The Illinois General Assembly offers the Google Translate™ service for visitor convenience. In no way should it be considered accurate as to the translation of any content herein.
Visitors of the Illinois General Assembly website are encouraged to use other translation services available on the internet.
The English language version is always the official and authoritative version of this website.
NOTE: To return to the original English language version, select the "Show Original" button on the Google Translate™ menu bar at the top of the window.
093_HB3661enr
HB3661 Enrolled LRB093 09245 JLS 09478 b
1 AN ACT in relation to insurance.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 3. The State Employees Group Insurance Act of
5 1971 is amended by changing Section 6.2 as follows:
6 (5 ILCS 375/6.2) (from Ch. 127, par. 526.2)
7 Sec. 6.2. When the Director, with the advice and consent
8 of the Commission, determines that it would be in the best
9 interests of the State and its employees, the program of
10 health benefits under this Act may be administered with the
11 State as a self-insurer in whole or in part. The State
12 assumes the risks of the program. The State may provide the
13 administrative services in connection with the self-insurance
14 health plan or purchase administrative services from an
15 administrative service organization. A plan of self-insurance
16 may combine forms of re-insurance or stop-loss insurance
17 which limits the amount of State liability.
18 The program of health benefits shall provide a
19 continuation and conversion privilege for persons whose State
20 employment is terminated and a continuation privilege for
21 members' spouses and dependent children who are covered under
22 the provisions of the program, consistent with the
23 requirements of federal law and Sections 367.2,and 367e, and
24 367e.1 of the Illinois Insurance Code.
25 (Source: P.A. 85-848.)
26 Section 5. The Illinois Insurance Code is amended by
27 changing Sections 143.17a, 245.25, 367.2, 367e, and 404.1, by
28 resectioning Section 367e as Sections 367e and 367e.1, and by
29 adding Section 367.2-5 as follows:
HB3661 Enrolled -2- LRB093 09245 JLS 09478 b
1 (215 ILCS 5/143.17a) (from Ch. 73, par. 755.17a)
2 Sec. 143.17a. Notice of intention not to renew.
3 a. No company shall fail to renew any policy of
4 insurance, to which Section 143.11 applies, except for those
5 defined in subsections (a), (b), (c), and (h) of Section
6 143.13, unless it shall send by mail to the named insured at
7 least 60 days advance notice of its intention not to renew.
8 The company shall maintain proof of mailing of such notice on
9 one of the following forms: a recognized U.S. Post Office
10 form or a form acceptable to the U.S. Post Office or other
11 commercial mail delivery service. An exact and unaltered
12 copy of such notice shall also be sent to the insured's
13 broker, if known, or the agent of record and to the mortgagee
14 or lien holder at the last mailing address known by the
15 company. However, where cancellation is for nonpayment of
16 premium, the notice of cancellation must be mailed at least
17 10 days before the effective date of the cancellation.
18 b. This Section does not apply if the company has
19 manifested its willingness to renew directly to the named
20 insured. Provided, however, that no company may increase the
21 renewal premium on any policy of insurance to which Section
22 143.11 applies, except for those defined in subsections (a),
23 (b), (c), and (h) of Section 143.13, by 30% or more, nor
24 impose changes in deductibles or coverage that materially
25 alter the policy, unless the company shall have mailed or
26 delivered to the named insured written notice of such
27 increase or change in deductible or coverage at least 60 days
28 prior to the renewal or anniversary date. The increase in
29 premium shall be the renewal premium based on the known
30 exposure as of the date of the quotation compared to the
31 premium as of the last day of coverage for the current year's
32 policy, annualized. The premium on the renewal policy may be
33 subsequently amended to reflect any change in exposure or
34 reinsurance costs not considered in the quotation. An exact
HB3661 Enrolled -3- LRB093 09245 JLS 09478 b
1 and unaltered copy of such notice shall also be sent to the
2 insured's broker, if known, or the agent of record. If an
3 insurer fails to provide the notice required by this
4 subsection, then the company must extend the current policy
5 under the same terms, conditions, and premium to allow 60
6 days notice of renewal and provide the actual renewal premium
7 quotation and any change in coverage or deductible on the
8 policy. Proof of mailing or proof of receipt may be proven
9 by a sworn affidavit by the insurer as to the usual and
10 customary business practices of mailing notice pursuant to
11 this Section or may be proven consistent with Illinois
12 Supreme Court Rule 236.The company shall maintain proof of
13 mailing or proof of receipt whichever is required.
14 c. Should a company fail to comply with the non-renewal
15 notice requirements of subsection a.,this Section,the
16 policy shall be extended for an additional yearthe policy
17 shall terminate only as provided in this subsection. In the
18 event notice is provided at least 31 days, but less than 60
19 days prior to expiration of the policy, the policy shall be
20 extended for a period of 60 days or until the effective date
21 of any similar insurance procured by the insured, whichever
22 is less, on the same terms and conditions as the policy
23 sought to be terminated. In the event notice is provided
24 less than 31 days prior to the expiration of the policy, the
25 policy shall be extended for a period of one year or until
26 the effective date of any similar insurance procured by the
27 insured, whichever is less, on the same terms and conditions
28 as the policy sought to be terminated, unless the insurer has
29 manifested its intention to renew at a different premium that
30 represents an increase not exceeding 30%unless the insurer
31 has manifested its willingness to renew at a premium which
32 represents an increase not exceeding 30%. The premium for
33 coverage shall be prorated in accordance with the amount of
34 the last year's premium, and the company shall be entitled to
HB3661 Enrolled -4- LRB093 09245 JLS 09478 b
1 this premium for the extension of coverage and such extension
2 may be contingent upon the payment of such premium.
3 d. Renewal of a policy does not constitute a waiver or
4 estoppel with respect to grounds for cancellation which
5 existed before the effective date of such renewal.
6 e. In all notices of intention not to renew any policy
7 of insurance, as defined in Section 143.11 the company shall
8 provide a specific explanation of the reasons for nonrenewal.
9 (Source: P.A. 89-669, eff. 1-1-97.)
10 (215 ILCS 5/245.25) (from Ch. 73, par. 857.25)
11 Sec. 245.25. Except for subparagraphs (1) (a), (1) (f),
12 (1) (g) and (3) of Section 226 of the Illinois Insurance
13 Code, in the case of a variable annuity contract and
14 subparagraphs (1) (b), (1) (f), (1) (g), (1) (h), (1) (i),
15 and (1) (k) of Section 224, subparagraph (1) (c) of Section
16 225, and subparagraph (h) of Section 231 in the case of a
17 variable life insurance policy, except for Sections 357.4,
18 357.5, and 367e, and 367e.1 in the case of a variable health
19 insurance policy, and except as otherwise provided in this
20 Article, all pertinent provisions of the Illinois Insurance
21 Code which are appropriate to those contracts apply to
22 separate accounts and contracts relating thereto. Any
23 individual variable life insurance contract, delivered or
24 issued for delivery in this State, must contain grace,
25 reinstatement and non-forfeiture provisions appropriate to
26 such a contract. Any individual variable annuity contract,
27 delivered or issued for delivery in this State, must contain
28 grace and reinstatement provisions appropriate to such a
29 contract. Any group variable life insurance contract,
30 delivered or issued for delivery in this State, must contain
31 a grace provision appropriate to such a contract. A group
32 variable health insurance contract delivered or issued for
33 delivery in this State must contain a continuation of group
HB3661 Enrolled -5- LRB093 09245 JLS 09478 b
1 coverage provision appropriate to the contract. The reserve
2 liability for variable contracts must be established in
3 accordance with actuarial procedures that recognize the
4 variable nature of the benefits provided and any mortality
5 guarantees.
6 (Source: P.A. 90-381, eff. 8-14-97.)
7 (215 ILCS 5/367.2) (from Ch. 73, par. 979.2)
8 Sec. 367.2. Spousal continuation privilege; group
9 contracts.
10 A. No policy of group accident or health insurance, nor
11 any certificate thereunder shall be delivered or issued for
12 delivery in this State after December 1, 1985, unless the
13 policy provides for a continuation of the existing insurance
14 benefits for an employee's spouse and dependent children who
15 are insured under the provisions of that group policy or
16 certificate thereunder, notwithstanding that the marriage is
17 dissolved by judgment or terminated by the death of the
18 employee spouse or, after the effective date of this
19 amendatory Act of the 93rd General Assembly1991,
20 notwithstanding the retirement of the employee spouse
21 provided that the employee's spouse is at least 55 years of
22 age, in each case without any other eligibility requirements.
23 The provisions of this amendatory Act of the 93rd General
24 Assembly1991 apply to every group policy of accident or
25 health insurance and every certificate issued thereunder
26 delivered or issued for delivery after the effective date of
27 this amendatory Act of the 93rd General Assembly1991.
28 B. Within 30 days of the entry of judgment or the death
29 or retirement of the employee spouse, the spouse of an
30 employee insured under the policy who seeks a continuation of
31 coverage thereunder shall give the employer orand the
32 insurer written notice of the dissolution of the marriage or
33 the death or retirement of the employee spouse. The
HB3661 Enrolled -6- LRB093 09245 JLS 09478 b
1 employer, within 15 days of receipt of the notice shall give
2 written notice of the dissolution of the employee's marriage
3 or the death or retirement of the employee and that former
4 spouse's or retired employee's spouse's residence, to the
5 insurance company issuing the policy., of the dissolution of
6 the employee's marriage or the death or retirement of the
7 employee spouse and the former or retired employee's spouse's
8 residence.
9 The employer shall immediately send a copy of the notice
10 to the former spouse of the employee or the spouse of the
11 retired employee at the retired employee's spouse's residence
12 or at the former spouse's residence. For purposes of this
13 Act, the term "former spouse" includes "widow" or "widower".
14 C. Within 30 days after the date of receipt of a notice
15 from the employer, retired employee's spouse or former spouse
16 or of the initiation of a new group policy, the insurance
17 company, by certified mail, return receipt requested, shall
18 notify the retired employee's spouse or former spouse at his
19 or her residence that the policy may be continued foras to
20 that retired employee's spouse or former spouse and covered
21 dependents, and the notice shall include:
22 (i) a form for election to continue the insurance
23 coverage;
24 (ii) the amount of periodic premiums to be charged
25 for continuation coverage and the method and place of
26 payment; and
27 (iii) instructions for returning the election form
28 by certified mail, return receipt requested, within 30
29 days after the date it is received fromof the mailing
30 receipt of the instruction by the insurance company.
31 Failure of the retired employee's spouse or former spouse
32 to exercise the election to continue insurance coverage by
33 notifying the insurance company in writingby certified mail,
34 return receipt requested, within such 30 day period shall
HB3661 Enrolled -7- LRB093 09245 JLS 09478 b
1 terminate the continuation of benefits and the right to
2 continuation.
3 If the insurance company fails to notify the retired
4 employee's spouse or former spouse as provided for in
5 subsection C hereof, all premiums shall be waived from the
6 date the notice was required until notice is sent, and the
7 benefits shall continue under the terms and provisions of the
8 policy, from the date the notice was required until the
9 notice is sent, notwithstanding any other provision hereof,
10 except where the benefits in existence at the time the
11 company's notice was to be sent pursuant to subsection C are
12 terminated as to all employees.
13 D. With respect to a former spouse who has not attained
14 the age of 55 at the time continuation coverage begins
15 hereunder, the monthly premium for continuation shall be
16 computed as follows:
17 (i) an amount, if any, that would be charged an
18 employee if the former spouse were a current employee of
19 the employer, plus;
20 (ii) an amount, if any, that the employer would
21 contribute toward the premium if the former spouse were a
22 current employee.
23 Failure to pay the initial monthly premium within 30 days
24 after the date of receipt of notice required in subsection C
25 of this Section terminates the continuation benefits and the
26 right to continuation benefits.
27 The continuation coverage forright granted hereunder to
28 former spouses who have not attained the age of 55 at the
29 time coverage begins hereunder shall terminate upon the
30 earliest to happen of the following:
31 (i) The failure to pay premiums when due, including
32 any grace period allowed by the policy; or
33 (ii) When coverage would terminate under the terms
34 of the existing policy if the employee and former spouse
HB3661 Enrolled -8- LRB093 09245 JLS 09478 b
1 were still married to each other; however, the existing
2 coverage shall not be modified or terminated during the
3 first 120 consecutive days subsequent to the employee
4 spouse's death or to the entry of the judgment dissolving
5 the marriage existing between the employee and the former
6 spouse unless the master policy in existence at the time
7 is modified or terminated as to all employees; or
8 (iii) the date on which the former spouse first
9 becomes, after the date of election, an insured employee
10 under any other group health plan; or
11 (iv) the date on which the former spouse remarries;
12 or
13 (v) the expiration of 2 years from the date
14 continuation coverage began hereunder.
15 Upon the termination of continuation coverage hereunder,
16 the former spouse shall be entitled to convert the coverage
17 to an individual policy.
18 The continuation rights granted to former spouses who
19 have not attained age 55 shall also include eligible
20 dependents insured prior to the dissolution of marriage or
21 the death of the employee.
22 E. With respect to a retired employee's spouse or former
23 spouse who has attained the age of 55 at the time
24 continuation coverage begins hereunder, the monthly premium
25 for the continuation shall be computed as follows:
26 (i) an amount, if any, that would be charged an
27 employee if the retired employee's spouse or former
28 spouse were a current employee of the employer, plus;
29 (ii) an amount, if any, that the employer would
30 contribute toward the premium if the retired employee's
31 spouse or former spouse were a current employee.
32 Beginning 2 years after coverage begins under this
33 paragraph, the monthly premium shall be computed as follows:
34 (i) an amount, if any, that would be charged an
HB3661 Enrolled -9- LRB093 09245 JLS 09478 b
1 employee if the retired employee's spouse or former
2 spouse were a current employee of the employer, plus;
3 (ii) an amount, if any, that the employer would
4 contribute toward the premium if the retired employee's
5 spouse or former spouse were a current employee.
6 (iii) an additional amount, not to exceed 20% of
7 (i) and (ii) above, for costs of administration.
8 Failure to pay the initial monthly premium within 30 days
9 after the date of receipt of the notice required in
10 subsection C of this Section terminates the continuation
11 benefits and the right to continuation benefits.
12 The continuation coverage forright granted to retired
13 employees' spouses and former spouses who have attained the
14 age of 55 at the time coverage begins hereunder shall
15 terminate upon the earliest to happen of the following:
16 (i) The failure to pay premiums when due, including
17 any grace period allowed by the policy; or
18 (ii) When coverage would terminate, except due to
19 the retirement of an employee, under the terms of the
20 existing policy if the employee and former spouse were
21 still married to each other; however, the existing
22 coverage shall not be modified or terminated during the
23 first 120 consecutive days subsequent to the employee
24 spouse's death or retirement to the entry of the judgment
25 dissolving the marriage existing between the employee and
26 the former spouse unless the master policy in existence
27 at the time is modified or terminated as to all
28 employees; or
29 (iii) the date on which the retired employee's
30 spouse or former spouse first becomes, after the date of
31 election, an insured employee under any other group
32 health plan; or
33 (iv) the date on which the former spouse remarries;
34 or
HB3661 Enrolled -10- LRB093 09245 JLS 09478 b
1 (v) the date that person reaches the qualifying age
2 or otherwise establishes eligibility under the Medicare
3 Program pursuant to Title XVIII of the federal Social
4 Security Act.
5 Upon the termination of continuation coverage hereunder,
6 the former spouse shall be entitled to convert the coverage
7 to an individual policy.
8 The continuation rights granted to former spouses who
9 have attained age 55 shall also include eligible dependents
10 insured prior to the dissolution of marriage, the death of
11 the employee, or the retirement of the employee.
12 F. The renewal, amendment, or extension of any group
13 policy affected by this Section shall be deemed to be
14 delivery or issuance for delivery of a new policy or contract
15 of insurance in this State.
16 G. If (i) the policy is canceledcancelled, and (ii)
17 another insurance company contracts to provide group health
18 and accident insurance to the employer, and (iii)
19 continuation coverage is in effect for the retired employee's
20 spouse or former spouse at the time of cancellation and (iv)
21 the employee is or would have been included under the new
22 group policy, then the new insurer must also offer
23 continuation coverage to the retired employee's spouse and to
24 an employee's former spouse under the same terms and
25 conditions as contained in this Section.
26 H. This Section shall not limit the right of the retired
27 employee's spouse or any former spouse to exercise the
28 privilege to convert to an individual policy as contained in
29 this Code.
30 I. No person who obtains coverage under this Section
31 shall be required to pay a rate greater than that applicable
32 to any employee or member covered under that group except as
33 provided in clause (iii) of the second paragraph of
34 subsection E.
HB3661 Enrolled -11- LRB093 09245 JLS 09478 b
1 (Source: P.A. 87-615.)
2 (215 ILCS 5/367.2-5 new)
3 Sec. 367.2-5. Dependent child continuation privilege;
4 group contracts.
5 (a) No policy of group accident or health insurance, nor
6 any certificate thereunder shall be amended, renewed,
7 delivered, or issued for delivery in this State after July 1,
8 2004, unless the policy provides for a continuation of the
9 existing insurance benefits for an employee's dependent child
10 who is insured under the provisions of that group policy or
11 certificate in the event of the death of the employee and the
12 child is not eligible for coverage as a dependent under the
13 provisions of Section 367.2 or the dependent child has
14 attained the limiting age under the policy.
15 (b) In the event of the death of the employee, if
16 continuation coverage is desired, the dependent child or a
17 responsible adult acting on behalf of the dependent child
18 shall give the employer or the insurer written notice of the
19 death of employee within 30 days of the date the coverage
20 terminates. The employer, within 15 days of receipt of the
21 notice, shall give written notice to the insurance company
22 issuing the policy of the death of the employee and the
23 dependent child's residence. The employer shall immediately
24 send a copy of the notice to the dependent child or
25 responsible adult at the dependent child's residence.
26 (c) In the event of the dependent child attaining the
27 limiting age under the policy, if continuation coverage is
28 desired, the dependent child shall give the employer or the
29 insurer written notice of the attainment of the limiting age
30 within 30 days of the date the coverage terminates. The
31 employer, within 15 days of receipt of the notice, shall give
32 written notice to the insurance company issuing the policy of
33 the attainment of the limiting age by the dependent child and
HB3661 Enrolled -12- LRB093 09245 JLS 09478 b
1 of the dependent child's residence.
2 (d) Within 30 days after the date of receipt of a notice
3 from the employer, dependent child, or responsible adult
4 acting on behalf of the dependent child, or of the initiation
5 of a new group policy, the insurance company, by certified
6 mail, return receipt requested, shall notify the dependent
7 child or responsible adult at the dependent child's residence
8 that the policy may be continued for the dependent child.
9 The notice shall include:
10 (1) a form for election to continue the insurance
11 coverage;
12 (2) the amount of periodic premiums to be charged
13 for continuation coverage and the method and place of
14 payment; and
15 (3) instructions for returning the election form
16 within 30 days after the date it is received from the
17 insurance company.
18 Failure of the dependent child or the responsible adult
19 acting on behalf of the dependent child to exercise the
20 election to continue insurance coverage by notifying the
21 insurance company in writing within such 30 day period shall
22 terminate the continuation of benefits and the right to
23 continuation.
24 If the insurance company fails to notify the dependent
25 child or responsible adult acting on behalf of the dependent
26 child as provided for in this subsection (d), all premiums
27 shall be waived from the date the notice was required until
28 notice was sent, and the benefits shall continue under the
29 terms and provisions of the policy, from the date the notice
30 was required until the notice was sent, notwithstanding any
31 other provision hereof, except where the benefits in
32 existence at the time the company's notice was to be sent
33 pursuant to this subsection (d) are terminated as to all
34 employees.
HB3661 Enrolled -13- LRB093 09245 JLS 09478 b
1 (e) The monthly premium for continuation shall be
2 computed as follows:
3 (1) an amount, if any, that would be charged an
4 employee if the dependent child were a current employee
5 of the employer, plus;
6 (2) an amount, if any, that the employer would
7 contribute toward the premium if the dependent child were
8 a current employee.
9 Failure to pay the initial monthly premium within 30 days
10 after the date of receipt of notice required in subsection
11 (d) of this Section terminates the continuation benefits and
12 the right to continuation benefits.
13 Continuation coverage provided under this Act shall
14 terminate upon the earliest to happen of the following:
15 (1) the failure to pay premiums when due, including
16 any grace period allowed by the policy;
17 (2) when coverage would terminate under the terms
18 of the existing policy if the dependent child was still
19 an eligible dependent of the employee;
20 (3) the date on which the dependent child first
21 becomes, after the date of election, an insured employee
22 under any other group health plan; or
23 (4) the expiration of 2 years from the date
24 continuation coverage began.
25 Upon the termination of continuation coverage, the
26 dependent child shall be entitled to convert the coverage to
27 an individual policy.
28 (f) The renewal, amendment, or extension of any group
29 policy affected by this Section shall be deemed to be
30 delivery or issuance for delivery of a new policy or contract
31 of insurance in this State.
32 (g) If (1) the policy is cancelled, and (2) another
33 insurance company contracts to provide group health and
34 accident insurance to the employer, and (3) continuation
HB3661 Enrolled -14- LRB093 09245 JLS 09478 b
1 coverage is in effect for the dependent child at the time of
2 cancellation, and (4) the employee is or would have been
3 included under the new group policy, then the new insurer
4 must also offer continuation coverage to the dependent child
5 under the same terms and conditions as contained in this
6 Section.
7 (h) This Section shall not limit the right of any
8 dependent child to exercise the privilege to convert to an
9 individual policy as contained in this Code.
10 (i) No person who obtains coverage under this Section
11 shall be required to pay a rate greater than that applicable
12 to any employee or member covered under that group.
13 (215 ILCS 5/367e) (from Ch. 73, par. 979e)
14 Sec. 367e. Continuation of Group Hospital, Surgical and
15 Major Medical Coverage After Termination of Employment or
16 Membership.
17 A group policy delivered, issued for delivery, renewed or
18 amended in this state which insures employees or members for
19 hospital, surgical or major medical insurance on an expense
20 incurred or service basis, other than for specific diseases
21 or for accidental injuries only, shall provide that employees
22 or members whose insurance under the group policy would
23 otherwise terminate because of termination of employment or
24 membership or because of a reduction in hours below the
25 minimum required by the group plan shall be entitled to
26 continue their hospital, surgical and major medical insurance
27 under that group policy, for themselves and their eligible
28 dependents, subject to all of the group policy's terms and
29 conditions applicable to those forms of insurance and to the
30 following conditions:
31 1. Continuation shall only be available to an employee
32 or member who has been continuously insured under the group
33 policy (and for similar benefits under any group policy which
HB3661 Enrolled -15- LRB093 09245 JLS 09478 b
1 it replaced) during the entire 3 months period ending with
2 such termination or reduction in hours below the minimum
3 required by the group plan.
4 2. Continuation shall not be available for any person
5 who is covered by Medicare, except for those individuals who
6 have been covered under a group Medicare supplement policy.
7 Neither shall continuation be available for any person who is
8 covered by any other insured or uninsured plan which provides
9 hospital, surgical or medical coverage for individuals in a
10 group and under which the person was not covered immediately
11 prior to such termination or reduction in hours below the
12 minimum required by the group plan or who exercises his
13 conversion privilege under the group policy.
14 3. Continuation need not include dental, vision care,
15 prescription drug benefits, disability income, specified
16 disease, or similar supplementary benefits which are provided
17 under the group policy in addition to its hospital, surgical
18 or major medical benefits.
19 4. Upon termination or reduction in hours below the
20 minimum required by the group plan written notice of
21 continuation shall be presented to the employee or member by
22 the employer or mailed by the employer to the last known
23 address of the employee. An employee or member who wishes
24 continuation of coverage must request such continuation in
25 writing within the ten-day period following the later of: (i)
26 the date of such termination or reduction in hours below the
27 minimum required by the group plan, or (ii) the date the
28 employee is given written notice of the right of continuation
29 by either the employer or the group policyholder. In no
30 event, however, may the employee or member elect continuation
31 more than 60 days after the date of such termination or
32 reduction in hours below the minimum required by the group
33 plan. Written notice of continuation presented to the
34 employee or member by the policyholder, or mailed by the
HB3661 Enrolled -16- LRB093 09245 JLS 09478 b
1 policyholder to the last known address of the employee, shall
2 constitute the giving of notice for the purpose of this
3 provision.
4 5. An employee or member electing continuation must pay
5 to the group policyholder or his employer, on a monthly basis
6 in advance, the total amount of premium required by the
7 insurer, including that portion of the premium contributed by
8 the policyholder or employer, if any, but not more than the
9 group rate for the insurance being continued with appropriate
10 reduction in premium for any supplementary benefits which
11 have been discontinued under paragraph (3) of this Section.
12 The premium rate required by the insurer shall be the
13 applicable premium required on the due date of each payment.
14 6. Continuation of insurance under the group policy for
15 any person shall terminate when he becomes eligible for
16 Medicare or is covered by any other insured or uninsured plan
17 which provides hospital, surgical or medical coverage for
18 individuals in a group and under which the person was not
19 covered immediately prior to such termination or reduction in
20 hours below the minimum required by the group plan as
21 provided in condition 2 above or, if earlier, at the first to
22 occur of the following:
23 (a) The date 9 months after the date the employee's
24 or member's insurance under the policy would otherwise
25 have terminated because of termination of employment or
26 membership or reduction in hours below the minimum
27 required by the group plan.
28 (b) If the employee or member fails to make timely
29 payment of a required contribution, the end of the period
30 for which contributions were made.
31 (c) The date on which the group policy is
32 terminated or, in the case of an employee, the date his
33 employer terminates participation under the group policy.
34 However, if this (c) applies and the coverage ceasing by
HB3661 Enrolled -17- LRB093 09245 JLS 09478 b
1 reason of such termination is replaced by similar
2 coverage under another group policy, the following shall
3 apply:
4 (i) The employee or member shall have the
5 right to become covered under that other group
6 policy, for the balance of the period that he would
7 have remained covered under the prior group policy
8 in accordance with condition 6 had a termination
9 described in this (c) not occurred.
10 (ii) The prior group policy shall continue to
11 provide benefits to the extent of its accrued
12 liabilities and extensions of benefits as if the
13 replacement had not occurred.
14 7. A notification of the continuation privilege shall be
15 included in each certificate of coverage.
16 8. Continuation shall not be available for any employee
17 who was discharged because of the commission of a felony in
18 connection with his work, or because of theft in connection
19 with his work, for which the employer was in no way
20 responsible; provided the employee admitted his commission of
21 the felony or theft or such act has resulted in a conviction
22 or order of supervision by a court of competent jurisdiction.
23 The requirements of this amendatory Act of 1983 shall
24 apply to any group policy as defined in this Section,
25 delivered or issued for delivery on or after 180 days
26 following the effective date of this amendatory Act of 1983.
27 The requirements of this amendatory Act of 1985 shall
28 apply to any group policy as defined in this Section,
29 delivered, issued for delivery, renewed or amended on or
30 after 180 days following the effective date of this
31 amendatory Act of 1985.
32 (Source: P.A. 85-210; 86-1475.)
33 (215 ILCS 5/367e.1 new)
HB3661 Enrolled -18- LRB093 09245 JLS 09478 b
1 Sec. 367e.1. Group Accident and Health Insurance
2 Conversion Privilege.
3 (A) A group policy which provides hospital, medical, or
4 major medical expense insurance, or any combination of these
5 coverages, on an expense-incurred basis, but not including a
6 policy which provides benefits for specific diseases or for
7 accidental injuries only, shall provide that an employee or
8 member (i) whose insurance under the group policy has been
9 terminated for any reason other than discontinuance of the
10 group policy in its entirety where there is a succeeding
11 carrier, or failure of the employee or member to pay any
12 required contribution; and (ii) who has been continuously
13 insured under the group policy (and under any group policy
14 providing similar benefits which it replaces) for at least
15 three months immediately prior to termination, shall be
16 entitled to have issued to him by the insurer a policy of
17 health insurance (hereafter referred to as the converted
18 policy), subject to the following conditions:
19 (1) Written application for the converted policy
20 shall be made and the first premium paid to the insurer
21 not later than the latter of (i) thirty-one days after
22 such termination or (ii) 15 days after the employee or
23 member has been given written notice of the existence of
24 the conversion privilege, but in no event later than 60
25 days after such termination.
26 Written notice presented to the employee or member by
27 the policyholder, or mailed by the policyholder to the
28 last known address of the employee or member, shall
29 constitute the giving of notice for the purpose of this
30 provision.
31 (2) The converted policy shall be issued without
32 evidence of insurability.
33 (3) The initial premium for the converted policy
34 shall be determined in accordance with the insurer's
HB3661 Enrolled -19- LRB093 09245 JLS 09478 b
1 table of premium rates applicable to the age and class of
2 risk of each person to be covered under the converted
3 policy and to the type and amount of the insurance
4 provided. Conditions pertaining to health shall not be an
5 acceptable basis of classification for the purposes of
6 this subsection. The frequency of premium payment shall
7 be the frequency customarily required by the insurer for
8 the policy form and plan selected, provided that the
9 insurer shall not require premium payments less
10 frequently than quarterly without the consent of the
11 insured.
12 (4) The effective date of the converted policy
13 shall be the day following the termination of insurance
14 under the group policy.
15 (5) The converted policy shall cover the employee
16 or member and his dependents who were covered by the
17 group policy on the date of termination of insurance. At
18 the option of the insurer, a separate converted policy
19 may be issued to cover any dependent.
20 (6) The insurer shall not be required to issue a
21 converted policy covering any person if such person is or
22 could be covered by Medicare (Title XVIII of the United
23 States Social Security Act as added by the Social
24 Security Amendments of 1965 or as later amended or
25 superseded). Furthermore, the insurer shall not be
26 required to issue a converted policy covering any person
27 if (i) such person is covered for similar benefits by
28 another hospital, surgical, medical, or major medical
29 expense insurance policy or hospital or medical service
30 subscriber contract or medical practice or other
31 prepayment plan or by any other plan or program; or (ii)
32 such person is eligible for similar benefits (whether or
33 not covered therefor) under any arrangement of coverage
34 for individuals in a group, whether on an insured or
HB3661 Enrolled -20- LRB093 09245 JLS 09478 b
1 uninsured basis; or (iii) similar benefits are provided
2 for or available to such person, pursuant to or in
3 accordance with the requirements of any statute, and the
4 benefits provided or available under the sources referred
5 to in (i), (ii), (iii) above for such person together
6 with the converted policy would result in overinsurance
7 according to the insurer's standards.
8 (7) In the event that coverage would be continued
9 under the group policy on an employee following his
10 retirement prior to the time he is or could be covered by
11 Medicare, he may elect, in lieu of such continuation of
12 such group insurance, to have the same conversion rights
13 as would apply had his insurance terminated at retirement
14 by reason of termination of employment or membership.
15 (8) Subject to the conditions set forth above, the
16 conversion privilege shall also be available (i) to the
17 surviving spouse, if any, at the death of the employee or
18 member, with respect to the spouse and such children
19 whose coverage under the group policy terminates by
20 reason of such death, otherwise to each surviving child
21 whose coverage under the group policy terminates by
22 reason of such death, or, if the group policy provides
23 for continuation of dependents' coverage following the
24 employee's or member's death, at the end of such
25 continuation; (ii) to the spouse of the employee or
26 member upon termination of coverage of the spouse, while
27 the employee or member remains insured under the group
28 policy, by reason of ceasing to be a qualified family
29 member under the group policy, with respect to the spouse
30 and such children whose coverage under the group policy
31 terminates at the same time; or (iii) to a child solely
32 with respect to himself upon termination of his coverage
33 by reason of ceasing to be a qualified family member
34 under the group policy, if a conversion privilege is not
HB3661 Enrolled -21- LRB093 09245 JLS 09478 b
1 otherwise provided above with respect to such
2 termination.
3 (9) A notification of the conversion privilege
4 shall be included in each certificate.
5 (10) The insurer may elect to provide group
6 insurance coverage in lieu of the issuance of a converted
7 policy.
8 (B) A converted policy issued upon the exercise of the
9 conversion privilege required by subsection (A) of this
10 Section shall conform to the following minimum standards:
11 (1) If the group policy provided hospital,
12 surgical, or medical expense insurance, or a combination
13 thereof, the converted policy shall provide benefits on
14 an expense-incurred basis equal to the lesser of (i) the
15 hospital room and board, miscellaneous hospital, surgical
16 and medical benefits provided under the group policy; and
17 (ii) the corresponding benefits described below:
18 (a) Hospital room and board benefits in an
19 amount per day elected by the group policyholder,
20 but in no event less than 60% of the then average
21 semi-private hospital room and board charge in the
22 State, such benefits to be payable for a maximum of
23 not less than 70 days for any period of hospital
24 confinement, as defined in the converted policy.
25 (b) Miscellaneous hospital benefits for any
26 one period of hospital confinement in an amount up
27 to twenty times the hospital room and board daily
28 benefit provided under the converted policy.
29 (c) Surgical benefits according to a surgical
30 schedule providing a benefit amount elected by the
31 group policy holder, but in no event less than 60%
32 of the then average surgical charge in the State and
33 with a maximum amount appropriate thereto. The
34 maximum surgical benefit shall be applicable to all
HB3661 Enrolled -22- LRB093 09245 JLS 09478 b
1 surgical operations of an individual resulting from
2 or contributed to by the same and all related causes
3 occurring in one period of disability. Two or more
4 surgical procedures performed in the course of a
5 single operation through the same incision, or in
6 the same natural body orifice, may be treated as one
7 surgical procedure with the payment determined by
8 the scheduled benefit for the most expensive
9 procedure performed. The surgical schedule shall be
10 consistent with the schedule of operations
11 customarily offered by the insurer under group or
12 individual health insurance policies.
13 (d) Non-surgical medical attendance benefits
14 for in-hospital services in an amount elected by the
15 group policyholder, but in no event less than 60% of
16 the then average in-hospital physician's visit
17 charge in the State, such benefits may be limited to
18 one visit per day of hospitalization and a maximum
19 number of visits numbering not less than seventy for
20 any period of hospital confinement as defined in the
21 converted policy.
22 (2) If the group policy provided major medical
23 insurance, the insurer may offer the insurance described
24 in (1) above only, major medical insurance only, or a
25 combination of the insurance described in (1) above and
26 major medical insurance. If the insurer elects to
27 provide major medical insurance, the converted policy
28 shall provide:
29 (a) A maximum benefit at least equal to (i) or
30 (ii) below:
31 (i) A maximum payment of twenty-five
32 thousand dollars for all covered medical
33 expenses incurred during the covered person's
34 lifetime with an annual restoration of the
HB3661 Enrolled -23- LRB093 09245 JLS 09478 b
1 lesser of, while coverage is in force, one
2 thousand dollars and the amount counted against
3 the maximum benefit which was not previously
4 restored; or
5 (ii) A maximum payment of twenty-five
6 thousand dollars for each unrelated injury or
7 illness.
8 (b) Payment of benefits for covered medical
9 expenses, in excess of the deductible, at a rate not
10 less than 80% except as otherwise permitted below.
11 (c) A deductible for each benefit period
12 which, at the option of the insurer, shall be (i)
13 the greater of $500 and the benefits deductible;
14 (ii) the sum of the benefits deductible and $100; or
15 (iii) the corresponding deductible in the group
16 policy. The term "benefit period," as used herein,
17 means, when the maximum payment is determined by (a)
18 (i) above, either a calendar year or a period of
19 twelve consecutive months; and, when the maximum
20 payment is determined by (a) (ii) above, a period of
21 twenty-four consecutive months. The term "benefits
22 deductible," as used herein, means the value of any
23 benefits provided on an expense-incurred basis which
24 are provided with respect to covered medical
25 expenses by any other hospital, surgical, or medical
26 insurance policy or hospital or medical service
27 subscriber contract of medical practice or other
28 prepayment plan, or any other plans or program
29 whether on an insured or uninsured basis, or of any
30 similar benefits which are provided or made
31 available pursuant to or in accordance with the
32 requirements of any statute and, if, pursuant to the
33 provisions of this subsection, the converted policy
34 provides both the coverage described in (1) above
HB3661 Enrolled -24- LRB093 09245 JLS 09478 b
1 and major medical insurance, the value of the
2 coverage described in (1) above. The insurer may
3 require that the deductible be satisfied during a
4 period of not less than three months. If the maximum
5 payment is determined by (a) (i) above, and if no
6 benefits become payable during the preceding benefit
7 period due to the cash deductible not being
8 satisfied; credit shall be given, in the succeeding
9 benefit period, to any expense applied toward the
10 cash deductible of the preceding benefit period and
11 incurred during the last three months of such
12 preceding benefit period, subject to any requirement
13 that the deductible be satisfied during a specified
14 period of time.
15 (d) The term "covered medical expenses," as
16 used above, may be limited (i) in the case of
17 hospital room and board benefits, maximum surgical
18 schedule, and non-surgical medical attendance
19 benefits to amounts not less than the amounts
20 provided in (1) (a), (1) (c) and (1) (d) above; and
21 (ii) in the case of mental and nervous condition
22 treatments while the patient is not a hospital
23 in-patient, to co-insurance of 50%, a maximum
24 benefit of $500 per calendar year or twelve
25 consecutive month periods subject to the inclusion
26 by the insurer of reasonable limits on the number of
27 visits and the maximum permissible expense per
28 visit.
29 (3) The converted policy may contain any exclusion,
30 reduction, or limitation contained in the group policy
31 and any exclusion, reduction, or limitation customarily
32 used in individual accident and health policies delivered
33 or issued for delivery in this state. It is not required
34 that the converted policy contain all of the covered
HB3661 Enrolled -25- LRB093 09245 JLS 09478 b
1 medical expenses or the same level of benefits as
2 provided in the group policy.
3 (4) The insurer may, at its option, also offer
4 alternative plans for group accident and health
5 conversion.
6 (5) The converted policy may only exclude a
7 pre-existing condition excluded by the group policy.
8 Any hospital, surgical, medical or major medical benefits
9 payable under the converted policy may be reduced by the
10 amount of any such benefits payable under the group
11 policy after the termination of the individual's
12 insurance thereunder and, during the first policy year of
13 such converted policy, the benefits payable under the
14 converted policy may be so reduced so that they are not
15 in excess of the benefits that would have been payable
16 had the individual's insurance under the group policy
17 remained in force and effect.
18 (6) The converted policy may provide for the
19 termination of coverage thereunder of any person when he
20 is or could be covered by Medicare (Title XVIII of the
21 United States Social Security Act as added by the Social
22 Security Amendments of 1965 or as later amended or
23 superseded).
24 (7) The converted policy may provide that the
25 insurer may request information from the converted
26 policyholder, in advance of any premium due date of the
27 converted policy, to determine whether any person covered
28 thereunder (i) is covered for similar benefits by another
29 hospital, surgical, medical, or major medical expense
30 insurance policy or hospital or medical service
31 subscriber contract or medical practice or other
32 prepayment plan or by any other plan or program; or (ii)
33 is eligible for similar benefits (whether or not covered
34 therefor) under any arrangement of coverage for
HB3661 Enrolled -26- LRB093 09245 JLS 09478 b
1 individuals in a group, whether on an insured or
2 uninsured basis; or (iii) has similar benefits provided
3 for or available to such person, pursuant to or in
4 accordance with the requirements of any statute. The
5 converted policy may also provide that the insurer need
6 not renew the converted policy or the coverage of any
7 person insured thereunder if either the benefits provided
8 or available under the sources referred to in (i), (ii),
9 (iii) above for such person, together with the converted
10 policy, would result in overinsurance according to the
11 insurer's standards, or if the converted policyholder
12 refuses to provide the requested information.
13 (8) The converted policy shall not contain any
14 provision allowing the insurer to non-renew due to a
15 change in the health of an insured.
16 (9) The converted policy may contain any provisions
17 permitted herein and may also include any other
18 provisions not expressly prohibited by law. Any
19 provisions required or permitted herein may be made a
20 part of the converted policy by means of an endorsement
21 or rider.
22 (10) In the conversion of group health insurance in
23 accordance with the provisions of subsection (A) above,
24 the insurer may, at its option, accomplish the conversion
25 by issuing one or more converted policies.
26 (11) With respect to any person who was covered by
27 the group policy, the period specified in the Time Limit
28 on Certain Defenses provisions of the converted policy
29 shall commence with the date the person's insurance
30 became effective under the group policy.
31 (12) If the insurer elects to provide group
32 insurance coverage in lieu of a converted policy, the
33 benefit levels required for a converted policy must be
34 applicable to such group insurance coverage.
HB3661 Enrolled -27- LRB093 09245 JLS 09478 b
1 (C) The requirements of this Section shall apply to any
2 group policy of accident and health insurance delivered,
3 issued for delivery, renewed or amended on or after 180 days
4 following the effective date of this Section.
5 (Source: P.A. 85-210; 86-1475.)
6 (215 ILCS 5/404.1) (from Ch. 73, par. 1016.1)
7 Sec. 404.1. Safekeeping of deposits. The Director may
8 maintain with a corporation qualified to administer trusts in
9 this State under the Corporate Fiduciary Act"An Act to
10 provide for and regulate the administration of trusts by
11 trust companies", approved June 15, 1887, as amended, for the
12 securities deposited with the Director, a limited agency,
13 custodial, or depository account, or other type of account
14 for the safekeeping of those securities, and for collecting
15 the income from those securities and providing supportive
16 accounting services relating to such safekeeping and
17 collection. Such a corporation, in safekeeping such
18 securities, shall have all the powers, rights, duties and
19 responsibilities that it has for holding securities in its
20 fiduciary accounts under the Securities in Fiduciary Accounts
21 Act"An Act concerning the powers of corporations authorized
22 to accept and execute trusts, to register and hold securities
23 of fiduciary accounts in bulk and to deposit same with a
24 clearing corporation", approved September 1, 1972, as
25 amended. The Director shall arrange with any depository
26 institution that has been authorized to accept and execute
27 trusts to provide for collateralization of any cash accounts
28 resulting from the failure of any depositing company to give
29 instruction regarding the investment of any such cash amounts
30 as provided for by Section 6 of the Public Funds Investment
31 Act.
32 (Source: P.A. 83-746.)
HB3661 Enrolled -28- LRB093 09245 JLS 09478 b
1 Section 7. The Comprehensive Health Insurance Plan Act
2 is amended by changing Section 2 as follows:
3 (215 ILCS 105/2) (from Ch. 73, par. 1302)
4 Sec. 2. Definitions. As used in this Act, unless the
5 context otherwise requires:
6 "Plan administrator" means the insurer or third party
7 administrator designated under Section 5 of this Act.
8 "Benefits plan" means the coverage to be offered by the
9 Plan to eligible persons and federally eligible individuals
10 pursuant to this Act.
11 "Board" means the Illinois Comprehensive Health Insurance
12 Board.
13 "Church plan" has the same meaning given that term in the
14 federal Health Insurance Portability and Accountability Act
15 of 1996.
16 "Continuation coverage" means continuation of coverage
17 under a group health plan or other health insurance coverage
18 for former employees or dependents of former employees that
19 would otherwise have terminated under the terms of that
20 coverage pursuant to any continuation provisions under
21 federal or State law, including the Consolidated Omnibus
22 Budget Reconciliation Act of 1985 (COBRA), as amended,
23 Sections 367.2,and 367e, and 367e.1 of the Illinois
24 Insurance Code, or any other similar requirement in another
25 State.
26 "Covered person" means a person who is and continues to
27 remain eligible for Plan coverage and is covered under one of
28 the benefit plans offered by the Plan.
29 "Creditable coverage" means, with respect to a federally
30 eligible individual, coverage of the individual under any of
31 the following:
32 (A) A group health plan.
33 (B) Health insurance coverage (including group
HB3661 Enrolled -29- LRB093 09245 JLS 09478 b
1 health insurance coverage).
2 (C) Medicare.
3 (D) Medical assistance.
4 (E) Chapter 55 of title 10, United States Code.
5 (F) A medical care program of the Indian Health
6 Service or of a tribal organization.
7 (G) A state health benefits risk pool.
8 (H) A health plan offered under Chapter 89 of title
9 5, United States Code.
10 (I) A public health plan (as defined in regulations
11 consistent with Section 104 of the Health Care
12 Portability and Accountability Act of 1996 that may be
13 promulgated by the Secretary of the U.S. Department of
14 Health and Human Services).
15 (J) A health benefit plan under Section 5(e) of the
16 Peace Corps Act (22 U.S.C. 2504(e)).
17 (K) Any other qualifying coverage required by the
18 federal Health Insurance Portability and Accountability
19 Act of 1996, as it may be amended, or regulations under
20 that Act.
21 "Creditable coverage" does not include coverage
22 consisting solely of coverage of excepted benefits, as
23 defined in Section 2791(c) of title XXVII of the Public
24 Health Service Act (42 U.S.C. 300 gg-91), nor does it include
25 any period of coverage under any of items (A) through (K)
26 that occurred before a break of more than 90 days during all
27 of which the individual was not covered under any of items
28 (A) through (K) above. Any period that an individual is in a
29 waiting period for any coverage under a group health plan (or
30 for group health insurance coverage) or is in an affiliation
31 period under the terms of health insurance coverage offered
32 by a health maintenance organization shall not be taken into
33 account in determining if there has been a break of more than
34 90 days in any creditable coverage.
HB3661 Enrolled -30- LRB093 09245 JLS 09478 b
1 "Department" means the Illinois Department of Insurance.
2 "Dependent" means an Illinois resident: who is a spouse;
3 or who is claimed as a dependent by the principal insured for
4 purposes of filing a federal income tax return and resides in
5 the principal insured's household, and is a resident
6 unmarried child under the age of 19 years; or who is an
7 unmarried child who also is a full-time student under the age
8 of 23 years and who is financially dependent upon the
9 principal insured; or who is a child of any age and who is
10 disabled and financially dependent upon the principal
11 insured.
12 "Direct Illinois premiums" means, for Illinois business,
13 an insurer's direct premium income for the kinds of business
14 described in clause (b) of Class 1 or clause (a) of Class 2
15 of Section 4 of the Illinois Insurance Code, and direct
16 premium income of a health maintenance organization or a
17 voluntary health services plan, except it shall not include
18 credit health insurance as defined in Article IX 1/2 of the
19 Illinois Insurance Code.
20 "Director" means the Director of the Illinois Department
21 of Insurance.
22 "Eligible person" means a resident of this State who
23 qualifies for Plan coverage under Section 7 of this Act.
24 "Employee" means a resident of this State who is employed
25 by an employer or has entered into the employment of or works
26 under contract or service of an employer including the
27 officers, managers and employees of subsidiary or affiliated
28 corporations and the individual proprietors, partners and
29 employees of affiliated individuals and firms when the
30 business of the subsidiary or affiliated corporations, firms
31 or individuals is controlled by a common employer through
32 stock ownership, contract, or otherwise.
33 "Employer" means any individual, partnership,
34 association, corporation, business trust, or any person or
HB3661 Enrolled -31- LRB093 09245 JLS 09478 b
1 group of persons acting directly or indirectly in the
2 interest of an employer in relation to an employee, for which
3 one or more persons is gainfully employed.
4 "Family" coverage means the coverage provided by the Plan
5 for the covered person and his or her eligible dependents who
6 also are covered persons.
7 "Federally eligible individual" means an individual
8 resident of this State:
9 (1)(A) for whom, as of the date on which the
10 individual seeks Plan coverage under Section 15 of this
11 Act, the aggregate of the periods of creditable coverage
12 is 18 or more months, and (B) whose most recent prior
13 creditable coverage was under group health insurance
14 coverage offered by a health insurance issuer, a group
15 health plan, a governmental plan, or a church plan (or
16 health insurance coverage offered in connection with any
17 such plans) or any other type of creditable coverage that
18 may be required by the federal Health Insurance
19 Portability and Accountability Act of 1996, as it may be
20 amended, or the regulations under that Act;
21 (2) who is not eligible for coverage under (A) a
22 group health plan, (B) part A or part B of Medicare due
23 to age, or (C) medical assistance, and does not have
24 other health insurance coverage;
25 (3) with respect to whom the most recent coverage
26 within the coverage period described in paragraph (1)(A)
27 of this definition was not terminated based upon a factor
28 relating to nonpayment of premiums or fraud;
29 (4) if the individual had been offered the option
30 of continuation coverage under a COBRA continuation
31 provision or under a similar State program, who elected
32 such coverage; and
33 (5) who, if the individual elected such
34 continuation coverage, has exhausted such continuation
HB3661 Enrolled -32- LRB093 09245 JLS 09478 b
1 coverage under such provision or program.
2 "Group health insurance coverage" means, in connection
3 with a group health plan, health insurance coverage offered
4 in connection with that plan.
5 "Group health plan" has the same meaning given that term
6 in the federal Health Insurance Portability and
7 Accountability Act of 1996.
8 "Governmental plan" has the same meaning given that term
9 in the federal Health Insurance Portability and
10 Accountability Act of 1996.
11 "Health insurance coverage" means benefits consisting of
12 medical care (provided directly, through insurance or
13 reimbursement, or otherwise and including items and services
14 paid for as medical care) under any hospital and medical
15 expense-incurred policy, certificate, or contract provided by
16 an insurer, non-profit health care service plan contract,
17 health maintenance organization or other subscriber contract,
18 or any other health care plan or arrangement that pays for or
19 furnishes medical or health care services whether by
20 insurance or otherwise. Health insurance coverage shall not
21 include short term, accident only, disability income,
22 hospital confinement or fixed indemnity, dental only, vision
23 only, limited benefit, or credit insurance, coverage issued
24 as a supplement to liability insurance, insurance arising out
25 of a workers' compensation or similar law, automobile
26 medical-payment insurance, or insurance under which benefits
27 are payable with or without regard to fault and which is
28 statutorily required to be contained in any liability
29 insurance policy or equivalent self-insurance.
30 "Health insurance issuer" means an insurance company,
31 insurance service, or insurance organization (including a
32 health maintenance organization and a voluntary health
33 services plan) that is authorized to transact health
34 insurance business in this State. Such term does not include
HB3661 Enrolled -33- LRB093 09245 JLS 09478 b
1 a group health plan.
2 "Health Maintenance Organization" means an organization
3 as defined in the Health Maintenance Organization Act.
4 "Hospice" means a program as defined in and licensed
5 under the Hospice Program Licensing Act.
6 "Hospital" means a duly licensed institution as defined
7 in the Hospital Licensing Act, an institution that meets all
8 comparable conditions and requirements in effect in the state
9 in which it is located, or the University of Illinois
10 Hospital as defined in the University of Illinois Hospital
11 Act.
12 "Individual health insurance coverage" means health
13 insurance coverage offered to individuals in the individual
14 market, but does not include short-term, limited-duration
15 insurance.
16 "Insured" means any individual resident of this State who
17 is eligible to receive benefits from any insurer (including
18 health insurance coverage offered in connection with a group
19 health plan) or health insurance issuer as defined in this
20 Section.
21 "Insurer" means any insurance company authorized to
22 transact health insurance business in this State and any
23 corporation that provides medical services and is organized
24 under the Voluntary Health Services Plans Act or the Health
25 Maintenance Organization Act.
26 "Medical assistance" means the State medical assistance
27 or medical assistance no grant (MANG) programs provided under
28 Title XIX of the Social Security Act and Articles V (Medical
29 Assistance) and VI (General Assistance) of the Illinois
30 Public Aid Code (or any successor program) or under any
31 similar program of health care benefits in a state other than
32 Illinois.
33 "Medically necessary" means that a service, drug, or
34 supply is necessary and appropriate for the diagnosis or
HB3661 Enrolled -34- LRB093 09245 JLS 09478 b
1 treatment of an illness or injury in accord with generally
2 accepted standards of medical practice at the time the
3 service, drug, or supply is provided. When specifically
4 applied to a confinement it further means that the diagnosis
5 or treatment of the covered person's medical symptoms or
6 condition cannot be safely provided to that person as an
7 outpatient. A service, drug, or supply shall not be medically
8 necessary if it: (i) is investigational, experimental, or for
9 research purposes; or (ii) is provided solely for the
10 convenience of the patient, the patient's family, physician,
11 hospital, or any other provider; or (iii) exceeds in scope,
12 duration, or intensity that level of care that is needed to
13 provide safe, adequate, and appropriate diagnosis or
14 treatment; or (iv) could have been omitted without adversely
15 affecting the covered person's condition or the quality of
16 medical care; or (v) involves the use of a medical device,
17 drug, or substance not formally approved by the United States
18 Food and Drug Administration.
19 "Medical care" means the ordinary and usual professional
20 services rendered by a physician or other specified provider
21 during a professional visit for treatment of an illness or
22 injury.
23 "Medicare" means coverage under both Part A and Part B of
24 Title XVIII of the Social Security Act, 42 U.S.C. Sec. 1395,
25 et seq.
26 "Minimum premium plan" means an arrangement whereby a
27 specified amount of health care claims is self-funded, but
28 the insurance company assumes the risk that claims will
29 exceed that amount.
30 "Participating transplant center" means a hospital
31 designated by the Board as a preferred or exclusive provider
32 of services for one or more specified human organ or tissue
33 transplants for which the hospital has signed an agreement
34 with the Board to accept a transplant payment allowance for
HB3661 Enrolled -35- LRB093 09245 JLS 09478 b
1 all expenses related to the transplant during a transplant
2 benefit period.
3 "Physician" means a person licensed to practice medicine
4 pursuant to the Medical Practice Act of 1987.
5 "Plan" means the Comprehensive Health Insurance Plan
6 established by this Act.
7 "Plan of operation" means the plan of operation of the
8 Plan, including articles, bylaws and operating rules, adopted
9 by the board pursuant to this Act.
10 "Provider" means any hospital, skilled nursing facility,
11 hospice, home health agency, physician, registered pharmacist
12 acting within the scope of that registration, or any other
13 person or entity licensed in Illinois to furnish medical
14 care.
15 "Qualified high risk pool" has the same meaning given
16 that term in the federal Health Insurance Portability and
17 Accountability Act of 1996.
18 "Resident" means a person who is and continues to be
19 legally domiciled and physically residing on a permanent and
20 full-time basis in a place of permanent habitation in this
21 State that remains that person's principal residence and from
22 which that person is absent only for temporary or transitory
23 purpose.
24 "Skilled nursing facility" means a facility or that
25 portion of a facility that is licensed by the Illinois
26 Department of Public Health under the Nursing Home Care Act
27 or a comparable licensing authority in another state to
28 provide skilled nursing care.
29 "Stop-loss coverage" means an arrangement whereby an
30 insurer insures against the risk that any one claim will
31 exceed a specific dollar amount or that the entire loss of a
32 self-insurance plan will exceed a specific amount.
33 "Third party administrator" means an administrator as
34 defined in Section 511.101 of the Illinois Insurance Code who
HB3661 Enrolled -36- LRB093 09245 JLS 09478 b
1 is licensed under Article XXXI 1/4 of that Code.
2 (Source: P.A. 91-357, eff. 7-29-99; 91-735, eff. 6-2-00;
3 92-153, eff. 7-25-01.)
4 Section 10. The Health Maintenance Organization Act is
5 amended by changing Sections 4-9.2 and 5-3 as follows:
6 (215 ILCS 125/4-9.2) (from Ch. 111 1/2, par. 1409.2-2)
7 Sec. 4-9.2. Continuation of group HMO coverage after
8 termination of employee or membership. A group contract
9 delivered, issued for delivery, renewed, or amended in this
10 State that covers employees or members for health care
11 services shall provide that employees or members whose
12 coverage under the group contract would otherwise terminate
13 because of termination of employment or membership or because
14 of a reduction in hours below the minimum required by the
15 group contract shall be entitled to continue their coverage
16 under that group contract, for themselves and their eligible
17 dependents, subject to all of the group contract's terms and
18 conditions applicable to those forms of coverage and to the
19 following conditions:
20 (1) Continuation shall only be available to an
21 employee or member who has been continuously covered
22 under the group contract (and for similar benefits under
23 any group contract that it replaced) during the entire 3
24 month period ending with the termination of employment or
25 membership or reduction in hours below the minimum
26 required by the group contract.
27 (2) Continuation shall not be available for any
28 enrollee who is covered by Medicare, except for those
29 individuals who have been covered under a group Medicare
30 supplement policy. Continuation shall not be available
31 for any enrollee who is covered by any other insured or
32 uninsured plan that provides hospital, surgical, or
HB3661 Enrolled -37- LRB093 09245 JLS 09478 b
1 medical coverage for individuals in a group and under
2 which the enrollee was not covered immediately before
3 termination or reduction in hours below the minimum
4 required by the group contract or who exercises his or
5 her conversion privilege under the group policy.
6 (3) Continuation need not include dental, vision
7 care, prescription drug, or similar supplementary
8 benefits that are provided under the group contract in
9 addition to its basic health care services.
10 (4) Upon termination or reduction in hours below
11 the minimum required by the group contract, written
12 notice of continuation shall be presented to the employee
13 or member by the employer or mailed by the employer to
14 the last known address of the employee. An employee or
15 member who wishes continuation of coverage must request
16 continuation in writing within the 10 day period
17 following the later of (i) the date of termination or
18 reduction in hours below the minimum required by the
19 group contract or (ii) the date the employee is given
20 written notice of the right of continuation by either the
21 employer or the group policyholder. In no event, however,
22 shall the employee or member elect continuation more than
23 60 days after the date of termination or reduction in
24 hours below the minimum required by the group contract.
25 Written notice of continuation presented to the employee
26 or member by the policyholder, or mailed by the
27 policyholder to the last known address of the employee,
28 shall constitute the giving of notice for the purpose of
29 this paragraph.
30 (5) An employee or member electing continuation
31 must pay to the group policyholder or his employer, on a
32 monthly basis in advance, the total amount of premium
33 required by the HMO, including that portion of the
34 premium contributed by the policyholder or employer, if
HB3661 Enrolled -38- LRB093 09245 JLS 09478 b
1 any, but not more than the group rate for the coverage
2 being continued with appropriate reduction in premium for
3 any supplementary benefits that have been discontinued
4 under paragraph (3) of this Section. The premium rate
5 required by the HMO shall be the applicable premium
6 required on the due date of each payment.
7 (6) Continuation of coverage under the group
8 contract for any person shall terminate when the person
9 becomes eligible for Medicare or is covered by any other
10 insured or uninsured plan that provides hospital,
11 surgical, or medical coverage for individuals in a group
12 and under which the person was not covered immediately
13 before termination or reduction in hours below the
14 minimum required by the group contract as provided in
15 paragraph (2) of this Section or, if earlier, at the
16 first to occur of the following:
17 (a) The expiration of 9 months after the
18 employee's or member's coverage because of
19 termination of employment or membership or reduction
20 in hours below the minimum required by the group
21 contract.
22 (b) If the employee or member fails to make
23 timely payment of a required contribution, the end
24 of the period for which contributions were made.
25 (c) The date on which the group contract is
26 terminated or, in the case of an employee, the date
27 his or her employer terminates participation under
28 the group contract. If, however, this paragraph
29 applies and the coverage ceasing by reason of
30 termination is replaced by similar coverage under
31 another group contract, then (i) the employee or
32 member shall have the right to become covered under
33 the replacement group contract for the balance of
34 the period that he or she would have remained
HB3661 Enrolled -39- LRB093 09245 JLS 09478 b
1 covered under the prior group contract in accordance
2 with paragraph (6) had a termination described in
3 this item (c) not occurred and (ii) the prior group
4 contract shall continue to provide benefits to the
5 extent of its accrued liabilities and extensions of
6 benefits as if the replacement had not occurred.
7 (7) A notification of the continuation privilege
8 shall be included in each evidence of coverage.
9 (8) Continuation shall not be available for any
10 employee who was discharged because of the commission of
11 a felony in connection with his or her work, or because
12 of theft in connection with his or her work, for which
13 the employer was in no way responsible if the employee
14 (i) admitted to committing the felony or theft or (ii)
15 was convicted or placed under supervision by a court of
16 competent jurisdiction.
17 The requirements of this amendatory Act of 1992
18 shall apply to any group contract, as defined in this
19 Section, delivered or issued for delivery on or after 180
20 days following the effective date of this amendatory Act
21 of 1992.
22 (Source: P.A. 87-1090.)
23 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
24 Sec. 5-3. Insurance Code provisions.
25 (a) Health Maintenance Organizations shall be subject to
26 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
27 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
28 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
29 356y, 356z.2, 367.2, 367.2-5, 367i, 368a, 401, 401.1, 402,
30 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph
31 (c) of subsection (2) of Section 367, and Articles IIA, VIII
32 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the
33 Illinois Insurance Code.
HB3661 Enrolled -40- LRB093 09245 JLS 09478 b
1 (b) For purposes of the Illinois Insurance Code, except
2 for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
3 Health Maintenance Organizations in the following categories
4 are deemed to be "domestic companies":
5 (1) a corporation authorized under the Dental
6 Service Plan Act or the Voluntary Health Services Plans
7 Act;
8 (2) a corporation organized under the laws of this
9 State; or
10 (3) a corporation organized under the laws of
11 another state, 30% or more of the enrollees of which are
12 residents of this State, except a corporation subject to
13 substantially the same requirements in its state of
14 organization as is a "domestic company" under Article
15 VIII 1/2 of the Illinois Insurance Code.
16 (c) In considering the merger, consolidation, or other
17 acquisition of control of a Health Maintenance Organization
18 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
19 (1) the Director shall give primary consideration
20 to the continuation of benefits to enrollees and the
21 financial conditions of the acquired Health Maintenance
22 Organization after the merger, consolidation, or other
23 acquisition of control takes effect;
24 (2)(i) the criteria specified in subsection (1)(b)
25 of Section 131.8 of the Illinois Insurance Code shall not
26 apply and (ii) the Director, in making his determination
27 with respect to the merger, consolidation, or other
28 acquisition of control, need not take into account the
29 effect on competition of the merger, consolidation, or
30 other acquisition of control;
31 (3) the Director shall have the power to require
32 the following information:
33 (A) certification by an independent actuary of
34 the adequacy of the reserves of the Health
HB3661 Enrolled -41- LRB093 09245 JLS 09478 b
1 Maintenance Organization sought to be acquired;
2 (B) pro forma financial statements reflecting
3 the combined balance sheets of the acquiring company
4 and the Health Maintenance Organization sought to be
5 acquired as of the end of the preceding year and as
6 of a date 90 days prior to the acquisition, as well
7 as pro forma financial statements reflecting
8 projected combined operation for a period of 2
9 years;
10 (C) a pro forma business plan detailing an
11 acquiring party's plans with respect to the
12 operation of the Health Maintenance Organization
13 sought to be acquired for a period of not less than
14 3 years; and
15 (D) such other information as the Director
16 shall require.
17 (d) The provisions of Article VIII 1/2 of the Illinois
18 Insurance Code and this Section 5-3 shall apply to the sale
19 by any health maintenance organization of greater than 10% of
20 its enrollee population (including without limitation the
21 health maintenance organization's right, title, and interest
22 in and to its health care certificates).
23 (e) In considering any management contract or service
24 agreement subject to Section 141.1 of the Illinois Insurance
25 Code, the Director (i) shall, in addition to the criteria
26 specified in Section 141.2 of the Illinois Insurance Code,
27 take into account the effect of the management contract or
28 service agreement on the continuation of benefits to
29 enrollees and the financial condition of the health
30 maintenance organization to be managed or serviced, and (ii)
31 need not take into account the effect of the management
32 contract or service agreement on competition.
33 (f) Except for small employer groups as defined in the
34 Small Employer Rating, Renewability and Portability Health
HB3661 Enrolled -42- LRB093 09245 JLS 09478 b
1 Insurance Act and except for medicare supplement policies as
2 defined in Section 363 of the Illinois Insurance Code, a
3 Health Maintenance Organization may by contract agree with a
4 group or other enrollment unit to effect refunds or charge
5 additional premiums under the following terms and conditions:
6 (i) the amount of, and other terms and conditions
7 with respect to, the refund or additional premium are set
8 forth in the group or enrollment unit contract agreed in
9 advance of the period for which a refund is to be paid or
10 additional premium is to be charged (which period shall
11 not be less than one year); and
12 (ii) the amount of the refund or additional premium
13 shall not exceed 20% of the Health Maintenance
14 Organization's profitable or unprofitable experience with
15 respect to the group or other enrollment unit for the
16 period (and, for purposes of a refund or additional
17 premium, the profitable or unprofitable experience shall
18 be calculated taking into account a pro rata share of the
19 Health Maintenance Organization's administrative and
20 marketing expenses, but shall not include any refund to
21 be made or additional premium to be paid pursuant to this
22 subsection (f)). The Health Maintenance Organization and
23 the group or enrollment unit may agree that the
24 profitable or unprofitable experience may be calculated
25 taking into account the refund period and the immediately
26 preceding 2 plan years.
27 The Health Maintenance Organization shall include a
28 statement in the evidence of coverage issued to each enrollee
29 describing the possibility of a refund or additional premium,
30 and upon request of any group or enrollment unit, provide to
31 the group or enrollment unit a description of the method used
32 to calculate (1) the Health Maintenance Organization's
33 profitable experience with respect to the group or enrollment
34 unit and the resulting refund to the group or enrollment unit
HB3661 Enrolled -43- LRB093 09245 JLS 09478 b
1 or (2) the Health Maintenance Organization's unprofitable
2 experience with respect to the group or enrollment unit and
3 the resulting additional premium to be paid by the group or
4 enrollment unit.
5 In no event shall the Illinois Health Maintenance
6 Organization Guaranty Association be liable to pay any
7 contractual obligation of an insolvent organization to pay
8 any refund authorized under this Section.
9 (Source: P.A. 91-357, eff. 7-29-99; 91-406, eff. 1-1-00;
10 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff.
11 6-9-00; 92-764, eff. 1-1-03.)
12 Section 15. The Voluntary Health Services Plans Act is
13 amended by changing Section 15.5 as follows:
14 (215 ILCS 165/15.5) (from Ch. 32, par. 609.5)
15 Sec. 15.5. Conversion Privilege-Group Type Contracts.
16 (1) Every service plan contract of a health service plan
17 corporation which provides that the continued coverage of a
18 beneficiary is contingent upon the continued employment or
19 membership of the subscriber with a particular employer,
20 union, or association shall further provide for the right of
21 said person to make application for an individual service
22 plan contract under the circumstances and in accordance with
23 the requirements set forth in SectionsSection 367e and
24 367e.1 of the "Illinois Insurance Code". The application of
25 SectionsSection 367e and 367e.1 of the Code shall not be
26 construed in such a manner as to require a health service
27 plan corporation to furnish a service or kind of benefit not
28 customarily provided by such corporation and which is
29 inconsistent with the provision of this Act.
30 (2) The requirements of this Section shall apply to all
31 such contracts delivered, issued for delivery, renewed or
32 amended on or after 180 days following the effective date of
HB3661 Enrolled -44- LRB093 09245 JLS 09478 b
1 this Section.
2 (Source: P.A. 82-498.)
3 Section 95. If and only if House Bill 1640 of the 93rd
4 General Assembly becomes law in the form it passed the House,
5 the Use of Credit Information in Personal Insurance Act is
6 amended by changing Section 20 as follows:
7 (093 HB 1640 eng, Sec. 20)
8 Sec. 20. Use of credit information. An insurer
9 authorized to do business in this State that uses credit
10 information to underwrite or rate risks shall not:
11 (1) Use an insurance score that is calculated using
12 income, gender, address, ethnic group, religion, marital
13 status, or nationality of the consumer as a factor.
14 (2) Deny, cancel, or nonrenew a policy of personal
15 insurance solely on the basis of credit information,
16 without consideration of any other applicable
17 underwriting factor independent of credit information and
18 not expressly prohibited by item (1). An insurer shall
19 not be considered to have denied, cancelled, or
20 nonrenewed a policy if coverage is available through an
21 affiliate.
22 (3) Base an insured's renewal rates for personal
23 insurance solely upon credit information, without
24 consideration of any other applicable factor independent
25 of credit information. An insurer shall not be
26 considered to have based rates solely on credit
27 information if coverage is available in a different tier
28 of the same insurer.
29 (4) Take an adverse action against a consumer
30 solely because he or she does not have a credit card
31 account, without consideration of any other applicable
32 factor independent of credit information.
HB3661 Enrolled -45- LRB093 09245 JLS 09478 b
1 (5) Consider an absence of credit information or an
2 inability to calculate an insurance score in underwriting
3 or rating personal insurance, unless the insurer does one
4 of the following:
5 (A) Treats the consumer as otherwise filed
6 withapproved by the Department, if the insurer
7 presents information that such an absence or
8 inability relates to the risk for the insurer and
9 submits a filing certification form signed by an
10 officer for the insurer certifying that such
11 treatment is actuarially justified.
12 (B) Treats the consumer as if the applicant or
13 insured had neutral credit information, as defined
14 by the insurer.
15 (C) Excludes the use of credit information as
16 a factor and uses only other underwriting criteria.
17 (6) Take an adverse action against a consumer based
18 on credit information, unless an insurer obtains and uses
19 a credit report issued or an insurance score calculated
20 within 90 days from the date the policy is first written
21 or renewal is issued.
22 (7) Use credit information unless not later than
23 every 36 months following the last time that the insurer
24 obtained current credit information for the insured, the
25 insurer recalculates the insurance score or obtains an
26 updated credit report. Regardless of the other
27 requirements of this Section:
28 (A) At annual renewal, upon the request of a
29 consumer or the consumer's agent, the insurer shall
30 re-underwrite and re-rate the policy based upon a
31 current credit report or insurance score. An insurer
32 need not recalculate the insurance score or obtain
33 the updated credit report of a consumer more
34 frequently than once in a 12-month period.
HB3661 Enrolled -46- LRB093 09245 JLS 09478 b
1 (B) The insurer shall have the discretion to
2 obtain current credit information upon any renewal
3 before the expiration of 36 months, if consistent
4 with its underwriting guidelines.
5 (C) An insurer is not required to obtain
6 current credit information for an insured, despite
7 the requirements of subitem (A) of item (7) of this
8 Section if one of the following applies:
9 (a) The insurer is treating the consumer
10 as otherwise filed withapproved by the
11 Department.
12 (b) The insured is in the most
13 favorably-priced tier of the insurer, within a
14 group of affiliated insurers. However, the
15 insurer shall have the discretion to order
16 credit information, if consistent with its
17 underwriting guidelines.
18 (c) Credit was not used for underwriting
19 or rating the insured when the policy was
20 initially written. However, the insurer shall
21 have the discretion to use credit for
22 underwriting or rating the insured upon
23 renewal, if consistent with its underwriting
24 guidelines.
25 (d) The insurer re-evaluates the insured
26 beginning no later than 36 months after
27 inception and thereafter based upon other
28 underwriting or rating factors, excluding
29 credit information.
30 (8) Use the following as a negative factor in any
31 insurance scoring methodology or in reviewing credit
32 information for the purpose of underwriting or rating a
33 policy of personal insurance:
34 (A) Credit inquiries not initiated by the
HB3661 Enrolled -47- LRB093 09245 JLS 09478 b
1 consumer or inquiries requested by the consumer for
2 his or her own credit information.
3 (B) Inquiries relating to insurance coverage,
4 if so identified on a consumer's credit report.
5 (C) Collection accounts with a medical
6 industry code, if so identified on the consumer's
7 credit report.
8 (D) Multiple lender inquiries, if coded by the
9 consumer reporting agency on the consumer's credit
10 report as being from the home mortgage industry and
11 made within 30 days of one another, unless only one
12 inquiry is considered.
13 (E) Multiple lender inquiries, if coded by the
14 consumer reporting agency on the consumer's credit
15 report as being from the automobile lending industry
16 and made within 30 days of one another, unless only
17 one inquiry is considered.
18 (Source: 093 HB 1640 eng, Sec. 20)
19 Section 99. Effective date. This Section and the
20 changes made to Sec. 143.17a of the Illinois Insurance Code
21 in Section 5 of this Act take effect upon becoming law.
22 Section 95 of this Act takes effect on October 1, 2003. The
23 rest of this Act takes effect on the uniform effective date
24 provided by law.
This site is maintained for the Illinois General Assembly
by the Legislative Information System, 705 Stratton Building, Springfield, Illinois 62706
Contact ILGA Webmaster
Translate
