103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB1912

 

Introduced 2/9/2023, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
20 ILCS 1405/1405-26 new
215 ILCS 5/355  from Ch. 73, par. 967
215 ILCS 125/4-12  from Ch. 111 1/2, par. 1409.5

    Amends the Department of Insurance Law. Provides that the Department of Insurance shall establish the Office of the Healthcare Advocate. Provides that the Office shall be administered by the Chief Health Care Advocate, who shall report to the Director of Insurance. 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 for approval. Provides that unreasonable rate increases or inadequate rates shall be modified or disapproved. Provides that when an insurer files a schedule or table of premium rates for individual or small group health benefit plans, the insurer shall post notice of the premium rate filings and a filing summary in plain language on the insurer's website. Provides that the Department shall post all insurers' rate filings and summaries 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 the Department shall hold a public hearing during the 30-day comment period. Provides that the Director shall adopt affordability standards that must be considered in any decision to approve, disapprove, or modify rate filings. 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", "plain language", and "unreasonable rate increase".


LRB103 25851 BMS 57008 b

 

 

A BILL FOR

 

SB1912LRB103 25851 BMS 57008 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 Department of Insurance Law is amended by
5adding Section 1405-26 as follows:
 
6    (20 ILCS 1405/1405-26 new)
7    Sec. 1405-26. Office of the Healthcare Advocate.
8    (a) The Department of Insurance shall establish the Office
9of the Healthcare Advocate. The Office shall be administered
10by the Chief Health Care Advocate, who shall report to the
11Director. The Advocate shall be an individual with expertise
12and experience in the fields of health insurance and consumer
13advocacy. The Advocate may employ legal counsel, independent
14actuaries, and other employees and contractors as needed to
15carry out the duties of the Office.
16    (b) The Advocate shall evaluate data, in consultation with
17an actuary, to assess individual and small group health
18benefit plan rate filings, networks, and affordability; and
19represent the interests of individuals and small business
20owners in public hearings held pursuant to subsection (e) of
21Section 355 of the Illinois Insurance Code and subsection (f)
22of Section 4-12 of the Health Maintenance Organization Act.
23    (c) The Advocate shall have access to the unredacted

 

 

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1actuarial memos that insurers send to the Department as part
2of the rate filings.
3    (d) In the performance of the Advocate's duties, the
4Advocate shall act independently of the Department. Any
5recommendations made or positions taken by the Advocate do not
6reflect those of the Department.
7    (e) The Department may adopt reasonable rules necessary to
8implement this Section.
 
9    Section 10. The Illinois Insurance Code is amended by
10changing Section 355 as follows:
 
11    (215 ILCS 5/355)  (from Ch. 73, par. 967)
12    Sec. 355. Accident and health policies; provisions.
13policies-Provisions.)
14    (a) As used in this Section:
15    "Inadequate rate" means a rate:
16        (1) that is insufficient to sustain projected losses
17    and expenses to which the rate applies; and
18        (2) the continued use of which endangers the solvency
19    of an insurer using that rate.
20    "Plain language" shall have the same meaning as "plain
21writing" as used in the federal Plain Writing Act of 2010, and
22subsequent guidance documents, including the Federal Plain
23Language Guidelines.
24    "Unreasonable rate increase" means a rate increase that

 

 

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1the Director determines to be excessive, unjustified, or
2unfairly discriminatory in accordance with 45 CFR 154.205.
3    (b) No policy of insurance against loss or damage from the
4sickness, or from the bodily injury or death of the insured by
5accident shall be issued or delivered to any person in this
6State until a copy of the form thereof and of the
7classification of risks and the premium rates pertaining
8thereto have been filed with the Director; nor shall it be so
9issued or delivered until the Director shall have approved
10such policy pursuant to the provisions of Section 143. If the
11Director disapproves the policy form he shall make a written
12decision stating the respects in which such form does not
13comply with the requirements of law and shall deliver a copy
14thereof to the company and it shall be unlawful thereafter for
15any such company to issue any policy in such form.
16    (c) Rate increases for all individual and small group
17accident and health insurance policies subject to the
18standards of 45 CFR Part 154 must be filed with the Department
19for approval. Unreasonable rate increases or inadequate rates
20shall be modified or disapproved.
21    (d) When an insurer files a schedule or table of premium
22rates for individual or small group health benefit plans, the
23insurer shall post notice of the rate filing and a filing
24summary in plain language on the insurer's website. The
25Department shall post all insurers' rate filings and summaries
26on the Department's website. All summaries shall include a

 

 

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1brief justification of any rate increase or decrease
2requested, including the number of individual members, the
3medical loss ratio, medical trend, administrative costs, and
4any other information requested by the Director. The plain
5language summary shall include notification of the public
6comment period established in subsection (e).
7    (e) The Department shall open a 30-day public comment
8period on the rate filing beginning on the date that the rate
9filing is posted on the website. The Department shall post all
10of the comments received to the Department's website within 5
11business days after the comment period ends. The Department
12shall hold a public hearing during the 30-day comment period.
13    (f) The Director shall adopt affordability standards that
14must be considered in any decision to approve, disapprove, or
15modify rate filings. These affordability standards include,
16but are not limited to, the following:
17        (1) trends, including historical rates for existing
18    products and national and regional medical and health
19    insurance trends;
20        (2) inflation;
21        (3) price comparisons to other market rates for
22    similar products;
23        (4) the ability of low-income individuals to pay for
24    health insurance;
25        (5) the ability of small businesses to pay for health
26    insurance;

 

 

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1        (6) health insurers' efforts to control administrative
2    costs; and
3        (7) effective strategies implemented by health
4    insurers to increase affordability, including payment
5    reform across the delivery system.
6    (g) After the close of the public comment period described
7in subsection (e), the Department shall issue a decision to
8approve, disapprove, or modify a rate filing. The Department
9shall notify the insurer of the decision, and make the
10decision available to the public by posting it on the
11Department's website, and include the following information:
12        (1) an explanation of the findings and rationale that
13    are the basis for the decision; and
14        (2) any actuarial or other analyses, calculations, or
15    evaluations relied upon by the Department in arriving at
16    the decision.
17    (h) If, following the issuance of a decision but before
18the effective date of the premium rates approved by the
19decision, an event occurs that materially affects the
20Director's decision to approve, deny, or modify the rates, the
21Director may consider supplemental facts or data reasonably
22related to the event.
23    (i) The Department shall adopt rules implementing the
24procedures described in subsections (d) through (h).
25(Source: P.A. 79-777.)
 

 

 

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1    Section 15. The Health Maintenance Organization Act is
2amended by changing Section 4-12 as follows:
 
3    (215 ILCS 125/4-12)  (from Ch. 111 1/2, par. 1409.5)
4    Sec. 4-12. Changes in Rate Methodology and Benefits,
5Material Modifications. A health maintenance organization
6shall file with the Director, prior to use, a notice of any
7change in rate methodology, or benefits and of any material
8modification of any matter or document furnished pursuant to
9Section 2-1, together with such supporting documents as are
10necessary to fully explain the change or modification.
11    (a) Contract modifications described in subsections
12(c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all
13form agreements between the organization and enrollees,
14providers, administrators of services and insurers of health
15maintenance organizations.
16    (b) Material transactions or series of transactions other
17than those described in subsection (a) of this Section, the
18total annual value of which exceeds the greater of $100,000 or
195% of net earned subscription revenue for the most current
20twelve month period as determined from filed financial
21statements.
22    (c) Any agreement between the organization and an insurer
23shall be subject to the provisions of the laws of this State
24regarding reinsurance as provided in Article XI of the
25Illinois Insurance Code. All reinsurance agreements must be

 

 

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1filed. Approval of the Director is required for all agreements
2except the following: individual stop loss, aggregate excess,
3hospitalization benefits or out-of-area of the participating
4providers unless 20% or more of the organization's total risk
5is reinsured, in which case all reinsurance agreements require
6approval.
7    (d) Rate increases for all individual and small group
8accident and health insurance policies subject to the
9standards of 45 CFR Part 154 must be filed with the Department
10for approval. Unreasonable rate increases in relation to
11benefits under the policy provided or inadequate rates shall
12be modified or disapproved.
13    (e) When a health maintenance organization files a
14schedule or table of premium rates for individual or small
15group health benefit plans, the health maintenance
16organization shall post notice of the rate filing and a filing
17summary in plain language on the organization's website. The
18Department shall post all insurers' rate filings and summaries
19on the Department's website. All summaries shall include a
20brief justification of any rate increase or decrease
21requested, including the number of individual members, the
22medical loss ratio, medical trend, administrative costs, and
23any other information requested by the Director. The plain
24language summary shall include notification of the public
25comment period established in subsection (f).
26    (f) The Department shall open a 30-day public comment

 

 

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1period on the rate filing beginning on the date that the rate
2filing is posted on the website. The Department shall post all
3of the comments received to the Department's website within 5
4business days after the comment period ends. The Department
5shall hold a public hearing during the 30-day comment period.
6    (g) The Director shall adopt affordability standards that
7must be considered in any decision to approve, disapprove, or
8modify rate filings. These affordability standards include,
9but are not limited to, the following:
10    (1) trends, including historical rates for existing
11    products and national and regional medical and health
12    insurance trends;
13        (2) inflation;
14        (3) price comparisons to other market rates for
15    similar products;
16        (4) the ability of low-income individuals to pay for
17    health insurance;
18        (5) the ability of small businesses to pay for health
19    insurance;
20        (6) health insurers' efforts to control administrative
21    costs; and
22        (7) effective strategies implemented by health
23    insurers to increase affordability, including payment
24    reform across the delivery system.
25    (h) After the close of the public comment period described
26in subsection (f), the Department shall issue a decision to

 

 

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1approve, disapprove, or modify a rate filing. The Department
2shall notify the health maintenance organization of the
3decision, and make the decision available to the public by
4posting it on the Department's website, and include the
5following information:
6        (1) an explanation of the findings and rationale that
7    are the basis for the decision; and
8        (2) any actuarial or other analyses, calculations, or
9    evaluations relied upon by the Department in arriving at
10    the decision.
11    (i) If, following the issuance of a decision but before
12the effective date of the premium rates approved by the
13decision, an event occurs that materially affects the
14Director's decision to approve, deny, or modify the rates, the
15Director may consider supplemental facts or data reasonably
16related to the event.
17    (j) The Department shall adopt rules implementing the
18procedures described in subsections (e) through (i).
19    (k) As used in this Section:
20    "Inadequate rate" means a rate:
21        (1) that is insufficient to sustain projected losses
22    and expenses to which the rate applies; and
23        (2) the continued use of which endangers the solvency
24    of an insurer using that rate.
25    "Plain language" shall have the same meaning as "plain
26writing" as used in the federal Plain Writing Act of 2010, and

 

 

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1subsequent guidance documents, including the Federal Plain
2Language Guidelines.
3    "Unreasonable rate increase" means a rate increase that
4the Director determines to be excessive, unjustified, or
5unfairly discriminatory in accordance with 45 CFR 154.205.
6(Source: P.A. 86-620.)