Illinois General Assembly - Full Text of HB0815
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Full Text of HB0815  101st General Assembly

HB0815 101ST GENERAL ASSEMBLY

  
  

 


 
101ST GENERAL ASSEMBLY
State of Illinois
2019 and 2020
HB0815

 

Introduced , by Rep. Bob Morgan

 

SYNOPSIS AS INTRODUCED:
 
New Act

    Creates the Freedom from Aggressive Insurance Increases Review Act. Creates the independent, quasi-judicial Health Insurance Rate Review Board to ensure insurance rates are reasonable and justified. Sets forth duties and prohibited activities concerning the Board. Sets forth the procedures for appointment to the Board. Provides requirements and procedures for health carriers to file current and proposed rates and rate schedules with the Board. Provides that the Board shall review and approve or disapprove all rates and rate schedules filed or used by a health carrier. Sets forth provisions concerning rate standards, public notice, hearings, and the disapproval and approval of rates and rate schedules. Requires the Board to annually report to the General Assembly all rate and rate schedules approved, disapproved, and amended.


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CORRECTIONAL BUDGET AND IMPACT NOTE ACT MAY APPLY
FISCAL NOTE ACT MAY APPLY

 

 

A BILL FOR

 

HB0815LRB101 05000 SMS 52055 b

1    AN ACT concerning insurance.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 1. Short title. This Act may be cited as the
5Freedom from Aggressive Insurance Increases Review Act.
 
6    Section 5. Definitions. For the purposes of this Act:
7    "Board" means the Health Insurance Rate Review Board.
8    "Director" means the Director of Insurance.
9    "Health benefit plan" means a policy, contract,
10certificate, plan, or agreement offered or issued by a health
11carrier to provide, deliver, arrange for, pay for, or reimburse
12any of the costs of health care services.
13    "Health care services" means services for the diagnosis,
14prevention, treatment, cure, or relief of a health condition,
15illness, injury or disease.
16    "Health carrier" means an entity subject to the insurance
17laws and regulations of this State, or subject to the
18jurisdiction of the Director, that contracts or offers to
19contract to provide, deliver, arrange for, pay for, or
20reimburse any of the costs of health care services, including a
21sickness and accident insurance company, a health maintenance
22organization, or any other entity providing a plan of health
23insurance, health benefits, or health care services. "Health

 

 

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1carrier" also includes a limited health service organization
2and voluntary health service plan.
3    "Insured" means an individual who is enrolled in or
4otherwise participating in a health benefit plan.
5    "Rate" means premium, deductible, co-payment, or any other
6amount that the health carrier requires its policyholders to
7pay.
8    "Supplementary rating information" means any manual,
9rating schedule, plan of rules, rating rules, classification
10systems, territory codes and descriptions, rating plans, and
11other similar information used by the insurer or health
12maintenance organization to determine the applicable rates for
13an insured. "Supplementary rating information" includes
14factors and relativities, including increased limits factors,
15classification relativities, deductible relativities, premium
16discount, and other similar factors and rating plans such as
17experience, schedule, and retrospective rating.
 
18    Section 10. Health Insurance Rate Review Board.
19    (a) There is created the Health Insurance Rate Review Board
20independent of the Department of Insurance to ensure insurance
21rates are reasonable and justified. The Board shall be a
22quasi-judicial body. The Board shall consist of 5 persons
23appointed, with the advice and consent of the Senate, by the
24Governor. The term of each member of the Board shall be 4
25years.

 

 

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1    (b) No member of the Board shall be involved in the
2operation or management of, have a pecuniary interest or a
3direct financial interest in, or be otherwise employed by a
4health carrier or any other organization or entity regulated by
5the Department of Insurance.
6    (c) No member of the Board or person employed by the Board
7shall solicit or accept any gift, gratuity, emolument, or
8employment from any person or corporation subject to the
9supervision of the Board, or from any officer, agent, or
10employee thereof; nor solicit, request from, or recommend,
11directly or indirectly, to any such person or corporation, and
12every officer, agent, or employee thereof, the appointment of
13any persons to any place or position. If any Board member or
14person employed by the Board violates any provision of this
15subsection (c), then he or she shall be removed from the Board
16or employment. Every person violating the provisions of this
17subsection (c) shall be guilty of a Class A misdemeanor.
18    (d) No former member of the Board or person formerly
19employed by the Board may represent any person before the Board
20in any capacity with respect to any particular Board proceeding
21in which he or she participated personally and substantially as
22a member or employee of the Board.
23    (e) No former member of the Board may appear before the
24Board in connection with any Board proceeding for a period of 2
25years following the termination of service with the Board.
26    (f) No former member of the Board may accept any employment

 

 

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1for 2 years following the termination of services with the
2Board with any entity subject to Board regulation or with any
3industry trade association that (i) receives a majority of its
4funding from entities regulated by the Board or (ii) has a
5majority of members regulated by the Board.
6    (g) No entity subject to Board regulation or trade
7association that (i) receives a majority of its funding from
8entities regulated by the Board or (ii) has a majority of
9members regulated by the Board shall offer a former member of
10the Board employment for a period of 2 years following the
11termination of member's services with the Board, or otherwise
12hire such person as an agent, consultant, or attorney where
13such employment or contractual relation would be in violation
14of this Act.
15    (h) The Board shall employ employees as may be necessary to
16carry out the provisions of this Act or to perform duties and
17exercise the powers conferred by law upon the Board.
18    (i) The Board shall adopt rules that the Board considers
19necessary to carry out the provisions of this Act or to perform
20duties and exercise the powers conferred by law upon the Board.
21    (j) The Governor shall select 5 nominees, including the
22chairperson, for appointment to the Health Insurance Rate
23Review Board, to be confirmed by the Senate. The Governor shall
24file the names of his or her appointments with the Senate and
25the Secretary of State. The Secretary of State shall indicate
26the date and time of filing.

 

 

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1    The Governor shall have 30 days from the date he or she
2files his or her list of nominees with the Secretary of State
3to make appointments to be confirmed by the Senate.
4    Appointments by the Governor must be confirmed by the
5Senate by two-thirds of its members by record vote. Any
6appointment not acted upon within 30 calendar days after the
7date of filing the names of appointments with the Secretary of
8State shall be deemed to have received the advice and consent
9of the Senate.
10    (k) When a vacancy occurs on the Health Insurance Rate
11Review Board, the Governor shall accept applications and
12nominations of candidates for 30 days from the date the vacancy
13occurs. All candidates must fill out a written application and
14submit to a background investigation to be eligible for
15consideration. The written application must include a sworn
16statement signed by the candidate disclosing communications
17relating to the regulation of health insurance, managed care
18plans, and health maintenance organizations that the applicant
19engaged in within the last year with a constitutional officer,
20a member of the General Assembly, an officer or other employee
21of the executive branch of this State, or an employee of the
22legislative branch of this State.
23    A person who provides false or misleading information on
24the application or fails to disclose a communication required
25to be disclosed in the sworn statement under this Section is
26guilty of a Class 4 felony.

 

 

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1    Once an application is submitted and until (i) the
2candidate is rejected by the Governor, (ii) the candidate is
3rejected by the Senate, or (iii) the candidate is confirmed by
4the Senate, whichever is applicable, a candidate may not engage
5in ex parte communications.
 
6    Section 15. Filing and approval of rates and rate
7schedules.
8    (a) Notwithstanding any law to the contrary, a health
9carrier may not deliver or issue for delivery any health
10benefit plan after the effective date of this Act unless:
11        (1) the health carrier has filed with the Health
12    Insurance Rate Review Board:
13            (A) all current and proposed rates and rate
14        schedules of the health benefit plan; and
15            (B) if filing changes to a previously approved rate
16        or rate schedule:
17                (i) proposed changes to the rate or rate
18            schedule;
19                (ii) an explanation of the changes;
20                (iii) financial information describing the
21            basis for the proposed changes;
22                (iv) the rate of return anticipated if the rate
23            or rate schedule is approved;
24                (v) the average rate increase or decrease
25            anticipated per insured;

 

 

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1                (vi) the medical loss ratio reserves and
2            surpluses anticipated if the rate or rate schedule
3            is approved;
4                (vii) a summary of the health carrier's
5            nonmedical expenses for the most recent fiscal
6            year;
7                (viii) supplementary rating information;
8                (ix) any other information required by the
9            Board by rule; and
10        (2) the Board has approved the rates and rate schedules
11    of the health benefit plan.
12    (b) The Board shall review and approve or disapprove all
13rates and rate schedules filed or used by a health carrier or
14filed by a rating or advisory organization on behalf of a
15health carrier.
16    (c) Within 30 days after the date a rate or rate schedule
17is filed with the Board, the Board shall:
18        (1) approve the rate or rate schedule if the Board
19    determines that the rate or rate schedule is not excessive,
20    inadequate, or unfairly discriminatory; or
21        (2) disapprove the rate or rate schedule if the Board
22    determines the rate or rate schedule is excessive,
23    inadequate, or unfairly discriminatory.
24    (d) Except as provided in subsection (e), if a rate or rate
25schedule has not been approved or disapproved by the Board
26before the expiration of the 30-day period, the rate or rate

 

 

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1schedule is considered approved and the rate or rate schedule
2may be used.
3    (e) For good cause, the Board may, on expiration of the
430-day period, extend the period for approval or disapproval of
5a rate or rate schedule for one additional 30-day period.
6    (f) If the Board determines that the information filed by a
7health carrier under this Section is incomplete or otherwise
8deficient, the Board may request additional information from
9the health carrier. If the Board requests additional
10information from the insurer during the 30-day period provided
11in subsection (c) or under a second 30-day period provided
12under subsection (e), then the time between the date that the
13Board submits the request to the health carrier and the date
14that the Board receives the information requested is not
15included in the computation of the first 30-day period or the
16second 30-day period, as applicable.
 
17    Section 20. Rate standards.
18    (a) A rate or rate schedule is excessive if the rate or
19rate schedule is likely to produce a long-term profit that is
20unreasonably high in relation to the insurance coverage
21provided.
22    (b) A rate or rate schedule is inadequate if:
23        (1) the rate or rate schedule is insufficient to
24    sustain projected losses and expenses to which the rate
25    applies; and

 

 

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1        (2) the continued use of the rate or rate schedule:
2            (A) endangers the solvency of an insurer using the
3        rate or rate schedule; or
4            (B) has the effect of substantially lessening
5        competition or creating a monopoly in a market.
6    (c) A rate or rate schedule is unfairly discriminatory if
7the rate or rate schedule:
8        (1) is not based on sound actuarial principles;
9        (2) does not bear a reasonable relationship to the
10    expected loss and expense experience among risks; or
11        (3) is based wholly or partly on the race, creed,
12    color, ethnicity, or national origin of the policyholder or
13    an insured.
 
14    Section 25. Public notice of filing. The Board must issue a
15notice to the public within 7 days after a filing for approval
16of a rate or rate schedule is received by the Board. The notice
17must include:
18        (1) the filing health carrier;
19        (2) the current rate or rate schedule;
20        (3) the proposed rate or rate schedule;
21        (4) notice that a consumer who is aggrieved by the rate
22    change may request a hearing on the proposed change within
23    30 days after the proposed change has been filed; and
24        (5) address and contact information of the Board.
 

 

 

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1    Section 30. Hearings on proposed changes.
2    (a) Within 30 days after the proposed change to a rate or
3rate schedule has been filed, the Board may request a hearing
4on the filing to hear testimony on the filing.
5    (b) Within 30 days after the proposed change has been
6filed, any person who is aggrieved with respect to any filing
7under this Act, the Director, or any public official charged
8with protecting insurance consumers may submit a request in
9writing to the Board for a hearing on the filing. The request
10must specify the grounds for the requester's grievance.
11    (c) The Board must hold a hearing as requested under
12subsection (b) not later than 30 days after the date the Board
13receives the request for hearing if the Board determines that:
14        (1) the request is made in good faith;
15        (2) the requester would be aggrieved as alleged if the
16    grounds specified in request were established; and
17        (3) the grounds specified in the request otherwise
18    justify holding the hearing.
19    (d) The Board must provide written notice of a hearing to
20the requester, if any, and each affected health carrier not
21later than 10 days before the date of the hearing. The Board
22shall also provide public notice of the hearing not later than
2310 days before the date of the hearing.
24    (e) If, after the hearing, the Board disapproves of the
25filing, the Board shall issue an order:
26        (1) specifying in what respects the filing fails to

 

 

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1    meet those requirements; and
2        (2) stating the date on which the filing is no longer
3    in effect, which must be within a reasonable period after
4    the order date.
5    The Board must send copies of the order to the requester,
6if any, and each affected health carrier.
 
7    Section 35. Hearings on filings in effect.
8    (a) The Board may disapprove a rate or rate schedule that
9is in effect only after a hearing. The Board must provide the
10filer at least 20 days written notice of the hearing.
11    The Board must issue an order disapproving a rate or rate
12schedule under this subsection (a) within 15 days after the
13close of the hearing. The order must:
14        (1) specify in what respects the filing fails to meet
15    those requirements; and
16        (2) state the date on which further use of the rate or
17    rate schedule is prohibited.
18    (b) Any person who is aggrieved with respect to any filing
19under this Act that is in effect, the Director, or any public
20official charged with protecting insurance consumers may apply
21to the Board in writing for a hearing on the filing. The
22request must specify the grounds for the requester's grievance.
23    (c) The Board must hold a hearing as requested under
24subsection (b) not later than 30 days after the date the Board
25receives the request for hearing if the Board determines that:

 

 

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1        (1) the request is made in good faith;
2        (2) the requester would be aggrieved as alleged if the
3    grounds specified in request were established; and
4        (3) the grounds specified in the request otherwise
5    justify holding the hearing.
6    (d) The Board must provide written notice of a hearing to
7the requester, if any, and each affected health carrier not
8later than 10 days before the date of the hearing. The Board
9shall also provide public notice of the hearing not later than
1010 days before the date of the hearing.
11    (e) If, after the hearing, the Board disapproves of the
12filing, the Board shall issue an order:
13        (1) specifying in what respects the filing fails to
14    meet those requirements; and
15        (2) stating the date on which the filing is no longer
16    in effect, which must be within a reasonable period after
17    the order date.
18    The Board must send copies of the order to the requester,
19if any, and each affected health carrier.
 
20    Section 40. Disapproval of rate or rate schedule.
21    (a) If the Board disapproves a filing under this Act, then
22the Board shall issue an order specifying in what respects the
23filing fails to meet the requirements of this Act.
24    (b) The aggrieved filer is entitled to a hearing on written
25request made to the Board within 30 days after the date the

 

 

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1order disapproving the rate or rate schedule filing takes
2effect.
 
3    Section 45. Approval of rate or rate schedule; use of the
4approved rate or rate schedule. If the Board approves a rate or
5rate schedule filing under this Act, the Board shall provide
6the health carrier with a written or electronic notification of
7the approval. The health carrier may use the rate or rate
8schedule on receipt of the approval notice. The Board shall
9provide public notice of its approval or disapproval of all
10filings.
 
11    Section 50. Annual report to the General Assembly. By
12January 15, 2021 and annually thereafter, the Board shall
13submit a report to the General Assembly that includes all rate
14and rate schedules approved, disapproved, and amended from the
15previous year.