SB1912 103RD GENERAL ASSEMBLY

LRB103 25851 BMS 57008 b

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".

A BILL FOR

AN ACT concerning regulation.

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

Section 5. The Department of Insurance Law is amended by adding Section 1405-26 as follows:

(20 ILCS 1405/1405-26 new)

Sec. 1405-26. Office of the Healthcare Advocate.

(a) The Department of Insurance shall establish the Office of the Healthcare Advocate. The Office shall be administered by the Chief Health Care Advocate, who shall report to the Director. The Advocate shall be an individual with expertise and experience in the fields of health insurance and consumer advocacy. The Advocate may employ legal counsel, independent actuaries, and other employees and contractors as needed to carry out the duties of the Office.

(b) The Advocate shall evaluate data, in consultation with an actuary, to assess individual and small group health benefit plan rate filings, networks, and affordability; and represent the interests of individuals and small business owners in public hearings held pursuant to subsection (e) of Section 355 of the Illinois Insurance Code and subsection (f) of Section 4-12 of the Health Maintenance Organization Act.

(c) The Advocate shall have access to the unredacted actuarial memos that insurers send to the Department as part of the rate filings.

(d) In the performance of the Advocate's duties, the Advocate shall act independently of the Department. Any recommendations made or positions taken by the Advocate do not reflect those of the Department.

(e) The Department may adopt reasonable rules necessary to implement this Section.

Section 10. The Illinois Insurance Code is amended by changing Section 355 as follows:

(215 ILCS 5/355) (from Ch. 73, par. 967)

Sec. 355. Accident and health policies; provisions. policies-Provisions.)

(a) As used in this Section:

"Inadequate rate" means a rate:

(1) that is insufficient to sustain projected losses and expenses to which the rate applies; and

(2) the continued use of which endangers the solvency of an insurer using that rate.

"Plain language" shall have the same meaning as "plain writing" as used in the federal Plain Writing Act of 2010, and subsequent guidance documents, including the Federal Plain Language Guidelines.

"Unreasonable rate increase" means a rate increase that the Director determines to be excessive, unjustified, or unfairly discriminatory in accordance with 45 CFR 154.205.

(b) No policy of insurance against loss or damage from the sickness, or from the bodily injury or death of the insured by accident shall be issued or delivered to any person in this State until a copy of the form thereof and of the classification of risks and the premium rates pertaining thereto have been filed with the Director; nor shall it be so issued or delivered until the Director shall have approved such policy pursuant to the provisions of Section 143. If the Director disapproves the policy form he shall make a written decision stating the respects in which such form does not comply with the requirements of law and shall deliver a copy thereof to the company and it shall be unlawful thereafter for any such company to issue any policy in such form.

(c) Rate increases for all individual and small group accident and health insurance policies subject to the standards of 45 CFR Part 154 must be filed with the Department for approval. Unreasonable rate increases or inadequate rates shall be modified or disapproved.

(d) 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 rate filing and a filing summary in plain language on the insurer's website. The Department shall post all insurers' rate filings and summaries on the Department's website. All summaries shall include a brief justification of any rate increase or decrease requested, including the number of individual members, the medical loss ratio, medical trend, administrative costs, and any other information requested by the Director. The plain language summary shall include notification of the public comment period established in subsection (e).

(e) The Department shall open a 30-day public comment period on the rate filing beginning on the date that the rate filing is posted on the website. The Department shall post all of the comments received to the Department's website within 5 business days after the comment period ends. The Department shall hold a public hearing during the 30-day comment period.

(f) The Director shall adopt affordability standards that must be considered in any decision to approve, disapprove, or modify rate filings. These affordability standards include, but are not limited to, the following:

(1) trends, including historical rates for existing products and national and regional medical and health insurance trends;

(2) inflation;

(3) price comparisons to other market rates for similar products;

(4) the ability of low-income individuals to pay for health insurance;

(5) the ability of small businesses to pay for health insurance;

(6) health insurers' efforts to control administrative costs; and

(7) effective strategies implemented by health insurers to increase affordability, including payment reform across the delivery system.

(g) After the close of the public comment period described in subsection (e), the Department shall issue a decision to approve, disapprove, or modify a rate filing. The Department shall notify the insurer of the decision, and make the decision available to the public by posting it on the Department's website, and include the following information:

(1) an explanation of the findings and rationale that are the basis for the decision; and

(2) any actuarial or other analyses, calculations, or evaluations relied upon by the Department in arriving at the decision.

(h) If, following the issuance of a decision but before the effective date of the premium rates approved by the decision, an event occurs that materially affects the Director's decision to approve, deny, or modify the rates, the Director may consider supplemental facts or data reasonably related to the event.

(i) The Department shall adopt rules implementing the procedures described in subsections (d) through (h).

(Source: P.A. 79-777.)

Section 15. The Health Maintenance Organization Act is amended by changing Section 4-12 as follows:

(215 ILCS 125/4-12) (from Ch. 111 1/2, par. 1409.5)

Sec. 4-12. Changes in Rate Methodology and Benefits, Material Modifications. A health maintenance organization shall file with the Director, prior to use, a notice of any change in rate methodology, or benefits and of any material modification of any matter or document furnished pursuant to Section 2-1, together with such supporting documents as are necessary to fully explain the change or modification.

(a) Contract modifications described in subsections (c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all form agreements between the organization and enrollees, providers, administrators of services and insurers of health maintenance organizations.

(b) Material transactions or series of transactions other than those described in subsection (a) of this Section, the total annual value of which exceeds the greater of $100,000 or 5% of net earned subscription revenue for the most current twelve month period as determined from filed financial statements.

(c) Any agreement between the organization and an insurer shall be subject to the provisions of the laws of this State regarding reinsurance as provided in Article XI of the Illinois Insurance Code. All reinsurance agreements must be filed. Approval of the Director is required for all agreements except the following: individual stop loss, aggregate excess, hospitalization benefits or out-of-area of the participating providers unless 20% or more of the organization's total risk is reinsured, in which case all reinsurance agreements require approval.

(d) Rate increases for all individual and small group accident and health insurance policies subject to the standards of 45 CFR Part 154 must be filed with the Department for approval. Unreasonable rate increases in relation to benefits under the policy provided or inadequate rates shall be modified or disapproved.

(e) When a health maintenance organization files a schedule or table of premium rates for individual or small group health benefit plans, the health maintenance organization shall post notice of the rate filing and a filing summary in plain language on the organization's website. The Department shall post all insurers' rate filings and summaries on the Department's website. All summaries shall include a brief justification of any rate increase or decrease requested, including the number of individual members, the medical loss ratio, medical trend, administrative costs, and any other information requested by the Director. The plain language summary shall include notification of the public comment period established in subsection (f).

(f) The Department shall open a 30-day public comment period on the rate filing beginning on the date that the rate filing is posted on the website. The Department shall post all of the comments received to the Department's website within 5 business days after the comment period ends. The Department shall hold a public hearing during the 30-day comment period.

(g) The Director shall adopt affordability standards that must be considered in any decision to approve, disapprove, or modify rate filings. These affordability standards include, but are not limited to, the following:

(1) trends, including historical rates for existing products and national and regional medical and health insurance trends;

(2) inflation;

(3) price comparisons to other market rates for similar products;

(4) the ability of low-income individuals to pay for health insurance;

(5) the ability of small businesses to pay for health insurance;

(6) health insurers' efforts to control administrative costs; and

(7) effective strategies implemented by health insurers to increase affordability, including payment reform across the delivery system.

(h) After the close of the public comment period described in subsection (f), the Department shall issue a decision to approve, disapprove, or modify a rate filing. The Department shall notify the health maintenance organization of the decision, and make the decision available to the public by posting it on the Department's website, and include the following information:

(1) an explanation of the findings and rationale that are the basis for the decision; and

(2) any actuarial or other analyses, calculations, or evaluations relied upon by the Department in arriving at the decision.

(i) If, following the issuance of a decision but before the effective date of the premium rates approved by the decision, an event occurs that materially affects the Director's decision to approve, deny, or modify the rates, the Director may consider supplemental facts or data reasonably related to the event.

(j) The Department shall adopt rules implementing the procedures described in subsections (e) through (i).

(k) As used in this Section:

"Inadequate rate" means a rate:

(1) that is insufficient to sustain projected losses and expenses to which the rate applies; and

(2) the continued use of which endangers the solvency of an insurer using that rate.

"Plain language" shall have the same meaning as "plain writing" as used in the federal Plain Writing Act of 2010, and subsequent guidance documents, including the Federal Plain Language Guidelines.

"Unreasonable rate increase" means a rate increase that the Director determines to be excessive, unjustified, or unfairly discriminatory in accordance with 45 CFR 154.205.

(Source: P.A. 86-620.)