Full Text of HB1453 95th General Assembly
HB1453eng 95TH GENERAL ASSEMBLY
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| AN ACT concerning insurance.
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| Be it enacted by the People of the State of Illinois,
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| represented in the General Assembly:
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| Section 5. The Illinois Insurance Code is amended by | 5 |
| changing Section
351B-5 and adding Section 367.4 as follows:
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| (215 ILCS 5/351B-5) (from Ch. 73, par. 963B-5)
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| Sec. 351B-5. Applicability of other Code provisions. All | 8 |
| policies of
accident and health insurance issued
under this | 9 |
| Article shall be subject to the provisions of Sections 356c,
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| subsection (a) of Section 356g, 356h, 356n, 367.4, 367c, 367d, | 11 |
| 370, 370a,
and 370e of this Code.
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| (Source: P.A. 86-1407; 87-792; 87-1066.)
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| (215 ILCS 5/367.4 new)
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| Sec. 367.4. Reporting of claims information to group health | 15 |
| plan sponsor.
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| (a) In this Section, "group health plan", "health insurance | 17 |
| coverage",
"health insurance issuer", and "plan sponsor" have | 18 |
| the meanings ascribed to
those terms in the Illinois Health | 19 |
| Insurance Portability and Accountability
Act.
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| "Summary health information" means information that may be
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| individually identifiable health information and
(i) that | 22 |
| summarizes the claims history, claims expenses, or type of
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| claims experienced by individuals for whom a plan sponsor has | 2 |
| provided
health benefits under a group health plan and
(ii) | 3 |
| from which the information identifying an individual, a | 4 |
| relative or employer of the individual, or a member of the | 5 |
| individual's household
has been deleted, except that | 6 |
| information describing geographic subdivisions of a State need | 7 |
| only be aggregated to the level of a 5-digit zip code.
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| (b) A group health plan, or a health insurance issuer or | 9 |
| health maintenance organization with
respect to a group health | 10 |
| plan, shall disclose summary health
information to a plan | 11 |
| sponsor with 50 or more employees if the plan sponsor requests | 12 |
| the
summary health information for the purpose of (i) obtaining | 13 |
| premium bids from health plans for providing health
insurance | 14 |
| coverage under the group health plan or (ii) modifying, | 15 |
| amending, or terminating the group health plan. | 16 |
| The plan documents of the group health plan must be amended | 17 |
| to
incorporate provisions to do the following: | 18 |
| (1) Establish the permitted and required uses and | 19 |
| disclosures of
such information by the plan sponsor. | 20 |
| (2) Provide that the plan sponsor agrees to not use or | 21 |
| further disclose the information other than as
permitted or | 22 |
| required by the plan documents or as required by law.
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| (3) Provide that the plan sponsor agrees to not use or | 24 |
| disclose the information for employment-related
actions | 25 |
| and decisions or in connection with any other benefit or
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| employee benefit plan of the plan sponsor. |
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| (4) Provide that the plan sponsor agrees to report to | 2 |
| the group health plan any use or disclosure of the
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| information that is inconsistent with the uses or | 4 |
| disclosures provided
for of which it becomes aware. | 5 |
| (5) Provide that the plan sponsor agrees to make | 6 |
| available the information required to provide an | 7 |
| accounting
of disclosures. | 8 |
| (6) Provide that the plan sponsor agrees to make its | 9 |
| internal practices, books, and records relating to the
use | 10 |
| and disclosure of the summary health information received | 11 |
| from the
group health plan available to the Director for | 12 |
| purposes of determining
compliance by the group health plan | 13 |
| with this Section. | 14 |
| (7) Provide that the plan sponsor agrees to, if | 15 |
| feasible, return or destroy all protected health | 16 |
| information
received from the group health plan that the | 17 |
| sponsor still maintains in
any form and retain no copies of | 18 |
| such information when no longer needed
for the purpose for | 19 |
| which disclosure was made, except that, if such
return or | 20 |
| destruction is not feasible, limit further uses and
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| disclosures to those purposes that make the return or | 22 |
| destruction of the
information infeasible. | 23 |
| (c) A health insurance issuer may not report any | 24 |
| information required under
this Section the release of which is | 25 |
| prohibited by State or federal law or
regulation.
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| (d) A health insurance issuer must provide information |
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| under this Section in
the aggregate, without any information | 2 |
| through which a specific individual
covered under the plan may | 3 |
| be identified.
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| (e) Information obtained by a plan sponsor under this | 5 |
| Section is
confidential. The sponsor may use the information | 6 |
| only for purposes relating to
obtaining and maintaining health | 7 |
| insurance coverage for the sponsor's
employees (if the sponsor | 8 |
| is an employer) or members (if the sponsor is an
employee | 9 |
| organization).
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| Section 10. The Health Care Purchasing Group Act is amended | 11 |
| by changing
Section 5 as follows:
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| (215 ILCS 123/5)
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| Sec. 5. Purpose; applicability of Illinois Health | 14 |
| Insurance Portability
and Accountability Act.
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| (a) The purpose and intent of this Act is
to authorize the | 16 |
| formation, operation, and regulation of health care
purchasing | 17 |
| groups (referred to in this Act as "HPGs") as described by
this | 18 |
| Act, to authorize the sale and regulation of health
insurance | 19 |
| products for employers that are sold to HPGs, and to
encourage | 20 |
| the development of financially secure and cost
effective | 21 |
| markets for the basic health care needs of employers,
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| employees, and their dependents in this State.
Nothing in this | 23 |
| Act authorizes an employer to join with other employers to
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| self-insure through risk pooling.
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| (b) All health insurance contracts issued under this Act | 2 |
| are subject to
the Illinois Health Insurance Portability and | 3 |
| Accountability Act.
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| (c) All health insurance contracts issued under this Act | 5 |
| are subject to
Section 367.4 of the Illinois Insurance Code.
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| (Source: P.A. 90-337, eff. 1-1-98; 90-567, eff. 1-23-98.)
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| Section 15. The Health Maintenance Organization Act is | 8 |
| amended by changing
Section 5-3 as follows:
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| (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
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| Sec. 5-3. Insurance Code provisions.
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| (a) Health Maintenance Organizations
shall be subject to | 12 |
| the provisions of Sections 133, 134, 137, 140, 141.1,
141.2, | 13 |
| 141.3, 143, 143c, 147, 148, 149, 151,
152, 153, 154, 154.5, | 14 |
| 154.6,
154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x, | 15 |
| 356y,
356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 364.01, 367.2, | 16 |
| 367.2-5, 367.4, 367i, 368a, 368b, 368c, 368d, 368e, 370c,
401, | 17 |
| 401.1, 402, 403, 403A,
408, 408.2, 409, 412, 444,
and
444.1,
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| paragraph (c) of subsection (2) of Section 367, and Articles | 19 |
| IIA, VIII 1/2,
XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of | 20 |
| the Illinois Insurance Code.
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| (b) For purposes of the Illinois Insurance Code, except for | 22 |
| Sections 444
and 444.1 and Articles XIII and XIII 1/2, Health | 23 |
| Maintenance Organizations in
the following categories are | 24 |
| deemed to be "domestic companies":
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| (1) a corporation authorized under the
Dental Service | 2 |
| Plan Act or the Voluntary Health Services Plans Act;
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| (2) a corporation organized under the laws of this | 4 |
| State; or
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| (3) a corporation organized under the laws of another | 6 |
| state, 30% or more
of the enrollees of which are residents | 7 |
| of this State, except a
corporation subject to | 8 |
| substantially the same requirements in its state of
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| organization as is a "domestic company" under Article VIII | 10 |
| 1/2 of the
Illinois Insurance Code.
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| (c) In considering the merger, consolidation, or other | 12 |
| acquisition of
control of a Health Maintenance Organization | 13 |
| pursuant to Article VIII 1/2
of the Illinois Insurance Code,
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| (1) the Director shall give primary consideration to | 15 |
| the continuation of
benefits to enrollees and the financial | 16 |
| conditions of the acquired Health
Maintenance Organization | 17 |
| after the merger, consolidation, or other
acquisition of | 18 |
| control takes effect;
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| (2)(i) the criteria specified in subsection (1)(b) of | 20 |
| Section 131.8 of
the Illinois Insurance Code shall not | 21 |
| apply and (ii) the Director, in making
his determination | 22 |
| with respect to the merger, consolidation, or other
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| acquisition of control, need not take into account the | 24 |
| effect on
competition of the merger, consolidation, or | 25 |
| other acquisition of control;
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| (3) the Director shall have the power to require the |
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| following
information:
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| (A) certification by an independent actuary of the | 3 |
| adequacy
of the reserves of the Health Maintenance | 4 |
| Organization sought to be acquired;
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| (B) pro forma financial statements reflecting the | 6 |
| combined balance
sheets of the acquiring company and | 7 |
| the Health Maintenance Organization sought
to be | 8 |
| acquired as of the end of the preceding year and as of | 9 |
| a date 90 days
prior to the acquisition, as well as pro | 10 |
| forma financial statements
reflecting projected | 11 |
| combined operation for a period of 2 years;
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| (C) a pro forma business plan detailing an | 13 |
| acquiring party's plans with
respect to the operation | 14 |
| of the Health Maintenance Organization sought to
be | 15 |
| acquired for a period of not less than 3 years; and
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| (D) such other information as the Director shall | 17 |
| require.
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| (d) The provisions of Article VIII 1/2 of the Illinois | 19 |
| Insurance Code
and this Section 5-3 shall apply to the sale by | 20 |
| any health maintenance
organization of greater than 10% of its
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| enrollee population (including without limitation the health | 22 |
| maintenance
organization's right, title, and interest in and to | 23 |
| its health care
certificates).
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| (e) In considering any management contract or service | 25 |
| agreement subject
to Section 141.1 of the Illinois Insurance | 26 |
| Code, the Director (i) shall, in
addition to the criteria |
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| specified in Section 141.2 of the Illinois
Insurance Code, take | 2 |
| into account the effect of the management contract or
service | 3 |
| agreement on the continuation of benefits to enrollees and the
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| financial condition of the health maintenance organization to | 5 |
| be managed or
serviced, and (ii) need not take into account the | 6 |
| effect of the management
contract or service agreement on | 7 |
| competition.
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| (f) Except for small employer groups as defined in the | 9 |
| Small Employer
Rating, Renewability and Portability Health | 10 |
| Insurance Act and except for
medicare supplement policies as | 11 |
| defined in Section 363 of the Illinois
Insurance Code, a Health | 12 |
| Maintenance Organization may by contract agree with a
group or | 13 |
| other enrollment unit to effect refunds or charge additional | 14 |
| premiums
under the following terms and conditions:
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| (i) the amount of, and other terms and conditions with | 16 |
| respect to, the
refund or additional premium are set forth | 17 |
| in the group or enrollment unit
contract agreed in advance | 18 |
| of the period for which a refund is to be paid or
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| additional premium is to be charged (which period shall not | 20 |
| be less than one
year); and
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| (ii) the amount of the refund or additional premium | 22 |
| shall not exceed 20%
of the Health Maintenance | 23 |
| Organization's profitable or unprofitable experience
with | 24 |
| respect to the group or other enrollment unit for the | 25 |
| period (and, for
purposes of a refund or additional | 26 |
| premium, the profitable or unprofitable
experience shall |
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| be calculated taking into account a pro rata share of the
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| Health Maintenance Organization's administrative and | 3 |
| marketing expenses, but
shall not include any refund to be | 4 |
| made or additional premium to be paid
pursuant to this | 5 |
| subsection (f)). The Health Maintenance Organization and | 6 |
| the
group or enrollment unit may agree that the profitable | 7 |
| or unprofitable
experience may be calculated taking into | 8 |
| account the refund period and the
immediately preceding 2 | 9 |
| plan years.
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| The Health Maintenance Organization shall include a | 11 |
| statement in the
evidence of coverage issued to each enrollee | 12 |
| describing the possibility of a
refund or additional premium, | 13 |
| and upon request of any group or enrollment unit,
provide to | 14 |
| the group or enrollment unit a description of the method used | 15 |
| to
calculate (1) the Health Maintenance Organization's | 16 |
| profitable experience with
respect to the group or enrollment | 17 |
| unit and the resulting refund to the group
or enrollment unit | 18 |
| or (2) the Health Maintenance Organization's unprofitable
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| experience with respect to the group or enrollment unit and the | 20 |
| resulting
additional premium to be paid by the group or | 21 |
| enrollment unit.
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| In no event shall the Illinois Health Maintenance | 23 |
| Organization
Guaranty Association be liable to pay any | 24 |
| contractual obligation of an
insolvent organization to pay any | 25 |
| refund authorized under this Section.
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| (Source: P.A. 93-102, eff. 1-1-04; 93-261, eff. 1-1-04; 93-477, |
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| eff. 8-8-03; 93-529, eff. 8-14-03; 93-853, eff. 1-1-05; | 2 |
| 93-1000, eff. 1-1-05; 94-906, eff. 1-1-07; 94-1076, eff. | 3 |
| 12-29-06; revised 1-5-07.)
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| Section 20. The Limited Health Service Organization Act is | 5 |
| amended by
changing Section 4003 as follows:
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| (215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
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| Sec. 4003. Illinois Insurance Code provisions. Limited | 8 |
| health service
organizations shall be subject to the provisions | 9 |
| of Sections 133, 134, 137,
140, 141.1, 141.2, 141.3, 143, 143c, | 10 |
| 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, | 11 |
| 155.04, 155.37, 355.2, 356v, 367.4, 368a, 401, 401.1,
402,
403, | 12 |
| 403A, 408,
408.2, 409, 412, 444, and 444.1 and Articles IIA, | 13 |
| VIII 1/2, XII, XII 1/2,
XIII,
XIII 1/2, XXV, and XXVI of the | 14 |
| Illinois Insurance Code. For purposes of the
Illinois Insurance | 15 |
| Code, except for Sections 444 and 444.1 and Articles XIII
and | 16 |
| XIII 1/2, limited health service organizations in the following | 17 |
| categories
are deemed to be domestic companies:
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| (1) a corporation under the laws of this State; or
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| (2) a corporation organized under the laws of another | 20 |
| state, 30% of more
of the enrollees of which are residents | 21 |
| of this State, except a corporation
subject to | 22 |
| substantially the same requirements in its state of | 23 |
| organization as
is a domestic company under Article VIII | 24 |
| 1/2 of the Illinois Insurance Code.
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| (Source: P.A. 91-549, eff. 8-14-99; 91-605, eff. 12-14-99; | 2 |
| 91-788, eff.
6-9-00; 92-440, eff. 8-17-01.)
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| Section 25. The Voluntary Health Services Plans Act is | 4 |
| amended by changing
Section 10 as follows:
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| (215 ILCS 165/10) (from Ch. 32, par. 604)
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| Sec. 10. Application of Insurance Code provisions. Health | 7 |
| services
plan corporations and all persons interested therein | 8 |
| or dealing therewith
shall be subject to the provisions of | 9 |
| Articles IIA and XII 1/2 and Sections
3.1, 133, 140, 143, 143c, | 10 |
| 149, 155.37, 354, 355.2, 356r, 356t, 356u, 356v,
356w, 356x, | 11 |
| 356y, 356z.1, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 364.01, | 12 |
| 367.2, 367.4, 368a, 401, 401.1,
402,
403, 403A, 408,
408.2, and | 13 |
| 412, and paragraphs (7) and (15) of Section 367 of the Illinois
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| Insurance Code.
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| (Source: P.A. 93-102, eff. 1-1-04; 93-529, eff. 8-14-03; | 16 |
| 93-853, eff. 1-1-05; 93-1000, eff. 1-1-05; 94-1076, eff. | 17 |
| 12-29-06.)
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