Full Text of HB2325 96th General Assembly
HB2325 96TH GENERAL ASSEMBLY
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96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010 HB2325
Introduced 2/18/2009, by Rep. Karen May SYNOPSIS AS INTRODUCED: |
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215 ILCS 5/367e |
from Ch. 73, par. 979e |
215 ILCS 125/4-9.2 |
from Ch. 111 1/2, par. 1409.2-2 |
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Amends the Illinois Insurance Code. Provides that an employee or member is eligible for continuing coverage under a group insurance policy for up to 18 months (instead of 9 months) after the date the employee's or member's insurance under the policy would have terminated because of termination of employment or membership or reduction in employment hours. Provides that the employer must give written notice of the employee's option to elect continuation coverage to the employee within 10 days after the employee's termination or reduction in hours and to the insurer. Provides that an employee or member who wishes continuation of coverage must make the request in writing within a 30 day (instead of ten-day) period. Provides that in the event the employer fails or refuses to provide notice of continuation rights to the employee or member, the insurer is required to mail notice of the continuation rights to the employee or member at the employee's last known address. Provides that any employer who fails to provide the notice required by the Act is guilty of a petty offense and shall be fined $500. Amends the Health Maintenance Organization Act to incorporate the written notice, penalty, and condition of termination provisions as they relate to continuation of group HMO coverage after termination of employment or membership. Effective immediately.
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A BILL FOR
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HB2325 |
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LRB096 09782 RPM 19945 b |
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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 367e as follows:
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| (215 ILCS 5/367e) (from Ch. 73, par. 979e)
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| Sec. 367e. Continuation of Group Hospital, Surgical and | 8 |
| Major Medical
Coverage After Termination of Employment or | 9 |
| Membership.
A group policy delivered, issued for delivery, | 10 |
| renewed or amended in this
state which insures employees or | 11 |
| members
for hospital, surgical or major medical insurance on an | 12 |
| expense incurred
or service basis, other than for specific | 13 |
| diseases or for accidental injuries
only, shall provide that | 14 |
| employees or members whose insurance under the
group policy | 15 |
| would otherwise terminate because of termination of employment
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| or membership or because of a reduction in hours below the | 17 |
| minimum required
by the group plan shall be entitled to | 18 |
| continue their hospital, surgical and
major medical insurance | 19 |
| under that group policy, for themselves and their
eligible | 20 |
| dependents, subject to all of the group policy's terms and | 21 |
| conditions
applicable to those forms of insurance and to the | 22 |
| following conditions:
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| 1. Continuation shall only be available to an employee |
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| or member who has
been continuously insured under the group | 2 |
| policy (and for similar benefits
under any group policy | 3 |
| which it replaced) during the entire 3 months period
ending | 4 |
| with such termination
or reduction in hours below the | 5 |
| minimum required by the group plan.
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| 2. Continuation shall not be available for any person | 7 |
| who is covered by
Medicare, except for those individuals | 8 |
| who have been covered under a
group Medicare supplement | 9 |
| policy. Neither shall continuation be
available for any | 10 |
| person who is
covered by any other insured or uninsured | 11 |
| plan
which provides hospital, surgical or medical coverage | 12 |
| for individuals in
a group and under which the person was | 13 |
| not
covered immediately prior to such termination
or | 14 |
| reduction in hours below the minimum required by the group | 15 |
| plan
or who exercises his conversion
privilege under the | 16 |
| group policy.
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| 3. Continuation need not include dental, vision care, | 18 |
| prescription drug
benefits, disability income, specified | 19 |
| disease, or similar supplementary
benefits which are | 20 |
| provided under the group policy in addition to its | 21 |
| hospital,
surgical or major medical benefits.
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| 4. Upon termination
or reduction in hours below the | 23 |
| minimum required by the group plan
written notice of | 24 |
| continuation shall be presented
to the employee or member | 25 |
| and the insurer by the employer or mailed by the employer | 26 |
| to the
last known address of the employee. This written |
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| notice must be given directly to the employee or sent via | 2 |
| certified mail within 10 days after the employee's | 3 |
| termination or reduction in hours below the minimum | 4 |
| required by the group plan. An employee or member who | 5 |
| wishes
continuation
of coverage must request such | 6 |
| continuation in writing within the 30 day ten-day
period | 7 |
| following the later of: (i) the date of such termination
or | 8 |
| reduction in hours below the minimum required by the group | 9 |
| plan, or (ii)
the date the employee is given written notice | 10 |
| of the right of continuation
by either the employer , or the
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| group policyholder , or insurer. The written notice | 12 |
| provided to an employee must include an explanation that | 13 |
| his or her option for continuation coverage will expire | 14 |
| within the 30 day period following the later of (i) the | 15 |
| date of such termination of employment or reduction in | 16 |
| hours below the minimum required by the group plan, or (ii) | 17 |
| the date the employee is given written notice of the right | 18 |
| of continuation by either the employer, group | 19 |
| policyholder, or insurer . In no event, however, may the | 20 |
| employee or member elect
continuation more than 60 days | 21 |
| after the date of such termination
or reduction in hours | 22 |
| below the minimum required by the group plan.
Written | 23 |
| notice of continuation presented to the employee or member | 24 |
| by the
policyholder, or mailed by the policyholder to the | 25 |
| last known address of
the employee, shall constitute the | 26 |
| giving of notice for the purpose of this
provision.
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| In the event the employer fails or refuses to provide | 2 |
| notice of continuation rights to the employee or member, | 3 |
| the insurer is required to mail notice of the continuation | 4 |
| rights to the employee or member at the last known address | 5 |
| of the employee. In the event the employee or member | 6 |
| contacts the insurer regarding continuation rights and | 7 |
| advises that notice has not been provided by the employer | 8 |
| or group policyholder, the insurer shall mail out notice to | 9 |
| that individual. An employee or member shall have 30 days | 10 |
| from receipt of the notice to elect continuation. | 11 |
| Any employer who fails to provide the notice required | 12 |
| in this subsection 4. is guilty of a petty offense and | 13 |
| shall be fined $500.
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| 5. An employee or member electing continuation must pay | 15 |
| to the group
policyholder
or his employer, on a monthly | 16 |
| basis in advance, the total amount of premium
required by | 17 |
| the insurer, including that portion of the premium | 18 |
| contributed
by the policyholder or employer, if any, but | 19 |
| not more than the group rate
for the insurance being | 20 |
| continued with appropriate reduction in premium
for any | 21 |
| supplementary benefits which have been discontinued under | 22 |
| paragraph
(3) of this Section. The premium rate required by | 23 |
| the insurer shall be
the applicable premium required on the | 24 |
| due date of each payment.
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| 6. Continuation of insurance under the group policy for
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| any person shall terminate when he becomes eligible for |
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| Medicare or is covered
by any other insured or uninsured | 2 |
| plan which provides hospital, surgical
or medical coverage | 3 |
| for individuals in a group and under which
the person was | 4 |
| not covered immediately prior to such termination
or | 5 |
| reduction in hours below the minimum required by the group | 6 |
| plan
as provided
in condition
2 above or, if earlier, at | 7 |
| the first to occur of the following:
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| (a) The date 18 9 months after the date the | 9 |
| employee's or member's
insurance
under the policy | 10 |
| would otherwise have terminated because of termination
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| of employment or membership
or reduction in hours below | 12 |
| the minimum required by the group plan.
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| (b) If the employee or member fails to make timely | 14 |
| payment of a required
contribution, the end of the | 15 |
| period for which contributions were made.
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| (c) The date on which the group policy is | 17 |
| terminated or, in the case of
an employee, the date his | 18 |
| employer terminates participation under the group
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| policy. However, if this (c) applies and the coverage | 20 |
| ceasing by reason of
such
termination is replaced by | 21 |
| similar coverage under another group policy,
the | 22 |
| following shall apply:
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| (i) The employee or member shall have the right | 24 |
| to become covered
under
that other group policy, | 25 |
| for the balance of the period that he would have
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| remained covered under the prior group policy in |
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| accordance with condition
6 had a termination | 2 |
| described in this (c) not occurred.
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| (ii) The prior group policy shall continue to | 4 |
| provide benefits to the
extent of its accrued | 5 |
| liabilities and extensions of benefits as if the
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| replacement
had not occurred.
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| 7. A notification of the continuation privilege shall | 8 |
| be included in each
certificate of coverage.
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| 8. Continuation shall not be available for any employee | 10 |
| who was
discharged because of the commission of a felony in | 11 |
| connection with his
work, or because of theft in connection | 12 |
| with his work, for which the
employer was in no way | 13 |
| responsible; provided the employee admitted his
commission | 14 |
| of the felony or theft or such act has resulted in a | 15 |
| conviction
or order of supervision by a court of competent | 16 |
| jurisdiction.
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| The requirements of this amendatory Act of 1983 shall apply | 18 |
| to any group
policy as defined in this Section, delivered or | 19 |
| issued for delivery on or after
180 days following the | 20 |
| effective date of this amendatory Act of 1983.
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| The requirements of this amendatory Act of 1985 shall apply | 22 |
| to any
group policy as defined in this Section, delivered, | 23 |
| issued for delivery,
renewed or amended on or after 180 days | 24 |
| following the effective date of
this amendatory Act of 1985.
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| (Source: P.A. 93-477, eff. 1-1-04.)
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HB2325 |
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LRB096 09782 RPM 19945 b |
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| Section 10. The Health Maintenance Organization Act is | 2 |
| amended by changing Section 4-9.2 as follows:
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| (215 ILCS 125/4-9.2) (from Ch. 111 1/2, par. 1409.2-2)
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| Sec. 4-9.2. Continuation of group HMO coverage after | 5 |
| termination of
employee or membership. A group contract | 6 |
| delivered, issued for delivery,
renewed, or amended in this | 7 |
| State that covers employees or members for health
care services | 8 |
| shall provide that employees or members whose coverage under
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| the group contract would otherwise terminate because of | 10 |
| termination of
employment or membership or because of a | 11 |
| reduction in hours below the minimum
required by the group | 12 |
| contract shall be entitled to continue their coverage
under
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| that group contract, for themselves and their eligible | 14 |
| dependents, subject
to all of the group contract's terms and | 15 |
| conditions applicable to those
forms of coverage and to the | 16 |
| following conditions:
| 17 |
| (1) Continuation shall only be available to an employee | 18 |
| or member who has
been continuously covered under the group | 19 |
| contract (and for similar
benefits under any group contract | 20 |
| that it replaced) during the entire 3
month period ending | 21 |
| with the termination of employment or membership or
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| reduction in hours below the minimum required by the group | 23 |
| contract.
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| (2) Continuation shall not be available for any | 25 |
| enrollee who is
covered by Medicare, except for those |
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| individuals who have been covered
under a group Medicare | 2 |
| supplement policy. Continuation shall not be
available for | 3 |
| any enrollee who is covered by any other insured or | 4 |
| uninsured
plan that provides hospital, surgical, or | 5 |
| medical coverage for individuals
in a group and under which | 6 |
| the enrollee was not covered immediately
before | 7 |
| termination or reduction in hours below the minimum | 8 |
| required by the
group contract or who exercises his or her | 9 |
| conversion privilege under
the group policy.
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| (3) Continuation need not include dental, vision care, | 11 |
| prescription
drug, or similar supplementary benefits that | 12 |
| are provided under
the group contract in addition to its | 13 |
| basic health care services.
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| (4) Upon termination or reduction in hours below the | 15 |
| minimum required by
the group contract, written notice of | 16 |
| continuation shall be presented
to the employee or member | 17 |
| and the HMO by the employer or mailed by the employer to | 18 |
| the last
known address of the employee. This written notice | 19 |
| must be given directly to the employee or sent via | 20 |
| certified mail within 10 days after the employee's | 21 |
| termination or reduction in hours below the minimum | 22 |
| required by the group plan. An employee or member who | 23 |
| wishes
continuation of coverage must request continuation | 24 |
| in writing within
the 30 10 day period following the later | 25 |
| of (i) the date of termination or
reduction in hours below | 26 |
| the minimum required by the group contract or (ii)
the date |
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LRB096 09782 RPM 19945 b |
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| the employee is given written notice of the right of | 2 |
| continuation by
either the employer , or the group | 3 |
| policyholder , or HMO . In no event, however, shall the
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| employee or member elect continuation more than 60 days | 5 |
| after the date of
termination
or reduction in hours below | 6 |
| the minimum required by the group contract.
Written notice | 7 |
| of continuation presented to the employee or member
by the | 8 |
| policyholder or HMO , or mailed by the policyholder or HMO | 9 |
| to the last known address of
the employee, shall constitute | 10 |
| the giving of notice for the purpose of this
paragraph. | 11 |
| The written notice provided to an employee must include | 12 |
| an explanation that his or her option for continuation | 13 |
| coverage will expire within the 30 day period following the | 14 |
| later of (i) the date of such termination of employment or | 15 |
| reduction in hours below the minimum required by the group | 16 |
| plan, or (ii) the date the employee is given written notice | 17 |
| of the right of continuation by either the employer, group | 18 |
| policyholder, or HMO. | 19 |
| In the event the employer fails or refuses to provide | 20 |
| notice of continuation rights to the employee or member, | 21 |
| the HMO is required to mail notice of the continuation | 22 |
| rights to the employee or member at the last known address | 23 |
| of the employee. In the event the employee or member | 24 |
| contacts the HMO regarding continuation rights and advises | 25 |
| that notice has not been provided by the employer or group | 26 |
| policyholder, the HMO shall mail out notice to that |
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LRB096 09782 RPM 19945 b |
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| individual. An employee or member shall have 30 days from | 2 |
| receipt of the notice to elect continuation. | 3 |
| Any employer who fails to provide the notice required | 4 |
| in this subsection (4) is guilty of a petty offense and | 5 |
| shall be fined $500.
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| (5) An employee or member electing continuation must | 7 |
| pay to the group
policyholder or his employer, on a monthly | 8 |
| basis in advance, the total
amount of premium required by | 9 |
| the HMO, including that portion of the
premium contributed | 10 |
| by the policyholder or employer, if any, but not more
than | 11 |
| the group rate for the coverage being continued with | 12 |
| appropriate
reduction in premium for any supplementary | 13 |
| benefits that have been
discontinued under paragraph (3) of | 14 |
| this Section. The premium rate required
by the HMO shall be | 15 |
| the applicable premium required on the due date of each
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| payment.
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| (6) Continuation of coverage under the group contract | 18 |
| for any person
shall terminate when the person becomes | 19 |
| eligible for Medicare or is covered by
any other insured or | 20 |
| uninsured plan that provides hospital, surgical, or
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| medical coverage for individuals in a group and under which | 22 |
| the person was not
covered immediately before termination
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| or reduction in hours below the minimum required by the | 24 |
| group contract
as provided in paragraph (2) of this
Section | 25 |
| or, if earlier, at the first to occur of the following:
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| (a) The expiration of 18 9 months after the |
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LRB096 09782 RPM 19945 b |
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| employee's or member's coverage
because of termination | 2 |
| of employment or membership
or reduction in hours below | 3 |
| the minimum required by the group contract.
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| (b) If the employee or member fails to make timely | 5 |
| payment of a
required contribution, the end of the | 6 |
| period for which contributions were made.
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| (c) The date on which the group contract is | 8 |
| terminated or, in the
case of an employee, the date his | 9 |
| or her employer terminates participation
under the | 10 |
| group contract. If, however, this paragraph applies | 11 |
| and the coverage
ceasing by reason of termination is | 12 |
| replaced by similar coverage under another
group | 13 |
| contract, then (i) the employee or member shall have | 14 |
| the right to become
covered under the replacement group | 15 |
| contract for the balance of the period that
he or she | 16 |
| would have remained covered under the prior group | 17 |
| contract in
accordance with paragraph (6) had a | 18 |
| termination described in this item (c) not
occurred and | 19 |
| (ii) the prior group contract shall continue to provide | 20 |
| benefits
to the extent of its accrued liabilities and | 21 |
| extensions of benefits as if the
replacement had not | 22 |
| occurred.
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| (7) A notification of the continuation privilege shall | 24 |
| be included in
each evidence of coverage.
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| (8) Continuation shall not be available for any | 26 |
| employee who was
discharged because of the commission of a |
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HB2325 |
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LRB096 09782 RPM 19945 b |
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| felony in connection with his or her
work, or because of | 2 |
| theft in connection with his or her work, for which the
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| employer was in no way responsible if the employee (i) | 4 |
| admitted to
committing the felony or theft or (ii) was | 5 |
| convicted or placed under
supervision by a court of | 6 |
| competent jurisdiction.
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| The requirements of this amendatory Act of 1992 shall apply | 8 |
| to any
group contract, as defined in this Section, delivered or | 9 |
| issued for
delivery on or after 180 days following the | 10 |
| effective date of this
amendatory Act of 1992.
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| (Source: P.A. 93-477, eff. 1-1-04.)
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| Section 99. Effective date. This Act takes effect upon | 13 |
| becoming law.
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