Illinois General Assembly - Full Text of SB2836
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Full Text of SB2836  103rd General Assembly

SB2836 103RD GENERAL ASSEMBLY

 


 
103RD GENERAL ASSEMBLY
State of Illinois
2023 and 2024
SB2836

 

Introduced 1/19/2024, by Sen. Laura Fine

 

SYNOPSIS AS INTRODUCED:
 
215 ILCS 5/121-2.05  from Ch. 73, par. 733-2.05
215 ILCS 5/352c new
215 ILCS 5/356z.18
215 ILCS 5/367.3  from Ch. 73, par. 979.3
215 ILCS 5/367a  from Ch. 73, par. 979a
215 ILCS 5/368f
215 ILCS 125/5-3  from Ch. 111 1/2, par. 1411.2
215 ILCS 130/4003  from Ch. 73, par. 1504-3
215 ILCS 190/Act rep.

    Amends the Illinois Insurance Code. Sets forth provisions concerning short-term, limited-duration insurance. Provides that on and after January 1, 2025, no company shall issue, deliver, amend, or renew short-term, limited-duration insurance to any natural or legal person that is a resident or domiciled in the State. Provides that the Department of Insurance may adopt rules as deemed necessary that prescribe specific standards for or restrictions on policy provisions, benefit design, disclosures, and sales and marketing practices for excepted benefits. Provides that the Director of Insurance's authority under specified provisions is extended to group and blanket excepted benefits. Provides that the language does not apply to limited-scope dental, limited-scope vision, long-term care, Medicare supplement, credit life, credit health, or any excepted benefits that are filed under specified provisions. Provides that nothing in the language shall be construed to limit the Director's authority under other statutes. Makes conforming changes in the Health Maintenance Organization Act and the Limited Health Service Organization Act. Repeals the Short-Term, Limited-Duration Health Insurance Coverage Act. Effective January 1, 2025.


LRB103 35223 JAG 65205 b

 

 

A BILL FOR

 

SB2836LRB103 35223 JAG 65205 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 Sections 121-2.05, 356z.18, 367.3, 367a, and 368f and
6by adding Section 352c as follows:
 
7    (215 ILCS 5/121-2.05)  (from Ch. 73, par. 733-2.05)
8    Sec. 121-2.05. Group insurance policies issued and
9delivered in other State-Transactions in this State. With the
10exception of insurance transactions authorized under Sections
11230.2 or 367.3 of this Code or transactions described under
12Section 352c, transactions in this State involving group
13legal, group life and group accident and health or blanket
14accident and health insurance or group annuities where the
15master policy of such groups was lawfully issued and delivered
16in, and under the laws of, a State in which the insurer was
17authorized to do an insurance business, to a group properly
18established pursuant to law or regulation, and where the
19policyholder is domiciled or otherwise has a bona fide situs.
20(Source: P.A. 86-753.)
 
21    (215 ILCS 5/352c new)
22    Sec. 352c. Short-term, limited-duration insurance

 

 

SB2836- 2 -LRB103 35223 JAG 65205 b

1prohibited; rules for excepted benefits.
2    (a) Definitions. As used in this Section:
3    "Excepted benefits" has the meaning given to that term in
442 U.S.C. 300gg-91 and implementing regulations. "Excepted
5benefits" includes individual, group, or blanket coverage.
6    "Short-term, limited-duration insurance" means any type of
7accident and health insurance offered or provided within this
8State pursuant to a group or individual policy or individual
9certificate by a company, regardless of the situs state of the
10delivery of the policy, that has an expiration date specified
11in the contract that is fewer than 365 days after the original
12effective date. Regardless of the duration of coverage,
13"short-term, limited-duration insurance" does not include
14excepted benefits or any student health insurance coverage.
15    "Student health insurance coverage" has the meaning given
16to that term in 45 CFR 147.145.
17    (b) On and after January 1, 2025, no company shall issue,
18deliver, amend, or renew short-term, limited-duration
19insurance to any natural or legal person that is a resident or
20domiciled in this State.
21    (c) To prevent the use, design, and combination of
22excepted benefits to circumvent State or federal requirements
23for comprehensive forms of health insurance coverage, to
24prevent confusion or misinformation of insureds about
25duplicate or distinct types of coverage, and to ensure a
26measure of consistency within product lines across the

 

 

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1individual, group, and blanket markets, the Department may
2adopt rules as deemed necessary that prescribe specific
3standards for or restrictions on policy provisions, benefit
4design, disclosures, and sales and marketing practices for
5excepted benefits. For purposes of these rules, the Director's
6authority under subsections (3) and (4) of Section 355a is
7extended to group and blanket excepted benefits. To ensure
8compliance with these rules, the Director may require policy
9forms and rates to be filed as provided in Sections 143 and 355
10and rules thereunder with respect to excepted benefits
11coverage intended to be issued to residents of this State
12under a master contract issued to a group domiciled or
13otherwise with bona fide situs outside of this State. This
14subsection does not apply to limited-scope dental,
15limited-scope vision, long-term care, Medicare supplement,
16credit life, credit health, or any excepted benefits that are
17filed under subsections (b) through (l) of Class 2 or under
18Class 3 of Section 4. Nothing in this subsection shall be
19construed to limit the Director's authority under other
20statutes.
 
21    (215 ILCS 5/356z.18)
22    (Text of Section before amendment by P.A. 103-512)
23    Sec. 356z.18. Prosthetic and customized orthotic devices.
24    (a) For the purposes of this Section:
25    "Customized orthotic device" means a supportive device for

 

 

SB2836- 4 -LRB103 35223 JAG 65205 b

1the body or a part of the body, the head, neck, or extremities,
2and includes the replacement or repair of the device based on
3the patient's physical condition as medically necessary,
4excluding foot orthotics defined as an in-shoe device designed
5to support the structural components of the foot during
6weight-bearing activities.
7    "Licensed provider" means a prosthetist, orthotist, or
8pedorthist licensed to practice in this State.
9    "Prosthetic device" means an artificial device to replace,
10in whole or in part, an arm or leg and includes accessories
11essential to the effective use of the device and the
12replacement or repair of the device based on the patient's
13physical condition as medically necessary.
14    (b) This amendatory Act of the 96th General Assembly shall
15provide benefits to any person covered thereunder for expenses
16incurred in obtaining a prosthetic or custom orthotic device
17from any Illinois licensed prosthetist, licensed orthotist, or
18licensed pedorthist as required under the Orthotics,
19Prosthetics, and Pedorthics Practice Act.
20    (c) A group or individual major medical policy of accident
21or health insurance or managed care plan or medical, health,
22or hospital service corporation contract that provides
23coverage for prosthetic or custom orthotic care and is
24amended, delivered, issued, or renewed 6 months after the
25effective date of this amendatory Act of the 96th General
26Assembly must provide coverage for prosthetic and orthotic

 

 

SB2836- 5 -LRB103 35223 JAG 65205 b

1devices in accordance with this subsection (c). The coverage
2required under this Section shall be subject to the other
3general exclusions, limitations, and financial requirements of
4the policy, including coordination of benefits, participating
5provider requirements, utilization review of health care
6services, including review of medical necessity, case
7management, and experimental and investigational treatments,
8and other managed care provisions under terms and conditions
9that are no less favorable than the terms and conditions that
10apply to substantially all medical and surgical benefits
11provided under the plan or coverage.
12    (d) The policy or plan or contract may require prior
13authorization for the prosthetic or orthotic devices in the
14same manner that prior authorization is required for any other
15covered benefit.
16    (e) Repairs and replacements of prosthetic and orthotic
17devices are also covered, subject to the co-payments and
18deductibles, unless necessitated by misuse or loss.
19    (f) A policy or plan or contract may require that, if
20coverage is provided through a managed care plan, the benefits
21mandated pursuant to this Section shall be covered benefits
22only if the prosthetic or orthotic devices are provided by a
23licensed provider employed by a provider service who contracts
24with or is designated by the carrier, to the extent that the
25carrier provides in-network and out-of-network service, the
26coverage for the prosthetic or orthotic device shall be

 

 

SB2836- 6 -LRB103 35223 JAG 65205 b

1offered no less extensively.
2    (g) The policy or plan or contract shall also meet
3adequacy requirements as established by the Health Care
4Reimbursement Reform Act of 1985 of the Illinois Insurance
5Code.
6    (h) This Section shall not apply to accident only,
7specified disease, short-term travel hospital or medical,
8hospital confinement indemnity, credit, dental, vision,
9Medicare supplement, long-term care, basic hospital and
10medical-surgical expense coverage, disability income insurance
11coverage, coverage issued as a supplement to liability
12insurance, workers' compensation insurance, or automobile
13medical payment insurance.
14(Source: P.A. 96-833, eff. 6-1-10.)
 
15    (Text of Section after amendment by P.A. 103-512)
16    Sec. 356z.18. Prosthetic and customized orthotic devices.
17    (a) For the purposes of this Section:
18    "Customized orthotic device" means a supportive device for
19the body or a part of the body, the head, neck, or extremities,
20and includes the replacement or repair of the device based on
21the patient's physical condition as medically necessary,
22excluding foot orthotics defined as an in-shoe device designed
23to support the structural components of the foot during
24weight-bearing activities.
25    "Licensed provider" means a prosthetist, orthotist, or

 

 

SB2836- 7 -LRB103 35223 JAG 65205 b

1pedorthist licensed to practice in this State.
2    "Prosthetic device" means an artificial device to replace,
3in whole or in part, an arm or leg and includes accessories
4essential to the effective use of the device and the
5replacement or repair of the device based on the patient's
6physical condition as medically necessary.
7    (b) This amendatory Act of the 96th General Assembly shall
8provide benefits to any person covered thereunder for expenses
9incurred in obtaining a prosthetic or custom orthotic device
10from any Illinois licensed prosthetist, licensed orthotist, or
11licensed pedorthist as required under the Orthotics,
12Prosthetics, and Pedorthics Practice Act.
13    (c) A group or individual major medical policy of accident
14or health insurance or managed care plan or medical, health,
15or hospital service corporation contract that provides
16coverage for prosthetic or custom orthotic care and is
17amended, delivered, issued, or renewed 6 months after the
18effective date of this amendatory Act of the 96th General
19Assembly must provide coverage for prosthetic and orthotic
20devices in accordance with this subsection (c). The coverage
21required under this Section shall be subject to the other
22general exclusions, limitations, and financial requirements of
23the policy, including coordination of benefits, participating
24provider requirements, utilization review of health care
25services, including review of medical necessity, case
26management, and experimental and investigational treatments,

 

 

SB2836- 8 -LRB103 35223 JAG 65205 b

1and other managed care provisions under terms and conditions
2that are no less favorable than the terms and conditions that
3apply to substantially all medical and surgical benefits
4provided under the plan or coverage.
5    (d) With respect to an enrollee at any age, in addition to
6coverage of a prosthetic or custom orthotic device required by
7this Section, benefits shall be provided for a prosthetic or
8custom orthotic device determined by the enrollee's provider
9to be the most appropriate model that is medically necessary
10for the enrollee to perform physical activities, as
11applicable, such as running, biking, swimming, and lifting
12weights, and to maximize the enrollee's whole body health and
13strengthen the lower and upper limb function.
14    (e) The requirements of this Section do not constitute an
15addition to this State's essential health benefits that
16requires defrayal of costs by this State pursuant to 42 U.S.C.
1718031(d)(3)(B).
18    (f) The policy or plan or contract may require prior
19authorization for the prosthetic or orthotic devices in the
20same manner that prior authorization is required for any other
21covered benefit.
22    (g) Repairs and replacements of prosthetic and orthotic
23devices are also covered, subject to the co-payments and
24deductibles, unless necessitated by misuse or loss.
25    (h) A policy or plan or contract may require that, if
26coverage is provided through a managed care plan, the benefits

 

 

SB2836- 9 -LRB103 35223 JAG 65205 b

1mandated pursuant to this Section shall be covered benefits
2only if the prosthetic or orthotic devices are provided by a
3licensed provider employed by a provider service who contracts
4with or is designated by the carrier, to the extent that the
5carrier provides in-network and out-of-network service, the
6coverage for the prosthetic or orthotic device shall be
7offered no less extensively.
8    (i) The policy or plan or contract shall also meet
9adequacy requirements as established by the Health Care
10Reimbursement Reform Act of 1985 of the Illinois Insurance
11Code.
12    (j) This Section shall not apply to accident only,
13specified disease, short-term travel hospital or medical,
14hospital confinement indemnity, credit, dental, vision,
15Medicare supplement, long-term care, basic hospital and
16medical-surgical expense coverage, disability income insurance
17coverage, coverage issued as a supplement to liability
18insurance, workers' compensation insurance, or automobile
19medical payment insurance.
20(Source: P.A. 103-512, eff. 1-1-25.)
 
21    (215 ILCS 5/367.3)  (from Ch. 73, par. 979.3)
22    Sec. 367.3. Group accident and health insurance;
23discretionary groups.
24    (a) No group health insurance offered to a resident of
25this State under a policy issued to a group, other than one

 

 

SB2836- 10 -LRB103 35223 JAG 65205 b

1specifically described in Section 367(1), shall be delivered
2or issued for delivery in this State unless the Director
3determines that:
4        (1) the issuance of the policy is not contrary to the
5    public interest;
6        (2) the issuance of the policy will result in
7    economies of acquisition and administration; and
8        (3) the benefits under the policy are reasonable in
9    relation to the premium charged.
10    (b) No such group health insurance may be offered in this
11State under a policy issued in another state unless this State
12or the state in which the group policy is issued has made a
13determination that the requirements of subsection (a) have
14been met.
15    Where insurance is to be offered in this State under a
16policy described in this subsection, the insurer shall file
17for informational review purposes:
18        (1) a copy of the group master contract;
19        (2) a copy of the statute authorizing the issuance of
20    the group policy in the state of situs, which statute has
21    the same or similar requirements as this State, or in the
22    absence of such statute, a certification by an officer of
23    the company that the policy meets the Illinois minimum
24    standards required for individual accident and health
25    policies under authority of Section 401 of this Code, as
26    now or hereafter amended, as promulgated by rule at 50

 

 

SB2836- 11 -LRB103 35223 JAG 65205 b

1    Illinois Administrative Code, Ch. I, Sec. 2007, et seq.,
2    as now or hereafter amended, or by a successor rule;
3        (3) evidence of approval by the state of situs of the
4    group master policy; and
5        (4) copies of all supportive material furnished to the
6    state of situs to satisfy the criteria for approval.
7    (c) The Director may, at any time after receipt of the
8information required under subsection (b) and after finding
9that the standards of subsection (a) have not been met, order
10the insurer to cease the issuance or marketing of that
11coverage in this State.
12    (d) Notwithstanding subsections (a) and (b), group Group
13accident and health insurance subject to the provisions of
14this Section is also subject to the provisions of Sections
15352c and Section 367i of this Code and rules thereunder.
16(Source: P.A. 90-655, eff. 7-30-98.)
 
17    (215 ILCS 5/367a)  (from Ch. 73, par. 979a)
18    Sec. 367a. Blanket accident and health insurance.
19    (1) Blanket accident and health insurance is the that form
20of accident and health insurance providing excepted benefits,
21as defined in Section 352c, that covers covering special
22groups of persons as enumerated in one of the following
23paragraphs (a) to (g), inclusive:
24    (a) Under a policy or contract issued to any carrier for
25hire, which shall be deemed the policyholder, covering a group

 

 

SB2836- 12 -LRB103 35223 JAG 65205 b

1defined as all persons who may become passengers on such
2carrier.
3    (b) Under a policy or contract issued to an employer, who
4shall be deemed the policyholder, covering all employees or
5any group of employees defined by reference to exceptional
6hazards incident to such employment.
7    (c) Under a policy or contract issued to a college,
8school, or other institution of learning or to the head or
9principal thereof, who or which shall be deemed the
10policyholder, covering students or teachers. However, except
11where inconsistent with 45 CFR 147.145, student health
12insurance coverage other than excepted benefits that is
13provided pursuant to a written agreement with an institution
14of higher education for the benefit of its enrolled students
15and their dependents shall remain subject to the standards and
16requirements for individual coverage.
17    (d) Under a policy or contract issued in the name of any
18volunteer fire department, first aid, or other such volunteer
19group, which shall be deemed the policyholder, covering all of
20the members of such department or group.
21    (e) Under a policy or contract issued to a creditor, who
22shall be deemed the policyholder, to insure debtors of the
23creditors; Provided, however, that in the case of a loan which
24is subject to the Small Loans Act, no insurance premium or
25other cost shall be directly or indirectly charged or assessed
26against, or collected or received from the borrower.

 

 

SB2836- 13 -LRB103 35223 JAG 65205 b

1    (f) Under a policy or contract issued to a sports team or
2to a camp, which team or camp sponsor shall be deemed the
3policyholder, covering members or campers.
4    (g) Under a policy or contract issued to any other
5substantially similar group which, in the discretion of the
6Director, may be subject to the issuance of a blanket accident
7and health policy or contract.
8    (2) Any insurance company authorized to write accident and
9health insurance in this state shall have the power to issue
10blanket accident and health insurance. No such blanket policy
11may be issued or delivered in this State unless a copy of the
12form thereof shall have been filed in accordance with Section
13355, and it contains in substance such of those provisions
14contained in Sections 357.1 through 357.30 as may be
15applicable to blanket accident and health insurance and the
16following provisions:
17    (a) A provision that the policy and the application shall
18constitute the entire contract between the parties, and that
19all statements made by the policyholder shall, in absence of
20fraud, be deemed representations and not warranties, and that
21no such statements shall be used in defense to a claim under
22the policy, unless it is contained in a written application.
23    (b) A provision that to the group or class thereof
24originally insured shall be added from time to time all new
25persons or individuals eligible for coverage.
26    (3) An individual application shall not be required from a

 

 

SB2836- 14 -LRB103 35223 JAG 65205 b

1person covered under a blanket accident or health policy or
2contract, nor shall it be necessary for the insurer to furnish
3each person a certificate.
4    (4) All benefits under any blanket accident and health
5policy shall be payable to the person insured, or to his
6designated beneficiary or beneficiaries, or to his or her
7estate, except that if the person insured be a minor or person
8under legal disability, such benefits may be made payable to
9his or her parent, guardian, or other person actually
10supporting him or her. Provided further, however, that the
11policy may provide that all or any portion of any indemnities
12provided by any such policy on account of hospital, nursing,
13medical or surgical services may, at the insurer's option, be
14paid directly to the hospital or person rendering such
15services; but the policy may not require that the service be
16rendered by a particular hospital or person. Payment so made
17shall discharge the insurer's obligation with respect to the
18amount of insurance so paid.
19    (5) Nothing contained in this section shall be deemed to
20affect the legal liability of policyholders for the death of
21or injury to, any such member of such group.
22(Source: P.A. 83-1362.)
 
23    (215 ILCS 5/368f)
24    Sec. 368f. Military service member insurance
25reinstatement.

 

 

SB2836- 15 -LRB103 35223 JAG 65205 b

1    (a) No Illinois resident activated for military service
2and no spouse or dependent of the resident who becomes
3eligible for a federal government-sponsored health insurance
4program, including the TriCare program providing coverage for
5civilian dependents of military personnel, as a result of the
6activation shall be denied reinstatement into the same
7individual health insurance coverage with the health insurer
8that the resident lapsed as a result of activation or becoming
9covered by the federal government-sponsored health insurance
10program. The resident shall have the right to reinstatement in
11the same individual health insurance coverage without medical
12underwriting, subject to payment of the current premium
13charged to other persons of the same age and gender that are
14covered under the same individual health coverage. Except in
15the case of birth or adoption that occurs during the period of
16activation, reinstatement must be into the same coverage type
17as the resident held prior to lapsing the individual health
18insurance coverage and at the same or, at the option of the
19resident, higher deductible level. The reinstatement rights
20provided under this subsection (a) are not available to a
21resident or dependents if the activated person is discharged
22from the military under other than honorable conditions.
23    (b) The health insurer with which the reinstatement is
24being requested must receive a request for reinstatement no
25later than 63 days following the later of (i) deactivation or
26(ii) loss of coverage under the federal government-sponsored

 

 

SB2836- 16 -LRB103 35223 JAG 65205 b

1health insurance program. The health insurer may request proof
2of loss of coverage and the timing of the loss of coverage of
3the government-sponsored coverage in order to determine
4eligibility for reinstatement into the individual coverage.
5The effective date of the reinstatement of individual health
6coverage shall be the first of the month following receipt of
7the notice requesting reinstatement.
8    (c) All insurers must provide written notice to the
9policyholder of individual health coverage of the rights
10described in subsection (a) of this Section. In lieu of the
11inclusion of the notice in the individual health insurance
12policy, an insurance company may satisfy the notification
13requirement by providing a single written notice:
14        (1) in conjunction with the enrollment process for a
15    policyholder initially enrolling in the individual
16    coverage on or after the effective date of this amendatory
17    Act of the 94th General Assembly; or
18        (2) by mailing written notice to policyholders whose
19    coverage was effective prior to the effective date of this
20    amendatory Act of the 94th General Assembly no later than
21    90 days following the effective date of this amendatory
22    Act of the 94th General Assembly.
23    (d) The provisions of subsection (a) of this Section do
24not apply to any policy or certificate providing coverage for
25any specified disease, specified accident or accident-only
26coverage, credit, dental, disability income, hospital

 

 

SB2836- 17 -LRB103 35223 JAG 65205 b

1indemnity, long-term care, Medicare supplement, vision care,
2or short-term travel nonrenewable health policy or other
3limited-benefit supplemental insurance, or any coverage issued
4as a supplement to any liability insurance, workers'
5compensation or similar insurance, or any insurance under
6which benefits are payable with or without regard to fault,
7whether written on a group, blanket, or individual basis.
8    (e) Nothing in this Section shall require an insurer to
9reinstate the resident if the insurer requires residency in an
10enrollment area and those residency requirements are not met
11after deactivation or loss of coverage under the
12government-sponsored health insurance program.
13    (f) All terms, conditions, and limitations of the
14individual coverage into which reinstatement is made apply
15equally to all insureds enrolled in the coverage.
16    (g) The Secretary may adopt rules as may be necessary to
17carry out the provisions of this Section.
18(Source: P.A. 94-1037, eff. 7-20-06.)
 
19    Section 10. The Health Maintenance Organization Act is
20amended by changing Section 5-3 as follows:
 
21    (215 ILCS 125/5-3)  (from Ch. 111 1/2, par. 1411.2)
22    Sec. 5-3. Insurance Code provisions.
23    (a) Health Maintenance Organizations shall be subject to
24the provisions of Sections 133, 134, 136, 137, 139, 140,

 

 

SB2836- 18 -LRB103 35223 JAG 65205 b

1141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153,
2154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 155.49,
3352c, 355.2, 355.3, 355b, 355c, 356f, 356g.5-1, 356m, 356q,
4356v, 356w, 356x, 356z.2, 356z.3a, 356z.4, 356z.4a, 356z.5,
5356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13,
6356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.20, 356z.21,
7356z.22, 356z.23, 356z.24, 356z.25, 356z.26, 356z.28, 356z.29,
8356z.30, 356z.30a, 356z.31, 356z.32, 356z.33, 356z.34,
9356z.35, 356z.36, 356z.37, 356z.38, 356z.39, 356z.40, 356z.41,
10356z.44, 356z.45, 356z.46, 356z.47, 356z.48, 356z.49, 356z.50,
11356z.51, 356z.53, 356z.54, 356z.55, 356z.56, 356z.57, 356z.58,
12356z.59, 356z.60, 356z.61, 356z.62, 356z.64, 356z.65, 356z.67,
13356z.68, 364, 364.01, 364.3, 367.2, 367.2-5, 367i, 368a, 368b,
14368c, 368d, 368e, 370c, 370c.1, 401, 401.1, 402, 403, 403A,
15408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
16subsection (2) of Section 367, and Articles IIA, VIII 1/2,
17XII, XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB of the
18Illinois Insurance Code.
19    (b) For purposes of the Illinois Insurance Code, except
20for Sections 444 and 444.1 and Articles XIII and XIII 1/2,
21Health Maintenance Organizations in the following categories
22are deemed to be "domestic companies":
23        (1) a corporation authorized under the Dental Service
24    Plan Act or the Voluntary Health Services Plans Act;
25        (2) a corporation organized under the laws of this
26    State; or

 

 

SB2836- 19 -LRB103 35223 JAG 65205 b

1        (3) a corporation organized under the laws of another
2    state, 30% or more of the enrollees of which are residents
3    of this State, except a corporation subject to
4    substantially the same requirements in its state of
5    organization as is a "domestic company" under Article VIII
6    1/2 of the Illinois Insurance Code.
7    (c) In considering the merger, consolidation, or other
8acquisition of control of a Health Maintenance Organization
9pursuant to Article VIII 1/2 of the Illinois Insurance Code,
10        (1) the Director shall give primary consideration to
11    the continuation of benefits to enrollees and the
12    financial conditions of the acquired Health Maintenance
13    Organization after the merger, consolidation, or other
14    acquisition of control takes effect;
15        (2)(i) the criteria specified in subsection (1)(b) of
16    Section 131.8 of the Illinois Insurance Code shall not
17    apply and (ii) the Director, in making his determination
18    with respect to the merger, consolidation, or other
19    acquisition of control, need not take into account the
20    effect on competition of the merger, consolidation, or
21    other acquisition of control;
22        (3) the Director shall have the power to require the
23    following information:
24            (A) certification by an independent actuary of the
25        adequacy of the reserves of the Health Maintenance
26        Organization sought to be acquired;

 

 

SB2836- 20 -LRB103 35223 JAG 65205 b

1            (B) pro forma financial statements reflecting the
2        combined balance sheets of the acquiring company and
3        the Health Maintenance Organization sought to be
4        acquired as of the end of the preceding year and as of
5        a date 90 days prior to the acquisition, as well as pro
6        forma financial statements reflecting projected
7        combined operation for a period of 2 years;
8            (C) a pro forma business plan detailing an
9        acquiring party's plans with respect to the operation
10        of the Health Maintenance Organization sought to be
11        acquired for a period of not less than 3 years; and
12            (D) such other information as the Director shall
13        require.
14    (d) The provisions of Article VIII 1/2 of the Illinois
15Insurance Code and this Section 5-3 shall apply to the sale by
16any health maintenance organization of greater than 10% of its
17enrollee population (including, without limitation, the health
18maintenance organization's right, title, and interest in and
19to its health care certificates).
20    (e) In considering any management contract or service
21agreement subject to Section 141.1 of the Illinois Insurance
22Code, the Director (i) shall, in addition to the criteria
23specified in Section 141.2 of the Illinois Insurance Code,
24take into account the effect of the management contract or
25service agreement on the continuation of benefits to enrollees
26and the financial condition of the health maintenance

 

 

SB2836- 21 -LRB103 35223 JAG 65205 b

1organization to be managed or serviced, and (ii) need not take
2into account the effect of the management contract or service
3agreement on competition.
4    (f) Except for small employer groups as defined in the
5Small Employer Rating, Renewability and Portability Health
6Insurance Act and except for medicare supplement policies as
7defined in Section 363 of the Illinois Insurance Code, a
8Health Maintenance Organization may by contract agree with a
9group or other enrollment unit to effect refunds or charge
10additional premiums under the following terms and conditions:
11        (i) the amount of, and other terms and conditions with
12    respect to, the refund or additional premium are set forth
13    in the group or enrollment unit contract agreed in advance
14    of the period for which a refund is to be paid or
15    additional premium is to be charged (which period shall
16    not be less than one year); and
17        (ii) the amount of the refund or additional premium
18    shall not exceed 20% of the Health Maintenance
19    Organization's profitable or unprofitable experience with
20    respect to the group or other enrollment unit for the
21    period (and, for purposes of a refund or additional
22    premium, the profitable or unprofitable experience shall
23    be calculated taking into account a pro rata share of the
24    Health Maintenance Organization's administrative and
25    marketing expenses, but shall not include any refund to be
26    made or additional premium to be paid pursuant to this

 

 

SB2836- 22 -LRB103 35223 JAG 65205 b

1    subsection (f)). The Health Maintenance Organization and
2    the group or enrollment unit may agree that the profitable
3    or unprofitable experience may be calculated taking into
4    account the refund period and the immediately preceding 2
5    plan years.
6    The Health Maintenance Organization shall include a
7statement in the evidence of coverage issued to each enrollee
8describing the possibility of a refund or additional premium,
9and upon request of any group or enrollment unit, provide to
10the group or enrollment unit a description of the method used
11to calculate (1) the Health Maintenance Organization's
12profitable experience with respect to the group or enrollment
13unit and the resulting refund to the group or enrollment unit
14or (2) the Health Maintenance Organization's unprofitable
15experience with respect to the group or enrollment unit and
16the resulting additional premium to be paid by the group or
17enrollment unit.
18    In no event shall the Illinois Health Maintenance
19Organization Guaranty Association be liable to pay any
20contractual obligation of an insolvent organization to pay any
21refund authorized under this Section.
22    (g) Rulemaking authority to implement Public Act 95-1045,
23if any, is conditioned on the rules being adopted in
24accordance with all provisions of the Illinois Administrative
25Procedure Act and all rules and procedures of the Joint
26Committee on Administrative Rules; any purported rule not so

 

 

SB2836- 23 -LRB103 35223 JAG 65205 b

1adopted, for whatever reason, is unauthorized.
2(Source: P.A. 102-30, eff. 1-1-22; 102-34, eff. 6-25-21;
3102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-443, eff.
41-1-22; 102-589, eff. 1-1-22; 102-642, eff. 1-1-22; 102-665,
5eff. 10-8-21; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22;
6102-804, eff. 1-1-23; 102-813, eff. 5-13-22; 102-816, eff.
71-1-23; 102-860, eff. 1-1-23; 102-901, eff. 7-1-22; 102-1093,
8eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24;
9103-91, eff. 1-1-24; 103-123, eff. 1-1-24; 103-154, eff.
106-30-23; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445,
11eff. 1-1-24; 103-551, eff. 8-11-23; revised 8-29-23.)
 
12    Section 15. The Limited Health Service Organization Act is
13amended by changing Section 4003 as follows:
 
14    (215 ILCS 130/4003)  (from Ch. 73, par. 1504-3)
15    Sec. 4003. Illinois Insurance Code provisions. Limited
16health service organizations shall be subject to the
17provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
18141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
19154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 352c,
20355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10,
21356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a,
22356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53,
23356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68,
24364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,

 

 

SB2836- 24 -LRB103 35223 JAG 65205 b

1444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
2XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
3Nothing in this Section shall require a limited health care
4plan to cover any service that is not a limited health service.
5For purposes of the Illinois Insurance Code, except for
6Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited
7health service organizations in the following categories are
8deemed to be domestic companies:
9        (1) a corporation under the laws of this State; or
10        (2) a corporation organized under the laws of another
11    state, 30% or more of the enrollees of which are residents
12    of this State, except a corporation subject to
13    substantially the same requirements in its state of
14    organization as is a domestic company under Article VIII
15    1/2 of the Illinois Insurance Code.
16(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22;
17102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff.
181-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816,
19eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23;
20102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff.
211-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445,
22eff. 1-1-24; revised 8-29-23.)
 
23    (215 ILCS 190/Act rep.)
24    Section 20. The Short-Term, Limited-Duration Health
25Insurance Coverage Act is repealed.
 

 

 

SB2836- 25 -LRB103 35223 JAG 65205 b

1    Section 95. No acceleration or delay. Where this Act makes
2changes in a statute that is represented in this Act by text
3that is not yet or no longer in effect (for example, a Section
4represented by multiple versions), the use of that text does
5not accelerate or delay the taking effect of (i) the changes
6made by this Act or (ii) provisions derived from any other
7Public Act.
 
8    Section 99. Effective date. This Act takes effect January
91, 2025.