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90_SB0480
215 ILCS 5/356t new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
215 ILCS 130/3009 from Ch. 73, par. 1503-9
215 ILCS 165/10 from Ch. 32, par. 604
Amends the Illinois Insurance Code, Health Maintenance
Organization Act, Limited Health Service Organization Act,
and Voluntary Health Services Plans Act. Provides that
health benefit coverage under those Acts must include
coverage for child health supervision services for children
under the age of 6. Child health supervision services
provide for a periodic review of a child's physical and
emotional status by a physician or under a physician's
supervision. Defines terms. Effective immediately.
LRB9002353JSmg
LRB9002353JSmg
1 AN ACT concerning children's health insurance coverage.
2 Be it enacted by the People of the State of Illinois,
3 represented in the General Assembly:
4 Section 5. The Illinois Insurance Code is amended by
5 adding Section 356t as follows:
6 (215 ILCS 5/356t new)
7 Sec. 356t. Child health supervision services.
8 (a) An individual or group policy of accident and health
9 insurance amended, delivered, issued, or renewed in this
10 State after the effective date of this amendatory Act of 1997
11 must provide coverage for child health supervision services
12 for children under the age of 6. The policy must provide, at
13 a minimum, benefits for child health supervision services
14 according to the current practices of the American Academy of
15 Pediatrics as defined by its "Recommendations for Preventive
16 Pediatric Health Care".
17 (b) Benefits for child health supervision services shall
18 be exempt from any copayment, coinsurance, deductible, or
19 dollar limit provisions in the policy. This exemption shall
20 be explicitly set forth in the policy.
21 (c) "Child health supervision services" means the
22 periodic review of a child's physical and emotional status by
23 a physician or pursuant to a physician's supervision. The
24 review shall include a history, complete physical
25 examination, developmental assessment, anticipatory guidance,
26 appropriate immunizations, and laboratory tests in keeping
27 with prevailing medical standards. The term applies to
28 services furnished from birth and includes one prenatal visit
29 by first-time parents or in the case of a high risk
30 pregnancy.
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1 Section 10. The Health Maintenance Organization Act is
2 amended by changing Section 5-3 as follows:
3 (215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
4 Sec. 5-3. Insurance Code provisions.
5 (a) Health Maintenance Organizations shall be subject to
6 the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
7 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
8 154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356t, 367i, 401,
9 401.1, 402, 403, 403A, 408, 408.2, and 412, paragraph (c) of
10 subsection (2) of Section 367, and Articles VIII 1/2, XII,
11 XII 1/2, XIII, XIII 1/2, and XXVI of the Illinois Insurance
12 Code.
13 (b) For purposes of the Illinois Insurance Code, except
14 for Articles XIII and XIII 1/2, Health Maintenance
15 Organizations in the following categories are deemed to be
16 "domestic companies":
17 (1) a corporation authorized under the Medical
18 Service Plan Act, the Dental Service Plan Act, the Vision
19 Service Plan Act, the Pharmaceutical Service Plan Act,
20 the Voluntary Health Services Plan Act, or the Nonprofit
21 Health Care Service Plan Act;
22 (2) a corporation organized under the laws of this
23 State; or
24 (3) a corporation organized under the laws of
25 another state, 30% or more of the enrollees of which are
26 residents of this State, except a corporation subject to
27 substantially the same requirements in its state of
28 organization as is a "domestic company" under Article
29 VIII 1/2 of the Illinois Insurance Code.
30 (c) In considering the merger, consolidation, or other
31 acquisition of control of a Health Maintenance Organization
32 pursuant to Article VIII 1/2 of the Illinois Insurance Code,
33 (1) the Director shall give primary consideration
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1 to the continuation of benefits to enrollees and the
2 financial conditions of the acquired Health Maintenance
3 Organization after the merger, consolidation, or other
4 acquisition of control takes effect;
5 (2)(i) the criteria specified in subsection (1)(b)
6 of Section 131.8 of the Illinois Insurance Code shall not
7 apply and (ii) the Director, in making his determination
8 with respect to the merger, consolidation, or other
9 acquisition of control, need not take into account the
10 effect on competition of the merger, consolidation, or
11 other acquisition of control;
12 (3) the Director shall have the power to require
13 the following information:
14 (A) certification by an independent actuary of
15 the adequacy of the reserves of the Health
16 Maintenance Organization sought to be acquired;
17 (B) pro forma financial statements reflecting
18 the combined balance sheets of the acquiring company
19 and the Health Maintenance Organization sought to be
20 acquired as of the end of the preceding year and as
21 of a date 90 days prior to the acquisition, as well
22 as pro forma financial statements reflecting
23 projected combined operation for a period of 2
24 years;
25 (C) a pro forma business plan detailing an
26 acquiring party's plans with respect to the
27 operation of the Health Maintenance Organization
28 sought to be acquired for a period of not less than
29 3 years; and
30 (D) such other information as the Director
31 shall require.
32 (d) The provisions of Article VIII 1/2 of the Illinois
33 Insurance Code and this Section 5-3 shall apply to the sale
34 by any health maintenance organization of greater than 10% of
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1 its enrollee population (including without limitation the
2 health maintenance organization's right, title, and interest
3 in and to its health care certificates).
4 (e) In considering any management contract or service
5 agreement subject to Section 141.1 of the Illinois Insurance
6 Code, the Director (i) shall, in addition to the criteria
7 specified in Section 141.2 of the Illinois Insurance Code,
8 take into account the effect of the management contract or
9 service agreement on the continuation of benefits to
10 enrollees and the financial condition of the health
11 maintenance organization to be managed or serviced, and (ii)
12 need not take into account the effect of the management
13 contract or service agreement on competition.
14 (f) Except for small employer groups as defined in the
15 Small Employer Rating, Renewability and Portability Health
16 Insurance Act and except for medicare supplement policies as
17 defined in Section 363 of the Illinois Insurance Code, a
18 Health Maintenance Organization may by contract agree with a
19 group or other enrollment unit to effect refunds or charge
20 additional premiums under the following terms and conditions:
21 (i) the amount of, and other terms and conditions
22 with respect to, the refund or additional premium are set
23 forth in the group or enrollment unit contract agreed in
24 advance of the period for which a refund is to be paid or
25 additional premium is to be charged (which period shall
26 not be less than one year); and
27 (ii) the amount of the refund or additional premium
28 shall not exceed 20% of the Health Maintenance
29 Organization's profitable or unprofitable experience with
30 respect to the group or other enrollment unit for the
31 period (and, for purposes of a refund or additional
32 premium, the profitable or unprofitable experience shall
33 be calculated taking into account a pro rata share of the
34 Health Maintenance Organization's administrative and
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1 marketing expenses, but shall not include any refund to
2 be made or additional premium to be paid pursuant to this
3 subsection (f)). The Health Maintenance Organization and
4 the group or enrollment unit may agree that the
5 profitable or unprofitable experience may be calculated
6 taking into account the refund period and the immediately
7 preceding 2 plan years.
8 The Health Maintenance Organization shall include a
9 statement in the evidence of coverage issued to each enrollee
10 describing the possibility of a refund or additional premium,
11 and upon request of any group or enrollment unit, provide to
12 the group or enrollment unit a description of the method used
13 to calculate (1) the Health Maintenance Organization's
14 profitable experience with respect to the group or enrollment
15 unit and the resulting refund to the group or enrollment unit
16 or (2) the Health Maintenance Organization's unprofitable
17 experience with respect to the group or enrollment unit and
18 the resulting additional premium to be paid by the group or
19 enrollment unit.
20 In no event shall the Illinois Health Maintenance
21 Organization Guaranty Association be liable to pay any
22 contractual obligation of an insolvent organization to pay
23 any refund authorized under this Section.
24 (Source: P.A. 88-313; 89-90, eff. 6-30-95.)
25 Section 15. The Limited Health Service Organization Act
26 is amended by changing Section 3009 as follows:
27 (215 ILCS 130/3009) (from Ch. 73, par. 1503-9)
28 Sec. 3009. Point-of-service limited health service
29 contracts.
30 (a) An LHSO that offers a POS contract:
31 (1) shall include as in-plan covered services all
32 services required by law to be provided by an LHSO;
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1 (2) shall provide incentives, which shall include
2 financial incentives, for enrollees to use in-plan
3 covered services;
4 (3) shall not offer services out-of-plan without
5 providing those services on an in-plan basis;
6 (4) may limit or exclude specific types of services
7 from coverage when obtained out-of-plan;
8 (5) may include annual out-of-pocket limits and
9 lifetime maximum benefits allowances for out-of-plan
10 services that are separate from any limits or allowances
11 applied to in-plan services;
12 (6) shall include an annual maximum benefit
13 allowance not to exceed $2,500 per year that is separate
14 from any limits or allowances applied to in-plan
15 services;
16 (7) may limit the groups to which a POS product is
17 offered, however, if a POS product is offered to a group,
18 then it must be offered to all eligible members of that
19 group, when an LHSO provider is available;
20 (8) shall not consider emergency services,
21 authorized referral services, or non-routine services
22 obtained out of the service area to be POS services; and
23 (9) may treat as out-of-plan services those
24 services that an enrollee obtains from a participating
25 provider, but for which the proper authorization was not
26 given by the LHSO.
27 (b) An LHSO offering a POS contract shall be subject to
28 the following limitations:
29 (1) The LHSO shall not expend in any calendar
30 quarter more than 20% of its total limited health
31 services expenditures for all its members for out-of-plan
32 covered services.
33 (2) If the amount specified in paragraph (1) is
34 exceeded by 2% in a quarter, the LHSO shall effect
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1 compliance with paragraph (1) by the end of the following
2 quarter.
3 (3) If compliance with the amount specified in
4 paragraph (1) is not demonstrated in the LHSO's next
5 quarterly report, the LHSO may not offer the POS contract
6 to new groups or include the POS option in the renewal of
7 an existing group until compliance with the amount
8 specified in paragraph (1) is demonstrated or otherwise
9 allowed by the Director.
10 (4) Any LHSO failing, without just cause, to comply
11 with the provisions of this subsection shall be required,
12 after notice and hearing, to pay a penalty of $250 for
13 each day out of compliance, to be recovered by the
14 Director of Insurance. Any penalty recovered shall be
15 paid into the General Revenue Fund. The Director may
16 reduce the penalty if the LHSO demonstrates to the
17 Director that the imposition of the penalty would
18 constitute a financial hardship to the LHSO.
19 (c) Any LHSO that offers a POS product shall:
20 (1) File a quarterly financial statement detailing
21 compliance with the requirements of subsection (b).
22 (2) Track out-of-plan POS utilization separately
23 from in-plan or non-POS out-of-plan emergency care,
24 referral care, and urgent care out of the service area
25 utilization.
26 (3) Record out-of-plan utilization in a manner that
27 will permit such utilization and cost reporting as the
28 Director may, by regulation, require.
29 (4) Demonstrate to the Director's satisfaction that
30 the LHSO has the fiscal, administrative, and marketing
31 capacity to control its POS enrollment, utilization, and
32 costs so as not to jeopardize the financial security of
33 the LHSO.
34 (5) Maintain the deposit required by subsection (b)
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1 of Section 2006 in addition to any other deposit required
2 under this Act.
3 (d) An LHSO shall not issue a POS contract until it has
4 filed and had approved by the Director a plan to comply with
5 the provisions of this Section. The compliance plan shall at
6 a minimum include provisions demonstrating that the LHSO will
7 do all of the following:
8 (1) Design the benefit levels and conditions of
9 coverage for in-plan covered services and out-of-plan
10 covered services as required by this Article.
11 (2) Provide or arrange for the provision of
12 adequate systems to:
13 (A) process and pay claims for all out-of-plan
14 covered services;
15 (B) meet the requirements for a POS contract
16 set forth in this Section and any additional
17 requirements that may be set forth by the Director;
18 and
19 (C) generate accurate data and financial and
20 regulatory reports on a timely basis so that the
21 Department can evaluate the LHSO's experience with
22 the POS contract and monitor compliance with POS
23 contract provisions.
24 (3) Comply initially and on an ongoing basis with
25 the requirements of subsections (b) and (c).
26 (e) A POS contract must comply with the requirements of
27 Section 356t of the Illinois Insurance Code.
28 (Source: P.A. 87-1079; 88-667, eff. 9-16-94.)
29 Section 20. The Voluntary Health Services Plans Act is
30 amended by changing Section 10 as follows:
31 (215 ILCS 165/10) (from Ch. 32, par. 604)
32 Sec. 10. Application of Insurance Code provisions.
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1 Health services plan corporations and all persons interested
2 therein or dealing therewith shall be subject to the
3 provisions of Article XII 1/2 and Sections 3.1, 133, 140,
4 143, 143c, 149, 354, 355.2, 356r, 356t, 367.2, 401, 401.1,
5 402, 403, 403A, 408, 408.2, and 412, and paragraphs (7) and
6 (15) of Section 367 of the Illinois Insurance Code.
7 (Source: P.A. 89-514, eff. 7-17-96.)