95TH GENERAL ASSEMBLY
State of Illinois
2007 and 2008
SB2008

 

Introduced 2/7/2008, by Sen. Jeffrey M. Schoenberg

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 97/50

    Amends the Health Insurance Portability and Accountability Act. In a provision involving the guaranteed renewability of individual health insurance, provides that the changes made to the provision by Public Act 94-502 apply to discontinuances of coverage occurring before, on, or after August 8, 2005 (the effective date of Public Act 94-502). Effective immediately.


LRB095 18651 KBJ 44738 b

 

 

A BILL FOR

 

SB2008 LRB095 18651 KBJ 44738 b

1     AN ACT concerning regulation.
 
2     Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
 
4     Section 5. The Illinois Health Insurance Portability and
5 Accountability Act is amended by changing Section 50 as
6 follows:
 
7     (215 ILCS 97/50)
8     Sec. 50. Guaranteed renewability of individual health
9 insurance coverage.
10     (A) In general. Except as provided in this Section, a
11 health insurance issuer that provides individual health
12 insurance coverage to an individual shall renew or continue in
13 force such coverage at the option of the individual.
14     (B) General exceptions. A health insurance issuer may
15 nonrenew or discontinue health insurance coverage of an
16 individual in the individual market based only on one or more
17 of the following:
18         (1) Nonpayment of premiums. The individual has failed
19     to pay premiums or contributions in accordance with the
20     terms of the health insurance coverage or the issuer has
21     not received timely premium payments.
22         (2)  Fraud. The individual has performed an act or
23     practice that constitutes fraud or made an intentional

 

 

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1     misrepresentation of material fact under the terms of the
2     coverage.
3         (3) Termination of plan. The issuer is ceasing to offer
4     coverage in the individual market in accordance with
5     subsection (C) of this Section and applicable Illinois law.
6         (4) Movement outside the service area. In the case of a
7     health insurance issuer that offers health insurance
8     coverage in the market through a network plan, the
9     individual no longer resides, lives, or works in the
10     service area (or in an area for which the issuer is
11     authorized to do business), but only if such coverage is
12     terminated under this paragraph uniformly without regard
13     to any health status-related factor of covered
14     individuals.
15         (5) Association membership ceases. In the case of
16     health insurance coverage that is made available in the
17     individual market only through one or more bona fide
18     associations, the membership of the individual in the
19     association (on the basis of which the coverage is
20     provided) ceases, but only if such coverage is terminated
21     under this paragraph uniformly without regard to any health
22     status-related factor of covered individuals.
23     (C) Requirements for uniform termination of coverage.
24         (1) Particular type of coverage not offered. In any
25     case in which an issuer decides to discontinue offering a
26     particular type of health insurance coverage offered in the

 

 

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1     individual market, coverage of such type may be
2     discontinued by the issuer only if:
3             (a) the issuer provides notice to each covered
4         individual provided coverage of this type in such
5         market of such discontinuation at least 90 days prior
6         to the date of the discontinuation of such coverage;
7             (b) the issuer offers, to each individual in the
8         individual market provided coverage of this type, the
9         option to purchase any other individual health
10         insurance coverage currently being offered by the
11         issuer for individuals in such market; and
12             (c) in exercising the option to discontinue
13         coverage of that type and in offering the option of
14         coverage under subparagraph (b), the issuer acts
15         uniformly without regard to any health status-related
16         factor of enrolled individuals or individuals who may
17         become eligible for such coverage.
18         (2) Discontinuance of all coverage.
19             (a) In general. Subject to subparagraph (c), in any
20         case in which a health insurance issuer elects to
21         discontinue offering all health insurance coverage in
22         the individual market in Illinois, health insurance
23         coverage may be discontinued by the issuer only if:
24                 (i) the issuer provides notice to the Director
25             and to each individual of the discontinuation at
26             least 180 days prior to the date of the expiration

 

 

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1             of such coverage;
2                 (ii) all health insurance issued or delivered
3             for issuance in Illinois in such market is
4             discontinued and coverage under such health
5             insurance coverage in such market is not renewed;
6             and
7                 (iii) in the case where the issuer has
8             affiliates in the individual market, the issuer
9             gives notice to each affected individual at least
10             180 days prior to the date of the expiration of the
11             coverage of the individual's option to purchase
12             all other individual health benefit plans
13             currently offered by any affiliate of the carrier.
14             (b) Prohibition on market reentry. In the case of a
15         discontinuation under subparagraph (a) in the
16         individual market, the issuer may not provide for the
17         issuance of any health insurance coverage in Illinois
18         involved during the 5-year period beginning on the date
19         of the discontinuation of the last health insurance
20         coverage not so renewed.
21             (c) If an issuer elects to discontinue offering all
22         health insurance coverage in the individual market
23         under subparagraph (a), its affiliates that offer
24         health insurance coverage in the individual market in
25         Illinois shall offer individual health insurance
26         coverage to all individuals who were covered by the

 

 

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1         discontinued health insurance coverage on the date of
2         the notice provided to affected individuals under
3         subdivision (iii) of subparagraph (a) of this item (2)
4         if the individual applies for coverage no later than 63
5         days after the discontinuation of coverage.
6             (d) Subject to subparagraph (e) of this item (2),
7         an affiliate that issues coverage under subparagraph
8         (c) shall waive the preexisting condition exclusion
9         period to the extent that the individual has satisfied
10         the preexisting condition exclusion period under the
11         individual's prior contract or policy.
12             (e) An affiliate that issues coverage under
13         subparagraph (c) may require the individual to satisfy
14         the remaining part of the preexisting condition
15         exclusion period, if any, under the individual's prior
16         contract or policy that has not been satisfied, unless
17         the coverage has a shorter preexisting condition
18         exclusion period, and may include in any coverage
19         issued under subparagraph (c) any waivers or
20         limitations of coverage that were included in the
21         individual's prior contract or policy.
22     (D) Exception for uniform modification of coverage. At the
23 time of coverage renewal, a health insurance issuer may modify
24 the health insurance coverage for a policy form offered to
25 individuals in the individual market so long as the
26 modification is consistent with Illinois law and effective on a

 

 

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1 uniform basis among all individuals with that policy form.
2     (E) Application to coverage offered only through
3 associations. In applying this Section in the case of health
4 insurance coverage that is made available by a health insurance
5 issuer in the individual market to individuals only through one
6 or more associations, a reference to an "individual" is deemed
7 to include a reference to such an association (of which the
8 individual is a member).
9     The changes to this Section made by Public Act 94-502 apply
10 to discontinuances of coverage occurring before, on, or after
11 August 8, 2008. The changes to this Section made by this
12 amendatory Act of the 94th General Assembly apply only to
13 discontinuances of coverage occurring on or after the effective
14 date of this amendatory Act of the 94th General Assembly.
15 (Source: P.A. 94-502, eff. 8-8-05.)
 
16     Section 99. Effective date. This Act takes effect upon
17 becoming law.