SB2857 93RD GENERAL ASSEMBLY

LRB093 14632 SAS 40145 b

93RD GENERAL ASSEMBLY
State of Illinois
2003 and 2004
SB2857

Introduced 2/6/2004, by Richard J. Winkel Jr.

SYNOPSIS AS INTRODUCED:

215 ILCS 5/351B-5	from Ch. 73, par. 963B-5
215 ILCS 5/367.4 new
215 ILCS 123/5
215 ILCS 125/5-3	from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003	from Ch. 73, par. 1504-3
215 ILCS 165/10	from Ch. 32, par. 604

Amends the Illinois Insurance Code, the Health Care Purchasing Group Act, the Health Maintenance Organization Act, the Limited Health Serve Organization Act, and the Voluntary Health Services Plans Act. Provides that upon the written request of a sponsor of a group health plan, the health insurance issuer providing health insurance coverage under the plan must report to the sponsor information from the 12 months preceding the date of the report regarding: (1) the total amount of charges submitted to the health insurance issuer for persons covered under the plan; (2) the total amount of payments made by the health insurance issuer to health care providers for persons covered under the plan; and (3) to the extent available, information on claims paid by type of health care provider.

A BILL FOR

AN ACT concerning insurance.

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

Section 5. The Illinois Insurance Code is amended by changing Section 351B-5 and by adding Section 367.4 as follows:

(215 ILCS 5/351B-5) (from Ch. 73, par. 963B-5)

Sec. 351B-5. Applicability of other Code provisions. All policies of accident and health insurance issued under this Article shall be subject to the provisions of Sections 356c, subsection (a) of Section 356g, 356h, 356n, 367.4, 367c, 367d, 370, 370a, and 370e of this Code.

(Source: P.A. 86-1407; 87-792; 87-1066.)

(215 ILCS 5/367.4 new)

Sec. 367.4. Reporting of claims information to group health plan sponsor.

(a) In this Section, "group health plan", "health insurance coverage", "health insurance issuer", and "plan sponsor" have the meanings ascribed to those terms in the Illinois Health Insurance Portability and Accountability Act.

(b) Upon written request from a plan sponsor, the health insurance issuer must report to the plan sponsor information from the 12 months preceding the date of the report regarding:

(1) the total amount of charges submitted to the health insurance issuer for persons covered under the health plan;

(2) the total amount of payments made by the health insurance issuer to health care providers for persons covered under the plan;

(3) to the extent available, information on claims paid by type of health care provider, including the total hospital charges, physician charges, pharmaceutical charges, and other charges.

(c) A health insurance issuer must provide information requested by a plan sponsor under this Section annually not later than the 30th day before the anniversary or renewal date of the sponsor's group health plan. Notwithstanding any other provisions of this subsection, a health insurance issuer is not required to provide information under this Section earlier than the 30th day after the date of the plan sponsor's initial written request.

(d) A health insurance issuer may not report any information required under this Section the release of which is prohibited by State or federal law or regulation.

(e) A health insurance issuer must provide claims information in the aggregate, without information through which any individual covered by the plan may be identified.

Section 10. The Health Care Purchasing Group Act is amended by changing Section 5 as follows:

(215 ILCS 123/5)

Sec. 5. Purpose; applicability of Illinois Health Insurance Portability and Accountability Act.

(a) The purpose and intent of this Act is to authorize the formation, operation, and regulation of health care purchasing groups (referred to in this Act as "HPGs") as described by this Act, to authorize the sale and regulation of health insurance products for employers that are sold to HPGs, and to encourage the development of financially secure and cost effective markets for the basic health care needs of employers, employees, and their dependents in this State. Nothing in this Act authorizes an employer to join with other employers to self-insure through risk pooling.

(b) All health insurance contracts issued under this Act are subject to the Illinois Health Insurance Portability and Accountability Act.

(c) All health insurance contracts issued under this Act are subject to Section 367.4 of the Illinois Insurance Code.

(Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)

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

(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)

Sec. 5-3. Insurance Code provisions.

(a) Health Maintenance Organizations shall be subject to the provisions of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 356y, 356z.2, 356z.4, 356z.5, 367.2, 367.2-5, 367.4, 367i, 368a, 368b, 368c, 368d, 368e, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.

(b) For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in the following categories are deemed to be "domestic companies":

(1) a corporation authorized under the Dental Service Plan Act or the Voluntary Health Services Plans Act;

(2) a corporation organized under the laws of this State; or

(3) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a "domestic company" under Article VIII 1/2 of the Illinois Insurance Code.

(c) In considering the merger, consolidation, or other acquisition of control of a Health Maintenance Organization pursuant to Article VIII 1/2 of the Illinois Insurance Code,

(1) the Director shall give primary consideration to the continuation of benefits to enrollees and the financial conditions of the acquired Health Maintenance Organization after the merger, consolidation, or other acquisition of control takes effect;

(2)(i) the criteria specified in subsection (1)(b) of Section 131.8 of the Illinois Insurance Code shall not apply and (ii) the Director, in making his determination with respect to the merger, consolidation, or other acquisition of control, need not take into account the effect on competition of the merger, consolidation, or other acquisition of control;

(3) the Director shall have the power to require the following information:

(A) certification by an independent actuary of the adequacy of the reserves of the Health Maintenance Organization sought to be acquired;

(B) pro forma financial statements reflecting the combined balance sheets of the acquiring company and the Health Maintenance Organization sought to be acquired as of the end of the preceding year and as of a date 90 days prior to the acquisition, as well as pro forma financial statements reflecting projected combined operation for a period of 2 years;

(C) a pro forma business plan detailing an acquiring party's plans with respect to the operation of the Health Maintenance Organization sought to be acquired for a period of not less than 3 years; and

(D) such other information as the Director shall require.

(d) The provisions of Article VIII 1/2 of the Illinois Insurance Code and this Section 5-3 shall apply to the sale by any health maintenance organization of greater than 10% of its enrollee population (including without limitation the health maintenance organization's right, title, and interest in and to its health care certificates).

(e) In considering any management contract or service agreement subject to Section 141.1 of the Illinois Insurance Code, the Director (i) shall, in addition to the criteria specified in Section 141.2 of the Illinois Insurance Code, take into account the effect of the management contract or service agreement on the continuation of benefits to enrollees and the financial condition of the health maintenance organization to be managed or serviced, and (ii) need not take into account the effect of the management contract or service agreement on competition.

(f) Except for small employer groups as defined in the Small Employer Rating, Renewability and Portability Health Insurance Act and except for medicare supplement policies as defined in Section 363 of the Illinois Insurance Code, a Health Maintenance Organization may by contract agree with a group or other enrollment unit to effect refunds or charge additional premiums under the following terms and conditions:

(i) the amount of, and other terms and conditions with respect to, the refund or additional premium are set forth in the group or enrollment unit contract agreed in advance of the period for which a refund is to be paid or additional premium is to be charged (which period shall not be less than one year); and

(ii) the amount of the refund or additional premium shall not exceed 20% of the Health Maintenance Organization's profitable or unprofitable experience with respect to the group or other enrollment unit for the period (and, for purposes of a refund or additional premium, the profitable or unprofitable experience shall be calculated taking into account a pro rata share of the Health Maintenance Organization's administrative and marketing expenses, but shall not include any refund to be made or additional premium to be paid pursuant to this subsection (f)). The Health Maintenance Organization and the group or enrollment unit may agree that the profitable or unprofitable experience may be calculated taking into account the refund period and the immediately preceding 2 plan years.

The Health Maintenance Organization shall include a statement in the evidence of coverage issued to each enrollee describing the possibility of a refund or additional premium, and upon request of any group or enrollment unit, provide to the group or enrollment unit a description of the method used to calculate (1) the Health Maintenance Organization's profitable experience with respect to the group or enrollment unit and the resulting refund to the group or enrollment unit or (2) the Health Maintenance Organization's unprofitable experience with respect to the group or enrollment unit and the resulting additional premium to be paid by the group or enrollment unit.

In no event shall the Illinois Health Maintenance Organization Guaranty Association be liable to pay any contractual obligation of an insolvent organization to pay any refund authorized under this Section.

(Source: P.A. 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-261, eff. 1-1-04; 93-477, eff. 8-8-03; 93-529, eff. 8-14-03; revised 9-25-03.)

Section 20. The Limited Health Service Organization Act is amended by changing Section 4003 as follows:

(215 ILCS 130/4003) (from Ch. 73, par. 1504-3)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 355.2, 356v, 367.4, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% of more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; 91-788, eff. 6-9-00; 92-440, eff. 8-17-01.)

Section 25. The Voluntary Health Services Plans Act is amended by changing Section 10 as follows:

(215 ILCS 165/10) (from Ch. 32, par. 604)

Sec. 10. Application of Insurance Code provisions. Health services plan corporations and all persons interested therein or dealing therewith shall be subject to the provisions of Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c, 149, 155.37, 354, 355.2, 356r, 356t, 356u, 356v, 356w, 356x, 356y, 356z.1, 356z.2, 356z.4, 356z.5, 367.2, 367.4, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and (15) of Section 367 of the Illinois Insurance Code.

(Source: P.A. 92-130, eff. 7-20-01; 92-440, eff. 8-17-01; 92-651, eff. 7-11-02; 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-529, eff. 8-14-03; revised 9-25-03.)