Rep. Naomi D. Jakobsson

Filed: 3/25/2004

 

 


 

 


 
09300HB4059ham003 LRB093 15454 DRJ 48601 a

1
AMENDMENT TO HOUSE BILL 4059

2     AMENDMENT NO. ______. Amend House Bill 4059, AS AMENDED, by
3 replacing everything after the enacting clause with the
4 following:
 
5     "Section 5. The Illinois Insurance Code is amended by
6 changing Section 351B-5 and adding Section 367.4 as follows:
 
7     (215 ILCS 5/351B-5)  (from Ch. 73, par. 963B-5)
8     Sec. 351B-5. Applicability of other Code provisions. All
9 policies of accident and health insurance issued under this
10 Article shall be subject to the provisions of Sections 356c,
11 subsection (a) of Section 356g, 356h, 356n, 367.4, 367c, 367d,
12 370, 370a, and 370e of this Code.
13 (Source: P.A. 86-1407; 87-792; 87-1066.)
 
14     (215 ILCS 5/367.4 new)
15     Sec. 367.4. Reporting of claims information to group health
16 plan sponsor.
17     (a) In this Section, "group health plan", "health insurance
18 coverage", "health insurance issuer", and "plan sponsor" have
19 the meanings ascribed to those terms in the Illinois Health
20 Insurance Portability and Accountability Act.
21     Summary health information" means information that may be
22 individually identifiable health information and (i) that
23 summarizes the claims history, claims expenses, or type of

 

 

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1 claims experienced by individuals for whom a plan sponsor has
2 provided health benefits under a group health plan and (ii)
3 from which the information identifying an individual, a
4 relative or employer of the individual, or a member of the
5 individual's household has been deleted, except that
6 information describing geographic subdivisions of a State need
7 only be aggregated to the level of a 5-digit zip code.
8     (b) A group health plan, or a health insurance issuer or
9 health maintenance organization with respect to a group health
10 plan, shall disclose summary health information to the plan
11 sponsor if the plan sponsor requests the summary health
12 information for the purpose of (i) obtaining premium bids from
13 health plans for providing health insurance coverage under the
14 group health plan or (ii) modifying, amending, or terminating
15 the group health plan.
16     The plan documents of the group health plan must be amended
17 to incorporate provisions to do the following:
18         (1) Establish the permitted and required uses and
19 disclosures of such information by the plan sponsor.
20         (2) Provide that the plan sponsor agrees to not use or
21 further disclose the information other than as permitted or
22 required by the plan documents or as required by law.
23         (3) Provide that the plan sponsor agrees to not use or
24 disclose the information for employment-related actions
25 and decisions or in connection with any other benefit or
26 employee benefit plan of the plan sponsor.
27         (4) Provide that the plan sponsor agrees to report to
28 the group health plan any use or disclosure of the
29 information that is inconsistent with the uses or
30 disclosures provided for of which it becomes aware.
31         (5) Provide that the plan sponsor agrees to make
32 available the information required to provide an
33 accounting of disclosures.
34         (6) Provide that the plan sponsor agrees to make its

 

 

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1 internal practices, books, and records relating to the use
2 and disclosure of the summary health information received
3 from the group health plan available to the Director for
4 purposes of determining compliance by the group health plan
5 with this Section.
6         (7) Provide that the plan sponsor agrees to, if
7 feasible, return or destroy all protected health
8 information received from the group health plan that the
9 sponsor still maintains in any form and retain no copies of
10 such information when no longer needed for the purpose for
11 which disclosure was made, except that, if such return or
12 destruction is not feasible, limit further uses and
13 disclosures to those purposes that make the return or
14 destruction of the information infeasible.
15     (c) A health insurance issuer may not report any
16 information required under this Section the release of which is
17 prohibited by State or federal law or regulation.
18     (d) A health insurance issuer must provide information
19 under this Section in the aggregate, without any information
20 through which a specific individual covered under the plan may
21 be identified.
22     (e) Information obtained by a plan sponsor under this
23 Section is confidential. The sponsor may use the information
24 only for purposes relating to obtaining and maintaining health
25 insurance coverage for the sponsor's employees (if the sponsor
26 is an employer) or members (if the sponsor is an employee
27 organization).
 
28     Section 10. The Health Care Purchasing Group Act is amended
29 by changing Section 5 as follows:
 
30     (215 ILCS 123/5)
31     Sec. 5. Purpose; applicability of Illinois Health
32 Insurance Portability and Accountability Act.

 

 

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1     (a) The purpose and intent of this Act is to authorize the
2 formation, operation, and regulation of health care purchasing
3 groups (referred to in this Act as "HPGs") as described by this
4 Act, to authorize the sale and regulation of health insurance
5 products for employers that are sold to HPGs, and to encourage
6 the development of financially secure and cost effective
7 markets for the basic health care needs of employers,
8 employees, and their dependents in this State. Nothing in this
9 Act authorizes an employer to join with other employers to
10 self-insure through risk pooling.
11     (b) All health insurance contracts issued under this Act
12 are subject to the Illinois Health Insurance Portability and
13 Accountability Act.
14     (c) All health insurance contracts issued under this Act
15 are subject to Section 367.4 of the Illinois Insurance Code.
16 (Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)
 
17     Section 15. The Health Maintenance Organization Act is
18 amended by changing Section 5-3 as follows:
 
19     (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
20     Sec. 5-3. Insurance Code provisions.
21     (a) Health Maintenance Organizations shall be subject to
22 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
23 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
24 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
25 356y, 356z.2, 356z.4, 356z.5, 367.2, 367.2-5, 367.4, 367i,
26 368a, 368b, 368c, 368d, 368e, 401, 401.1, 402, 403, 403A, 408,
27 408.2, 409, 412, 444, and 444.1, paragraph (c) of subsection
28 (2) of Section 367, and Articles IIA, VIII 1/2, XII, XII 1/2,
29 XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
30     (b) For purposes of the Illinois Insurance Code, except for
31 Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
32 Maintenance Organizations in the following categories are

 

 

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

 

 

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1 acquired as of the end of the preceding year and as of
2 a date 90 days prior to the acquisition, as well as pro
3 forma financial statements reflecting projected
4 combined operation for a period of 2 years;
5             (C) a pro forma business plan detailing an
6 acquiring party's plans with respect to the operation
7 of the Health Maintenance Organization sought to be
8 acquired for a period of not less than 3 years; and
9             (D) such other information as the Director shall
10 require.
11     (d) The provisions of Article VIII 1/2 of the Illinois
12 Insurance Code and this Section 5-3 shall apply to the sale by
13 any health maintenance organization of greater than 10% of its
14 enrollee population (including without limitation the health
15 maintenance organization's right, title, and interest in and to
16 its health care certificates).
17     (e) In considering any management contract or service
18 agreement subject to Section 141.1 of the Illinois Insurance
19 Code, the Director (i) shall, in addition to the criteria
20 specified in Section 141.2 of the Illinois Insurance Code, take
21 into account the effect of the management contract or service
22 agreement on the continuation of benefits to enrollees and the
23 financial condition of the health maintenance organization to
24 be managed or serviced, and (ii) need not take into account the
25 effect of the management contract or service agreement on
26 competition.
27     (f) Except for small employer groups as defined in the
28 Small Employer Rating, Renewability and Portability Health
29 Insurance Act and except for medicare supplement policies as
30 defined in Section 363 of the Illinois Insurance Code, a Health
31 Maintenance Organization may by contract agree with a group or
32 other enrollment unit to effect refunds or charge additional
33 premiums under the following terms and conditions:
34         (i) the amount of, and other terms and conditions with

 

 

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1 respect to, the refund or additional premium are set forth
2 in the group or enrollment unit contract agreed in advance
3 of the period for which a refund is to be paid or
4 additional premium is to be charged (which period shall not
5 be less than one year); and
6         (ii) the amount of the refund or additional premium
7 shall not exceed 20% of the Health Maintenance
8 Organization's profitable or unprofitable experience with
9 respect to the group or other enrollment unit for the
10 period (and, for purposes of a refund or additional
11 premium, the profitable or unprofitable experience shall
12 be calculated taking into account a pro rata share of the
13 Health Maintenance Organization's administrative and
14 marketing expenses, but shall not include any refund to be
15 made or additional premium to be paid pursuant to this
16 subsection (f)). The Health Maintenance Organization and
17 the group or enrollment unit may agree that the profitable
18 or unprofitable experience may be calculated taking into
19 account the refund period and the immediately preceding 2
20 plan years.
21     The Health Maintenance Organization shall include a
22 statement in the evidence of coverage issued to each enrollee
23 describing the possibility of a refund or additional premium,
24 and upon request of any group or enrollment unit, provide to
25 the group or enrollment unit a description of the method used
26 to calculate (1) the Health Maintenance Organization's
27 profitable experience with respect to the group or enrollment
28 unit and the resulting refund to the group or enrollment unit
29 or (2) the Health Maintenance Organization's unprofitable
30 experience with respect to the group or enrollment unit and the
31 resulting additional premium to be paid by the group or
32 enrollment unit.
33     In no event shall the Illinois Health Maintenance
34 Organization Guaranty Association be liable to pay any

 

 

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1 contractual obligation of an insolvent organization to pay any
2 refund authorized under this Section.
3 (Source: P.A. 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-261,
4 eff. 1-1-04; 93-477, eff. 8-8-03; 93-529, eff. 8-14-03; revised
5 9-25-03.)
 
6     Section 20. The Limited Health Service Organization Act is
7 amended by changing Section 4003 as follows:
 
8     (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
9     Sec. 4003. Illinois Insurance Code provisions. Limited
10 health service organizations shall be subject to the provisions
11 of Sections 133, 134, 137, 140, 141.1, 141.2, 141.3, 143, 143c,
12 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8,
13 155.04, 155.37, 355.2, 356v, 367.4, 368a, 401, 401.1, 402, 403,
14 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA,
15 VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the
16 Illinois Insurance Code. For purposes of the Illinois Insurance
17 Code, except for Sections 444 and 444.1 and Articles XIII and
18 XIII 1/2, limited health service organizations in the following
19 categories are deemed to be domestic companies:
20         (1) a corporation under the laws of this State; or
21         (2) a corporation organized under the laws of another
22 state, 30% of more of the enrollees of which are residents
23 of this State, except a corporation subject to
24 substantially the same requirements in its state of
25 organization as is a domestic company under Article VIII
26 1/2 of the Illinois Insurance Code.
27 (Source: P.A. 91-549, eff. 8-14-99; 91-605, eff. 12-14-99;
28 91-788, eff. 6-9-00; 92-440, eff. 8-17-01.)
 
29     Section 25. The Voluntary Health Services Plans Act is
30 amended by changing Section 10 as follows:
 

 

 

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1     (215 ILCS 165/10)  (from Ch. 32, par. 604)
2     Sec. 10. Application of Insurance Code provisions. Health
3 services plan corporations and all persons interested therein
4 or dealing therewith shall be subject to the provisions of
5 Articles IIA and XII 1/2 and Sections 3.1, 133, 140, 143, 143c,
6 149, 155.37, 354, 355.2, 356r, 356t, 356u, 356v, 356w, 356x,
7 356y, 356z.1, 356z.2, 356z.4, 356z.5, 367.2, 367.4, 368a, 401,
8 401.1, 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7)
9 and (15) of Section 367 of the Illinois Insurance Code.
10 (Source: P.A. 92-130, eff. 7-20-01; 92-440, eff. 8-17-01;
11 92-651, eff. 7-11-02; 92-764, eff. 1-1-03; 93-102, eff. 1-1-04;
12 93-529, eff. 8-14-03; revised 9-25-03.)".