HB4059 Engrossed LRB093 15454 DRJ 41057 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 5. The Illinois Insurance Code is amended by
5 changing Section 351B-5 and adding Section 367.4 as follows:
 
6     (215 ILCS 5/351B-5)  (from Ch. 73, par. 963B-5)
7     Sec. 351B-5. Applicability of other Code provisions. All
8 policies of accident and health insurance issued under this
9 Article shall be subject to the provisions of Sections 356c,
10 subsection (a) of Section 356g, 356h, 356n, 367.4, 367c, 367d,
11 370, 370a, and 370e of this Code.
12 (Source: P.A. 86-1407; 87-792; 87-1066.)
 
13     (215 ILCS 5/367.4 new)
14     Sec. 367.4. Reporting of claims information to group health
15 plan sponsor.
16     (a) In this Section, "group health plan", "health insurance
17 coverage", "health insurance issuer", and "plan sponsor" have
18 the meanings ascribed to those terms in the Illinois Health
19 Insurance Portability and Accountability Act.
20     "Summary health information" means information that may be
21 individually identifiable health information and (i) that
22 summarizes the claims history, claims expenses, or type of
23 claims experienced by individuals for whom a plan sponsor has
24 provided health benefits under a group health plan and (ii)
25 from which the information identifying an individual, a
26 relative or employer of the individual, or a member of the
27 individual's household has been deleted, except that
28 information describing geographic subdivisions of a State need
29 only be aggregated to the level of a 5-digit zip code.
30     (b) A group health plan, or a health insurance issuer or
31 health maintenance organization with respect to a group health

 

 

HB4059 Engrossed - 2 - LRB093 15454 DRJ 41057 b

1 plan, shall disclose summary health information to the plan
2 sponsor if the plan sponsor requests the summary health
3 information for the purpose of (i) obtaining premium bids from
4 health plans for providing health insurance coverage under the
5 group health plan or (ii) modifying, amending, or terminating
6 the group health plan.
7     The plan documents of the group health plan must be amended
8 to incorporate provisions to do the following:
9         (1) Establish the permitted and required uses and
10 disclosures of such information by the plan sponsor.
11         (2) Provide that the plan sponsor agrees to not use or
12 further disclose the information other than as permitted or
13 required by the plan documents or as required by law.
14         (3) Provide that the plan sponsor agrees to not use or
15 disclose the information for employment-related actions
16 and decisions or in connection with any other benefit or
17 employee benefit plan of the plan sponsor.
18         (4) Provide that the plan sponsor agrees to report to
19 the group health plan any use or disclosure of the
20 information that is inconsistent with the uses or
21 disclosures provided for of which it becomes aware.
22         (5) Provide that the plan sponsor agrees to make
23 available the information required to provide an
24 accounting of disclosures.
25         (6) Provide that the plan sponsor agrees to make its
26 internal practices, books, and records relating to the use
27 and disclosure of the summary health information received
28 from the group health plan available to the Director for
29 purposes of determining compliance by the group health plan
30 with this Section.
31         (7) Provide that the plan sponsor agrees to, if
32 feasible, return or destroy all protected health
33 information received from the group health plan that the
34 sponsor still maintains in any form and retain no copies of
35 such information when no longer needed for the purpose for
36 which disclosure was made, except that, if such return or

 

 

HB4059 Engrossed - 3 - LRB093 15454 DRJ 41057 b

1 destruction is not feasible, limit further uses and
2 disclosures to those purposes that make the return or
3 destruction of the information infeasible.
4     (c) A health insurance issuer may not report any
5 information required under this Section the release of which is
6 prohibited by State or federal law or regulation.
7     (d) A health insurance issuer must provide information
8 under this Section in the aggregate, without any information
9 through which a specific individual covered under the plan may
10 be identified.
11     (e) Information obtained by a plan sponsor under this
12 Section is confidential. The sponsor may use the information
13 only for purposes relating to obtaining and maintaining health
14 insurance coverage for the sponsor's employees (if the sponsor
15 is an employer) or members (if the sponsor is an employee
16 organization).
 
17     Section 10. The Health Care Purchasing Group Act is amended
18 by changing Section 5 as follows:
 
19     (215 ILCS 123/5)
20     Sec. 5. Purpose; applicability of Illinois Health
21 Insurance Portability and Accountability Act.
22     (a) The purpose and intent of this Act is to authorize the
23 formation, operation, and regulation of health care purchasing
24 groups (referred to in this Act as "HPGs") as described by this
25 Act, to authorize the sale and regulation of health insurance
26 products for employers that are sold to HPGs, and to encourage
27 the development of financially secure and cost effective
28 markets for the basic health care needs of employers,
29 employees, and their dependents in this State. Nothing in this
30 Act authorizes an employer to join with other employers to
31 self-insure through risk pooling.
32     (b) All health insurance contracts issued under this Act
33 are subject to the Illinois Health Insurance Portability and
34 Accountability Act.

 

 

HB4059 Engrossed - 4 - LRB093 15454 DRJ 41057 b

1     (c) All health insurance contracts issued under this Act
2 are subject to Section 367.4 of the Illinois Insurance Code.
3 (Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)
 
4     Section 15. The Health Maintenance Organization Act is
5 amended by changing Section 5-3 as follows:
 
6     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
7     Sec. 5-3. Insurance Code provisions.
8     (a) Health Maintenance Organizations shall be subject to
9 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
10 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
11 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
12 356y, 356z.2, 356z.4, 356z.5, 367.2, 367.2-5, 367.4, 367i,
13 368a, 368b, 368c, 368d, 368e, 401, 401.1, 402, 403, 403A, 408,
14 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection
15 (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2,
16 XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
17     (b) For purposes of the Illinois Insurance Code, except for
18 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
19 Maintenance Organizations in the following categories are
20 deemed to be "domestic companies":
21         (1) a corporation authorized under the Dental Service
22 Plan Act or the Voluntary Health Services Plans Act;
23         (2) a corporation organized under the laws of this
24 State; or
25         (3) a corporation organized under the laws of another
26 state, 30% or more of the enrollees of which are residents
27 of this State, except a corporation subject to
28 substantially the same requirements in its state of
29 organization as is a "domestic company" under Article VIII
30 1/2 of the Illinois Insurance Code.
31     (c) In considering the merger, consolidation, or other
32 acquisition of control of a Health Maintenance Organization
33 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
34         (1) the Director shall give primary consideration to

 

 

HB4059 Engrossed - 5 - LRB093 15454 DRJ 41057 b

1 the continuation of benefits to enrollees and the financial
2 conditions of the acquired Health Maintenance Organization
3 after the merger, consolidation, or other acquisition of
4 control takes effect;
5         (2)(i) the criteria specified in subsection (1)(b) of
6 Section 131.8 of the Illinois Insurance Code shall not
7 apply and (ii) the Director, in making his determination
8 with respect to the merger, consolidation, or other
9 acquisition of control, need not take into account the
10 effect on competition of the merger, consolidation, or
11 other acquisition of control;
12         (3) the Director shall have the power to require the
13 following information:
14             (A) certification by an independent actuary of the
15 adequacy of the reserves of the Health Maintenance
16 Organization sought to be acquired;
17             (B) pro forma financial statements reflecting the
18 combined balance sheets of the acquiring company and
19 the Health Maintenance Organization sought to be
20 acquired as of the end of the preceding year and as of
21 a date 90 days prior to the acquisition, as well as pro
22 forma financial statements reflecting projected
23 combined operation for a period of 2 years;
24             (C) a pro forma business plan detailing an
25 acquiring party's plans with respect to the operation
26 of the Health Maintenance Organization sought to be
27 acquired for a period of not less than 3 years; and
28             (D) such other information as the Director shall
29 require.
30     (d) The provisions of Article VIII 1/2 of the Illinois
31 Insurance Code and this Section 5-3 shall apply to the sale by
32 any health maintenance organization of greater than 10% of its
33 enrollee population (including without limitation the health
34 maintenance organization's right, title, and interest in and to
35 its health care certificates).
36     (e) In considering any management contract or service

 

 

HB4059 Engrossed - 6 - LRB093 15454 DRJ 41057 b

1 agreement subject to Section 141.1 of the Illinois Insurance
2 Code, the Director (i) shall, in addition to the criteria
3 specified in Section 141.2 of the Illinois Insurance Code, take
4 into account the effect of the management contract or service
5 agreement on the continuation of benefits to enrollees and the
6 financial condition of the health maintenance organization to
7 be managed or serviced, and (ii) need not take into account the
8 effect of the management contract or service agreement on
9 competition.
10     (f) Except for small employer groups as defined in the
11 Small Employer Rating, Renewability and Portability Health
12 Insurance Act and except for medicare supplement policies as
13 defined in Section 363 of the Illinois Insurance Code, a Health
14 Maintenance Organization may by contract agree with a group or
15 other enrollment unit to effect refunds or charge additional
16 premiums under the following terms and conditions:
17         (i) the amount of, and other terms and conditions with
18 respect to, the refund or additional premium are set forth
19 in the group or enrollment unit contract agreed in advance
20 of the period for which a refund is to be paid or
21 additional premium is to be charged (which period shall not
22 be less than one year); and
23         (ii) the amount of the refund or additional premium
24 shall not exceed 20% of the Health Maintenance
25 Organization's profitable or unprofitable experience with
26 respect to the group or other enrollment unit for the
27 period (and, for purposes of a refund or additional
28 premium, the profitable or unprofitable experience shall
29 be calculated taking into account a pro rata share of the
30 Health Maintenance Organization's administrative and
31 marketing expenses, but shall not include any refund to be
32 made or additional premium to be paid pursuant to this
33 subsection (f)). The Health Maintenance Organization and
34 the group or enrollment unit may agree that the profitable
35 or unprofitable experience may be calculated taking into
36 account the refund period and the immediately preceding 2

 

 

HB4059 Engrossed - 7 - LRB093 15454 DRJ 41057 b

1 plan years.
2     The Health Maintenance Organization shall include a
3 statement in the evidence of coverage issued to each enrollee
4 describing the possibility of a refund or additional premium,
5 and upon request of any group or enrollment unit, provide to
6 the group or enrollment unit a description of the method used
7 to calculate (1) the Health Maintenance Organization's
8 profitable experience with respect to the group or enrollment
9 unit and the resulting refund to the group or enrollment unit
10 or (2) the Health Maintenance Organization's unprofitable
11 experience with respect to the group or enrollment unit and the
12 resulting additional premium to be paid by the group or
13 enrollment unit.
14     In no event shall the Illinois Health Maintenance
15 Organization Guaranty Association be liable to pay any
16 contractual obligation of an insolvent organization to pay any
17 refund authorized under this Section.
18 (Source: P.A. 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-261,
19 eff. 1-1-04; 93-477, eff. 8-8-03; 93-529, eff. 8-14-03; revised
20 9-25-03.)
 
21     Section 20. The Limited Health Service Organization Act is
22 amended by changing Section 4003 as follows:
 
23     (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
24     Sec. 4003. Illinois Insurance Code provisions. Limited
25 health service organizations shall be subject to the provisions
26 of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c,
27 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8,
28 155.04, 155.37, 355.2, 356v, 367.4, 368a, 401, 401.1, 402, 403,
29 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA,
30 VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the
31 Illinois Insurance Code. For purposes of the Illinois Insurance
32 Code, except for Sections 444 and 444.1 and Articles XIII and
33 XIII 1/2, limited health service organizations in the following
34 categories are deemed to be domestic companies:

 

 

HB4059 Engrossed - 8 - LRB093 15454 DRJ 41057 b

1         (1) a corporation under the laws of this State; or
2         (2) a corporation organized under the laws of another
3 state, 30% of more of the enrollees of which are residents
4 of this State, except a corporation subject to
5 substantially the same requirements in its state of
6 organization as is a domestic company under Article VIII
7 1/2 of the Illinois Insurance Code.
8 (Source: P.A. 91-549, eff. 8-14-99; 91-605, eff. 12-14-99;
9 91-788, eff. 6-9-00; 92-440, eff. 8-17-01.)
 
10     Section 25. The Voluntary Health Services Plans Act is
11 amended by changing Section 10 as follows:
 
12     (215 ILCS 165/10)  (from Ch. 32, par. 604)
13     Sec. 10. Application of Insurance Code provisions. Health
14 services plan corporations and all persons interested therein
15 or dealing therewith shall be subject to the provisions of
16 Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
17 149, 155.37, 354, 355.2, 356r, 356t, 356u, 356v, 356w, 356x,
18 356y, 356z.1, 356z.2, 356z.4, 356z.5, 367.2, 367.4, 368a, 401,
19 401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)
20 and (15) of Section 367 of the Illinois Insurance Code.
21 (Source: P.A. 92-130, eff. 7-20-01; 92-440, eff. 8-17-01;
22 92-651, eff. 7-11-02; 92-764, eff. 1-1-03; 93-102, eff. 1-1-04;
23 93-529, eff. 8-14-03; revised 9-25-03.)