SB3419 96TH GENERAL ASSEMBLY

LRB096 19501 RPM 34893 b

96TH GENERAL ASSEMBLY
State of Illinois
2009 and 2010
SB3419

Introduced 2/10/2010, by Sen. Dan Kotowski

SYNOPSIS AS INTRODUCED:

215 ILCS 97/40

Amends the Illinois Health Insurance Portability and Accountability Act. Includes large group markets in the provision concerning guaranteed availability of coverage for employers in the group market. Effective July 1, 2010.

A BILL FOR

AN ACT concerning insurance.

Be it enacted by the People of the State of Illinois, represented in the General Assembly:

Section 5. The Illinois Health Insurance Portability and Accountability Act is amended by changing Section 40 as follows:

(215 ILCS 97/40)

Sec. 40. Guaranteed availability of coverage for employers in the group market.

(A) Issuance of coverage in the small and large group markets market.

(1) In general. Subject to subsections (C) through (F), each health insurance issuer that offers health insurance coverage in the small group market or the large group market or both markets in the a State:

(a) must accept every small or large employer (as defined in Section 5 10) in the State that applies for such coverage; and

(b) must accept for enrollment under such coverage every eligible individual (as defined in paragraph (2)) who applies for enrollment during the period in which the individual first becomes eligible to enroll under the terms of the group health plan and may not place any restriction which is inconsistent with Section 25 on an eligible individual being a participant or beneficiary.

(2) Eligible individual defined. For purposes of this Section, the term "eligible individual" means, with respect to a health insurance issuer that offers health insurance coverage to a small employer in connection with a group health plan in the small group market or to a large employer in connection with a group health plan in the large group market, such an individual in relation to the employer as shall be determined:

(a) in accordance with the terms of such plan;

(b) as provided by the issuer under rules of the issuer which are uniformly applicable in the a State to all small employers in such the small group market or markets; and

(c) in accordance with all applicable State laws governing such issuer and such market or markets.

(B) Special rules for network plans.

(1) In general. In the case of a health insurance issuer that offers health insurance coverage in the small group market or the large group market or both markets through a network plan, the issuer may:

(a) limit the employers that may apply for such coverage to those with eligible individuals who live, work, or reside in the service area for such network plan; and

(b) within the service area of such plan, deny such coverage to such employers if the issuer has demonstrated, if required, to the Department that:

(i) it will not have the capacity to deliver services adequately to enrollees of any additional groups in such market or markets because of its obligations to existing group contract holders and enrollees; and

(ii) it is applying this paragraph uniformly to all employers in such market or markets without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to such employees and dependents.

(2) 180-day suspension upon denial of coverage. An issuer, upon denying health insurance coverage in any service area in accordance with paragraph (1)(b), may not offer coverage in such the small group market or markets within such service area for a period of 180 days after the date such coverage is denied.

(C) Application of financial capacity limits.

(1) In general. A health insurance issuer may deny health insurance coverage in the small group market if the issuer has demonstrated, if required, to the Department:

(a) it does not have the financial capacity necessary to underwrite additional coverage in such market or markets; and

(b) it is applying this paragraph uniformly to all employers in such the small group market or markets in the State and without regard to the claims experience of those employers and their employees (and their dependents) or any health status-related factor relating to such employees and dependents.

(2) 180-day suspension upon denial of coverage. A health insurance issuer upon denying health insurance coverage in connection with group health plans in accordance with paragraph (1) may not offer coverage in connection with group health plans in such the small group market or markets for a period of 180 days after the date such coverage is denied or until the issuer has demonstrated to the Department that the issuer has sufficient financial capacity to underwrite additional coverage in such market or markets, whichever is later. The Department may provide for the application of this subsection on a service-area-specific basis.

(D) Exception to requirement for failure to meet certain minimum participation or contribution rules.

(1) In general. Subsection (A) shall not be construed to preclude a health insurance issuer from establishing employer contribution rules or group participation rules for the offering of health insurance coverage in connection with a group health plan in the small or large group market.

(2) Rules defined. For purposes of paragraph (1):

(a) the term "employer contribution rule" means a requirement relating to the minimum level or amount of employer contribution toward the premium for enrollment of participants and beneficiaries; and

(b) the term "group participation rule" means a requirement relating to the minimum number of participants or beneficiaries that must be enrolled in relation to a specified percentage or number of eligible individuals or employees of an employer.

(E) Exception for coverage offered only to bona fide association members. Subsection (A) shall not apply to health insurance coverage offered by a health insurance issuer if such coverage is made available in the small or large group market only through one or more bona fide associations (as defined in Section 5 10).

(Source: P.A. 90-30, eff. 7-1-97.)

Section 99. Effective date. This Act takes effect July 1, 2010.