103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB0324

 

Introduced 2/2/2023, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/355  from Ch. 73, par. 967
215 ILCS 125/4-12  from Ch. 111 1/2, par. 1409.5

    Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that all individual and small group accident and health policies written subject to certain federal standards must file rates with the Department of Insurance for approval. Provides that unreasonable rate increases or inadequate rates shall be disapproved. Provides that when an insurer files a schedule or table of premium rates for individual or small employer health benefit plans, the Department of Insurance shall post notice of the premium rate filings, rate filing summaries, and other information about the rate increase or decrease online on the Department's website. Provides that the Department shall open a 30-day public comment period on the date that a rate filing is posted on the website. Provides that after the close of the public comment period, the Department shall issue a decision to approve, disapprove, or modify a rate filing, and post the decision on the Department's website. Provides that the Department shall adopt rules implementing specified procedures. Defines "inadequate rate" and "unreasonable rate increase".


LRB103 26156 BMS 52514 b

 

 

A BILL FOR

 

SB0324LRB103 26156 BMS 52514 b

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 355 as follows:
 
6    (215 ILCS 5/355)  (from Ch. 73, par. 967)
7    Sec. 355. Accident and health policies; provisions.
8policies-Provisions.)
9    (a) As used in this Section:
10    "Inadequate rate" means a rate:
11        (1) that is insufficient to sustain projected losses
12    and expenses to which the rate applies; and
13        (2) the continued use of which endangers the solvency
14    of an insurer using that rate.
15    "Unreasonable rate increase" means a rate increase that
16the Director determines to be excessive, unjustified, or
17unfairly discriminatory in accordance with 45 CFR 154.205.
18    (b) No policy of insurance against loss or damage from the
19sickness, or from the bodily injury or death of the insured by
20accident shall be issued or delivered to any person in this
21State until a copy of the form thereof and of the
22classification of risks and the premium rates pertaining
23thereto have been filed with the Director; nor shall it be so

 

 

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1issued or delivered until the Director shall have approved
2such policy pursuant to the provisions of Section 143. If the
3Director disapproves the policy form he shall make a written
4decision stating the respects in which such form does not
5comply with the requirements of law and shall deliver a copy
6thereof to the company and it shall be unlawful thereafter for
7any such company to issue any policy in such form.
8    (c) Rate increases for all individual and small group
9accident and health insurance policies subject to the
10standards of 45 CFR Part 154 must be filed with the Department
11for approval. Unreasonable rate increases or inadequate rates
12shall be disapproved.
13    (d) When an insurer files a schedule or table of premium
14rates for individual or small employer health benefit plans,
15the Department shall post notice of the rate filings, rate
16filing summaries, and other information about the rate
17increase or decrease online on the Department's website. The
18Department shall open a 30-day public comment period on the
19rate filing beginning on the date that the rate filing is
20posted on the website. The Department shall post all of the
21comments received to the Department's website within 5
22business days after the comment period ends.
23    (e) After the close of the public comment period described
24in subsection (d), the Department shall issue a decision to
25approve, disapprove, or modify a rate filing. The Department
26shall notify the insurer of the decision, and make the

 

 

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1decision available to the public by posting it on the
2Department's website, and include the following information:
3        (1) an explanation of the findings and rationale that
4    are the basis for the decision; and
5        (2) any actuarial or other analyses, calculations, or
6    evaluations relied upon by the Department in arriving at
7    the decision.
8    (f) If, following the issuance of a decision but before
9the effective date of the premium rates approved by the
10decision, an event occurs that materially affects the
11Director's decision to approve, deny, or modify the rates, the
12Director may consider supplemental facts or data reasonably
13related to the event.
14    (g) The Department shall adopt rules implementing the
15procedures described in subsections (d) through (f).
16(Source: P.A. 79-777.)
 
17    Section 10. The Health Maintenance Organization Act is
18amended by changing Section 4-12 as follows:
 
19    (215 ILCS 125/4-12)  (from Ch. 111 1/2, par. 1409.5)
20    Sec. 4-12. Changes in Rate Methodology and Benefits,
21Material Modifications. A health maintenance organization
22shall file with the Director, prior to use, a notice of any
23change in rate methodology, or benefits and of any material
24modification of any matter or document furnished pursuant to

 

 

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1Section 2-1, together with such supporting documents as are
2necessary to fully explain the change or modification.
3    (a) Contract modifications described in subsections
4(c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all
5form agreements between the organization and enrollees,
6providers, administrators of services and insurers of health
7maintenance organizations.
8    (b) Material transactions or series of transactions other
9than those described in subsection (a) of this Section, the
10total annual value of which exceeds the greater of $100,000 or
115% of net earned subscription revenue for the most current
12twelve month period as determined from filed financial
13statements.
14    (c) Any agreement between the organization and an insurer
15shall be subject to the provisions of the laws of this State
16regarding reinsurance as provided in Article XI of the
17Illinois Insurance Code. All reinsurance agreements must be
18filed. Approval of the Director is required for all agreements
19except the following: individual stop loss, aggregate excess,
20hospitalization benefits or out-of-area of the participating
21providers unless 20% or more of the organization's total risk
22is reinsured, in which case all reinsurance agreements require
23approval.
24    (d) Rate increases for all individual and small group
25health care plans subject to the standards of 45 CFR Part 154
26must be filed with the Department for approval. Unreasonable

 

 

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1rate increases in relation to benefits under the policy
2provided or inadequate rates shall be disapproved.
3    (e) When a health maintenance organization files a
4schedule or table of premium rates for individual or small
5employer health benefit plans, the Department shall post
6notice of the rate filings, rate filing summaries, and other
7information about the rate increase or decrease online on the
8Department's website. The Department shall open a 30-day
9public comment period on the rate filing beginning on the date
10that the rate filing is posted on the website. The Department
11shall post all of the comments received to the Department's
12website within 5 business days after the comment period ends.
13    (f) After the close of the public comment period described
14in subsection (e), the Department shall issue a decision to
15approve, disapprove, or modify a rate filing. The Department
16shall notify the health maintenance organization of the
17decision, and make the decision available to the public by
18posting it on the Department's website, and include the
19following information:
20        (1) an explanation of the findings and rationale that
21    are the basis for the decision; and
22        (2) any actuarial or other analyses, calculations, or
23    evaluations relied upon by the Department in arriving at
24    the decision.
25    (g) If, following the issuance of a decision but before
26the effective date of the premium rates approved by the

 

 

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1decision, an event occurs that materially affects the
2Director's decision to approve, deny, or modify the rates, the
3Director may consider supplemental facts or data reasonably
4related to the event.
5    (h) The Department shall adopt rules implementing the
6procedures described in subsections (e) through (g).
7    (i) As used in this Section:
8    "Inadequate rate" means a rate:
9        (1) that is insufficient to sustain projected losses
10    and expenses to which the rate applies; and
11        (2) the continued use of which endangers the solvency
12    of an insurer using that rate.
13    "Unreasonable rate increase" means a rate increase that
14the Director determines to be excessive, unjustified, or
15unfairly discriminatory in accordance with 45 CFR 154.205.
16(Source: P.A. 86-620.)