition related to such information.
(C) Rules relating to crediting previous coverage.
(1) Creditable coverage defined. For purposes of this
Act, the term "creditable coverage" means, with respect
to an individual, coverage of the individual under any of
the following:
(a) A group health plan.
(b) Health insurance coverage.
(c) Part A or part B of title XVIII of the Social
Security Act.
(d) Title XIX of the Social Security Act, other
than coverage consisting solely of benefits under Section
1928.
(e) Chapter 55 of title 10, United States Code.
(f) A medical care program of the Indian Health
Service or of a tribal organization.
(g) A State health benefits risk pool.
(h) A health plan offered under chapter 89 of title
5, United States Code.
(i) A public health plan (as defined in
regulations).
(j) A health benefit plan under Section 5(e) of the
Peace Corps Act (22 U.S.C. 2504(e)).
Such term does not include coverage consisting solely of
coverage of excepted benefits.
(2) Excepted benefits. For purposes of this Act, the
term "excepted benefits" means benefits under one or more of
the following:
(a) Benefits not subject to requirements:
(i) Coverage only for accident, or disability
income insurance, or any combination thereof.
(ii) Coverage issued as a supplement to
liability insurance.
(iii) Liability insurance, including general
liability insurance and automobile liability
insurance.
(iv) Workers' compensation or similar
insurance.
(v) Automobile medical payment insurance.
(vi) Credit-only insurance.
(vii) Coverage for on-site medical clinics.
(viii) Other similar insurance coverage,
specified in regulations, under which benefits for
medical care are secondary or incidental to other
insurance benefits.
(b) Benefits not subject to requirements if offered
separately:
(i) Limited scope dental or vision benefits.
(ii) Benefits for long-term care, nursing home
care, home health care, community-based care, or any
combination thereof.
(iii) Such other similar, limited benefits as
are specified in rules.
(c) Benefits not subject to requirements if
offered, as independent, noncoordinated benefits:
(i) Coverage only for a specified disease or
illness.
(ii) Hospital indemnity or other fixed
indemnity insurance.
(d) Benefits not subject to requirements if offered
as separate insurance policy. Medicare supplemental
health insurance (as defined under Section 1882(g)(1) of
the Social Security Act), coverage supplemental to the
coverage provided under chapter 55 of title 10, United
States Code, and similar supplemental coverage provided
to coverage under a group health plan.
(3) Not counting periods before significant breaks in
coverage.
(a) In general. A period of creditable coverage
shall not be counted, with respect to enrollment of an
individual under a group health plan, if, after such
period and before the enrollment date, there was a 63-
day period during all of which the individual was not
covered under any creditable coverage.
(b) Waiting period not treated as a break in
coverage. For purposes of subparagraph (a) and
subsection (D)(3), any period that an individual is in a
waiting period for any coverage under a group health plan
(or for group health insurance coverage) or is in an
affiliation period (as defined in subsection (G)(2))
shall not be taken into account in determining the
continuous period under subparagraph (a).
(4) Method of crediting coverage.
(a) Standard method. Except as otherwise provided
under subparagraph (b), for purposes of applying
subsection (A)(3), a group health plan, and a health
insurance issuer offering group health insurance
coverage, shall count a period of creditable coverage
without regard to the specific benefits covered during
the period.
(b) Election of alternative method. A group health
plan, or a health insurance issuer offering group health
insurance, may elect to apply subsection (A)(3) based on
coverage of benefits within each of several classes or
categories of benefits specified in regulations rather
than as provided under subparagraph (a). Such election
shall be made on a uniform basis for all participants and
beneficiaries. Under such election a group health plan
or issuer shall count a period of creditable coverage
with respect to any class or category of benefits if any
level of benefits is covered within such class or
category.
(c) Plan notice. In the case of an election with
respect to a group health plan under subparagraph (b)
(whether or not health insurance coverage is provided in
connection with such plan), the plan shall:
(i) prominently state in any disclosure
statements concerning the plan, and state to each
enrollee at the time of enrollment under the plan,
that the plan has made such election; and
(ii) include in such statements a description
of the effect of this election.
(d) Issuer notice. In the case of an election
under subparagraph (b) with respect to health insurance
coverage offered by an issuer in the small or large group
market, the issuer:
(i) shall prominently state in any disclosure
statements concerning the coverage, and to each
employer at the time of the offer or sale of the
coverage, that the issuer has made such election;
and
(ii) shall include in such statements a
description of the effect of such election.
(5) Establishment of period. Periods of creditable
coverage with respect to an individual shall be established
through presentation or certifications described in
subsection (E) or in such other manner as may be specified in
regulations.
(D) Exceptions:
(1) Exclusion not applicable to certain newborns.
Subject to paragraph (3), a group health plan, and a health
insurance issuer offering group health insurance coverage,
may not impose any preexisting condition exclusion in the
case of an individual who, as of the last day of the 30-day
period beginning with the date of birth, is covered under
creditable coverage.
(2) Exclusion not applicable to certain adopted
children. Subject to paragraph (3), a group health plan, and
a health insurance issuer offering group health insurance
coverage, may not impose any preexisting condition exclusion
in the case of a child who is adopted or placed for adoption
before attaining 18 years of age and who, as of the last day
of the 30-day period beginning on the date of the adoption or
placement for adoption, is covered under creditable coverage.
The previous sentence shall not apply to coverage before
the date of such adoption or placement for adoption.
(3) Loss if break in coverage. Paragraphs (1) and (2)
shall no longer apply to an individual after the end of the
first 63-day period during all of which the individual was
not covered under any creditable coverage.
(E) Certifications and disclosure of coverage.
(1) Requirement for Certification of Period of
Creditable Coverage.
(a) A group health plan, and a health insurance
issuer offering group health insurance coverage, shall
provide the certification described in subparagraph (b):
(i) at the time an individual ceases to be
covered under the plan or otherwise becomes covered
under a COBRA continuation provision;
(ii) in the case of an individual becoming
covered under such a provision, at the time the
individual ceases to be covered under such
provision; and
(iii) on the request on behalf of an
individual made not later than 24 months after the
date of cessation of the coverage described in
clause (i) or (ii), whichever is later.
The certification under clause (i) may be provided, to
the extent practicable, at a time consistent with notices
required under any applicable COBRA continuation
provision.
(b) The certification described in this
subparagraph is a written certification of:
(i) the period of creditable coverage of the
individual under such plan and the coverage (if any)
under such COBRA continuation provision; and
(ii) the waiting period (if any) (and
affiliation period, if applicable) imposed with
respect to the individual for any coverage under
such plan.
(c) To the extent that medical care under a group
health plan consists of group health insurance coverage,
the plan is deemed to have satisfied the certification
requirement under this paragraph if the health insurance
issuer offering the coverage provides for such
certification in accordance with this paragraph.
(2) Disclosure of information on previous benefits. In
the case of an election described in subsection (C)(4)(b) by
a group health plan or health insurance issuer, if the plan
or issuer enrolls an individual for coverage under the plan
and the individual provides a certification of coverage of
the individual under paragraph (1):
(a) upon request of such plan or issuer, the entity
which issued the certification provided by the individual
shall promptly disclose to such requesting plan or issuer
information on coverage of classes and categories of
health benefits available under such entity's plan or
coverage; and
(b) such entity may charge the requesting plan or
issuer for the reasonable cost of disclosing such
information.
(3) Rules. The Department shall establish rules to
prevent an entity's failure to provide information under
paragraph (1) or (2) with respect to previous coverage of an
individual from adversely affecting any subsequent coverage
of the individual under another group health plan or health
insurance coverage.
(4) Treatment of certain plans as group health plan for
notice provision. A program under which creditable coverage
described in subparagraph (c), (d), (e), or (f) of Section
20(C)(1) is provided shall be treated as a group health plan
for purposes of this Section.
(F) Special enrollment periods.
(1) Individuals losing other coverage. A group health
plan, and a health insurance issuer offering group health
insurance coverage in connection with a group health plan,
shall permit an employee who is eligible, but not enrolled,
for coverage under the terms of the plan (or a dependent of
such an employee if the dependent is eligible, but not
enrolled, for coverage under such terms) to enroll for
coverage under the terms of the plan if each of the following
conditions is met:
(a) The employee or dependent was covered under a
group health plan or had health insurance coverage at the
time coverage was previously offered to the employee or
dependent.
(b) The employee stated in writing at such time
that coverage under a group health plan or health
insurance coverage was the reason for declining
enrollment, but only if the plan sponsor or issuer (if
applicable) required such a statement at such time and
provided the employee with notice of such requirement
(and the consequences of such requirement) at such time.
(c) The employee's or dependent's coverage
described in subparagraph (a):
(i) was under a COBRA continuation provision
and the coverage under such provision was exhausted;
or
(ii) was not under such a provision and either
the coverage was terminated as a result of loss of
eligibility for the coverage (including as a result
of legal separation, divorce, death, termination of
employment, or reduction in the number of hours of
employment) or employer contributions towards such
coverage were terminated.
(d) Under the terms of the plan, the employee
requests such enrollment not later than 30 days after the
date of exhaustion of coverage described in subparagraph
(c)(i) or termination of coverage or employer
contributions described in subparagraph (c)(ii).
(2) For dependent beneficiaries.
(a) In general. If:
(i) a group health plan makes coverage
available with respect to a dependent of an
individual,
(ii) the individual is a participant under the
plan (or has met any waiting period applicable to
becoming a participant under the plan and is
eligible to be enrolled under the plan but for a
failure to enroll during a previous enrollment
period), and
(iii) a person becomes such a dependent of the
individual through marriage, birth, or adoption or
placement for adoption,
then the group health plan shall provide for a dependent
special enrollment period described in subparagraph (b)
during which the person (or, if not otherwise enrolled,
the individual) may be enrolled under the plan as a
dependent of the individual, and in the case of the birth
or adoption of a child, the spouse of the individual may
be enrolled as a dependent of the individual if such
spouse is otherwise eligible for coverage.
(b) Dependent special enrollment period. A
dependent special enrollment period under this
subparagraph shall be a period of not less than 30 days
and shall begin on the later of:
(i) the date dependent coverage is made
available; or
(ii) the date of the marriage, birth, or
adoption or placement for adoption (as the case may
be) described in subparagraph (a)(iii).
(c) No waiting period. If an individual seeks to
enroll a dependent during the first 30 days of such a
dependent special enrollment period, the coverage of the
dependent shall become effective:
(i) in the case of marriage, not later than
the first day of the first month beginning after the
date the completed request for enrollment is
received;
(ii) in the case of a dependent's birth, as of
the date of such birth; or
(iii) in the case of a dependent's adoption or
placement for adoption, the date of such adoption or
placement for adoption.
(G) Use of affiliation period by HMOs as alternative to
preexisting condition exclusion.
(1) In general. A health maintenance organization which
offers health insurance coverage in connection with a group
health plan and which does not impose any pre-existing
condition exclusion allowed under subsection (A) with respect
to any particular coverage option may impose an affiliation
period for such coverage option, but only if:
(a) such period is applied uniformly without regard
to any health status-related factors; and
(b) such period does not exceed 2 months (or 3
months in the case of a late enrollee).
(2) Affiliation period.
(a) Defined. For purposes of this Act, the term
"affiliation period" means a period which, under the
terms of the health insurance coverage offered by the
health maintenance organization, must expire before the
health insurance coverage becomes effective. The
organization is not required to provide health care
services or benefits during such period and no premium
shall be charged to the participant or beneficiary for
any coverage during the period.
(b) Beginning. Such period shall begin on the
enrollment date.
(c) Runs concurrently with waiting periods. An
affiliation period under a plan shall run concurrently
with any waiting period under the plan.
(3) Alternative methods. A health maintenance
organization described in paragraph (1) may use alternative
methods, from those described in such paragraph, to address
adverse selection as approved by the Department.
Section 25. Prohibiting discrimination against
individual participants.
(A) In eligibility to enroll.
(1) In general. Subject to paragraph (2), a group
health plan, and a health insurance issuer offering group
health insurance coverage in connection with a group health
plan, may not establish rules for eligibility (including
continued eligibility) of any individual to enroll under the
terms of the plan based on any of the following health
status-related factors in relation to the individual or a
dependent of the individual:
(a) Health status.
(b) Medical condition (including both physical and
mental illnesses).
(c) Claims experience.
(d) Receipt of health care.
(e) Medical history.
(f) Genetic information.
(g) Evidence of insurability (including conditions
arising out of acts of domestic violence).
(h) Disability.
(2) No application to benefits or exclusions. To the
extent consistent with Section 20, the provisions of
paragraph (1) shall not be construed:
(a) to require a group health plan, or group health
insurance coverage, to provide particular benefits other
than those provided under the terms of such plan or
coverage; or
(b) to prevent such a plan or coverage from
establishing limitations or restrictions on the amount,
level, extent, or nature of the benefits or coverage for
similarly situated individuals enrolled in the plan or
coverage.
(3) Construction. For purposes of paragraph (1), rules
for eligibility to enroll under a plan include rules defining
any applicable waiting periods for such enrollment.
(B) In premium contributions.
(1) In general. A group health plan, and a health
insurance issuer offering health insurance coverage in
connection with a group health plan, may not require any
individual (as a condition of enrollment or continued
enrollment under the plan) to pay a premium or contribution
which is greater than such premium or contribution for a
similarly situated individual enrolled in the plan on the
basis of any health status-related factor in relation to the
individual or to an individual enrolled under the plan as a
dependent of the individual.
(2) Construction. Nothing in paragraph (1) shall be
construed:
(a) to restrict the amount that an employer may be
charged for coverage under a group health plan; or
(b) to prevent a group health plan, and a health
insurance issuer offering group health insurance
coverage, from establishing premium discounts or rebates
or modifying otherwise applicable copayments or
deductibles in return for adherence to programs of health
promotion and disease prevention.
Section 30. Guaranteed renewability of coverage for
employers in the group market.
(A) In general. Except as provided in this Section, if
a health insurance issuer offers health insurance coverage in
the small or large group market in connection with a group
health plan, the issuer must renew or continue in force such
coverage at the option of the plan sponsor of the plan.
(B) General exceptions. A health insurance issuer may
nonrenew or discontinue health insurance coverage offered in
connection with a group health plan in the small or large
group market based only on one or more of the following:
(1) Nonpayment of premiums. The plan sponsor has failed
to pay premiums or contributions in accordance with the terms
of the health insurance coverage or the issuer has not
received timely premium payments.
(2) Fraud. The plan sponsor has performed an act or
practice that constitutes fraud or made an intentional
misrepresentation of material fact under the terms of the
coverage.
(3) Violation of participation or contribution rules.
The plan sponsor has failed to comply with a material plan
provision relating to employer contribution or group
participation rules, as permitted under Section 40(D) in the
case of the small group market or pursuant to applicable
State law in the case of the large group market.
(4) Termination of coverage. The issuer is ceasing to
offer coverage in such market in accordance with subsection
(C) and applicable State law.
(5) Movement outside service area. In the case of a
health insurance issuer that offers health insurance coverage
in the market through a network plan, there is no longer any
enrollee in connection with such plan who lives, resides, or
works in the service area of the issuer (or in the area for
which the issuer is authorized to do business) and, in the
case of the small group market, the issuer would deny
enrollment with respect to such plan under Section
40(C)(1)(a).
(6) Association membership ceases. In the case of
health insurance coverage that is made available in the small
or large group market (as the case may be) only through one
or more bona fide association, the membership of an employer
in the association (on the basis of which the coverage is
provided) ceases but only if such coverage is terminated
under this paragraph uniformly without regard to any health
status-related factor relating to any covered individual.
(C) Requirements for uniform termination of coverage.
(1) Particular type of coverage not offered. In any
case in which an issuer decides to discontinue offering a
particular type of group health insurance coverage offered in
the small or large group market, coverage of such type may be
discontinued by the issuer in accordance with applicable
State law in such market only if:
(a) the issuer provides notice to each plan sponsor
provided coverage of this type in such market (and
participants and beneficiaries covered under such
coverage) of such discontinuation at least 90 days prior
to the date of the discontinuation of such coverage;
(b) the issuer offers to each plan sponsor provided
coverage of this type in such market, the option to
purchase all (or, in the case of the large group market,
any) other health insurance coverage currently being
offered by the issuer to a group health plan in such
market; and
(c) in exercising the option to discontinue
coverage of this type and in offering the option of
coverage under subparagraph (b), the issuer acts
uniformly without regard to the claims experience of
those sponsors or any health status-related factor
relating to any participants or beneficiaries who may
become eligible for such coverage.
(2) Discontinuance of all coverage.
(a) In general. In any case in which a health
insurance issuer elects to discontinue offering all
health insurance coverage in the small group market or
the large group market, or both markets, in Illinois,
health insurance coverage may be discontinued by the
issuer only in accordance with Illinois law and if:
(i) the issuer provides notice to the
Department and to each plan sponsor (and
participants and beneficiaries covered under such
coverage) of such discontinuation at least 180 days
prior to the date of the discontinuation of such
coverage; and
(ii) all health insurance issued or delivered
for issuance in Illinois in such market (or markets)
are discontinued and coverage under such health
insurance coverage in such market (or markets) is
not renewed.
(b) Prohibition on market reentry. In the case of a
discontinuation under subparagraph (a) in a market, the
issuer may not provide for the issuance of any health
insurance coverage in the Illinois market involved during the
5-year period beginning on the date of the discontinuation of
the last health insurance coverage not so renewed.
(D) Exception for uniform modification of coverage. At
the time of coverage renewal, a health insurance issuer may
modify the health insurance coverage for a product offered to
a group health plan:
(1) in the large group market; or
(2) in the small group market if, for coverage that is
available in such market other than only through one or more
bona fide associations, such modification is consistent with
State law and effective on a uniform basis among group health
plans with that product.
(E) Application to coverage offered only through
associations. In applying this Section in the case of health
insurance coverage that is made available by a health
insurance issuer in the small or large group market to
employers only through one or more associations, a reference
to "plan sponsor" is deemed, with respect to coverage
provided to an employer member of the association, to include
a reference to such employer.
Section 35. Disclosure of Information.
(A) Disclosure of information by health plan issuers.
In connection with the offering of any health insurance
coverage to a small employer, a health insurance issuer:
(1) shall make a reasonable disclosure to such employer,
as part of its solicitation and sales materials, of the
availability of information described in subsection (B), and
(2) upon request of such a small employer, provide such
information.
(B) Information described.
(1) In general. Subject to paragraph (3), with respect
to a health insurance issuer offering health insurance
coverage to a small employer, information described in this
subsection is information concerning:
(a) the provisions of such coverage concerning
issuer's right to change premium rates and the factors
that may affect changes in premium rates;
(b) the provisions of such coverage relating to
renewability of coverage;
(c) the provisions of such coverage relating to any
pre-existing condition exclusion; and
(d) the benefits and premiums available under all
health insurance coverage for which the employer is
qualified.
(2) Form of information. Information under this
subsection shall be provided to small employers in a manner
determined to be understandable by the average small
employer, and shall be sufficient to reasonably inform small
employers of their rights and obligations under the health
insurance coverage.
(3) Exception. An issuer is not required under this
Section to disclose any information that is proprietary and
trade secret information under applicable law.
Section 40. Guaranteed availability of coverage for
employers in the group market.
(A) Issuance of coverage in the small group market.
(1) In general. Subject to subsections (C) through (F),
each health insurance issuer that offers health insurance
coverage in the small group market in a State:
(a) must accept every small employer (as defined in
Section 10) in the State that applies for such coverage;
and
(b) must accept for enrollment under such coverage
every eligible individual (as defined in paragraph (2))
who applies for enrollment during the period in which the
individual first becomes eligible to enroll under the
terms of the group health plan and may not place any
restriction which is inconsistent with Section 25 on an
eligible individual being a participant or beneficiary.
(2) Eligible individual defined. For purposes of this
Section, the term "eligible individual" means, with respect
to a health insurance issuer that offers health insurance
coverage to a small employer in connection with a group
health plan in the small group market, such an individual in
relation to the employer as shall be determined:
(a) in accordance with the terms of such plan;
(b) as provided by the issuer under rules of the
issuer which are uniformly applicable in a State to small
employers in the small group market; and
(c) in accordance with all applicable State laws
governing such issuer and such market.
(B) Special rules for network plans.
(1) In general. In the case of a health insurance
issuer that offers health insurance coverage in the small
group market through a network plan, the issuer may:
(a) limit the employers that may apply for such
coverage to those with eligible individuals who live,
work, or reside in the service area for such network
plan; and
(b) within the service area of such plan, deny such
coverage to such employers if the issuer has
demonstrated, if required, to the Department that:
(i) it will not have the capacity to deliver
services adequately to enrollees of any additional
groups because of its obligations to existing group
contract holders and enrollees; and
(ii) it is applying this paragraph uniformly to
all employers without regard to the claims
experience of those employers and their employees
(and their dependents) or any health status-related
factor relating to such employees and dependents.
(2) 180-day suspension upon denial of coverage. An
issuer, upon denying health insurance coverage in any service
area in accordance with paragraph (1)(b), may not offer
coverage in the small group market within such service area
for a period of 180 days after the date such coverage is
denied.
(C) Application of financial capacity limits.
(1) In general. A health insurance issuer may deny
health insurance coverage in the small group market if the
issuer has demonstrated, if required, to the Department:
(a) it does not have the financial capacity
necessary to underwrite additional coverage; and
(b) it is applying this paragraph uniformly to all
employers in the small group market in the State and
without regard to the claims experience of those
employers and their employees (and their dependents) or
any health status-related factor relating to such
employees and dependents.
(2) 180-day suspension upon denial of coverage. A
health insurance issuer upon denying health insurance
coverage in connection with group health plans in accordance
with paragraph (1) may not offer coverage in connection with
group health plans in the small group market for a period of
180 days after the date such coverage is denied or until the
issuer has demonstrated to the Department that the issuer has
sufficient financial capacity to underwrite additional
coverage, whichever is later. The Department may provide for
the application of this subsection on a service-area-specific
basis.
(D) Exception to requirement for failure to meet certain
minimum participation or contribution rules.
(1) In general. Subsection (A) shall not be construed
to preclude a health insurance issuer from establishing
employer contribution rules or group participation rules for
the offering of health insurance coverage in connection with
a group health plan in the small group market.
(2) Rules defined. For purposes of paragraph (1):
(a) the term "employer contribution rule" means a
requirement relating to the minimum level or amount of
employer contribution toward the premium for enrollment
of participants and beneficiaries; and
(b) the term "group participation rule" means a
requirement relating to the minimum number of
participants or beneficiaries that must be enrolled in
relation to a specified percentage or number of eligible
individuals or employees of an employer.
(E) Exception for coverage offered only to bona fide
association members. Subsection (A) shall not apply to
health insurance coverage offered by a health insurance
issuer if such coverage is made available in the small group
market only through one or more bona fide associations (as
defined in Section 10).
Section 45. Exclusion of certain plans.
(A) Exception for certain small group health plans. The
requirements of this Act shall not apply to any group health
plan (and health insurance coverage offered in connection
with a group health plan) for any plan year if, on the first
day of such plan year, such plan has less than 2 participants
who are current employees.
(B) Limitation on application of provisions relating to
group health plans.
(1) In general. The requirements of this Act shall
apply with respect to group health plans only:
(a) subject to paragraph (2), in the case of a plan
that is a nonfederal governmental plan; and
(b) with respect to health insurance coverage
offered in connection with a group health plan (including
such a plan that is a church plan or a governmental
plan).
(2) Treatment of nonfederal governmental plans.
(a) Election to be excluded. If the plan sponsor
of a nonfederal governmental plan which is a group health
plan to which the provisions of this Act otherwise apply
makes an election under this subparagraph (in such form
and manner as may be prescribed by rule), then the
requirements of this Act insofar as they apply directly
to group health plans (and not merely to group health
insurance coverage) shall not apply to such governmental
plans for such period except as provided in this
paragraph.
(b) Period of election. An election under
subparagraph (a) shall apply:
(i) for a single specified plan year; or
(ii) in the case of a plan provided pursuant to
a collective bargaining agreement, for the term of
such agreement.
An election under clause (i) may be extended through
subsequent elections under this paragraph.
(c) Notice to enrollees. Under such an election,
the plan shall provide for:
(i) notice to enrollees (on an annual basis
and at the time of enrollment under the plan) of the
fact and consequences of such election; and
(ii) certification and disclosure of creditable
coverage under the plan with respect to enrollees in
accordance with Section 20(E).
(C) Exception for certain benefits. The requirements of
this Act shall not apply to any group health plan (or group
health insurance coverage) in relation to its provision of
excepted benefits described in Section 20(C)(2)(a).
(D) Exception for certain benefits if certain conditions
met.
(1) Limited, excepted benefits. The requirements of
this Act shall not apply to any group health plan (and group
health insurance coverage offered in connection with a group
health plan) in relation to its provision of excepted
benefits described in Section 20(C)(2)(b) if the benefits:
(a) are provided under a separate policy,
certificate, or contract of insurance; or
(b) are otherwise not an integral part of the plan.
(2) Noncoordinated, excepted benefits. The requirements
of this Act shall not apply to any group health plan (and
group health insurance coverage offered in connection with a
group health plan) in relation to its provision of excepted
benefits described in Section 20(C)(2)(c) if all of the
following conditions are met:
(a) The benefits are provided under a separate
policy, certificate, or contract of insurance.
(b) There is no coordination between the provision
of such benefits and any exclusion of benefits under any
group health plan maintained by the same plan sponsor.
(c) Such benefits are paid with respect to an event
without regard to whether benefits are provided with
respect to such an event under any group health plan
maintained by the same plan sponsor.
(3) Supplemental excepted benefits. The requirements of
this Act shall not apply to any group health plan (and group
health insurance coverage) in relation to its provision of
excepted benefits described in Section 20(C)(2)(d) if the
benefits are provided under a separate policy, certificate,
or contract of insurance.
(E) Treatment of partnerships. For purposes of this
Act:
(1) Treatment as a group health plan. Any plan, fund,
or program which would not be (but for this subsection) an
employee welfare benefit plan and which is established or
maintained by a partnership, to the extent that such plan,
fund, or program provides medical care (including items and
services paid for as medical care) to present or former
partners in the partnership or to their dependents (as
defined under the terms of the plan, fund, or program),
directly or through insurance, reimbursement, or otherwise,
shall be treated (subject to paragraph (2)) as an employee
welfare benefit plan which is a group health plan.
(2) Employer. In the case of a group health plan, the
term "employer" also includes the partnership in relation to
any partner.
(3) Partnerships of group health plans. In the case of
a group health plan, the term "participant" also includes:
(a) in connection with a group health plan
maintained by a partnership, an individual who is a
partner in relation to the partnership, or
(b) in connection with a group health plan
maintained by a self-employed individual (under which one
or more employees are participants), the self-employed
individual, if such individual is or may become eligible
to receive a benefit under the plan or the individual's
beneficiaries may be eligible for any benefit.
Section 85. The Illinois Insurance Code is amended by
adding Section 155.31 as follows:
(215 ILCS 5/155.31 new)
Sec. 155.31. Illinois Health Insurance Portability and
Accountability Act. The provisions of this Code are subject
to the Illinois Health Insurance Portability and
Accountability Act as provided in Section 15 of that Act.
(215 ILCS 95/1 rep.)
(215 ILCS 95/5 rep.)
(215 ILCS 95/10 rep.)
(215 ILCS 95/15 rep.)
(215 ILCS 95/20 rep.)
(215 ILCS 95/55 rep.)
Section 86. The Small Employer Rating, Renewability and
Portability Health Insurance Act is amended by repealing
Sections 1, 5, 10, 15, 20, and 55 on July 1, 1998.
(215 ILCS 95/25 rep.)
(215 ILCS 95/30 rep.)
(215 ILCS 95/35 rep.)
(215 ILCS 95/40 rep.)
(215 ILCS 95/45 rep.)
(215 ILCS 95/50 rep.)
Section 87. The Small Employer Rating, Renewability and
Portability Health Insurance Act is amended by repealing
Sections 25, 30, 35, 40, 45, and 50.
Section 92. The Comprehensive Health Insurance Plan Act
is amended by changing Sections 1.1, 2, 3, 4, 5, 7, 8, 10,
12, and 14 and adding Sections 7.1 and 15 as follows:
(215 ILCS 105/1.1) (from Ch. 73, par. 1301.1)
Sec. 1.1. The General Assembly hereby makes the
following findings and declarations:
(a) The Comprehensive Health Insurance Plan is
established as a State program that is intended to provide an
alternate market for health insurance for certain uninsurable
eligible Illinois residents, such insurance being funded
primarily by premiums paid by eligible resident policyholders
and further is intended to provide an acceptable alternative
mechanism as described in the federal Health Insurance
Portability and Accountability Act of 1996 for providing
portable and accessible individual health insurance coverage
for federally eligible individuals as defined in this Act.;
(b) The State of Illinois may subsidize the cost of
health insurance coverage policies offered by the Plan.
However, since the State has only a limited amount of
resources, the General Assembly declares that it intends for
this program to provide portable and accessible individual
health insurance coverage for every federally eligible
individual who qualifies for coverage in accordance with
Section 15 of this Act, but does not intend for every
eligible person who qualifies for Plan coverage in accordance
with Section 7 of this Act resident to be guaranteed a right
to be issued a policy under this Plan as a matter of
entitlement.; and
(c) The Comprehensive Health Insurance Plan Board shall
operate the Plan in a manner so that the estimated cost of
the program providing health insurance during any fiscal year
will not exceed the total income it expects to receive from
policy premiums, investment income, assessments, or fees
collected or received by the Board and other and funds which
are made available from appropriations for the Plan by the
General Assembly for that fiscal year. After determining the
amount that it has had appropriated for the fiscal year, the
Board shall estimate the number of new policies that it
believes it has the financial capacity to issue during that
year so that total costs do not exceed income. The Board
shall take steps necessary to assure that plan enrollment
does not exceed the number of residents it estimates it has
the financial capacity to insure.
(Source: P.A. 87-560.)
(215 ILCS 105/2) (from Ch. 73, par. 1302)
Sec. 2. Definitions. As used in this Act, unless the
context otherwise requires:
"Plan administrator" "Administering carrier" means the
insurer or third party administrator designated under Section
5 of this Act.
"Benefits plan" means the coverage to be offered by the
Plan to eligible persons and federally eligible individuals
pursuant to this Act.
"Board" means the Illinois Comprehensive Health Insurance
Board.
"Church plan" has the same meaning given that term in the
federal Health Insurance Portability and Accountability Act
of 1996.
"Continuation coverage" means continuation of coverage
under a group health plan or other health insurance coverage
for former employees or dependents of former employees that
would otherwise have terminated under the terms of that
coverage pursuant to any continuation provisions under
federal or State law, including the Consolidated Omnibus
Budget Reconciliation Act of 1985 (COBRA), as amended,
Sections 367.2 and 367e of the Illinois Insurance Code, or
any other similar requirement in another State.
"Covered person" means a person who is and continues to
remain eligible for Plan coverage and is covered under one of
the benefit plans offered by the Plan.
"Creditable coverage" means, with respect to a federally
eligible individual, coverage of the individual under any of
the following:
(A) A group health plan.
(B) Health insurance coverage (including group health
insurance coverage).
(C) Medicare.
(D) Medical assistance.
(E) Chapter 55 of title 10, United States Code.
(F) A medical care program of the Indian Health Service
or of a tribal organization.
(G) A state health benefits risk pool.
(H) A health plan offered under Chapter 89 of title 5,
United States Code.
(I) A public health plan (as defined in regulations
consistent with Section 104 of the Health Care Portability
and Accountability Act of 1996 that may be promulgated by the
Secretary of the U.S. Department of Health and Human
Services).
(J) A health benefit plan under Section 5(e) of the
Peace Corps Act (22 U.S.C. 2504(e)).
(K) Any other qualifying coverage required by the
federal Health Insurance Portability and Accountability Act
of 1996, as it may be amended, or regulations under that Act.
"Creditable coverage" does not include coverage
consisting solely of coverage of excepted benefits (as
defined in Section 2791(c) of title XXVII of the Public
Health Service Act (42 U.S.C. 300 gg-91) nor does it include
any period of coverage under any of items (A) through (K)
that occurred before a break of more than 63 days during all
of which the individual was not covered under any of items
(A) through (K) above. Any period that an individual is in a
waiting period for any coverage under a group health plan (or
for group health insurance coverage) or is in an affiliation
period under the terms of health insurance coverage offered
by a health maintenance organization shall not be taken into
account in determining if there has been a break of more than
63 days in any credible coverage.
"Department" means the Illinois Department of Insurance.
"Dependent" means an Illinois resident: who is a spouse;
or who is claimed as a dependent by the principal insured for
purposes of filing a federal income tax return and resides in
the principal insured's household, and is a resident
unmarried child under the age of 19 years; or who is an
unmarried child who also is a full-time student under the age
of 23 years and who is financially dependent upon the
principal insured; or who is a child of any age and who is
disabled and financially dependent upon the principal
insured.
"Direct Illinois premiums" means, for Illinois business,
an insurer's direct premium income for the kinds of business
described in clause (b) of Class 1 or clause (a) of Class 2
of Section 4 of the Illinois Insurance Code, and direct
premium income of a health maintenance organization or a
voluntary health services plan, except it shall not include
credit health insurance as defined in Article IX 1/2 of the
Illinois Insurance Code.
"Director" means the Director of the Illinois Department
of Insurance.
"Eligible person" means a resident of this State who
qualifies for Plan coverage under Section 7 of this Act.
"Employee" means a resident of this State who is employed
by an employer or has entered into the employment of or works
under contract or service of an employer including the
officers, managers and employees of subsidiary or affiliated
corporations and the individual proprietors, partners and
employees of affiliated individuals and firms when the
business of the subsidiary or affiliated corporations, firms
or individuals is controlled by a common employer through
stock ownership, contract, or otherwise.
"Employer" means any individual, partnership,
association, corporation, business trust, or any person or
group of persons acting directly or indirectly in the
interest of an employer in relation to an employee, for which
one or more persons is gainfully employed.
"Family" coverage means the coverage provided by the Plan
for the covered eligible person and his or her eligible
dependents who also are covered persons legal spouse, the
eligible person's dependent children under the age of 19, the
eligible person's dependent children under the age of 23 who
are full-time students, the eligible person's dependent
disabled children of any age, or any other member of the
eligible person's family who is claimed as a dependent for
purposes of filing federal income tax returns and resides in
the eligible person's household.
"Federally eligible individual" means an individual
resident of this State:
(1)(A) for whom, as of the date on which the individual
seeks Plan coverage under Section 15 of this Act, the
aggregate of the periods of creditable coverage is 18 or more
months, and (B) whose most recent prior creditable coverage
was under group health insurance coverage offered by a health
insurance issuer, a group health plan, a governmental plan,
or a church plan (or health insurance coverage offered in
connection with any such plans) or any other type of
creditable coverage that may be required by the federal
Health Insurance Portability and Accountability Act of 1996,
as it may be amended, or the regulations under that Act;
(2) who is not eligible for coverage under (A) a group
health plan, (B) part A or part B of Medicare, or (C) medical
assistance, and does not have other health insurance
coverage;
(3) with respect to whom the most recent coverage within
the coverage period described in paragraph (1)(A) of this
definition was not terminated based upon a factor relating to
nonpayment of premiums or fraud;
(4) if the individual had been offered the option of
continuation coverage under a COBRA continuation provision or
under a similar State program, who elected such coverage; and
(5) who, if the individual elected such continuation
coverage, has exhausted such continuation coverage under such
provision or program.
"Group health plan" has the same meaning given that term
in the federal Health Insurance Portability and
Accountability Act of 1996.
"Governmental plan" has the same meaning given that term
in the federal Health Insurance Portability and
Accountability Act of 1996.
"Health insurance" means any hospital and, surgical, or
medical coverage provided under an expense-incurred policy,
certificate, or contract provided by an insurer, minimum
premium plan, stop loss coverage, non-profit health care
service plan contract, health maintenance organization or
other subscriber contract, or any other health care plan or
arrangement that pays for or furnishes medical or health care
services by a provider of these services, whether by
insurance or otherwise. Health insurance shall not include
short term, accident only, disability income, hospital
confinement or fixed indemnity, dental only, vision only,
limited benefit, or credit insurance, coverage issued as a
supplement to liability insurance, insurance arising out of a
workers' compensation or similar law, automobile
medical-payment insurance, or insurance under which benefits
are payable with or without regard to fault and which is
statutorily required to be contained in any liability
insurance policy or equivalent self-insurance.
"Health insurance coverage" means benefits consisting of
medical care (provided directly, through insurance or
reimbursement, or otherwise and including items and services
paid for as medical care) under any hospital or medical
service policy or certificate, hospital or medical service
plan contract, or health maintenance organization contract
offered by a health insurance issuer.
"Health insurance issuer" means an insurance company,
insurance service, or insurance organization (including a
health maintenance organization and a voluntary health
services plan) that is authorized to transact health
insurance business in this State. Such term does not include
a group health plan.
"Health Maintenance Organization" means an organization
as defined in the Health Maintenance Organization Act.
"Hospice" means a program as defined in and licensed
under the Hospice Program Licensing Act.
"Hospital" means a duly licensed an institution as
defined in the Hospital Licensing Act, an institution that
meets all comparable conditions and requirements in effect in
the state in which it is located, or the University of
Illinois Hospital as defined in the University of Illinois
Hospital Act.
"Individual health insurance coverage" means health
insurance coverage offered to individuals in the individual
market, but does not include short-term, limited-duration
insurance.
"Insured" means any individual resident of this State who
is eligible to receive benefits from any insurer (including
health insurance coverage offered in connection with a group
health plan) or health insurance issuer arrangement as
defined in this Section.
"Insurer" means any insurance company authorized to
transact health insurance business in this State and any
corporation that provides medical services and is organized
under the Voluntary Health Services Plans Act or the Health
Maintenance Organization Act.
"Medical assistance" means the State medical assistance
or medical assistance no grant (MANG) programs health care
benefits provided under Title XIX of the Social Security Act
and Articles V (Medical Assistance) and VI (General
Assistance) of the Illinois Public Aid Code (or any successor
program) or under any similar program of health care benefits
in a state other than Illinois.
"Medically necessary" means that a service, drug, or
supply is necessary and appropriate for the diagnosis or
treatment of an illness or injury in accord with generally
accepted standards of medical practice at the time the
service, drug, or supply is provided. When specifically
applied to a confinement it further means that the diagnosis
or treatment of the covered insured person's medical symptoms
or condition cannot be safely provided to that person as an
outpatient. A service, drug, or supply shall not be medically
necessary if it: (i) is investigational, experimental, or for
research purposes; or (ii) is provided solely for the
convenience of the patient, the patient's family, physician,
hospital, or any other provider; or (iii) exceeds in scope,
duration, or intensity that level of care that is needed to
provide safe, adequate, and appropriate diagnosis or
treatment; or (iv) could have been omitted without adversely
affecting the covered insured person's condition or the
quality of medical care; or (v) involves the use of a medical
device, drug, or substance not formally approved by the
United States Food and Drug Administration.
"Medical care" means the ordinary and usual professional
services rendered by a physician or other specified provider
during a professional visit for treatment of an illness or
injury.
"Medicare" means coverage under both Part A and Part B of
Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395,
et seq..
"Minimum premium plan" means an arrangement whereby a
specified amount of health care claims is self-funded, but
the insurance company assumes the risk that claims will
exceed that amount.
"Participating transplant center" means a hospital
designated by the Board as a preferred or exclusive provider
of services for one or more specified human organ or tissue
transplants for which the hospital has signed an agreement
with the Board to accept a transplant payment allowance for
all expenses related to the transplant during a transplant
benefit period.
"Physician" means a person licensed to practice medicine
pursuant to the Medical Practice Act of 1987.
"Plan" means the Comprehensive Health Insurance Plan
established by this Act.
"Plan of operation" means the plan of operation of the
Plan, including articles, bylaws and operating rules, adopted
by the board pursuant to this Act.
"Provider" means any hospital, skilled nursing facility,
hospice, home health agency, physician, registered pharmacist
acting within the scope of that registration, or any other
person or entity licensed in Illinois to furnish medical
care.
"Qualified high risk pool" has the same meaning given
that term in the federal Health Insurance Portability and
Accountability Act of 1996.
"Resident eligible person" means a person who has been
legally domiciled in this State for a period of at least 180
days and continues to be domiciled in this State.
"Skilled nursing facility" means a facility or that
portion of a facility that is licensed by the Illinois
Department of Public Health under the Nursing Home Care Act
or a comparable licensing authority in another state to
provide skilled nursing care.
"Stop-loss coverage" means an arrangement whereby an
insurer insures against the risk that any one claim will
exceed a specific dollar amount or that the entire loss of a
self-insurance plan will exceed a specific amount.
"Third party administrator" means an administrator as
defined in Section 511.101 of the Illinois Insurance Code who
is licensed under Article XXXI 1/4 of that Code.
(Source: P.A. 87-560; 88-364.)
(215 ILCS 105/3) (from Ch. 73, par. 1303)
Sec. 3. Operation of the Plan.
a. There is hereby created an Illinois Comprehensive
Health Insurance Plan.
b. The Plan shall operate subject to the supervision and
control of the board. The board is created as a political
subdivision and body politic and corporate and, as such, is
not a State agency. The board shall consist of 10 public
members, appointed by the Governor with the advice and
consent of the Senate.
Initial members shall be appointed to the Board by the
Governor as follows: 2 members to serve until July 1, 1988,
and until their successors are appointed and qualified; 2
members to serve until July 1, 1989, and until their
successors are appointed and qualified; 3 members to serve
until July 1, 1990, and until their successors are appointed
and qualified; and 3 members to serve until July 1, 1991, and
until their successors are appointed and qualified. As terms
of initial members expire, their successors shall be
appointed for terms to expire the first day in July 3 years
thereafter, and until their successors are appointed and
qualified.
Any vacancy in the Board occurring for any reason other
than the expiration of a term shall be filled for the
unexpired term in the same manner as the original
appointment.
Any member of the Board may be removed by the Governor
for neglect of duty, misfeasance, malfeasance, or nonfeasance
in office.
In addition, a representative of the Illinois Health Care
Cost Containment Council, a representative of the Office of
the Attorney General and the Director or the Director's
designated representative shall be members of the board.
Four members of the General Assembly, one each appointed by
the President and Minority Leader of the Senate and by the
Speaker and Minority Leader of the House of Representatives,
shall serve as nonvoting members of the board. At least 2 of
the public members shall be individuals reasonably expected
to qualify for coverage under the Plan, the parent or spouse
of such an individual, or a surviving family member of an
individual who could have qualified for the plan during his
lifetime. The Director or Director's representative shall be
the chairperson of the board. Members of the board shall
receive no compensation, but shall be reimbursed for
reasonable expenses incurred in the necessary performance of
their duties.
c. The board shall make an annual report in September
and shall file the report with the Secretary of the Senate
and the Clerk of the House of Representatives. The report
shall summarize the activities of the Plan in the preceding
calendar year, including net written and earned premiums, the
expense of administration, the paid and incurred losses for
the year and other information as may be requested by the
General Assembly. The report shall also include analysis and
recommendations regarding utilization review, quality
assurance and access to cost effective quality health care.
d. In its plan of operation the board shall:
(1) Establish procedures for selecting a plan
administrator an administering carrier in accordance with
Section 5 of this Act.
(2) Establish procedures for the operation of the
board.
(3) Create a Plan fund, under management of the
board, to fund administrative, claim, and other expenses
of the Plan.
(4) Establish procedures for the handling and
accounting of assets and monies of the Plan.
(5) Develop and implement a program to publicize
the existence of the Plan, the eligibility requirements
and procedures for enrollment and to maintain public
awareness of the Plan.
(6) Establish procedures under which applicants and
participants may have grievances reviewed by a grievance
committee appointed by the board. The grievances shall
be reported to the board immediately after completion of
the review. The Department and the board shall retain
all written complaints regarding the Plan for at least 3
years. Oral complaints shall be reduced to written form
and maintained for at least 3 years.
(7) Provide for other matters as may be necessary
and proper for the execution of its powers, duties and
obligations under the Plan.
e. No later than 5 years after the Plan is operative the
board and the Department shall conduct cooperatively a study
of the Plan and the persons insured by the Plan to determine:
(1) claims experience including a breakdown of medical
conditions for which claims were paid; (2) whether
availability of the Plan affected employment opportunities
for participants; (3) whether availability of the Plan
affected the receipt of medical assistance benefits by Plan
participants; (4) whether a change occurred in the number of
personal bankruptcies due to medical or other health related
costs; (5) data regarding all complaints received about the
Plan including its operation and services; (6) and any other
significant observations regarding utilization of the Plan.
The study shall culminate in a written report to be presented
to the Governor, the President of the Senate, the Speaker of
the House and the chairpersons of the House and Senate
Insurance Committees. The report shall be filed with the
Secretary of the Senate and the Clerk of the House of
Representatives. The report shall also be available to
members of the general public upon request.
f. The board may:
(1) Prepare and distribute certificate of
eligibility forms and enrollment instruction forms to
insurance producers and to the general public in this
State.
(2) Provide for reinsurance of risks incurred by
the Plan and enter into reinsurance agreements with
insurers to establish a reinsurance plan for risks of
coverage described in the Plan, or obtain commercial
reinsurance to reduce the risk of loss through the Plan.
(3) Issue additional types of health insurance
policies to provide optional coverages as are otherwise
permitted by this Act including a Medicare supplement
policy designed to supplement Medicare.
(4) Provide for and employ cost containment
measures and requirements including, but not limited to,
preadmission certification, second surgical opinion,
concurrent utilization review programs, and individual
case management for the purpose of making the pool more
cost effective.
(5) Design, utilize, or contract, or otherwise
arrange for the delivery of cost effective health care
services, including establishing or contracting with
preferred provider organizations, and health maintenance
organizations, and other limited network provider
arrangements otherwise arrange for the delivery of cost
effective health care services.
(6) Adopt bylaws, rules, regulations, policies and
procedures as may be necessary or convenient for the
implementation of the Act and the operation of the Plan.
(7) Administer separate pools, separate accounts,
or other plans or arrangements as required by this Act to
separate federally eligible individuals or groups of
federally eligible individuals who qualify for plan
coverage under Section 15 of this Act from eligible
persons or groups of eligible persons who qualify for
plan coverage under Section 7 of this Act and apportion
the costs of the administration among such separate
pools, separate accounts, or other plans or arrangements.
g. The Director may, by rule, establish additional
powers and duties of the board and may adopt rules for any
other purposes, including the operation of the Plan, as are
necessary or proper to implement this Act.
h. The board is not liable for any obligation of the
Plan. There is no liability on the part of any member or
employee of the board or the Department, and no cause of
action of any nature may arise against them, for any action
taken or omission made by them in the performance of their
powers and duties under this Act, unless the action or
omission constitutes willful or wanton misconduct. The board
may provide in its bylaws or rules for indemnification of,
and legal representation for, its members and employees.
i. There is no liability on the part of any insurance
producer for the failure of any applicant to be accepted by
the Plan unless the failure of the applicant to be accepted
by the Plan is due to an act or omission by the insurance
producer which constitutes willful or wanton misconduct.
(Source: P.A. 86-547; 86-1322; 87-560.)
(215 ILCS 105/4) (from Ch. 73, par. 1304)
Sec. 4. Powers and authority of the board. The board
shall have the general powers and authority granted under the
laws of this State to insurance companies licensed to
transact health and accident insurance and in addition
thereto, the specific authority to:
a. Enter into contracts as are necessary or proper to
carry out the provisions and purposes of this Act, including
the authority, with the approval of the Director, to enter
into contracts with similar plans of other states for the
joint performance of common administrative functions, or with
persons or other organizations for the performance of
administrative functions including, without limitation,
utilization review and quality assurance programs, or with
health maintenance organizations or preferred provider
organizations for the provision of health care services.
b. Sue or be sued, including taking any legal actions
necessary or proper.
c. Take such legal action as necessary to:
(1) avoid the payment of improper claims against
the plan or the coverage provided by or through the plan;
(2) to recover any amounts erroneously or
improperly paid by the plan; or
(3) to recover any amounts paid by the plan as a
result of a mistake of fact or law; or.
(4) to recover or collect any other amounts,
including assessments, that are due or owed the Plan or
have been billed on its or the Plan's behalf.
d. Establish appropriate rates, rate schedules, rate
adjustments, expense allowances, agents' referral fees, claim
reserves, and formulas and any other actuarial function
appropriate to the operation of the plan. Rates shall not be
unreasonable in relation to the coverage provided, the risk
experience and expenses of providing the coverage. Rates and
rate schedules may be adjusted for appropriate risk factors
such as age and area variation in claim costs and shall take
into consideration appropriate risk factors in accordance
with established actuarial and underwriting practices.
e. Issue policies of insurance in accordance with the
requirements of this Act.
f. Appoint appropriate legal, actuarial and other
committees as necessary to provide technical assistance in
the operation of the plan, policy and other contract design,
and any other function within the authority of the plan.
g. Borrow money to effect the purposes of the Illinois
Comprehensive Health Insurance Plan. Any notes or other
evidence of indebtedness of the plan not in default shall be
legal investments for insurers and may be carried as admitted
assets.
h. Establish rules, conditions and procedures for
reinsuring risks under this Act.
i. Employ and fix the compensation of employees. Such
employees may be paid on a warrant issued by the State
Treasurer pursuant to a payroll voucher certified by the
Board and drawn by the Comptroller against appropriations or
trust funds held by the State Treasurer.
j. Enter into intergovernmental cooperation agreements
with other agencies or entities of State government for the
purpose of sharing the cost of providing health care services
that are otherwise authorized by this Act for children who
are both plan participants and eligible for financial
assistance from the Division of Specialized Care for Children
of the University of Illinois.
k. Establish conditions and procedures under which the
plan may, if funds permit, discount or subsidize premium
rates that are paid directly by senior citizens, as defined
by the Board, and other plan participants, who are retired or
unemployed and meet other qualifications.
l. Establish and maintain the Plan Fund authorized in
Section 3 of this Act, which shall be divided into separate
accounts, as follows:
(1) accounts to fund the administrative, claim, and
other expenses of the Plan associated with eligible
persons who qualify for Plan coverage under Section 7 of
this Act, which shall consist of:
(A) premiums paid on behalf of covered
persons;
(B) appropriated funds and other revenues
collected or received by the Board;
(C) reserves for future losses maintained by
the Board; and
(D) interest earnings from investment of the
funds in the Plan Fund or any of its accounts other
than the funds in the account established under item
2 of this subsection.
(2) an account, to be denominated the federally
eligible individuals account, to fund the administrative,
claim, and other expenses of the Plan associated with
federally eligible individuals who qualify for Plan
coverage under Section 15 of this Act, which shall
consist of:
(A) premiums paid on behalf of covered
persons;
(B) assessments and other revenues collected
or received by the Board;
(C) reserves for future losses maintained by
the Board; and
(D) interest earnings from investment of the
federally eligible individuals account funds; and
(3) such other accounts as may be appropriate.
m. Charge and collect assessments paid by insurers
pursuant to Section 12 of this Act and recover any
assessments for, on behalf of, or against those insurers.
(Source: P.A. 88-625, eff. 9-9-94; 89-628, eff. 8-9-96.)
(215 ILCS 105/5) (from Ch. 73, par. 1305)
Sec. 5. Plan administrator Administering Carrier.
a. The board shall select a plan administrator an
administering carrier through a competitive bidding process
to administer the plan. The board shall evaluate bids
submitted under this Section based on criteria established by
the board which shall include:
(1) The plan administrator's carrier's proven ability to
handle other large group accident and health benefit plans.
(2) The efficiency and timeliness of the plan
administrator's carrier's claim processing paying procedures.
(3) An estimate of total charges for administering the
plan.
(4) The plan administrator's ability to apply effective
cost containment programs and procedures and of the carrier
to administer the plan in a cost-efficient manner.
(5) The financial condition and stability of the plan
administrator carrier.
b. The plan administrator administering carrier shall
serve for a period of 5 years subject to removal for cause
and subject to the terms, conditions and limitations of the
contract between the board and the plan administrator
administering carrier. At least one year prior to the
expiration of each 5 year period of service by the current
plan administrator an administering carrier, the board shall
advertise for and accept bids to serve as the plan
administrator administering carrier for the succeeding 5 year
period. Selection of the plan administrator administering
carrier for the succeeding period shall be made at least 6
months prior to the end of the current 5 year period.
c. The plan administrator administering carrier shall
perform such eligibility and administrative claims payment
functions relating to the plan as may be assigned to it
including:
(1) establishment of the administering carrier shall
establish a premium billing procedure for collection of
premiums from plan participants. Billings shall be made on a
periodic basis as determined by the board;.
(2) payment and processing of claims; and
(3) (2) other The administering carrier shall perform
all necessary functions to assure timely payment of benefits
to participants under the plan, including:
(a) Making available information relating to the proper
manner of submitting a claim for benefits under the plan and
distributing forms upon which submissions shall be made.
(b) Evaluating the eligibility of each claim for payment
under the plan.
(c) The plan administrator administering carrier shall
be governed by the requirements of Part 919 of Title 50 of
the Illinois Administrative Code, promulgated by the
Department of Insurance, regarding the handling of claims
under this Act.
d. The plan administrator administering carrier shall
submit regular reports to the board regarding the operation
of the plan. The frequency, content and form of the report
shall be as determined by the board.
e. The plan administrator administering carrier shall
pay claims expenses from the premium payments received from
or on behalf of plan participants. If the plan
administrator's administering carrier's payments for claims
expenses exceed the portion of premiums allocated by the
board for payment of claims expenses, the board shall provide
to the administering carrier additional funds to the plan
administrator for payment of claims expenses.
f. The plan administrator administering carrier shall be
paid as provided in the board's contract between the Board
and the plan administrator with the administering carrier for
expenses incurred in the performance of its services.
(Source: P.A. 85-1013.)
(215 ILCS 105/7) (from Ch. 73, par. 1307)
Sec. 7. Eligibility.
a. Except as provided in subsection (e) of this Section
or in Section 15 of this Act, any individual person who is
either a citizen of the United States or an alien lawfully
admitted for permanent residence and continues to be a
resident of this State shall be eligible for Plan coverage if
evidence is provided of:
(1) A notice of rejection or refusal to issue
substantially similar individual health insurance
coverage for health reasons by a health insurance issuer
one insurer; or
(2) A refusal by a health insurance issuer to issue
individual health the insurance coverage except at a rate
exceeding the applicable Plan rate for which the person
is responsible.
A rejection or refusal by a group health plan or health
insurance issuer an insurer offering only stop-loss or excess
of loss insurance or contracts, agreements, or other
arrangements for reinsurance coverage with respect to the
applicant shall not be sufficient evidence under this
subsection.
b. The board shall promulgate a list of medical or
health conditions for which a person who is either a citizen
of the United States or an alien lawfully admitted for
permanent residence and a resident of this State would be
eligible for Plan coverage without applying for health
insurance coverage pursuant to subsection a. of this Section.
Persons who can demonstrate the existence or history of any
medical or health conditions on the list promulgated by the
board shall not be required to provide the evidence specified
in subsection a. of this Section. The list shall be
effective on the first day of the operation of the Plan and
may be amended from time to time as appropriate.
c. Resident Family members of the same household who
each are covered persons meet the eligibility criteria set
forth in this Section are eligible for optional family
coverage under the Plan.
d. For persons qualifying for coverage in accordance
with Section 7 of this Act, the board shall, if it determines
that such appropriations as are made pursuant to Section 12
of this Act are insufficient to allow the board to accept all
of the eligible persons which it projects will apply for
enrollment under the Plan, limit or close enrollment to
ensure that the Plan is not over-subscribed and that it has
sufficient resources to meet its obligations to existing
enrollees. The board shall not limit or close enrollment for
federally eligible individuals.
e. A person shall not be eligible for coverage under the
Plan if:
(1) He or she has or obtains other coverage under a
group health plan or health insurance coverage
substantially similar to or better than a Plan policy as
an insured or covered dependent or would be eligible to
have that coverage if he or she elected to obtain it.
Persons otherwise eligible for Plan coverage may,
however, solely for the purpose of having coverage for a
pre-existing condition, maintain other coverage only
while satisfying any pre-existing condition waiting
period under a Plan policy or a subsequent replacement
policy of a Plan policy.
(1.1) His or her prior coverage under a group
health plan or health insurance coverage, provided or
arranged by under a group policy or plan of an employer
of more than 10 employees was discontinued for any reason
without the entire group or plan being discontinued and
not replaced, provided he or she remains an employee, or
dependent thereof, of the same employer.
(2) He or she is a recipient of or is approved to
receive medical assistance, except that a person may
continue to receive medical assistance through the
medical assistance no grant program, but only while
satisfying the requirements for a preexisting condition
under Section 8, subsection f. of this Act. Payment of
premiums pursuant to this Act shall be allocable to the
person's spenddown for purposes of the medical assistance
no grant program, but that person shall not be eligible
for any Plan benefits while that person remains eligible
for medical assistance. If the person continues to
receive or be approved to receive medical assistance
through the medical assistance no grant program at or
after the time that requirements for a preexisting
condition are satisfied, the person shall not be eligible
for coverage under the Plan. In that circumstance,
coverage under the plan shall terminate as of the
expiration of the preexisting condition limitation
period. Under all other circumstances, coverage under
the Plan shall automatically terminate as of the
effective date of any medical assistance.
(3) Except as provided in Section 15, the person
has previously participated in the Plan and voluntarily
terminated Plan terminates coverage, unless 12 months
have elapsed since the person's latest voluntary
termination of coverage.
(4) The person fails to pay the required premium
under the covered person's insured's terms of enrollment
and participation, in which event the liability of the
Plan shall be limited to benefits incurred under the Plan
for the time period for which premiums had been paid and
the covered person remained eligible for Plan coverage.
(5) The Plan has paid a total of $1,000,000
$500,000 in benefits on behalf of the covered person.
(6) The person is a resident of a public
institution.
(7) The person's premium is paid for or reimbursed
under any government sponsored program or by any
government agency or health care provider, except as an
otherwise qualifying full-time employee, or dependent of
such employee, of a government agency or health care
provider.
(8) The person has or later receives other benefits
or funds from any settlement, judgement, or award
resulting from any accident or injury, regardless of the
date of the accident or injury, or any other
circumstances creating a legal liability for damages due
that person by a third party, whether the settlement,
judgment, or award is in the form of a contract,
agreement, or trust on behalf of a minor or otherwise and
whether the settlement, judgment, or award is payable to
the person, his or her dependent, estate, personal
representative, or guardian in a lump sum or over time,
so long as there continues to be benefits or assets
remaining from those sources in an amount in excess of
$100,000.
f. The board or the administrator shall require
verification of residency and may require any additional
information or documentation, or statements under oath, when
necessary to determine residency upon initial application and
for the entire term of the policy.
g. Coverage shall cease (i) on the date a person is no
longer a resident of Illinois, (ii) on the date a person
requests coverage to end, (iii) upon the death of the covered
person, (iv) on the date State law requires cancellation of
the policy, or (v) at the Plan's option, 30 days after the
Plan makes any inquiry concerning a person's eligibility or
place of residence to which the person does not reply.
h. Except under the conditions set forth in subsection g
of this Section, the coverage of any person who ceases to
meet the eligibility requirements of this Section shall be
terminated at the end of the current policy period for which
the necessary premiums have been paid.
(Source: P.A. 88-364; 89-486, eff. 6-21-96.)
(215 ILCS 105/7.1 new)
Sec. 7.1. Premiums.
(a) The Board shall establish premium rates for coverage
as provided in subsection (d) of this Section.
(b) Separate schedules of premium rates based on sex,
age, geographical location, and benefit plan shall apply for
individual risks.
(c) The Board may provide for separate premium rates for
optional family coverage for the spouse or one or more
dependents who reside together in any eligible individual's
or eligible person's household. The rates for each spouse or
dependent who qualifies to be covered under this optional
family coverage shall be such percentage of the applicable
individual Plan rate as the Board, in accordance with
appropriate actuarial principles, shall establish.
(d) The Board, with the assistance of the Director and
in accordance with appropriate actuarial principles, shall
determine a standard risk rate by using the average rates
that individual standard risks in this State are charged by
at least 5 of the largest health insurance issuers providing
individual health insurance coverage to residents of Illinois
that is substantially similar to the coverage offered by the
Plan. In determining the average rate or charges of those
health insurance issuers, the rates charged by those issuers
shall be actuarially adjusted to determine the rate or charge
that would have been charged for benefits similar to those
provided by the Plan. The standard risk rates shall be
established using reasonable actuarial techniques and shall
reflect anticipated claims experience, expenses, and other
appropriate risk factors for such coverage.
(e) Rates for Plan coverage shall not be less than 125%
nor more than 150% of rates established as applicable for
individual standard risks pursuant to subsection (d).
(215 ILCS 105/8) (from Ch. 73, par. 1308)
Sec. 8. Minimum benefits.
a. Availability. The Plan shall offer in an annually
renewable policy major medical expense coverage to every
eligible person who is not eligible for Medicare. Major
medical expense coverage offered by the Plan shall pay an
eligible person's covered expenses, subject to limit on the
deductible and coinsurance payments authorized under
paragraph (4) of subsection d of this Section, up to a
lifetime benefit limit of $1,000,000 $500,000 per covered
individual. The maximum limit under this subsection shall
not be altered by the Board, and no actuarial equivalent
benefit may be substituted by the Board. Any person who
otherwise would qualify for coverage under the Plan, but is
excluded because he or she is eligible for Medicare, shall be
eligible for any separate Medicare supplement policy or
policies which the Board may offer.
b. Outline of benefits Covered expenses. Covered
expenses shall be limited to the usual reasonable and
customary charge, including negotiated fees, in the locality
for the following services and articles when prescribed by a
physician and determined by the Plan to be medically
necessary for the following areas of services, subject to
such separate deductibles, co-payments, exclusions, and other
limitations on benefits as the Board shall establish and
approve, and the other provisions of this Section and
prescribed by a person licensed and practicing within the
scope of his or her profession as authorized by State law:
(1) Hospital services room and board and any other
hospital services, except that inpatient hospitalization
for the treatment of mental and emotional disorders shall
only be covered for a maximum of 45 days in a calendar
year.
(2) Professional services for the diagnosis or
treatment of injuries, illnesses or conditions, other
than dental and, or outpatient mental and nervous
disorders as described in paragraph (17), which are
rendered by a physician or chiropractor, or by other
licensed professionals at the physician's or
chiropractor's direction.
(3) (Blank). If surgery has been recommended, a
second opinion may be required. The charge for a second
opinion as to whether the surgery is required will be
paid in full without regard to deductible or co-payment
requirements. If the second opinion differs from the
first, the charge for a third opinion, if desired, will
also be paid in full without regard to deductible or
co-payment requirements. Regardless of whether the
second opinion or third opinion confirms the original
recommendation, it is the patient's decision whether to
undergo surgery.
(4) Drugs requiring a physician's or other legally
authorized prescription.
(5) Skilled nursing services of care provided in a
licensed skilled nursing facility for not more than 120
days during in a policy calendar year, provided the
service commences within 14 days following a confinement
of at least 3 consecutive days in a hospital for the same
condition.
(6) Services of a home health agency in accord with
a home health care plan, up to a maximum of 270 visits
per year.
(7) Services of a licensed hospice for not more
than 180 days during a policy year.
(8) Use of radium or other radioactive materials.
(9) Oxygen.
(10) Anesthetics.
(11) Orthoses and prostheses other than dental.
(12) Rental or purchase in accordance with Board
policies or procedures of durable medical equipment,
other than eyeglasses or hearing aids, for which there is
no personal use in the absence of the condition for which
it is prescribed.
(13) Diagnostic x-rays and laboratory tests.
(14) Oral surgery for excision of partially or
completely unerupted impacted teeth or the gums and
tissues of the mouth, when not performed in connection
with the routine extraction or repair of teeth, and oral
surgery and procedures, including orthodontics and
prosthetics necessary for craniofacial or maxillofacial
conditions and to correct congenital defects or injuries
due to accident.
(15) Physical, speech, and functional occupational
therapy as medically necessary and provided by
appropriate licensed professionals.
(16) Emergency and other medically necessary
transportation provided by a licensed ambulance service
to the nearest health care facility qualified to treat a
covered the illness, injury, or condition, subject to the
provisions of the Emergency Medical Systems (EMS) Act.
(17) The first 50 professional Outpatient services
visits for diagnosis and treatment of mental and nervous
emotional disorders provided that a covered person shall
be required to make a copayment not to exceed 50% and
that the Plan's payment shall not exceed such amounts as
are established by the Board rendered during the year, up
to a maximum of $80 per visit.
(18) Human organ or tissue transplants specified by
the Board that are performed at a hospital designated by
the Board as a participating transplant center for that
specific organ or tissue transplant.
c. Exclusions Exclusion. Covered expenses of the Plan
shall not include the following:
(1) Any charge for treatment for cosmetic purposes
other than for reconstructive surgery when the service is
incidental to or follows surgery resulting from injury,
sickness or other diseases of the involved part or
surgery for the repair or treatment of a congenital
bodily defect to restore normal bodily functions.
(2) Any charge for care that is primarily for rest,
custodial, educational, or domiciliary purposes.
(3) Any charge for services in a private room to
the extent it is in excess of the institution's charge
for its most common semiprivate room, unless a private
room is prescribed as medically necessary by a physician.
(4) That part of any charge for room and board or
for services rendered or articles prescribed by a
physician, dentist, or other health care personnel that
exceeds the reasonable and customary charge in the
locality or for any services or supplies not medically
necessary for the diagnosed injury or illness.
(5) Any charge for services or articles the
provision of which is not within the scope of licensure
of the institution or individual providing the services
or articles.
(6) Any expense incurred prior to the effective
date of coverage by the Plan for the person on whose
behalf the expense is incurred.
(7) Dental care, dental surgery, dental treatment
or dental appliances, except as provided in paragraph
(14) of subsection b of this Section.
(8) Eyeglasses, contact lenses, hearing aids or
their fitting.
(9) Illness or injury due to (A) war or any acts of
war; (B) commission of, or attempt to commit, a felony;
or (C) aviation activities, except when traveling as a
fare-paying passenger on a commercial airline.
(10) Services of blood donors and any fee for
failure to replace the first 3 pints of blood provided to
a covered an eligible person each policy year.
(11) Personal supplies or services provided by a
hospital or nursing home, or any other nonmedical or
nonprescribed supply or service.
(12) Routine maternity charges for a pregnancy,
except where added as optional coverage with payment of
an additional premium for pregnancy resulting from
conception occurring after the effective date of the
optional coverage.
(13) (Blank). Expenses of obtaining an abortion,
induced miscarriage or induced premature birth unless, in
the opinion of a physician, those procedures are
necessary for the preservation of life of the woman
seeking such treatment, or except an induced premature
birth intended to produce a live viable child and the
procedure is necessary for the health of the mother or
unborn child.
(14) Any expense or charge for services, drugs, or
supplies that are: (i) not provided in accord with
generally accepted standards of current medical practice;
(ii) for procedures, treatments, equipment, transplants,
or implants, any of which are investigational,
experimental, or for research purposes; (iii)
investigative and not proven safe and effective; or (iv)
for, or resulting from, a gender transformation
operation.
(15) Any expense or charge for routine physical
examinations or tests.
(16) Any expense for which a charge is not made in
the absence of insurance or for which there is no legal
obligation on the part of the patient to pay.
(17) Any expense incurred for benefits provided
under the laws of the United States and this State,
including Medicare and Medicaid and other medical
assistance, military service-connected disability
payments, medical services provided for members of the
armed forces and their dependents or employees of the
armed forces of the United States, and medical services
financed on behalf of all citizens by the United States.
(18) Any expense or charge for in vitro
fertilization, artificial insemination, or any other
artificial means used to cause pregnancy.
(19) Any expense or charge for oral contraceptives
used for birth control or any other temporary birth
control measures.
(20) Any expense or charge for sterilization or
sterilization reversals.
(21) Any expense or charge for weight loss
programs, exercise equipment, or treatment of obesity,
except when certified by a physician as morbid obesity
(at least 2 times normal body weight).
(22) Any expense or charge for acupuncture
treatment unless used as an anesthetic agent for a
covered surgery.
(23) Any expense or charge for or related to organ
or tissue transplants other than those performed at a
hospital with a Board approved organ transplant program
that has been designated by the Board as a preferred or
exclusive provider organization for that specific organ
or tissue transplant.
(24) Any expense or charge for procedures,
treatments, equipment, or services that are provided in
special settings for research purposes or in a controlled
environment, are being studied for safety, efficiency,
and effectiveness, and are awaiting endorsement by the
appropriate national medical speciality college for
general use within the medical community.
d. Premiums, Deductibles, and coinsurance. (1) Premiums
charged for coverage issued by the Plan may not be
unreasonable in relation to the benefits provided, the risk
experience and the reasonable expenses of providing the
coverage.
(2) Separate schedules of premium rates based on sex,
age and geographical location shall apply for individual
risks.
(3) The Plan may provide for separate premium rates for
optional family coverage for the spouse or one or more
dependents of any person eligible to be insured under the
Plan who is also the oldest adult member of the family and
remains continuously enrolled in the Plan as the primary
enrollee. The rates shall be such percentage of the
applicable individual Plan rate as the Board, in accordance
with appropriate actuarial principles, shall establish for
each spouse or dependent.
(4) The Board shall determine, in accordance with
appropriate actuarial principles, the average rates that
individual standard risks in this State are charged by at
least 5 of the largest insurers providing coverage to
residents of Illinois that is substantially similar to the
Plan coverage. In the event at least 5 insurers do not offer
substantially similar coverage, the rates shall be
established using reasonable actuarial techniques and shall
reflect anticipated claims experience, expenses, and other
appropriate risk factors relating to the Plan. Rates for
Plan coverage shall be 135% of rates so established as
applicable for individual standard risks; provided, however,
if after determining that the appropriations made pursuant to
Section 12 of this Act are insufficient to ensure that total
income from all sources will equal or exceed the total
incurred costs and expenses for the current number of
enrollees, the board shall raise premium rates above this
135% standard to the level it deems necessary to ensure the
financial solvency of the Plan for enrollees already in the
Plan. All rates and rate schedules shall be submitted to the
board for approval.
(5) The Plan coverage defined in Section 6 shall provide
for a choice of deductibles per individual as authorized by
the Board per individual per annum. If 2 individual members
of the same a family household, who are both covered persons
under the Plan, satisfy the same applicable deductibles, no
other member of that family who is also a covered person
eligible for coverage under the Plan shall be required to
meet any deductibles for the balance of that calendar year.
The deductibles must be applied first to the authorized
amount of covered expenses incurred by the covered person. A
mandatory coinsurance requirement shall be imposed at the
rate authorized by the Board in excess of the mandatory
deductible, the coinsurance in the aggregate not to exceed
such amounts as are authorized by the Board per annum. At
its discretion the Board may, however, offer catastrophic
coverages or other policies that provide for larger
deductibles with or without coinsurance requirements. The
deductibles and coinsurance factors may be adjusted annually
according to the Medical Component of the Consumer Price
Index.
(6) The Plan may provide for and employ cost containment
measures and requirements including, but not limited to,
preadmission certification, second surgical opinion,
concurrent utilization review programs, individual case
management, preferred provider organizations, and other cost
effective arrangements for paying for covered expenses.
e. Scope of coverage.
(1) In approving any of the benefit plans to be offered
by the Plan, the Board shall establish such benefit levels,
deductibles, coinsurance factors, exclusions, and limitations
as it may deem appropriate and that it believes to be
generally reflective of and commensurate with health
insurance coverage that is provided in the individual market
in this State.
(2) The benefit plans approved by the Board may also
provide for and employ various cost containment measures and
other requirements including, but not limited to,
preadmission certification, prior approval, second surgical
opinions, concurrent utilization review programs, individual
case management, preferred provider organizations, health
maintenance organizations, and other cost effective
arrangements for paying for covered expenses. Except as
provided in subsection c of this Section, if the covered
expenses incurred by the eligible person exceed the
deductible for major medical expense coverage in a calendar
year, the Plan shall pay at least 80% of any additional
covered expenses incurred by the person during the calendar
year.
f. Preexisting conditions.
(1) Except for federally eligible individuals
qualifying for Plan coverage under Section 15 of this Act
or eligible persons who qualify for and elect to purchase
the waiver authorized in paragraph (3) of this
subsection, Six months: plan coverage shall exclude
charges or expenses incurred during the first 6 months
following the effective date of coverage as to any
condition if: (a) the condition had manifested itself
within the 6 month period immediately preceding the
effective date of coverage in such a manner as would
cause an ordinarily prudent person to seek diagnosis,
care or treatment; or (b) medical advice, care or
treatment was recommended or received within the 6 month
period immediately preceding the effective date of
coverage.
(2) (Blank).
(3) Waiver: The preexisting condition exclusions as
set forth in paragraph (1) of this subsection shall be
waived to the extent to which the eligible person: (a)
has satisfied similar exclusions under any prior health
insurance coverage policy or group health plan that was
involuntarily terminated; (b) is ineligible for any
continuation coverage or conversion rights that would
continue or provide substantially similar coverage
following that termination; and (c) has applied for Plan
coverage not later than 30 days following the involuntary
termination. No policy or plan shall be deemed to have
been involuntarily terminated if the master policyholder
or other controlling party elected to change insurance
coverage from one health insurance issuer company or
group health plan to another even if that decision
resulted in a discontinuation of coverage for any
individual under the plan, either totally or for any
medical condition. For each eligible person who qualifies
for and elects this waiver, there shall be added to each
payment of premium, on a prorated basis, a surcharge of
up to 10% of the otherwise applicable annual premium for
as long as that individual's coverage under the Plan
remains in effect or 60 months, whichever is less.
g. Other sources primary; nonduplication of benefits.
(1) The Plan shall be the last payor of benefits
whenever any other benefit or source of third party
payment is available. Subject to the provisions of
subsection e of Section 7, benefits otherwise payable
under Plan coverage shall be reduced by all amounts paid
or payable by Medicare or any other government program or
through any health insurance or group other health
benefit plan, whether by insurance, reimbursement,
insured or otherwise, or through any third party
liability, settlement, judgment, or award, regardless of
the date of the settlement, judgment, or award, whether
the settlement, judgment, or award is in the form of a
contract, agreement, or trust on behalf of a minor or
otherwise and whether the settlement, judgment, or award
is payable to the covered person, his or her dependent,
estate, personal representative, or guardian in a lump
sum or over time, and by all hospital or medical expense
benefits paid or payable under any worker's compensation
coverage, automobile medical payment, or liability
insurance, whether provided on the basis of fault or
nonfault, and by any hospital or medical benefits paid or
payable under or provided pursuant to any State or
federal law or program.
(2) The Plan shall have a cause of action against
any covered person or any other person or entity for the
recovery of any amount paid to the extent the amount was
for treatment, services, or supplies not covered in this
Section or in excess of benefits as set forth in this
Section.
(3) Whenever benefits are due from the Plan because
of sickness or an injury to a covered person resulting
from a third party's wrongful act or negligence and the
covered person has recovered or may recover damages from
a third party or its insurer, the Plan shall have the
right to reduce benefits or to refuse to pay benefits
that otherwise may be payable by the amount of damages
that the covered person has recovered or may recover
regardless of the date of the sickness or injury or the
date of any settlement, judgment, or award resulting from
that sickness or injury.
During the pendency of any action or claim that is
brought by or on behalf of a covered person against a
third party or its insurer, any benefits that would
otherwise be payable except for the provisions of this
paragraph (3) shall be paid if payment by or for the
third party has not yet been made and the covered person
or, if incapable, that person's legal representative
agrees in writing to pay back promptly the benefits paid
as a result of the sickness or injury to the extent of
any future payments made by or for the third party for
the sickness or injury. This agreement is to apply
whether or not liability for the payments is established
or admitted by the third party or whether those payments
are itemized.
Any amounts due the plan to repay benefits may be
deducted from other benefits payable by the Plan after
payments by or for the third party are made.
(4) Benefits due from the Plan may be reduced or
refused as an offset against any amount otherwise
recoverable under this Section.
h. Right of subrogation; recoveries.
(1) Whenever the Plan has paid benefits because of
sickness or an injury to any covered person resulting
from a third party's wrongful act or negligence, or for
which an insurer is liable in accordance with the
provisions of any policy of insurance, and the covered
person has recovered or may recover damages from a third
party that is liable for the damages, the Plan shall have
the right to recover the benefits it paid from any
amounts that the covered person has received or may
receive regardless of the date of the sickness or injury
or the date of any settlement, judgment, or award
resulting from that sickness or injury. The Plan shall
be subrogated to any right of recovery the covered person
may have under the terms of any private or public health
care coverage or liability coverage, including coverage
under the Workers' Compensation Act or the Workers'
Occupational Diseases Act, without the necessity of
assignment of claim or other authorization to secure the
right of recovery. To enforce its subrogation right, the
Plan may (i) intervene or join in an action or proceeding
brought by the covered person or his personal
representative, including his guardian, conservator,
estate, dependents, or survivors, against any third party
or the third party's insurer that may be liable or (ii)
institute and prosecute legal proceedings against any
third party or the third party's insurer that may be
liable for the sickness or injury in an appropriate court
either in the name of the Plan or in the name of the
covered person or his personal representative, including
his guardian, conservator, estate, dependents, or
survivors.
(2) If any action or claim is brought by or on
behalf of a covered person against a third party or the
third party's insurer, the covered person or his personal
representative, including his guardian, conservator,
estate, dependents, or survivors, shall notify the Plan
by personal service or registered mail of the action or
claim and of the name of the court in which the action or
claim is brought, filing proof thereof in the action or
claim. The Plan may, at any time thereafter, join in the
action or claim upon its motion so that all orders of
court after hearing and judgment shall be made for its
protection. No release or settlement of a claim for
damages and no satisfaction of judgment in the action
shall be valid without the written consent of the Plan to
the extent of its interest in the settlement or judgment
and of the covered person or his personal representative.
(3) In the event that the covered person or his
personal representative fails to institute a proceeding
against any appropriate third party before the fifth
month before the action would be barred, the Plan may, in
its own name or in the name of the covered person or
personal representative, commence a proceeding against
any appropriate third party for the recovery of damages
on account of any sickness, injury, or death to the
covered person. The covered person shall cooperate in
doing what is reasonably necessary to assist the Plan in
any recovery and shall not take any action that would
prejudice the Plan's right to recovery. The Plan shall
pay to the covered person or his personal representative
all sums collected from any third party by judgment or
otherwise in excess of amounts paid in benefits under the
Plan and amounts paid or to be paid as costs, attorneys
fees, and reasonable expenses incurred by the Plan in
making the collection or enforcing the judgment.
(4) In the event that a covered person or his
personal representative, including his guardian,
conservator, estate, dependents, or survivors, recovers
damages from a third party for sickness or injury caused
to the covered person, the covered person or the personal
representative shall pay to the Plan from the damages
recovered the amount of benefits paid or to be paid on
behalf of the covered person.
(5) When the action or claim is brought by the
covered person alone and the covered person incurs a
personal liability to pay attorney's fees and costs of
litigation, the Plan's claim for reimbursement of the
benefits provided to the covered person shall be the full
amount of benefits paid to or on behalf of the covered
person under this Act less a pro rata share that
represents the Plan's reasonable share of attorney's fees
paid by the covered person and that portion of the cost
of litigation expenses determined by multiplying by the
ratio of the full amount of the expenditures to the full
amount of the judgement, award, or settlement.
(6) In the event of judgment or award in a suit or
claim against a third party or insurer, the court shall
first order paid from any judgement or award the
reasonable litigation expenses incurred in preparation
and prosecution of the action or claim, together with
reasonable attorney's fees. After payment of those
expenses and attorney's fees, the court shall apply out
of the balance of the judgment or award an amount
sufficient to reimburse the Plan the full amount of
benefits paid on behalf of the covered person under this
Act, provided the court may reduce and apportion the
Plan's portion of the judgement proportionate to the
recovery of the covered person. The burden of producing
evidence sufficient to support the exercise by the court
of its discretion to reduce the amount of a proven charge
sought to be enforced against the recovery shall rest
with the party seeking the reduction. The court may
consider the nature and extent of the injury, economic
and non-economic loss, settlement offers, comparative
negligence as it applies to the case at hand, hospital
costs, physician costs, and all other appropriate costs.
The Plan shall pay its pro rata share of the attorney
fees based on the Plan's recovery as it compares to the
total judgment. Any reimbursement rights of the Plan
shall take priority over all other liens and charges
existing under the laws of this State with the exception
of any attorney liens filed under the Attorneys Lien Act.
(7) The Plan may compromise or settle and release
any claim for benefits provided under this Act or waive
any claims for benefits, in whole or in part, for the
convenience of the Plan or if the Plan determines that
collection would result in undue hardship upon the
covered person.
(Source: P.A. 89-486, eff. 6-21-96.)
(215 ILCS 105/10) (from Ch. 73, par. 1310)
Sec. 10. Collective action. Participation in the
operation of the Plan, the establishment of rates, forms or
procedures, or any other joint or collective action required
by this Act shall not be the basis of any legal action,
criminal or civil liability or penalty against the Plan, the
plan administrator, the board or any of its members,
employees, contractors, or consultants.
(Source: P.A. 85-702; 86-1322.)
(215 ILCS 105/12) (from Ch. 73, par. 1312)
Sec. 12. Deficit or surplus.
a. If premiums or other receipts by the Director, Board,
or administering carrier exceed the amount required for the
operation of the Plan, including actual losses and
administrative expenses of the Plan, the Board shall direct
that the excess be held at interest, in a bank designated by
the Board, or used to offset future losses or to reduce Plan
premiums. In this subsection, the term "future losses"
includes reserves for incurred but not reported claims.
b. Any deficit incurred or expected to be incurred on
behalf of eligible persons who qualify for plan coverage
under Section 7 of this Act the Plan shall be recouped by an
appropriation made by the General Assembly.
c. For the purposes of this Section, a deficit shall be
incurred when anticipated losses and incurred but not
reported claims expenses exceed anticipated income from
earned premiums net of administrative expenses.
d. Any deficit incurred or expected to be incurred on
behalf of federally eligible individuals who qualify for Plan
coverage under Section 15 of this Act shall be recouped by an
assessment of all insurers made in accordance with the
provisions of this Section. The Board shall within 90 days
of the effective date of this amendatory Act of 1997 and
within the first quarter of each fiscal year thereafter
assess all insurers for the anticipated deficit in accordance
with the provisions of this Section. The board may also make
additional assessments no more than 4 times a year to fund
unanticipated deficits, implementation expenses, and cash
flow needs.
e. An insurer's assessment shall be determined by
multiplying the total assessment, as determined in subsection
d. of this Section, by a fraction, the numerator of which
equals that insurer's direct Illinois premiums during the
preceding calendar year and the denominator of which equals
the total of all insurers' direct Illinois premiums. The
Board may exempt those insurers whose share as determined
under this subsection would be so minimal as to not exceed
the estimated cost of levying the assessment.
f. The Board shall charge and collect from each insurer
the amounts determined to be due under this Section. The
assessment shall be billed by Board invoice based upon the
insurer's direct Illinois premium income as shown in its
annual statement for the preceding calendar year as filed
with the Director. The invoice shall be due upon receipt and
must be paid no later than 30 days after receipt by the
insurer.
g. When an insurer fails to pay the full amount of any
assessment of $100 or more due under this Section there shall
be added to the amount due as a penalty the greater of $50 or
an amount equal to 5% of the deficiency for each month or
part of a month that the deficiency remains unpaid.
h. Amounts collected under this Section shall be paid to
the Board for deposit into the Plan Fund authorized by
Section 3 of this Act.
i. An insurer may petition the Director for an abatement
or deferment of all or part of an assessment imposed by the
Board. The Director may abate or defer, in whole or in part,
the assessment if, in the opinion of the Director, payment of
the assessment would endanger the ability of the insurer to
fulfill its contractual obligations. In the event an
assessment against an insurer is abated or deferred in whole
or in part, the amount by which the assessment is abated or
deferred shall be assessed against the other insurers in a
manner consistent with the basis for assessments set forth in
this subsection. The insurer receiving a deferment shall
remain liable to the plan for the deficiency for 4 years.
(Source: P.A. 85-702; 86-1322.)
(215 ILCS 105/14) (from Ch. 73, par. 1314)
Sec. 14. Confidentiality.
(a) All steps necessary under State and Federal law to
protect insured confidentiality of applicants and covered
persons shall be undertaken by the board to prevent the
identification of individual records of persons covered
insured under the Plan, rejected by the Plan, or who become
ineligible for further participation in the Plan. Procedures
shall Regulations are to be written by the board to assure
the confidentiality of records of persons covered insured
under, rejected by, or who become ineligible for further
participation in, the Plan when gathering and submitting data
to the board or any other entity.
(b) The information submitted to the board by hospitals
pursuant to this Act shall be privileged and confidential,
and shall not be disclosed in any manner. The foregoing
includes, but shall not be limited to, disclosure, inspection
or copying under The Freedom of Information Act, The State
Records Act, and paragraph (1) of Section 404 of the Illinois
Insurance Code. However, the prohibitions stated in this
subsection shall not apply to the compilations of information
assembled by the board pursuant to subsections c. and e. of
Section 3 of this Act.
(Source: P.A. 85-702; 86-1322.)
(215 ILCS 105/15 new)
Sec. 15. Alternative portable coverage for federally
eligible individuals.
(a) Notwithstanding the requirements of subsection a. of
Section 7, any federally eligible individual for whom a Plan
application, and such enclosures and supporting documentation
as the Board may require, is received by the Board within 63
days after the termination of prior creditable coverage shall
qualify to enroll in the Plan under the portability
provisions of this Section.
(b) Any federally eligible individual seeking Plan
coverage under this Section must submit with his or her
application evidence, including acceptable written
certification of previous creditable coverage, that will
establish to the Board's satisfaction, that he or she meets
all of the requirements to be a federally eligible individual
and is currently and permanently residing in this State (as
of the date his or her application was received by the
Board).
(c) A period of creditable coverage shall not be
counted, with respect to qualifying an applicant for Plan
coverage as a federally eligible individual under this
Section, if after such period and before the application for
Plan coverage was received by the Board, there was at least a
63 day period during all of which the individual was not
covered under any creditable coverage.
(d) Any federally eligible individual who the Board
determines qualifies for Plan coverage under this Section
shall be offered his or her choice of enrolling in one of
alternative portability health benefit plans which the Board
is authorized under this Section to establish for these
federally eligible individuals and their dependents.
(e) The Board shall offer a choice of health care
coverages consistent with major medical coverage under the
alternative health benefit plans authorized by this Section
to every federally eligible individual. The coverages to be
offered under the plans, the schedule of benefits,
deductibles, co-payments, exclusions, and other limitations
shall be approved by the Board. One optional form of
coverage shall be comparable to comprehensive health
insurance coverage offered in the individual market in this
State or a standard option of coverage available under the
group or individual health insurance laws of the State. The
standard benefit plan that is authorized by Section 8 of this
Act may be used for this purpose. The Board may also offer a
preferred provider option and such other options as the Board
determines may be appropriate for these federally eligible
individuals who qualify for Plan coverage pursuant to this
Section.
(f) Notwithstanding the requirements of subsection f. of
Section 8, any plan coverage that is issued to federally
eligible individuals who qualify for the Plan pursuant to the
portability provisions of this Section shall not be subject
to any preexisting conditions exclusion, waiting period, or
other similar limitation on coverage.
(g) Federally eligible individuals who qualify and
enroll in the Plan pursuant to this Section shall be required
to pay such premium rates as the Board shall establish and
approve in accordance with the requirements of Section 7.1 of
this Act.
(h) A federally eligible individual who qualifies and
enrolls in the Plan pursuant to this Section must satisfy on
an ongoing basis all of the other eligibility requirements of
this Act to the extent not inconsistent with the federal
Health Insurance Portability and Accountability Act of 1996
in order to maintain continued eligibility for coverage under
the Plan.
Section 94. The Health Maintenance Organization Act is
amended by adding Section 5-3.5 as follows:
(215 ILCS 125/5-3.5 new)
Sec. 5-3.5. Illinois Health Insurance Portability and
Accountability Act. The provisions of this Act are subject
to the Illinois Health Insurance Portability and
Accountability Act as provided in Section 15 of that Act.
Section 96. The Limited Health Service Organization Act
is amended by adding Section 4002.5 as follows:
(215 ILCS 130/4002.5 new)
Sec. 4002.5. Illinois Health Insurance Portability and
Accountability Act. The provisions of this Act are subject
to the Illinois Health Insurance Portability and
Accountability Act as provided in Section 15 of that Act.
Section 98. The Voluntary Health Services Plans Act is
amended by adding Section 15.25 as follows:
(215 ILCS 165/15.25 new)
Sec. 15.25. Illinois Health Insurance Portability and
Accountability Act. The provisions of this Act are subject to
the Illinois Health Insurance Portability and Accountability
Act as provided in Section 15 of that Act.
Section 99. Effective date. This Act takes effect on
July 1, 1997.