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| [ Introduced ] | [ House Amendment 001 ] |
90_HB0098ham002
LRB9000720JSmgam02
1 AMENDMENT TO HOUSE BILL 98
2 AMENDMENT NO. . Amend House Bill 98 on page 1 by
3 replacing line 1 with the following:
4 "AN ACT concerning insurance coverage relating to
5 children, amending named Acts."; and
6 on page 1 by replacing line 5 with the following:
7 "changing Section 356h and adding Section 155.31 as follows:
8 Sec. 155.31. Subjects of child abuse or domestic
9 violence; discrimination prohibited.
10 (a) For purposes of this Section, "subject of child
11 abuse" means a person who is or was an abused child as
12 defined in the Abused and Neglected Child Reporting Act.
13 (b) A company may not cancel, deny, refuse to issue or
14 renew, or in any way make or permit any distinction or
15 discrimination in the amount or payment of premiums or rates
16 charged, the length of coverage, payment of claims, or any
17 other terms and conditions of a group or individual policy of
18 accident and health insurance, a policy providing coverage
19 against disability from injury or disease, or a policy of
20 life insurance based solely on an individual's status as a
21 subject of child abuse. A company may not seek information
22 that an insured or proposed insured has been the subject of
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1 child abuse.
2 (c) A company subject to this Article shall maintain
3 strict confidentiality of information, as defined in the
4 Insurance Information and Privacy Protection Article of this
5 Code, relating to an applicant's or insured's status as a
6 subject of child abuse. Disclosure of such abuse-related
7 information shall be subject to the disclosure limitations
8 and conditions contained in Section 1014 of this Code.
9 (d) Nothing in this Section shall be construed as
10 creating a special class of insureds who have been subjects
11 of child abuse.
12 (e) This Section does not prohibit a company from (i)
13 refusing to insure, refusing to continue to insure, limiting
14 the amount, extent, or kind of coverage available to an
15 individual, or charging a different rate for the same
16 coverage on the basis of that individual's physical or mental
17 condition regardless of the underlying cause of that
18 condition; (ii) declining to issue a life insurance policy
19 insuring an individual who is, has been, or has the
20 significant potential to be the subject of child abuse if the
21 perpetrator of the child abuse is the applicant or would be
22 the owner of the insurance policy; or (iii) inquiring about a
23 physical or mental condition, even if that condition was
24 caused by or is related in any manner to child abuse.
25 (f) No company shall be held criminally or civilly
26 liable in any action arising out of compliance with this
27 Section.
28 (g) A violation of this Section constitutes an unfair
29 method of competition or an unfair or deceptive act or
30 practice in violation of Article XXVI of this Code."; and
31 on page 3, line 2, by changing "Section 4-9" to "Sections 4-9
32 and 5-3"; and
33 on page 4 by inserting immediately below line 31 the
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1 following:
2 "(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
3 Sec. 5-3. Insurance Code provisions.
4 (a) Health Maintenance Organizations shall be subject to
5 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
6 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
7 154.6, 154.7, 154.8, 155.04, 155.31, 355.2, 356m, 367i, 401,
8 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
9 subsection (2) of Section 367, and Articles VIII 1/2, XII,
10 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
11 Code.
12 (b) For purposes of the Illinois Insurance Code, except
13 for Articles XIII and XIII 1/2, Health Maintenance
14 Organizations in the following categories are deemed to be
15 "domestic companies":
16 (1) a corporation authorized under the Medical
17 Service Plan Act, the Dental Service Plan Act, the Vision
18 Service Plan Act, the Pharmaceutical Service Plan Act,
19 the Voluntary Health Services Plan Act, or the Nonprofit
20 Health Care Service Plan Act;
21 (2) a corporation organized under the laws of this
22 State; or
23 (3) a corporation organized under the laws of
24 another state, 30% or more of the enrollees of which are
25 residents of this State, except a corporation subject to
26 substantially the same requirements in its state of
27 organization as is a "domestic company" under Article
28 VIII 1/2 of the Illinois Insurance Code.
29 (c) In considering the merger, consolidation, or other
30 acquisition of control of a Health Maintenance Organization
31 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
32 (1) the Director shall give primary consideration
33 to the continuation of benefits to enrollees and the
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1 financial conditions of the acquired Health Maintenance
2 Organization after the merger, consolidation, or other
3 acquisition of control takes effect;
4 (2)(i) the criteria specified in subsection (1)(b)
5 of Section 131.8 of the Illinois Insurance Code shall not
6 apply and (ii) the Director, in making his determination
7 with respect to the merger, consolidation, or other
8 acquisition of control, need not take into account the
9 effect on competition of the merger, consolidation, or
10 other acquisition of control;
11 (3) the Director shall have the power to require
12 the following information:
13 (A) certification by an independent actuary of
14 the adequacy of the reserves of the Health
15 Maintenance Organization sought to be acquired;
16 (B) pro forma financial statements reflecting
17 the combined balance sheets of the acquiring company
18 and the Health Maintenance Organization sought to be
19 acquired as of the end of the preceding year and as
20 of a date 90 days prior to the acquisition, as well
21 as pro forma financial statements reflecting
22 projected combined operation for a period of 2
23 years;
24 (C) a pro forma business plan detailing an
25 acquiring party's plans with respect to the
26 operation of the Health Maintenance Organization
27 sought to be acquired for a period of not less than
28 3 years; and
29 (D) such other information as the Director
30 shall require.
31 (d) The provisions of Article VIII 1/2 of the Illinois
32 Insurance Code and this Section 5-3 shall apply to the sale
33 by any health maintenance organization of greater than 10% of
34 its enrollee population (including without limitation the
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1 health maintenance organization's right, title, and interest
2 in and to its health care certificates).
3 (e) In considering any management contract or service
4 agreement subject to Section 141.1 of the Illinois Insurance
5 Code, the Director (i) shall, in addition to the criteria
6 specified in Section 141.2 of the Illinois Insurance Code,
7 take into account the effect of the management contract or
8 service agreement on the continuation of benefits to
9 enrollees and the financial condition of the health
10 maintenance organization to be managed or serviced, and (ii)
11 need not take into account the effect of the management
12 contract or service agreement on competition.
13 (f) Except for small employer groups as defined in the
14 Small Employer Rating, Renewability and Portability Health
15 Insurance Act and except for medicare supplement policies as
16 defined in Section 363 of the Illinois Insurance Code, a
17 Health Maintenance Organization may by contract agree with a
18 group or other enrollment unit to effect refunds or charge
19 additional premiums under the following terms and conditions:
20 (i) the amount of, and other terms and conditions
21 with respect to, the refund or additional premium are set
22 forth in the group or enrollment unit contract agreed in
23 advance of the period for which a refund is to be paid or
24 additional premium is to be charged (which period shall
25 not be less than one year); and
26 (ii) the amount of the refund or additional premium
27 shall not exceed 20% of the Health Maintenance
28 Organization's profitable or unprofitable experience with
29 respect to the group or other enrollment unit for the
30 period (and, for purposes of a refund or additional
31 premium, the profitable or unprofitable experience shall
32 be calculated taking into account a pro rata share of the
33 Health Maintenance Organization's administrative and
34 marketing expenses, but shall not include any refund to
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1 be made or additional premium to be paid pursuant to this
2 subsection (f)). The Health Maintenance Organization and
3 the group or enrollment unit may agree that the
4 profitable or unprofitable experience may be calculated
5 taking into account the refund period and the immediately
6 preceding 2 plan years.
7 The Health Maintenance Organization shall include a
8 statement in the evidence of coverage issued to each enrollee
9 describing the possibility of a refund or additional premium,
10 and upon request of any group or enrollment unit, provide to
11 the group or enrollment unit a description of the method used
12 to calculate (1) the Health Maintenance Organization's
13 profitable experience with respect to the group or enrollment
14 unit and the resulting refund to the group or enrollment unit
15 or (2) the Health Maintenance Organization's unprofitable
16 experience with respect to the group or enrollment unit and
17 the resulting additional premium to be paid by the group or
18 enrollment unit.
19 In no event shall the Illinois Health Maintenance
20 Organization Guaranty Association be liable to pay any
21 contractual obligation of an insolvent organization to pay
22 any refund authorized under this Section.
23 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
24 Section 12. The Limited Health Service Organization Act
25 is amended by changing Section 3009 as follows:
26 (215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
27 Sec. 3009. Point-of-service limited health service
28 contracts.
29 (a) An LHSO that offers a POS contract:
30 (1) shall include as in-plan covered services all
31 services required by law to be provided by an LHSO;
32 (2) shall provide incentives, which shall include
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1 financial incentives, for enrollees to use in-plan
2 covered services;
3 (3) shall not offer services out-of-plan without
4 providing those services on an in-plan basis;
5 (4) may limit or exclude specific types of services
6 from coverage when obtained out-of-plan;
7 (5) may include annual out-of-pocket limits and
8 lifetime maximum benefits allowances for out-of-plan
9 services that are separate from any limits or allowances
10 applied to in-plan services;
11 (6) shall include an annual maximum benefit
12 allowance not to exceed $2,500 per year that is separate
13 from any limits or allowances applied to in-plan
14 services;
15 (7) may limit the groups to which a POS product is
16 offered, however, if a POS product is offered to a group,
17 then it must be offered to all eligible members of that
18 group, when an LHSO provider is available;
19 (8) shall not consider emergency services,
20 authorized referral services, or non-routine services
21 obtained out of the service area to be POS services; and
22 (9) may treat as out-of-plan services those
23 services that an enrollee obtains from a participating
24 provider, but for which the proper authorization was not
25 given by the LHSO.
26 (b) An LHSO offering a POS contract shall be subject to
27 the following limitations:
28 (1) The LHSO shall not expend in any calendar
29 quarter more than 20% of its total limited health
30 services expenditures for all its members for out-of-plan
31 covered services.
32 (2) If the amount specified in paragraph (1) is
33 exceeded by 2% in a quarter, the LHSO shall effect
34 compliance with paragraph (1) by the end of the following
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1 quarter.
2 (3) If compliance with the amount specified in
3 paragraph (1) is not demonstrated in the LHSO's next
4 quarterly report, the LHSO may not offer the POS contract
5 to new groups or include the POS option in the renewal of
6 an existing group until compliance with the amount
7 specified in paragraph (1) is demonstrated or otherwise
8 allowed by the Director.
9 (4) Any LHSO failing, without just cause, to comply
10 with the provisions of this subsection shall be required,
11 after notice and hearing, to pay a penalty of $250 for
12 each day out of compliance, to be recovered by the
13 Director of Insurance. Any penalty recovered shall be
14 paid into the General Revenue Fund. The Director may
15 reduce the penalty if the LHSO demonstrates to the
16 Director that the imposition of the penalty would
17 constitute a financial hardship to the LHSO.
18 (c) Any LHSO that offers a POS product shall:
19 (1) File a quarterly financial statement detailing
20 compliance with the requirements of subsection (b).
21 (2) Track out-of-plan POS utilization separately
22 from in-plan or non-POS out-of-plan emergency care,
23 referral care, and urgent care out of the service area
24 utilization.
25 (3) Record out-of-plan utilization in a manner that
26 will permit such utilization and cost reporting as the
27 Director may, by regulation, require.
28 (4) Demonstrate to the Director's satisfaction that
29 the LHSO has the fiscal, administrative, and marketing
30 capacity to control its POS enrollment, utilization, and
31 costs so as not to jeopardize the financial security of
32 the LHSO.
33 (5) Maintain the deposit required by subsection (b)
34 of Section 2006 in addition to any other deposit required
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1 under this Act.
2 (d) An LHSO shall not issue a POS contract until it has
3 filed and had approved by the Director a plan to comply with
4 the provisions of this Section. The compliance plan shall at
5 a minimum include provisions demonstrating that the LHSO will
6 do all of the following:
7 (1) Design the benefit levels and conditions of
8 coverage for in-plan covered services and out-of-plan
9 covered services as required by this Article.
10 (2) Provide or arrange for the provision of
11 adequate systems to:
12 (A) process and pay claims for all out-of-plan
13 covered services;
14 (B) meet the requirements for a POS contract
15 set forth in this Section and any additional
16 requirements that may be set forth by the Director;
17 and
18 (C) generate accurate data and financial and
19 regulatory reports on a timely basis so that the
20 Department can evaluate the LHSO's experience with
21 the POS contract and monitor compliance with POS
22 contract provisions.
23 (3) Comply initially and on an ongoing basis with
24 the requirements of subsections (b) and (c).
25 (e) A POS contract must comply with the requirements of
26 Section 155.31 of the Illinois Insurance Code.
27 (Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
28 Section 13. The Voluntary Health Services Plans Act is
29 amended by changing Section 10 as follows:
30 (215 ILCS 165/10) (from Ch. 32, par. 604)
31 Sec. 10. Application of Insurance Code provisions.
32 Health services plan corporations and all persons interested
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1 therein or dealing therewith shall be subject to the
2 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
3 143, 143c, 149, 155.31, 354, 355.2, 356r, 367.2, 401, 401.1,
4 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
5 (15) of Section 367 of the Illinois Insurance Code.
6 (Source: P.A. 89-514, eff. 7-17-96.)".