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90_HB1881sam004
LRB9000419JSgcam09
1 AMENDMENT TO HOUSE BILL 1881
2 AMENDMENT NO. . Amend House Bill 1881, AS AMENDED,
3 by replacing the introductory clause to Section 30 of the
4 bill with the following:
5 "Section 30. The Illinois Insurance Code is amended by
6 changing Sections 122-1, 356g, and 1003 and adding Sections
7 356t, 356u, and 356v as follows:
8 (215 ILCS 5/122-1) (from Ch. 73, par. 734-1)
9 Sec. 122-1. The authority and jurisdiction of Insurance
10 Department. Notwithstanding any other provision of law, and
11 except as provided herein, any person or other entity which
12 provides coverage in this State for medical, surgical,
13 chiropractic, naprapathic, physical therapy, speech
14 pathology, audiology, professional mental health, dental,
15 hospital, ophthalmologic, or optometric expenses, whether
16 such coverage is by direct-payment, reimbursement, or
17 otherwise, shall be presumed to be subject to the
18 jurisdiction of the Department unless the person or other
19 entity shows that while providing such coverage it is subject
20 to the jurisdiction of another agency of this state, any
21 subdivision of this state, or the Federal Government, or is a
22 plan of self-insurance or other employee welfare benefit
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1 program of an individual employer or labor union established
2 or maintained under or pursuant to a collective bargaining
3 agreement or other arrangement which provides for health care
4 services solely for its employees or members and their
5 dependents.
6 (Source: P.A. 86-753.)"; and
7 in the body of Section 30 of the bill by inserting
8 immediately below the last line of Sec. 356v the following:
9 "(215 ILCS 5/1003) (from Ch. 73, par. 1065.703)
10 Sec. 1003. Definitions. As used in this Article: (A)
11 "Adverse underwriting decision" means:
12 (1) any of the following actions with respect to
13 insurance transactions involving insurance coverage which is
14 individually underwritten:
15 (a) a declination of insurance coverage,
16 (b) a termination of insurance coverage,
17 (c) failure of an agent to apply for insurance coverage
18 with a specific insurance institution which the agent
19 represents and which is requested by an applicant,
20 (d) in the case of a property or casualty insurance
21 coverage:
22 (i) placement by an insurance institution or agent of a
23 risk with a residual market mechanism, an unauthorized
24 insurer or an insurance institution which specializes in
25 substandard risks, or
26 (ii) the charging of a higher rate on the basis of
27 information which differs from that which the applicant or
28 policyholder furnished, or
29 (e) in the case of life, health or disability insurance
30 coverage, an offer to insure at higher than standard rates.
31 (2) Notwithstanding paragraph (1) above, the following
32 actions shall not be considered adverse underwriting
33 decisions but the insurance institution or agent responsible
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1 for their occurrence shall nevertheless provide the applicant
2 or policyholder with the specific reason or reasons for their
3 occurrence:
4 (a) the termination of an individual policy form on a
5 class or statewide basis,
6 (b) a declination of insurance coverage solely because
7 such coverage is not available on a class or statewide basis,
8 or
9 (c) the rescission of a policy.
10 (B) "Affiliate" or "affiliated" means a person that
11 directly, or indirectly through one or more intermediaries,
12 controls, is controlled by or is under common control with
13 another person.
14 (C) "Agent" means an individual, firm, partnership,
15 association or corporation who is involved in the
16 solicitation, negotiation or binding of coverages for or on
17 applications or policies of insurance, covering property or
18 risks located in this State. For the purposes of this
19 Article, both "Insurance Agent" and "Insurance Broker", as
20 defined in Section 490, shall be considered an agent.
21 (D) "Applicant" means any person who seeks to contract
22 for insurance coverage other than a person seeking group
23 insurance that is not individually underwritten.
24 (E) "Director" means the Director of Insurance.
25 (F) "Consumer report" means any written, oral or other
26 communication of information bearing on a natural person's
27 credit worthiness, credit standing, credit capacity,
28 character, general reputation, personal characteristics or
29 mode of living which is used or expected to be used in
30 connection with an insurance transaction.
31 (G) "Consumer reporting agency" means any person who:
32 (1) regularly engages, in whole or in part, in the
33 practice of assembling or preparing consumer reports for a
34 monetary fee,
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1 (2) obtains information primarily from sources other than
2 insurance institutions, and
3 (3) furnishes consumer reports to other persons.
4 (H) "Control", including the terms "controlled by" or
5 "under common control with", means the possession, direct or
6 indirect, of the power to direct or cause the direction of
7 the management and policies of a person, whether through the
8 ownership of voting securities, by contract other than a
9 commercial contract for goods or nonmanagement services, or
10 otherwise, unless the power is the result of an official
11 position with or corporate office held by the person.
12 (I) "Declination of insurance coverage" means a denial,
13 in whole or in part, by an insurance institution or agent of
14 requested insurance coverage.
15 (J) "Individual" means any natural person who:
16 (1) in the case of property or casualty insurance, is a
17 past, present or proposed named insured or certificateholder;
18 (2) in the case of life, health or disability insurance,
19 is a past, present or proposed principal insured or
20 certificateholder;
21 (3) is a past, present or proposed policyowner;
22 (4) is a past or present applicant;
23 (5) is a past or present claimant; or
24 (6) derived, derives or is proposed to derive insurance
25 coverage under an insurance policy or certificate subject to
26 this Article.
27 (K) "Institutional source" means any person or
28 governmental entity that provides information about an
29 individual to an agent, insurance institution or
30 insurance-support organization, other than:
31 (1) an agent,
32 (2) the individual who is the subject of the
33 information, or
34 (3) a natural person acting in a personal capacity
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1 rather than in a business or professional capacity.
2 (L) "Insurance institution" means any corporation,
3 association, partnership, reciprocal exchange, inter-insurer,
4 Lloyd's insurer, fraternal benefit society or other person
5 engaged in the business of insurance, health maintenance
6 organizations as defined in Section 2 of the "Health
7 Maintenance Organization Act", medical service plans as
8 defined in Section 2 of "The Medical Service Plan Act",
9 hospital service corporation under "The Nonprofit Health Care
10 Service Plan Act", voluntary health services plans as defined
11 in Section 2 of "The Voluntary Health Services Plans Act",
12 vision service plans as defined in Section 2 of "The Vision
13 Service Plan Act", dental service plans as defined in Section
14 4 of "The Dental Service Plan Act", and pharmaceutical
15 service plans as defined in Section 4 of "The Pharmaceutical
16 Service Plan Act". "Insurance institution" shall not include
17 agents or insurance-support organizations.
18 (M) "Insurance-support organization" means: (1) any
19 person who regularly engages, in whole or in part, in the
20 practice of assembling or collecting information about
21 natural persons for the primary purpose of providing the
22 information to an insurance institution or agent for
23 insurance transactions, including:
24 (a) the furnishing of consumer reports or investigative
25 consumer reports to an insurance institution or agent for use
26 in connection with an insurance transaction, or
27 (b) the collection of personal information from
28 insurance institutions, agents or other insurance-support
29 organizations for the purpose of detecting or preventing
30 fraud, material misrepresentation or material nondisclosure
31 in connection with insurance underwriting or insurance claim
32 activity.
33 (2) Notwithstanding paragraph (1) above, the following
34 persons shall not be considered "insurance-support
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1 organizations" for purposes of this Article: agents,
2 government institutions, insurance institutions, medical care
3 institutions and medical professionals.
4 (N) "Insurance transaction" means any transaction
5 involving insurance primarily for personal, family or
6 household needs rather than business or professional needs
7 which entails:
8 (1) the determination of an individual's eligibility for
9 an insurance coverage, benefit or payment, or
10 (2) the servicing of an insurance application, policy,
11 contract or certificate.
12 (O) "Investigative consumer report" means a consumer
13 report or portion thereof in which information about a
14 natural person's character, general reputation, personal
15 characteristics or mode of living is obtained through
16 personal interviews with the person's neighbors, friends,
17 associates, acquaintances or others who may have knowledge
18 concerning such items of information.
19 (P) "Medical-care institution" means any facility or
20 institution that is licensed to provide health care services
21 to natural persons, including but not limited to: hospitals,
22 skilled nursing facilities, home-health agencies, medical
23 clinics, rehabilitation agencies and public-health agencies
24 and health-maintenance organizations.
25 (Q) "Medical professional" means any person licensed or
26 certified to provide health care services to natural
27 persons, including but not limited to, a physician, dentist,
28 nurse, optometrist, chiropractor, naprapath, pharmacist,
29 physical or occupational therapist, psychiatric social
30 worker, speech therapist, clinical dietitian or clinical
31 psychologist.
32 (R) "Medical-record information" means personal
33 information which:
34 (1) relates to an individual's physical or mental
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1 condition, medical history or medical treatment, and
2 (2) is obtained from a medical professional or
3 medical-care institution, from the individual, or from the
4 individual's spouse, parent or legal guardian.
5 (S) "Person" means any natural person, corporation,
6 association, partnership or other legal entity.
7 (T) "Personal information" means any individually
8 identifiable information gathered in connection with an
9 insurance transaction from which judgments can be made about
10 an individual's character, habits, avocations, finances,
11 occupation, general reputation, credit, health or any other
12 personal characteristics. "Personal information" includes an
13 individual's name and address and "medical-record
14 information" but does not include "privileged information".
15 (U) "Policyholder" means any person who:
16 (1) in the case of individual property or casualty
17 insurance, is a present named insured;
18 (2) in the case of individual life, health or disability
19 insurance, is a present policyowner; or
20 (3) in the case of group insurance which is individually
21 underwritten, is a present group certificateholder.
22 (V) "Pretext interview" means an interview whereby a
23 person, in an attempt to obtain information about a natural
24 person, performs one or more of the following acts:
25 (1) pretends to be someone he or she is not,
26 (2) pretends to represent a person he or she is not in
27 fact representing,
28 (3) misrepresents the true purpose of the interview, or
29 (4) refuses to identify himself or herself upon request.
30 (W) "Privileged information" means any individually
31 identifiable information that: (1) relates to a claim for
32 insurance benefits or a civil or criminal proceeding
33 involving an individual, and (2) is collected in connection
34 with or in reasonable anticipation of a claim for insurance
-8- LRB9000419JSgcam09
1 benefits or civil or criminal proceeding involving an
2 individual; provided, however, information otherwise meeting
3 the requirements of this subsection shall nevertheless be
4 considered "personal information" under this Article if it is
5 disclosed in violation of Section 1014 of this Article.
6 (X) "Residual market mechanism" means an association,
7 organization or other entity described in Article XXXIII of
8 this Act, or Section 7-501 of "The Illinois Vehicle Code".
9 (Y) "Termination of insurance coverage" or "termination
10 of an insurance policy" means either a cancellation or
11 nonrenewal of an insurance policy, in whole or in part, for
12 any reason other than the failure to pay a premium as
13 required by the policy.
14 (Z) "Unauthorized insurer" means an insurance institution
15 that has not been granted a certificate of authority by the
16 Director to transact the business of insurance in this State.
17 (Source: P.A. 82-108.)"; and
18 by inserting immediately below the last line of Section 30 of
19 the bill the following:
20 "Section 32. The Comprehensive Health Insurance Plan Act
21 is amended by changing Section 8 as follows:
22 (215 ILCS 105/8) (from Ch. 73, par. 1308)
23 Sec. 8. Minimum benefits.
24 a. Availability. The Plan shall offer in an annually
25 renewable policy major medical expense coverage to every
26 eligible person who is not eligible for Medicare. Major
27 medical expense coverage offered by the Plan shall pay an
28 eligible person's covered expenses, subject to limit on the
29 deductible and coinsurance payments authorized under
30 paragraph (4) of subsection d of this Section, up to a
31 lifetime benefit limit of $500,000 per covered individual.
32 The maximum limit under this subsection shall not be altered
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1 by the Board, and no actuarial equivalent benefit may be
2 substituted by the Board. Any person who otherwise would
3 qualify for coverage under the Plan, but is excluded because
4 he or she is eligible for Medicare, shall be eligible for any
5 separate Medicare supplement policy which the Board may
6 offer.
7 b. Covered expenses. Covered expenses shall be limited
8 to the reasonable and customary charge, including negotiated
9 fees, in the locality for the following services and articles
10 when medically necessary and prescribed by a person licensed
11 and practicing within the scope of his or her profession as
12 authorized by State law:
13 (1) Hospital room and board and any other hospital
14 services, except that inpatient hospitalization for the
15 treatment of mental and emotional disorders shall only be
16 covered for a maximum of 45 days in a calendar year.
17 (2) Professional services for the diagnosis or
18 treatment of injuries, illnesses or conditions, other
19 than dental, or outpatient mental as described in
20 paragraph (17), which are rendered by a physician or
21 chiropractor, or by other licensed professionals at the
22 physician's or chiropractor's direction.
23 (3) If surgery has been recommended, a second
24 opinion may be required. The charge for a second opinion
25 as to whether the surgery is required will be paid in
26 full without regard to deductible or co-payment
27 requirements. If the second opinion differs from the
28 first, the charge for a third opinion, if desired, will
29 also be paid in full without regard to deductible or
30 co-payment requirements. Regardless of whether the
31 second opinion or third opinion confirms the original
32 recommendation, it is the patient's decision whether to
33 undergo surgery.
34 (4) Drugs requiring a physician's or other legally
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1 authorized prescription.
2 (5) Skilled nursing care provided in a skilled
3 nursing facility for not more than 120 days in a calendar
4 year, provided the service commences within 14 days
5 following a confinement of at least 3 consecutive days in
6 a hospital for the same condition.
7 (6) Services of a home health agency in accord with
8 a home health care plan, up to a maximum of 270 visits
9 per year.
10 (7) Services of a licensed hospice for not more
11 than 180 days during a policy year.
12 (8) Use of radium or other radioactive materials.
13 (9) Oxygen.
14 (10) Anesthetics.
15 (11) Orthoses and prostheses other than dental.
16 (12) Rental or purchase in accordance with Board
17 policies or procedures of durable medical equipment,
18 other than eyeglasses or hearing aids, for which there is
19 no personal use in the absence of the condition for which
20 it is prescribed.
21 (13) Diagnostic x-rays and laboratory tests.
22 (14) Oral surgery for excision of partially or
23 completely unerupted impacted teeth or the gums and
24 tissues of the mouth, when not performed in connection
25 with the routine extraction or repair of teeth, and oral
26 surgery and procedures, including orthodontics and
27 prosthetics necessary for craniofacial or maxillofacial
28 conditions and to correct congenital defects or injuries
29 due to accident.
30 (15) Physical, speech, and functional occupational
31 therapy as medically necessary and provided by
32 appropriate licensed professionals.
33 (16) Transportation provided by a licensed
34 ambulance service to the nearest health care facility
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1 qualified to treat the illness, injury or condition,
2 subject to the provisions of the Emergency Medical
3 Systems (EMS) Act.
4 (17) The first 50 professional outpatient visits
5 for diagnosis and treatment of mental and emotional
6 disorders rendered during the year, up to a maximum of
7 $80 per visit.
8 (18) Human organ or tissue transplants specified by
9 the Board that are performed at a hospital designated by
10 the Board as a participating transplant center for that
11 specific organ or tissue transplant.
12 (19) Naprapathic services, as appropriate, provided
13 by a licensed naprapathic practitioner.
14 c. Exclusion. Covered expenses of the Plan shall not
15 include the following:
16 (1) Any charge for treatment for cosmetic purposes
17 other than for reconstructive surgery when the service is
18 incidental to or follows surgery resulting from injury,
19 sickness or other diseases of the involved part or
20 surgery for the repair or treatment of a congenital
21 bodily defect to restore normal bodily functions.
22 (2) Any charge for care that is primarily for rest,
23 custodial, educational, or domiciliary purposes.
24 (3) Any charge for services in a private room to
25 the extent it is in excess of the institution's charge
26 for its most common semiprivate room, unless a private
27 room is prescribed as medically necessary by a physician.
28 (4) That part of any charge for room and board or
29 for services rendered or articles prescribed by a
30 physician, dentist, or other health care personnel that
31 exceeds the reasonable and customary charge in the
32 locality or for any services or supplies not medically
33 necessary for the diagnosed injury or illness.
34 (5) Any charge for services or articles the
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1 provision of which is not within the scope of licensure
2 of the institution or individual providing the services
3 or articles.
4 (6) Any expense incurred prior to the effective
5 date of coverage by the Plan for the person on whose
6 behalf the expense is incurred.
7 (7) Dental care, dental surgery, dental treatment
8 or dental appliances, except as provided in paragraph
9 (14) of subsection b of this Section.
10 (8) Eyeglasses, contact lenses, hearing aids or
11 their fitting.
12 (9) Illness or injury due to (A) war or any acts of
13 war; (B) commission of, or attempt to commit, a felony;
14 or (C) aviation activities, except when traveling as a
15 fare-paying passenger on a commercial airline.
16 (10) Services of blood donors and any fee for
17 failure to replace blood provided to an eligible person
18 each policy year.
19 (11) Personal supplies or services provided by a
20 hospital or nursing home, or any other nonmedical or
21 nonprescribed supply or service.
22 (12) Routine maternity charges for a pregnancy,
23 except where added as optional coverage with payment of
24 an additional premium for pregnancy resulting from
25 conception occurring after the effective date of the
26 optional coverage.
27 (13) Expenses of obtaining an abortion, induced
28 miscarriage or induced premature birth unless, in the
29 opinion of a physician, those procedures are necessary
30 for the preservation of life of the woman seeking such
31 treatment, or except an induced premature birth intended
32 to produce a live viable child and the procedure is
33 necessary for the health of the mother or unborn child.
34 (14) Any expense or charge for services, drugs, or
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1 supplies that are: (i) not provided in accord with
2 generally accepted standards of current medical practice;
3 (ii) for procedures, treatments, equipment, transplants,
4 or implants, any of which are investigational,
5 experimental, or for research purposes; (iii)
6 investigative and not proven safe and effective; or (iv)
7 for, or resulting from, a gender transformation
8 operation.
9 (15) Any expense or charge for routine physical
10 examinations or tests.
11 (16) Any expense for which a charge is not made in
12 the absence of insurance or for which there is no legal
13 obligation on the part of the patient to pay.
14 (17) Any expense incurred for benefits provided
15 under the laws of the United States and this State,
16 including Medicare and Medicaid and other medical
17 assistance, military service-connected disability
18 payments, medical services provided for members of the
19 armed forces and their dependents or employees of the
20 armed forces of the United States, and medical services
21 financed on behalf of all citizens by the United States.
22 (18) Any expense or charge for in vitro
23 fertilization, artificial insemination, or any other
24 artificial means used to cause pregnancy.
25 (19) Any expense or charge for oral contraceptives
26 used for birth control or any other temporary birth
27 control measures.
28 (20) Any expense or charge for sterilization or
29 sterilization reversals.
30 (21) Any expense or charge for weight loss
31 programs, exercise equipment, or treatment of obesity,
32 except when certified by a physician as morbid obesity
33 (at least 2 times normal body weight).
34 (22) Any expense or charge for acupuncture
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1 treatment unless used as an anesthetic agent for a
2 covered surgery.
3 (23) Any expense or charge for or related to organ
4 or tissue transplants other than those performed at a
5 hospital with a Board approved organ transplant program
6 that has been designated by the Board as a preferred or
7 exclusive provider organization for that specific organ
8 or tissue.
9 (24) Any expense or charge for procedures,
10 treatments, equipment, or services that are provided in
11 special settings for research purposes or in a controlled
12 environment, are being studied for safety, efficiency,
13 and effectiveness, and are awaiting endorsement by the
14 appropriate national medical speciality college for
15 general use within the medical community.
16 d. Premiums, deductibles, and coinsurance.
17 (1) Premiums charged for coverage issued by the
18 Plan may not be unreasonable in relation to the benefits
19 provided, the risk experience and the reasonable expenses
20 of providing the coverage.
21 (2) Separate schedules of premium rates based on
22 sex, age and geographical location shall apply for
23 individual risks.
24 (3) The Plan may provide for separate premium rates
25 for optional family coverage for the spouse or one or
26 more dependents of any person eligible to be insured
27 under the Plan who is also the oldest adult member of the
28 family and remains continuously enrolled in the Plan as
29 the primary enrollee. The rates shall be such percentage
30 of the applicable individual Plan rate as the Board, in
31 accordance with appropriate actuarial principles, shall
32 establish for each spouse or dependent.
33 (4) The Board shall determine, in accordance with
34 appropriate actuarial principles, the average rates that
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1 individual standard risks in this State are charged by at
2 least 5 of the largest insurers providing coverage to
3 residents of Illinois that is substantially similar to
4 the Plan coverage. In the event at least 5 insurers do
5 not offer substantially similar coverage, the rates shall
6 be established using reasonable actuarial techniques and
7 shall reflect anticipated claims experience, expenses,
8 and other appropriate risk factors relating to the Plan.
9 Rates for Plan coverage shall be 135% of rates so
10 established as applicable for individual standard risks;
11 provided, however, if after determining that the
12 appropriations made pursuant to Section 12 of this Act
13 are insufficient to ensure that total income from all
14 sources will equal or exceed the total incurred costs and
15 expenses for the current number of enrollees, the board
16 shall raise premium rates above this 135% standard to the
17 level it deems necessary to ensure the financial solvency
18 of the Plan for enrollees already in the Plan. All rates
19 and rate schedules shall be submitted to the board for
20 approval.
21 (5) The Plan coverage defined in Section 6 shall
22 provide for a choice of deductibles as authorized by the
23 Board per individual per annum. If 2 individual members
24 of a family satisfy the same applicable deductibles, no
25 other member of that family who is eligible for coverage
26 under the Plan shall be required to meet any deductibles
27 for the balance of that calendar year. The deductibles
28 must be applied first to the authorized amount of covered
29 expenses incurred by the covered person. A mandatory
30 coinsurance requirement shall be imposed at the rate
31 authorized by the Board in excess of the mandatory
32 deductible, the coinsurance in the aggregate not to
33 exceed such amounts as are authorized by the Board per
34 annum. At its discretion the Board may, however, offer
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1 catastrophic coverages or other policies that provide for
2 larger deductibles with or without coinsurance
3 requirements. The deductibles and coinsurance factors
4 may be adjusted annually according to the Medical
5 Component of the Consumer Price Index.
6 (6) The Plan may provide for and employ cost
7 containment measures and requirements including, but not
8 limited to, preadmission certification, second surgical
9 opinion, concurrent utilization review programs,
10 individual case management, preferred provider
11 organizations, and other cost effective arrangements for
12 paying for covered expenses.
13 e. Scope of coverage. Except as provided in subsection
14 c of this Section, if the covered expenses incurred by the
15 eligible person exceed the deductible for major medical
16 expense coverage in a calendar year, the Plan shall pay at
17 least 80% of any additional covered expenses incurred by the
18 person during the calendar year.
19 f. Preexisting conditions.
20 (1) Six months: Plan coverage shall exclude charges
21 or expenses incurred during the first 6 months following
22 the effective date of coverage as to any condition if:
23 (a) the condition had manifested itself within the 6
24 month period immediately preceding the effective date of
25 coverage in such a manner as would cause an ordinarily
26 prudent person to seek diagnosis, care or treatment; or
27 (b) medical advice, care or treatment was recommended or
28 received within the 6 month period immediately preceding
29 the effective date of coverage.
30 (2) (Blank).
31 (3) Waiver: The preexisting condition exclusions as
32 set forth in paragraph (1) of this subsection shall be
33 waived to the extent to which the eligible person: (a)
34 has satisfied similar exclusions under any prior health
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1 insurance policy or plan that was involuntarily
2 terminated; (b) is ineligible for any continuation or
3 conversion rights that would continue or provide
4 substantially similar coverage following that
5 termination; and (c) has applied for Plan coverage not
6 later than 30 days following the involuntary termination.
7 No policy or plan shall be deemed to have been
8 involuntarily terminated if the master policyholder or
9 other controlling party elected to change insurance
10 coverage from one company or plan to another even if that
11 decision resulted in a discontinuation of coverage for
12 any individual under the plan, either totally or for any
13 medical condition. For each eligible person who qualifies
14 for and elects this waiver, there shall be added to each
15 payment of premium, on a prorated basis, a surcharge of
16 up to 10% of the otherwise applicable annual premium for
17 as long as that individual's coverage under the Plan
18 remains in effect or 60 months, whichever is less.
19 g. Other sources primary; nonduplication of benefits.
20 (1) The Plan shall be the last payor of benefits
21 whenever any other benefit or source of third party
22 payment is available. Subject to the provisions of
23 subsection e of Section 7, benefits otherwise payable
24 under Plan coverage shall be reduced by all amounts paid
25 or payable by Medicare or any other government program or
26 through any health insurance or other health benefit
27 plan, whether insured or otherwise, or through any third
28 party liability, settlement, judgment, or award,
29 regardless of the date of the settlement, judgment, or
30 award, whether the settlement, judgment, or award is in
31 the form of a contract, agreement, or trust on behalf of
32 a minor or otherwise and whether the settlement,
33 judgment, or award is payable to the covered person, his
34 or her dependent, estate, personal representative, or
-18- LRB9000419JSgcam09
1 guardian in a lump sum or over time, and by all hospital
2 or medical expense benefits paid or payable under any
3 worker's compensation coverage, automobile medical
4 payment, or liability insurance, whether provided on the
5 basis of fault or nonfault, and by any hospital or
6 medical benefits paid or payable under or provided
7 pursuant to any State or federal law or program.
8 (2) The Plan shall have a cause of action against
9 any covered person or any other person or entity for the
10 recovery of any amount paid to the extent the amount was
11 for treatment, services, or supplies not covered in this
12 Section or in excess of benefits as set forth in this
13 Section.
14 (3) Whenever benefits are due from the Plan because
15 of sickness or an injury to a covered person resulting
16 from a third party's wrongful act or negligence and the
17 covered person has recovered or may recover damages from
18 a third party or its insurer, the Plan shall have the
19 right to reduce benefits or to refuse to pay benefits
20 that otherwise may be payable by the amount of damages
21 that the covered person has recovered or may recover
22 regardless of the date of the sickness or injury or the
23 date of any settlement, judgment, or award resulting from
24 that sickness or injury.
25 During the pendency of any action or claim that is
26 brought by or on behalf of a covered person against a
27 third party or its insurer, any benefits that would
28 otherwise be payable except for the provisions of this
29 paragraph (3) shall be paid if payment by or for the
30 third party has not yet been made and the covered person
31 or, if incapable, that person's legal representative
32 agrees in writing to pay back promptly the benefits paid
33 as a result of the sickness or injury to the extent of
34 any future payments made by or for the third party for
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1 the sickness or injury. This agreement is to apply
2 whether or not liability for the payments is established
3 or admitted by the third party or whether those payments
4 are itemized.
5 Any amounts due the plan to repay benefits may be
6 deducted from other benefits payable by the Plan after
7 payments by or for the third party are made.
8 (4) Benefits due from the Plan may be reduced or
9 refused as an offset against any amount otherwise
10 recoverable under this Section.
11 h. Right of subrogation; recoveries.
12 (1) Whenever the Plan has paid benefits because of
13 sickness or an injury to any covered person resulting
14 from a third party's wrongful act or negligence, or for
15 which an insurer is liable in accordance with the
16 provisions of any policy of insurance, and the covered
17 person has recovered or may recover damages from a third
18 party that is liable for the damages, the Plan shall have
19 the right to recover the benefits it paid from any
20 amounts that the covered person has received or may
21 receive regardless of the date of the sickness or injury
22 or the date of any settlement, judgment, or award
23 resulting from that sickness or injury. The Plan shall
24 be subrogated to any right of recovery the covered person
25 may have under the terms of any private or public health
26 care coverage or liability coverage, including coverage
27 under the Workers' Compensation Act or the Workers'
28 Occupational Diseases Act, without the necessity of
29 assignment of claim or other authorization to secure the
30 right of recovery. To enforce its subrogation right, the
31 Plan may (i) intervene or join in an action or proceeding
32 brought by the covered person or his personal
33 representative, including his guardian, conservator,
34 estate, dependents, or survivors, against any third party
-20- LRB9000419JSgcam09
1 or the third party's insurer that may be liable or (ii)
2 institute and prosecute legal proceedings against any
3 third party or the third party's insurer that may be
4 liable for the sickness or injury in an appropriate court
5 either in the name of the Plan or in the name of the
6 covered person or his personal representative, including
7 his guardian, conservator, estate, dependents, or
8 survivors.
9 (2) If any action or claim is brought by or on
10 behalf of a covered person against a third party or the
11 third party's insurer, the covered person or his personal
12 representative, including his guardian, conservator,
13 estate, dependents, or survivors, shall notify the Plan
14 by personal service or registered mail of the action or
15 claim and of the name of the court in which the action or
16 claim is brought, filing proof thereof in the action or
17 claim. The Plan may, at any time thereafter, join in the
18 action or claim upon its motion so that all orders of
19 court after hearing and judgment shall be made for its
20 protection. No release or settlement of a claim for
21 damages and no satisfaction of judgment in the action
22 shall be valid without the written consent of the Plan to
23 the extent of its interest in the settlement or judgment
24 and of the covered person or his personal representative.
25 (3) In the event that the covered person or his
26 personal representative fails to institute a proceeding
27 against any appropriate third party before the fifth
28 month before the action would be barred, the Plan may, in
29 its own name or in the name of the covered person or
30 personal representative, commence a proceeding against
31 any appropriate third party for the recovery of damages
32 on account of any sickness, injury, or death to the
33 covered person. The covered person shall cooperate in
34 doing what is reasonably necessary to assist the Plan in
-21- LRB9000419JSgcam09
1 any recovery and shall not take any action that would
2 prejudice the Plan's right to recovery. The Plan shall
3 pay to the covered person or his personal representative
4 all sums collected from any third party by judgment or
5 otherwise in excess of amounts paid in benefits under the
6 Plan and amounts paid or to be paid as costs, attorneys
7 fees, and reasonable expenses incurred by the Plan in
8 making the collection or enforcing the judgment.
9 (4) In the event that a covered person or his
10 personal representative, including his guardian,
11 conservator, estate, dependents, or survivors, recovers
12 damages from a third party for sickness or injury caused
13 to the covered person, the covered person or the personal
14 representative shall pay to the Plan from the damages
15 recovered the amount of benefits paid or to be paid on
16 behalf of the covered person.
17 (5) When the action or claim is brought by the
18 covered person alone and the covered person incurs a
19 personal liability to pay attorney's fees and costs of
20 litigation, the Plan's claim for reimbursement of the
21 benefits provided to the covered person shall be the full
22 amount of benefits paid to or on behalf of the covered
23 person under this Act less a pro rata share that
24 represents the Plan's reasonable share of attorney's fees
25 paid by the covered person and that portion of the cost
26 of litigation expenses determined by multiplying by the
27 ratio of the full amount of the expenditures to the full
28 amount of the judgement, award, or settlement.
29 (6) In the event of judgment or award in a suit or
30 claim against a third party or insurer, the court shall
31 first order paid from any judgement or award the
32 reasonable litigation expenses incurred in preparation
33 and prosecution of the action or claim, together with
34 reasonable attorney's fees. After payment of those
-22- LRB9000419JSgcam09
1 expenses and attorney's fees, the court shall apply out
2 of the balance of the judgment or award an amount
3 sufficient to reimburse the Plan the full amount of
4 benefits paid on behalf of the covered person under this
5 Act, provided the court may reduce and apportion the
6 Plan's portion of the judgement proportionate to the
7 recovery of the covered person. The burden of producing
8 evidence sufficient to support the exercise by the court
9 of its discretion to reduce the amount of a proven charge
10 sought to be enforced against the recovery shall rest
11 with the party seeking the reduction. The court may
12 consider the nature and extent of the injury, economic
13 and non-economic loss, settlement offers, comparative
14 negligence as it applies to the case at hand, hospital
15 costs, physician costs, and all other appropriate costs.
16 The Plan shall pay its pro rata share of the attorney
17 fees based on the Plan's recovery as it compares to the
18 total judgment. Any reimbursement rights of the Plan
19 shall take priority over all other liens and charges
20 existing under the laws of this State with the exception
21 of any attorney liens filed under the Attorneys Lien Act.
22 (7) The Plan may compromise or settle and release
23 any claim for benefits provided under this Act or waive
24 any claims for benefits, in whole or in part, for the
25 convenience of the Plan or if the Plan determines that
26 collection would result in undue hardship upon the
27 covered person.
28 (Source: P.A. 89-486, eff. 6-21-96.)".