94TH GENERAL ASSEMBLY
State of Illinois
2005 and 2006
SB2444


 
Introduced 1/18/2006, by Sen. John O. Jones
 
SYNOPSIS AS INTRODUCED:
 		

















215 ILCS 5/356z.8 new





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


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







    Amends the Illinois Insurance Code, the Health Maintenance Organization Act, and the Voluntary Health Services Plans Act. Provides that a group or individual policy of accident and health insurance or managed care plan amended, delivered, issued, or renewed after the effective date of the amendatory Act must provide coverage for ostomy equipment and related medical supplies, including disposable ostomy bags, that are medically necessary for the treatment of ostomies. Effective January 1, 2007.
















LRB094 18791 LJB 54197 b

















 


 


A BILL FOR









 











SB2444

LRB094 18791 LJB 54197 b






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    AN ACT concerning insurance.

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


 
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    Section 5. The Illinois Insurance Code is amended  by adding 
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Section 356z.8 as follows:
 
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    (215 ILCS 5/356z.8  new)
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    Sec. 356z.8. Ostomy supplies. A group or individual policy 
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of accident and health insurance or managed care plan amended, 
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delivered, issued, or renewed after the effective date of this 
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amendatory Act of the 94th General Assembly must provide 
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coverage for ostomy equipment and related medical supplies, 
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including disposable ostomy bags, that are medically necessary 
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for the treatment of ostomies.
 
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    Section 10. The Health Maintenance Organization Act is 
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amended  by changing Section 5-3 as follows:
 



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



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    Sec. 5-3. Insurance Code provisions. 

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    (a) Health Maintenance Organizations
shall be subject to 
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the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, 
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141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, 
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154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, 
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356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 364.01, 367.2, 
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367.2-5, 367i, 368a, 368b, 368c, 368d, 368e,
401, 401.1, 402, 
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403, 403A,
408, 408.2, 409, 412, 444,
and
444.1,
paragraph (c) 
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of subsection (2) of Section 367, and Articles IIA, VIII 1/2,

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XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois 
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Insurance Code.

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


 






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deemed to be "domestic companies":


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


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


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        (3) a corporation organized under the laws of another 
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    state, 30% or more
of the enrollees of which are residents 
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    of this State, except a
corporation subject to 
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    substantially the same requirements in its state of

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    organization as is a "domestic company" under Article VIII 
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    1/2 of the
Illinois Insurance Code.

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


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


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        (2)(i) the criteria specified in subsection (1)(b) of 
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    Section 131.8 of
the Illinois Insurance Code shall not 
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    apply and (ii) the Director, in making
his determination 
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    with respect to the merger, consolidation, or other

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    acquisition of control, need not take into account the 
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    effect on
competition of the merger, consolidation, or 
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    other acquisition of control;


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


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


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


 






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        forma financial statements
reflecting projected 
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        combined operation for a period of 2 years;


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


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

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    (d) The provisions of Article VIII 1/2 of the Illinois 
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Insurance Code
and this Section 5-3 shall apply to the sale by 
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any health maintenance
organization of greater than 10% of its

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enrollee population (including without limitation the health 
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maintenance
organization's right, title, and interest in and to 
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its health care
certificates).

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    (e) In considering any management contract or service 
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agreement subject
to Section 141.1 of the Illinois Insurance 
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Code, the Director (i) shall, in
addition to the criteria 
18
specified in Section 141.2 of the Illinois
Insurance Code, take 
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into account the effect of the management contract or
service 
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agreement on the continuation of benefits to enrollees and the

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financial condition of the health maintenance organization to 
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be managed or
serviced, and (ii) need not take into account the 
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effect of the management
contract or service agreement on 
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competition.

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


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        (i) the amount of, and other terms and conditions with 
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    respect to, the
refund or additional premium are set forth 
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    in the group or enrollment unit
contract agreed in advance 
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    of the period for which a refund is to be paid or

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    additional premium is to be charged (which period shall not 
 


 






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    be less than one
year); and


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        (ii) the amount of the refund or additional premium 
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    shall not exceed 20%
of the Health Maintenance 
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    Organization's profitable or unprofitable experience
with 
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    respect to the group or other enrollment unit for the 
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    period (and, for
purposes of a refund or additional 
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    premium, the profitable or unprofitable
experience shall 
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    be calculated taking into account a pro rata share of the

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    Health Maintenance Organization's administrative and 
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    marketing expenses, but
shall not include any refund to be 
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    made or additional premium to be paid
pursuant to this 
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    subsection (f)).  The Health Maintenance Organization and 
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    the
group or enrollment unit may agree that the profitable 
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    or unprofitable
experience may be calculated taking into 
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    account the refund period and the
immediately preceding 2 
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    plan years.

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

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experience with respect to the group or enrollment unit and the 
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resulting
additional premium to be paid by the group or 
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enrollment unit.

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

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(Source: P.A. 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 93-261, 
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eff. 1-1-04; 93-477, eff. 8-8-03; 93-529, eff. 8-14-03; 93-853, 
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eff. 1-1-05; 93-1000, eff. 1-1-05; revised 10-14-04.)

 
 


 






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    Section 15. The Voluntary Health Services Plans Act is 
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amended  by changing Section 10 as follows:
 



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



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    Sec. 10. Application of Insurance Code provisions. Health 
5
services
plan corporations and all persons interested therein 
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or dealing therewith
shall be subject to the provisions of 
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Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, 
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149, 155.37, 354, 355.2, 356r, 356t, 356u, 356v,
356w, 356x, 
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356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 364.01, 
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367.2, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, and 412, 
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and paragraphs (7) and (15) of Section 367 of the Illinois

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Insurance Code.

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(Source: P.A. 92-130, eff. 7-20-01; 92-440, eff. 8-17-01; 
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92-651, eff. 7-11-02; 92-764, eff. 1-1-03; 93-102, eff. 1-1-04; 
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93-529, eff. 8-14-03; 93-853, eff. 1-1-05; 93-1000, eff. 
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1-1-05; revised 10-14-04.)

 

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    Section 99. Effective date. This Act takes effect January 
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1, 2007.