97TH GENERAL ASSEMBLY
State of Illinois
2011 and 2012
HB1530

 

Introduced 2/15/2011, by Rep. Lou Lang

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/356z.14
215 ILCS 5/356z.15
215 ILCS 5/370c  from Ch. 73, par. 982c
215 ILCS 5/370c.1 new
215 ILCS 125/5-3  from Ch. 111 1/2, par. 1411.2

    Amends the Illinois Insurance Code in the provisions concerning autism spectrum disorders, habilitative services for children, and mental and emotional disorders to provide that certain coverage provided under those respective provisions through a group or individual policy of accident and health insurance or managed care plan shall be subject to the parity requirements of the provision concerning mental health parity. Sets forth a provision concerning mental health parity. Provides that every insurer that amends, delivers, issues, or renews a group policy of accident and health insurance in the State providing coverage for hospital or medical treatment and for the treatment of mental, emotional, nervous, or substance use disorders or conditions shall ensure adherence to the provisions concerning financial requirements and treatment limitations. Sets forth provisions concerning aggregate lifetime and annual limits. Amends the Health Maintenance Organization Act to comport with the provision of the Illinois Insurance Code concerning mental health parity. Makes other changes. Effective immediately.


LRB097 09356 RPM 49491 b

 

 

A BILL FOR

 

HB1530LRB097 09356 RPM 49491 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Illinois Insurance Code is amended by
5changing Sections 356z.14, 356z.15, and 370c and by adding
6Section 370c.1 as follows:
 
7    (215 ILCS 5/356z.14)
8    Sec. 356z.14. Autism spectrum disorders.
9    (a) A group or individual policy of accident and health
10insurance or managed care plan amended, delivered, issued, or
11renewed after the effective date of this amendatory Act of the
1295th General Assembly must provide individuals under 21 years
13of age coverage for the diagnosis of autism spectrum disorders
14and for the treatment of autism spectrum disorders to the
15extent that the diagnosis and treatment of autism spectrum
16disorders are not already covered by the policy of accident and
17health insurance or managed care plan.
18    (b) Coverage provided under this Section through a group or
19individual policy of accident and health insurance or managed
20care plan shall be subject to the parity requirements of
21Section 370c.1 of this Code; provided, however, that a group or
22individual policy of accident and health insurance or managed
23care plan amended, delivered, issued, or renewed on or after

 

 

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1the effective date of this amendatory Act of the 97th General
2Assembly must provide a minimum maximum benefit of $36,000 per
3year, and but shall not be subject to any limits on the number
4of visits to a service provider. After December 30, 2009, the
5Director of the Division of Insurance shall, on an annual
6basis, adjust the minimum maximum benefit for inflation using
7the Medical Care Component of the United States Department of
8Labor Consumer Price Index for All Urban Consumers. Payments
9made by an insurer on behalf of a covered individual for any
10care, treatment, intervention, service, or item, the provision
11of which was for the treatment of a health condition not
12diagnosed as an autism spectrum disorder, shall not be applied
13toward any minimum maximum benefit established under this
14subsection.
15    (c) (Blank). Coverage under this Section shall be subject
16to copayment, deductible, and coinsurance provisions of a
17policy of accident and health insurance or managed care plan to
18the extent that other medical services covered by the policy of
19accident and health insurance or managed care plan are subject
20to these provisions.
21    (d) This Section shall not be construed as limiting
22benefits that are otherwise available to an individual under a
23policy of accident and health insurance or managed care plan
24and benefits provided under this Section may not be subject to
25dollar limits, deductibles, copayments, or coinsurance
26provisions that are less favorable to the insured than the

 

 

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1dollar limits, deductibles, or coinsurance provisions that
2apply to physical illness generally.
3    (e) An insurer may not deny or refuse to provide otherwise
4covered services, or refuse to renew, refuse to reissue, or
5otherwise terminate or restrict coverage under an individual
6contract to provide services to an individual because the
7individual or their dependent is diagnosed with an autism
8spectrum disorder or due to the individual utilizing benefits
9in this Section.
10    (f) Upon request of the reimbursing insurer, a provider of
11treatment for autism spectrum disorders shall furnish medical
12records, clinical notes, or other necessary data that
13substantiate that initial or continued medical treatment is
14medically necessary and is resulting in improved clinical
15status. When treatment is anticipated to require continued
16services to achieve demonstrable progress, the insurer may
17request a treatment plan consisting of diagnosis, proposed
18treatment by type, frequency, anticipated duration of
19treatment, the anticipated outcomes stated as goals, and the
20frequency by which the treatment plan will be updated.
21    (g) When making a determination of medical necessity for a
22treatment modality for autism spectrum disorders, an insurer
23must make the determination in a manner that is consistent with
24the manner used to make that determination with respect to
25other diseases or illnesses covered under the policy, including
26an appeals process. During the appeals process, any challenge

 

 

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1to medical necessity must be viewed as reasonable only if the
2review includes a physician with expertise in the most current
3and effective treatment modalities for autism spectrum
4disorders.
5    (h) Coverage for medically necessary early intervention
6services must be delivered by certified early intervention
7specialists, as defined in 89 Ill. Admin. Code 500 and any
8subsequent amendments thereto.
9    (i) As used in this Section:
10    "Autism spectrum disorders" means pervasive developmental
11disorders as defined in the most recent edition of the
12Diagnostic and Statistical Manual of Mental Disorders,
13including autism, Asperger's disorder, and pervasive
14developmental disorder not otherwise specified.
15    "Diagnosis of autism spectrum disorders" means one or more
16tests, evaluations, or assessments to diagnose whether an
17individual has autism spectrum disorder that is prescribed,
18performed, or ordered by (A) a physician licensed to practice
19medicine in all its branches or (B) a licensed clinical
20psychologist with expertise in diagnosing autism spectrum
21disorders.
22    "Medically necessary" means any care, treatment,
23intervention, service or item which will or is reasonably
24expected to do any of the following: (i) prevent the onset of
25an illness, condition, injury, disease or disability; (ii)
26reduce or ameliorate the physical, mental or developmental

 

 

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1effects of an illness, condition, injury, disease or
2disability; or (iii) assist to achieve or maintain maximum
3functional activity in performing daily activities.
4    "Treatment for autism spectrum disorders" shall include
5the following care prescribed, provided, or ordered for an
6individual diagnosed with an autism spectrum disorder by (A) a
7physician licensed to practice medicine in all its branches or
8(B) a certified, registered, or licensed health care
9professional with expertise in treating effects of autism
10spectrum disorders when the care is determined to be medically
11necessary and ordered by a physician licensed to practice
12medicine in all its branches:
13        (1) Psychiatric care, meaning direct, consultative, or
14    diagnostic services provided by a licensed psychiatrist.
15        (2) Psychological care, meaning direct or consultative
16    services provided by a licensed psychologist.
17        (3) Habilitative or rehabilitative care, meaning
18    professional, counseling, and guidance services and
19    treatment programs, including applied behavior analysis,
20    that are intended to develop, maintain, and restore the
21    functioning of an individual. As used in this subsection
22    (i), "applied behavior analysis" means the design,
23    implementation, and evaluation of environmental
24    modifications using behavioral stimuli and consequences to
25    produce socially significant improvement in human
26    behavior, including the use of direct observation,

 

 

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1    measurement, and functional analysis of the relations
2    between environment and behavior.
3        (4) Therapeutic care, including behavioral, speech,
4    occupational, and physical therapies that provide
5    treatment in the following areas: (i) self care and
6    feeding, (ii) pragmatic, receptive, and expressive
7    language, (iii) cognitive functioning, (iv) applied
8    behavior analysis, intervention, and modification, (v)
9    motor planning, and (vi) sensory processing.
10    (j) Rulemaking authority to implement this amendatory Act
11of the 95th General Assembly, if any, is conditioned on the
12rules being adopted in accordance with all provisions of the
13Illinois Administrative Procedure Act and all rules and
14procedures of the Joint Committee on Administrative Rules; any
15purported rule not so adopted, for whatever reason, is
16unauthorized.
17(Source: P.A. 95-1005, eff. 12-12-08; 96-1000, eff. 7-2-10.)
 
18    (215 ILCS 5/356z.15)
19    Sec. 356z.15. Habilitative services for children.
20    (a) As used in this Section, "habilitative services" means
21occupational therapy, physical therapy, speech therapy, and
22other services prescribed by the insured's treating physician
23pursuant to a treatment plan to enhance the ability of a child
24to function with a congenital, genetic, or early acquired
25disorder. A congenital or genetic disorder includes, but is not

 

 

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1limited to, hereditary disorders. An early acquired disorder
2refers to a disorder resulting from illness, trauma, injury, or
3some other event or condition suffered by a child prior to that
4child developing functional life skills such as, but not
5limited to, walking, talking, or self-help skills. Congenital,
6genetic, and early acquired disorders may include, but are not
7limited to, autism or an autism spectrum disorder, cerebral
8palsy, and other disorders resulting from early childhood
9illness, trauma, or injury.
10    (b) A group or individual policy of accident and health
11insurance or managed care plan amended, delivered, issued, or
12renewed after the effective date of this amendatory Act of the
1395th General Assembly must provide coverage for habilitative
14services for children under 19 years of age with a congenital,
15genetic, or early acquired disorder so long as all of the
16following conditions are met:
17        (1) A physician licensed to practice medicine in all
18    its branches has diagnosed the child's congenital,
19    genetic, or early acquired disorder.
20        (2) The treatment is administered by a licensed
21    speech-language pathologist, licensed audiologist,
22    licensed occupational therapist, licensed physical
23    therapist, licensed physician, licensed nurse, licensed
24    optometrist, licensed nutritionist, licensed social
25    worker, or licensed psychologist upon the referral of a
26    physician licensed to practice medicine in all its

 

 

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1    branches.
2        (3) The initial or continued treatment must be
3    medically necessary and therapeutic and not experimental
4    or investigational.
5    (c) The coverage required by this Section shall be subject
6to other general exclusions and limitations of the policy,
7including coordination of benefits, participating provider
8requirements, restrictions on services provided by family or
9household members, utilization review of health care services,
10including review of medical necessity, case management,
11experimental, and investigational treatments, and other
12managed care provisions.
13    (d) Coverage under this Section does not apply to those
14services that are solely educational in nature or otherwise
15paid under State or federal law for purely educational
16services. Nothing in this subsection (d) relieves an insurer or
17similar third party from an otherwise valid obligation to
18provide or to pay for services provided to a child with a
19disability.
20    (e) Coverage under this Section for children under age 19
21shall not apply to treatment of mental or emotional disorders
22or illnesses as covered under Section 370 of this Code as well
23as any other benefit based upon a specific diagnosis that may
24be otherwise required by law.
25    (f) The provisions of this Section do not apply to
26short-term travel, accident-only, limited, or specific disease

 

 

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1policies.
2    (g) Any denial of care for habilitative services shall be
3subject to appeal and external independent review procedures as
4provided by Section 45 of the Managed Care Reform and Patient
5Rights Act.
6    (h) Upon request of the reimbursing insurer, the provider
7under whose supervision the habilitative services are being
8provided shall furnish medical records, clinical notes, or
9other necessary data to allow the insurer to substantiate that
10initial or continued medical treatment is medically necessary
11and that the patient's condition is clinically improving. When
12the treating provider anticipates that continued treatment is
13or will be required to permit the patient to achieve
14demonstrable progress, the insurer may request that the
15provider furnish a treatment plan consisting of diagnosis,
16proposed treatment by type, frequency, anticipated duration of
17treatment, the anticipated goals of treatment, and how
18frequently the treatment plan will be updated.
19    (i) Rulemaking authority to implement this amendatory Act
20of the 95th General Assembly, if any, is conditioned on the
21rules being adopted in accordance with all provisions of the
22Illinois Administrative Procedure Act and all rules and
23procedures of the Joint Committee on Administrative Rules; any
24purported rule not so adopted, for whatever reason, is
25unauthorized.
26    (j) Coverage provided under this Section through a group or

 

 

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1individual policy of accident and health insurance or managed
2care plan for the treatment of mental, emotional, nervous, or
3substance use disorders or conditions shall be subject to the
4parity requirements of Section 370c.1 of this Code.
5(Source: P.A. 95-1049, eff. 1-1-10; 96-833, eff. 6-1-10;
696-1000, eff. 7-2-10.)
 
7    (215 ILCS 5/370c)  (from Ch. 73, par. 982c)
8    Sec. 370c. Mental and emotional disorders.
9    (a) (1) On and after the effective date of this amendatory
10Act of the 97th General Assembly Section, every insurer which
11amends, delivers, issues, or renews delivers, issues for
12delivery or renews or modifies group accident and health A&H
13policies providing coverage for hospital or medical treatment
14or services for illness on an expense-incurred basis shall
15offer to the applicant or group policyholder subject to the
16insurer's insurers standards of insurability, coverage for
17reasonable and necessary treatment and services for mental,
18emotional or nervous disorders or conditions, other than
19serious mental illnesses as defined in item (2) of subsection
20(b), consistent with the parity requirements of Section 370c.1
21of this Code up to the limits provided in the policy for other
22disorders or conditions, except (i) the insured may be required
23to pay up to 50% of expenses incurred as a result of the
24treatment or services, and (ii) the annual benefit limit may be
25limited to the lesser of $10,000 or 25% of the lifetime policy

 

 

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1limit.
2    (2) Each insured that is covered for mental, emotional, or
3nervous, or substance use disorders or conditions shall be free
4to select the physician licensed to practice medicine in all
5its branches, licensed clinical psychologist, licensed
6clinical social worker, licensed clinical professional
7counselor, or licensed marriage and family therapist, licensed
8speech therapist, or other individual licensed pursuant to the
9Illinois Alcoholism and Other Drug Dependency Act of his choice
10to treat such disorders, and the insurer shall pay the covered
11charges of such physician licensed to practice medicine in all
12its branches, licensed clinical psychologist, licensed
13clinical social worker, licensed clinical professional
14counselor, or licensed marriage and family therapist, licensed
15speech therapist, or other individual licensed pursuant to the
16Illinois Alcoholism and Other Drug Dependency Act up to the
17limits of coverage, provided (i) the disorder or condition
18treated is covered by the policy, and (ii) the physician,
19licensed psychologist, licensed clinical social worker,
20licensed clinical professional counselor, or licensed marriage
21and family therapist, licensed speech therapist, or other
22individual licensed pursuant to the Illinois Alcoholism and
23Other Drug Dependency Act is authorized to provide said
24services under the statutes of this State and in accordance
25with accepted principles of his profession.
26    (3) Insofar as this Section applies solely to licensed

 

 

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1clinical social workers, licensed clinical professional
2counselors, and licensed marriage and family therapists, those
3persons who may provide services to individuals shall do so
4after the licensed clinical social worker, licensed clinical
5professional counselor, or licensed marriage and family
6therapist has informed the patient of the desirability of the
7patient conferring with the patient's primary care physician
8and the licensed clinical social worker, licensed clinical
9professional counselor, or licensed marriage and family
10therapist has provided written notification to the patient's
11primary care physician, if any, that services are being
12provided to the patient. That notification may, however, be
13waived by the patient on a written form. Those forms shall be
14retained by the licensed clinical social worker, licensed
15clinical professional counselor, or licensed marriage and
16family therapist for a period of not less than 5 years.
17    (b) (1) An insurer that provides coverage for hospital or
18medical expenses under a group policy of accident and health
19insurance or health care plan amended, delivered, issued, or
20renewed after the effective date of this amendatory Act of the
2197th 92nd General Assembly shall provide coverage under the
22policy for treatment of serious mental illness consistent with
23the parity requirements of Section 370c.1 of this Code under
24the same terms and conditions as coverage for hospital or
25medical expenses related to other illnesses and diseases. The
26coverage required under this Section must provide for same

 

 

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1durational limits, amount limits, deductibles, and
2co-insurance requirements for serious mental illness as are
3provided for other illnesses and diseases. This subsection does
4not apply to any group policy of accident and health insurance
5or health care plan for any plan year of a small employer as
6defined in Section 5 of the Illinois Health Insurance
7Portability and Accountability Act coverage provided to
8employees by employers who have 50 or fewer employees.
9    (2) "Serious mental illness" means the following
10psychiatric illnesses as defined in the most current edition of
11the Diagnostic and Statistical Manual (DSM) published by the
12American Psychiatric Association:
13        (A) schizophrenia;
14        (B) paranoid and other psychotic disorders;
15        (C) bipolar disorders (hypomanic, manic, depressive,
16    and mixed);
17        (D) major depressive disorders (single episode or
18    recurrent);
19        (E) schizoaffective disorders (bipolar or depressive);
20        (F) pervasive developmental disorders;
21        (G) obsessive-compulsive disorders;
22        (H) depression in childhood and adolescence;
23        (I) panic disorder;
24        (J) post-traumatic stress disorders (acute, chronic,
25    or with delayed onset); and
26        (K) anorexia nervosa and bulimia nervosa; and .

 

 

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1        (L) substance use disorders, with the exception of
2    caffeine and nicotine-related substance use disorders.
3    (3) Consistent with the parity requirements of Section
4370c.1 of this Code, Upon request of the reimbursing insurer, a
5provider of treatment of serious mental illness shall furnish
6medical records or other necessary data that substantiate that
7initial or continued treatment is at all times medically
8necessary. An insurer shall provide a mechanism for the timely
9review by a provider holding the same license and practicing in
10the same specialty as the patient's provider, who is
11unaffiliated with the insurer, jointly selected by the patient
12(or the patient's next of kin or legal representative if the
13patient is unable to act for himself or herself), the patient's
14provider, and the insurer in the event of a dispute between the
15insurer and patient's provider regarding the medical necessity
16of a treatment proposed by a patient's provider. If the
17reviewing provider determines the treatment to be medically
18necessary, the insurer shall provide reimbursement for the
19treatment. Future contractual or employment actions by the
20insurer regarding the patient's provider may not be based on
21the provider's participation in this procedure. Nothing
22prevents the insured from agreeing in writing to continue
23treatment at his or her expense. When making a determination of
24the medical necessity for a treatment modality for serous
25mental illness, an insurer must make the determination in a
26manner that is consistent with the manner used to make that

 

 

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1determination with respect to other diseases or illnesses
2covered under the policy, including an appeals process.
3    (4) A group health benefit plan amended, delivered, issued,
4or renewed on or after the effective date of this amendatory
5Act of the 97th General Assembly:
6        (A) shall provide coverage based upon medical
7    necessity for the following treatment of mental illness
8    consistent with the parity requirements of Section 370c.1
9    of this Code; provided, however, that in each calendar year
10    coverage shall not be less than the following:
11            (i) 45 days of inpatient treatment; and
12            (ii) beginning on June 26, 2006 (the effective date
13        of Public Act 94-921), 60 visits for outpatient
14        treatment including group and individual outpatient
15        treatment; and
16            (iii) for plans or policies delivered, issued for
17        delivery, renewed, or modified after January 1, 2007
18        (the effective date of Public Act 94-906), 20
19        additional outpatient visits for speech therapy for
20        treatment of pervasive developmental disorders that
21        will be in addition to speech therapy provided pursuant
22        to item (ii) of this subparagraph (A); and
23        (B) may not include a lifetime limit on the number of
24    days of inpatient treatment or the number of outpatient
25    visits covered under the plan. ; and
26        (C) (Blank). shall include the same amount limits,

 

 

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1    deductibles, copayments, and coinsurance factors for
2    serious mental illness as for physical illness.
3    (5) An issuer of a group health benefit plan may not count
4toward the number of outpatient visits required to be covered
5under this Section an outpatient visit for the purpose of
6medication management and shall cover the outpatient visits
7under the same terms and conditions as it covers outpatient
8visits for the treatment of physical illness.
9    (6) An issuer of a group health benefit plan may provide or
10offer coverage required under this Section through a managed
11care plan.
12    (7) (Blank). This Section shall not be interpreted to
13require a group health benefit plan to provide coverage for
14treatment of:
15        (A) an addiction to a controlled substance or cannabis
16    that is used in violation of law; or
17        (B) mental illness resulting from the use of a
18    controlled substance or cannabis in violation of law.
19    (8) (Blank).
20    (9) With respect to substance use disorders, coverage for
21inpatient treatment shall include coverage for treatment in a
22residential treatment center licensed by the Department of
23Human Services, Division of Alcoholism and Substance Abuse.
24    (c) This Section shall not be interpreted to require
25coverage for speech therapy or other habilitative services for
26those individuals covered under Section 356z.15 of this Code.

 

 

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1(Source: P.A. 95-331, eff. 8-21-07; 95-972, eff. 9-22-08;
295-973, eff. 1-1-09; 95-1049, eff. 1-1-10; 96-328, eff.
38-11-09; 96-1000, eff. 7-2-10.)
 
4    (215 ILCS 5/370c.1 new)
5    Sec. 370c.1. Mental health parity.
6    (a) On and after the effective date of this amendatory Act
7of the 97th General Assembly, every insurer that amends,
8delivers, issues, or renews a group policy of accident and
9health insurance in this State providing coverage for hospital
10or medical treatment and for the treatment of mental,
11emotional, nervous, or substance use disorders or conditions
12shall ensure that:
13        (1) the financial requirements applicable to such
14    mental, emotional, nervous, or substance use disorder or
15    condition benefits are no more restrictive than the
16    predominant financial requirements applied to
17    substantially all hospital and medical benefits covered by
18    the policy and that there are no separate cost-sharing
19    requirements that are applicable only with respect to
20    mental, emotional, nervous, or substance use disorder or
21    condition benefits; and
22        (2) the treatment limitations applicable to such
23    mental, emotional, nervous, or substance use disorder or
24    condition benefits are no more restrictive than the
25    predominant treatment limitations applied to substantially

 

 

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1    all hospital and medical benefits covered by the policy and
2    that there are no separate treatment limitations that are
3    applicable only with respect to mental, emotional,
4    nervous, or substance use disorder or condition benefits.
5    (b) The following provisions shall apply concerning
6aggregate lifetime limits:
7        (1) In the case of a group policy of accident and
8    health insurance amended, delivered, issued, or renewed in
9    this State on or after the effective date of this
10    amendatory Act of the 97th General Assembly that provides
11    coverage for hospital or medical treatment and for the
12    treatment of mental, emotional, nervous, or substance use
13    disorders or conditions the following provisions shall
14    apply:
15            (A) if the policy does not include an aggregate
16        lifetime limit on substantially all hospital and
17        medical benefits, then the policy may not impose any
18        aggregate lifetime limit on mental, emotional,
19        nervous, or substance use disorder or condition
20        benefits; or
21            (B) if the policy includes an aggregate lifetime
22        limit on substantially all hospital and medical
23        benefits (in this subsection referred to as the
24        "applicable lifetime limit"), then the policy shall
25        either:
26                (i) apply the applicable lifetime limit both

 

 

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1            to the hospital and medical benefits to which it
2            otherwise would apply and to mental, emotional,
3            nervous, or substance use disorder or condition
4            benefits and not distinguish in the application of
5            the limit between the hospital and medical
6            benefits and mental, emotional, nervous, or
7            substance use disorder or condition benefits; or
8                (ii) not include any aggregate lifetime limit
9            on mental, emotional, nervous, or substance use
10            disorder or condition benefits that is less than
11            the applicable lifetime limit.
12        (2) In the case of a policy that is not described in
13    paragraph (1) of subsection (b) of this Section and that
14    includes no or different aggregate lifetime limits on
15    different categories of hospital and medical benefits, the
16    Director shall establish rules under which subparagraph
17    (B) of paragraph (1) of subsection (b) of this Section is
18    applied to such policy with respect to mental, emotional,
19    nervous, or substance use disorder or condition benefits by
20    substituting for the applicable lifetime limit an average
21    aggregate lifetime limit that is computed taking into
22    account the weighted average of the aggregate lifetime
23    limits applicable to such categories.
24    (c) The following provisions shall apply concerning annual
25limits:
26        (1) In the case of a group policy of accident and

 

 

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1    health insurance amended, delivered, issued, or renewed in
2    this State on or after the effective date of this
3    amendatory Act of the 97th General Assembly that provides
4    coverage for hospital or medical treatment and for the
5    treatment of mental, emotional, nervous, or substance use
6    disorders or conditions the following provisions shall
7    apply:
8            (A) if the policy does not include an annual limit
9        on substantially all hospital and medical benefits,
10        then the policy may not impose any annual limits on
11        mental, emotional, nervous, or substance use disorder
12        or condition benefits; or
13            (B) if the policy includes an annual limit on
14        substantially all hospital and medical benefits (in
15        this subsection referred to as the "applicable annual
16        limit"), then the policy shall either:
17                (i) apply the applicable annual limit both to
18            the hospital and medical benefits to which it
19            otherwise would apply and to mental, emotional,
20            nervous, or substance use disorder or condition
21            benefits and not distinguish in the application of
22            the limit between the hospital and medical
23            benefits and mental, emotional, nervous, or
24            substance use disorder or condition benefits; or
25                (ii) not include any annual limit on mental,
26            emotional, nervous, or substance use disorder or

 

 

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1            condition benefits that is less than the
2            applicable annual limit.
3        (2) In the case of a policy that is not described in
4    paragraph (1) of subsection (c) of this Section and that
5    includes no or different annual limits on different
6    categories of hospital and medical benefits, the Director
7    shall establish rules under which subparagraph (B) of
8    paragraph (1) of subsection (c) of this Section is applied
9    to such policy with respect to mental, emotional, nervous,
10    or substance use disorder or condition benefits by
11    substituting for the applicable annual limit an average
12    annual limit that is computed taking into account the
13    weighted average of the annual limits applicable to such
14    categories.
15    (d) As used in this Section:
16    "Financial requirement" includes deductibles, copayments,
17coinsurance, and out-of-pocket maximums, but does not include
18an aggregate lifetime limit or an annual limit subject to
19subsections (b) and (c).
20    "Treatment limitation" includes limits on benefits based
21on the frequency of treatment, number of visits, days of
22coverage, days in a waiting period, or other similar limits on
23the scope or duration of treatment. "Treatment limitation"
24includes both quantitative treatment limitations, which are
25expressed numerically (such as 50 outpatient visits per year),
26and nonquantitative treatment limitations, which otherwise

 

 

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1limit the scope or duration of treatment. A permanent exclusion
2of all benefits for a particular condition or disorder shall
3not be considered a treatment limitation.
 
4    Section 10. The Health Maintenance Organization Act is
5amended by changing Section 5-3 as follows:
 
6    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
7    Sec. 5-3. Insurance Code provisions.
8    (a) Health Maintenance Organizations shall be subject to
9the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
10141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
11154.6, 154.7, 154.8, 155.04, 355.2, 356g.5-1, 356m, 356v, 356w,
12356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,
13356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
14356z.18, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d,
15368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A, 408, 408.2,
16409, 412, 444, and 444.1, paragraph (c) of subsection (2) of
17Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
18XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
19    (b) For purposes of the Illinois Insurance Code, except for
20Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
21Maintenance Organizations in the following categories are
22deemed to be "domestic companies":
23        (1) a corporation authorized under the Dental Service
24    Plan Act or the Voluntary Health Services Plans Act;

 

 

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1        (2) a corporation organized under the laws of this
2    State; or
3        (3) a corporation organized under the laws of another
4    state, 30% or more of the enrollees of which are residents
5    of this State, except a corporation subject to
6    substantially the same requirements in its state of
7    organization as is a "domestic company" under Article VIII
8    1/2 of the Illinois Insurance Code.
9    (c) In considering the merger, consolidation, or other
10acquisition of control of a Health Maintenance Organization
11pursuant to Article VIII 1/2 of the Illinois Insurance Code,
12        (1) the Director shall give primary consideration to
13    the continuation of benefits to enrollees and the financial
14    conditions of the acquired Health Maintenance Organization
15    after the merger, consolidation, or other acquisition of
16    control takes effect;
17        (2)(i) the criteria specified in subsection (1)(b) of
18    Section 131.8 of the Illinois Insurance Code shall not
19    apply and (ii) the Director, in making his determination
20    with respect to the merger, consolidation, or other
21    acquisition of control, need not take into account the
22    effect on competition of the merger, consolidation, or
23    other acquisition of control;
24        (3) the Director shall have the power to require the
25    following information:
26            (A) certification by an independent actuary of the

 

 

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1        adequacy of the reserves of the Health Maintenance
2        Organization sought to be acquired;
3            (B) pro forma financial statements reflecting the
4        combined balance sheets of the acquiring company and
5        the Health Maintenance Organization sought to be
6        acquired as of the end of the preceding year and as of
7        a date 90 days prior to the acquisition, as well as pro
8        forma financial statements reflecting projected
9        combined operation for a period of 2 years;
10            (C) a pro forma business plan detailing an
11        acquiring party's plans with respect to the operation
12        of the Health Maintenance Organization sought to be
13        acquired for a period of not less than 3 years; and
14            (D) such other information as the Director shall
15        require.
16    (d) The provisions of Article VIII 1/2 of the Illinois
17Insurance Code and this Section 5-3 shall apply to the sale by
18any health maintenance organization of greater than 10% of its
19enrollee population (including without limitation the health
20maintenance organization's right, title, and interest in and to
21its health care certificates).
22    (e) In considering any management contract or service
23agreement subject to Section 141.1 of the Illinois Insurance
24Code, the Director (i) shall, in addition to the criteria
25specified in Section 141.2 of the Illinois Insurance Code, take
26into account the effect of the management contract or service

 

 

HB1530- 25 -LRB097 09356 RPM 49491 b

1agreement on the continuation of benefits to enrollees and the
2financial condition of the health maintenance organization to
3be managed or serviced, and (ii) need not take into account the
4effect of the management contract or service agreement on
5competition.
6    (f) Except for small employer groups as defined in the
7Small Employer Rating, Renewability and Portability Health
8Insurance Act and except for medicare supplement policies as
9defined in Section 363 of the Illinois Insurance Code, a Health
10Maintenance Organization may by contract agree with a group or
11other enrollment unit to effect refunds or charge additional
12premiums under the following terms and conditions:
13        (i) the amount of, and other terms and conditions with
14    respect to, the refund or additional premium are set forth
15    in the group or enrollment unit contract agreed in advance
16    of the period for which a refund is to be paid or
17    additional premium is to be charged (which period shall not
18    be less than one year); and
19        (ii) the amount of the refund or additional premium
20    shall not exceed 20% of the Health Maintenance
21    Organization's profitable or unprofitable experience with
22    respect to the group or other enrollment unit for the
23    period (and, for purposes of a refund or additional
24    premium, the profitable or unprofitable experience shall
25    be calculated taking into account a pro rata share of the
26    Health Maintenance Organization's administrative and

 

 

HB1530- 26 -LRB097 09356 RPM 49491 b

1    marketing expenses, but shall not include any refund to be
2    made or additional premium to be paid pursuant to this
3    subsection (f)). The Health Maintenance Organization and
4    the group or enrollment unit may agree that the profitable
5    or unprofitable experience may be calculated taking into
6    account the refund period and the immediately preceding 2
7    plan years.
8    The Health Maintenance Organization shall include a
9statement in the evidence of coverage issued to each enrollee
10describing the possibility of a refund or additional premium,
11and upon request of any group or enrollment unit, provide to
12the group or enrollment unit a description of the method used
13to calculate (1) the Health Maintenance Organization's
14profitable experience with respect to the group or enrollment
15unit and the resulting refund to the group or enrollment unit
16or (2) the Health Maintenance Organization's unprofitable
17experience with respect to the group or enrollment unit and the
18resulting additional premium to be paid by the group or
19enrollment unit.
20    In no event shall the Illinois Health Maintenance
21Organization Guaranty Association be liable to pay any
22contractual obligation of an insolvent organization to pay any
23refund authorized under this Section.
24    (g) Rulemaking authority to implement Public Act 95-1045,
25if any, is conditioned on the rules being adopted in accordance
26with all provisions of the Illinois Administrative Procedure

 

 

HB1530- 27 -LRB097 09356 RPM 49491 b

1Act and all rules and procedures of the Joint Committee on
2Administrative Rules; any purported rule not so adopted, for
3whatever reason, is unauthorized.
4(Source: P.A. 95-422, eff. 8-24-07; 95-520, eff. 8-28-07;
595-876, eff. 8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09;
695-1005, eff. 12-12-08; 95-1045, eff. 3-27-09; 95-1049, eff.
71-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
86-1-10; 96-1000, eff. 7-2-10.)
 
9    Section 99. Effective date. This Act takes effect upon
10becoming law.