Illinois General Assembly - Full Text of SB0147
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Full Text of SB0147  102nd General Assembly




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1    AN ACT concerning regulation.
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
4    Section 5. The Illinois Insurance Code is amended by
5changing Section 363 as follows:
6    (215 ILCS 5/363)  (from Ch. 73, par. 975)
7    Sec. 363. Medicare supplement policies; minimum standards.
8    (1) Except as otherwise specifically provided therein,
9this Section and Section 363a of this Code shall apply to:
10        (a) all Medicare supplement policies and subscriber
11    contracts delivered or issued for delivery in this State
12    on and after January 1, 1989; and
13        (b) all certificates issued under group Medicare
14    supplement policies or subscriber contracts, which
15    certificates are issued or issued for delivery in this
16    State on and after January 1, 1989.
17    This Section shall not apply to "Accident Only" or
18"Specified Disease" types of policies. The provisions of this
19Section are not intended to prohibit or apply to policies or
20health care benefit plans, including group conversion
21policies, provided to Medicare eligible persons, which
22policies or plans are not marketed or purported or held to be
23Medicare supplement policies or benefit plans.



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1    (2) For the purposes of this Section and Section 363a, the
2following terms have the following meanings:
3        (a) "Applicant" means:
4            (i) in the case of individual Medicare supplement
5        policy, the person who seeks to contract for insurance
6        benefits, and
7            (ii) in the case of a group Medicare policy or
8        subscriber contract, the proposed certificate holder.
9        (b) "Certificate" means any certificate delivered or
10    issued for delivery in this State under a group Medicare
11    supplement policy.
12        (c) "Medicare supplement policy" means an individual
13    policy of accident and health insurance, as defined in
14    paragraph (a) of subsection (2) of Section 355a of this
15    Code, or a group policy or certificate delivered or issued
16    for delivery in this State by an insurer, fraternal
17    benefit society, voluntary health service plan, or health
18    maintenance organization, other than a policy issued
19    pursuant to a contract under Section 1876 of the federal
20    Social Security Act (42 U.S.C. Section 1395 et seq.) or a
21    policy issued under a demonstration project specified in
22    42 U.S.C. Section 1395ss(g)(1), or any similar
23    organization, that is advertised, marketed, or designed
24    primarily as a supplement to reimbursements under Medicare
25    for the hospital, medical, or surgical expenses of persons
26    eligible for Medicare.



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1        (d) "Issuer" includes insurance companies, fraternal
2    benefit societies, voluntary health service plans, health
3    maintenance organizations, or any other entity providing
4    Medicare supplement insurance, unless the context clearly
5    indicates otherwise.
6        (e) "Medicare" means the Health Insurance for the Aged
7    Act, Title XVIII of the Social Security Amendments of
8    1965.
9    (3) No Medicare supplement insurance policy, contract, or
10certificate, that provides benefits that duplicate benefits
11provided by Medicare, shall be issued or issued for delivery
12in this State after December 31, 1988. No such policy,
13contract, or certificate shall provide lesser benefits than
14those required under this Section or the existing Medicare
15Supplement Minimum Standards Regulation, except where
16duplication of Medicare benefits would result.
17    (4) Medicare supplement policies or certificates shall
18have a notice prominently printed on the first page of the
19policy or attached thereto stating in substance that the
20policyholder or certificate holder shall have the right to
21return the policy or certificate within 30 days of its
22delivery and to have the premium refunded directly to him or
23her in a timely manner if, after examination of the policy or
24certificate, the insured person is not satisfied for any
26    (5) A Medicare supplement policy or certificate may not



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1deny a claim for losses incurred more than 6 months from the
2effective date of coverage for a preexisting condition. The
3policy may not define a preexisting condition more
4restrictively than a condition for which medical advice was
5given or treatment was recommended by or received from a
6physician within 6 months before the effective date of
8    (6) An issuer of a Medicare supplement policy shall:
9        (a) not deny coverage to an applicant under 65 years
10    of age who meets any of the following criteria:
11            (i) becomes eligible for Medicare by reason of
12        disability if the person makes application for a
13        Medicare supplement policy within 6 months of the
14        first day on which the person enrolls for benefits
15        under Medicare Part B; for a person who is
16        retroactively enrolled in Medicare Part B due to a
17        retroactive eligibility decision made by the Social
18        Security Administration, the application must be
19        submitted within a 6-month period beginning with the
20        month in which the person received notice of
21        retroactive eligibility to enroll;
22            (ii) has Medicare and an employer group health
23        plan (either primary or secondary to Medicare) that
24        terminates or ceases to provide all such supplemental
25        health benefits;
26            (iii) is insured by a Medicare Advantage plan that



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1        includes a Health Maintenance Organization, a
2        Preferred Provider Organization, and a Private
3        Fee-For-Service or Medicare Select plan and the
4        applicant moves out of the plan's service area; the
5        insurer goes out of business, withdraws from the
6        market, or has its Medicare contract terminated; or
7        the plan violates its contract provisions or is
8        misrepresented in its marketing; or
9            (iv) is insured by a Medicare supplement policy
10        and the insurer goes out of business, withdraws from
11        the market, or the insurance company or agents
12        misrepresent the plan and the applicant is without
13        coverage;
14        (b) make available to persons eligible for Medicare by
15    reason of disability each type of Medicare supplement
16    policy the issuer makes available to persons eligible for
17    Medicare by reason of age;
18        (c) not charge individuals who become eligible for
19    Medicare by reason of disability and who are under the age
20    of 65 premium rates for any medical supplemental insurance
21    benefit plan offered by the issuer that exceed the
22    issuer's highest rate on the current rate schedule filed
23    with the Division of Insurance for that plan to
24    individuals who are age 65 or older; and
25        (d) provide the rights granted by items (a) through
26    (d), for 6 months after the effective date of this



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1    amendatory Act of the 95th General Assembly, to any person
2    who had enrolled for benefits under Medicare Part B prior
3    to this amendatory Act of the 95th General Assembly who
4    otherwise would have been eligible for coverage under item
5    (a).
6    (7) The Director shall issue reasonable rules and
7regulations for the following purposes:
8        (a) To establish specific standards for policy
9    provisions of Medicare policies and certificates. The
10    standards shall be in accordance with the requirements of
11    this Code. No requirement of this Code relating to minimum
12    required policy benefits, other than the minimum standards
13    contained in this Section and Section 363a, shall apply to
14    Medicare medicare supplement policies and certificates.
15    The standards may cover, but are not limited to the
16    following:
17            (A) Terms of renewability.
18            (B) Initial and subsequent terms of eligibility.
19            (C) Non-duplication of coverage.
20            (D) Probationary and elimination periods.
21            (E) Benefit limitations, exceptions and
22        reductions.
23            (F) Requirements for replacement.
24            (G) Recurrent conditions.
25            (H) Definition of terms.
26            (I) Requirements for issuing rebates or credits to



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1        policyholders if the policy's loss ratio does not
2        comply with subsection (7) of Section 363a.
3            (J) Uniform methodology for the calculating and
4        reporting of loss ratio information.
5            (K) Assuring public access to loss ratio
6        information of an issuer of Medicare supplement
7        insurance.
8            (L) Establishing a process for approving or
9        disapproving proposed premium increases.
10            (M) Establishing a policy for holding public
11        hearings prior to approval of premium increases.
12            (N) Establishing standards for Medicare Select
13        policies.
14            (O) Prohibited policy provisions not otherwise
15        specifically authorized by statute that, in the
16        opinion of the Director, are unjust, unfair, or
17        unfairly discriminatory to any person insured or
18        proposed for coverage under a medicare supplement
19        policy or certificate.
20        (b) To establish minimum standards for benefits and
21    claims payments, marketing practices, compensation
22    arrangements, and reporting practices for Medicare
23    supplement policies.
24        (c) To implement transitional requirements of Medicare
25    supplement insurance benefits and premiums of Medicare
26    supplement policies and certificates to conform to



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1    Medicare program revisions.
2    (8) If an individual is at least 65 years of age but no
3more than 75 years of age and has an existing Medicare
4supplement policy, the individual is entitled to an annual
5open enrollment period lasting 45 days, commencing with the
6individual's birthday, and the individual may purchase any
7Medicare supplement policy with the same issuer that offers
8benefits equal to or lesser than those provided by the
9previous coverage. During this open enrollment period, an
10issuer of a Medicare supplement policy shall not deny or
11condition the issuance or effectiveness of Medicare
12supplemental coverage, nor discriminate in the pricing of
13coverage, because of health status, claims experience, receipt
14of health care, or a medical condition of the individual. An
15issuer shall provide notice of this annual open enrollment
16period for eligible Medicare supplement policyholders at the
17time that the application is made for a Medicare supplement
18policy or certificate. The notice shall be in a form that may
19be prescribed by the Department.
20(Source: P.A. 95-436, eff. 6-1-08.)
21    Section 99. Effective date. This Act takes effect on
22January 1, 2022.