215 ILCS 130/ Limited Health Service Organization Act.

(215 ILCS 130/Art. 1 heading) ARTICLE 1. SHORT TITLE AND DEFINITIONS

(215 ILCS 130/1001) (from Ch. 73, par. 1501-1)

Sec. 1001. Short Title. This Act may be cited as the Limited Health Service Organization Act.

(Source: P.A. 86-600.)

(215 ILCS 130/1002) (from Ch. 73, par. 1501-2)

Sec. 1002. Definitions. As used in this Act, unless the context otherwise requires, the following terms shall have the meanings ascribed to them:

"Advertisement" means any printed or published material, audiovisual material and descriptive literature of the limited health care plan used in direct mail, newspapers, magazines, radio scripts, television scripts, billboards and similar displays; and any descriptive literature or sales aids of all kinds disseminated by a representative of the limited health care plan for presentation to the public including, but not limited to, circulars, leaflets, booklets, depictions, illustrations, form letters and prepared sales presentations.

"Copayment" means the amount that an enrollee must pay in order to receive a specific service that is not fully prepaid.

"Director" means the Director of Insurance.

"Enrollee" means an individual who has been enrolled in a limited health care plan.

"Evidence of coverage" means any certificate, agreement or contract issued to an enrollee setting out the coverage to which that enrollee is entitled in exchange for a per capita prepaid sum.

"Group contract" means a contract for limited health services which by its terms limits eligibility to members of a specified group.

"In-plan covered services" means covered limited health services obtained from providers who are employed by, under contract with, referred by, or otherwise affiliated with the LHSO and emergency services.

"Limited health care plan" means any arrangement whereby an organization undertakes to provide or arrange for and, pay for or reimburse the cost of any limited health services from providers selected by the limited health service organization and such arrangement consists of arranging for or the provision of such limited health services on a per capita prepaid basis, as distinguished from mere indemnification against the cost of such limited services on a per capita prepaid basis through insurance except as otherwise provided under Section 3009.

"Limited health service" means ambulance care services, dental care services, vision care services, pharmaceutical services, clinical laboratory services, and podiatric care services. Limited health service shall not include hospital, medical, surgical or emergency services except when those services are essential to the delivery of the limited health service. Essential hospital, medical, surgical, or emergency services shall be covered unless specifically excluded.

"Limited health service organization" (LHSO) means any organization formed under the laws of this or another state to provide or arrange for one or more limited health care plans under a system which causes any part of the risk of limited health care delivery to be borne by the organization or its providers.

"Net worth" means admitted assets, as defined in Section 1003 of this Act, minus liabilities.

"Organization" means any insurance company or other corporation organized under the laws of this or another state for the purpose of operating one or more limited health care plans and doing no business other than that of a health maintenance organization or a limited health service organization or an insurance company. Organization does not include (1) any entity otherwise authorized on the effective date of this Act pursuant to the laws of this State either to provide any limited health service on a prepayment basis or to indemnity for any limited health service; nor does it include (2) any provider or other entity when providing or arranging for the provision of limited health services pursuant to a contract with a limited health service organization or with any entity described in (1) of this definition.

"Out-of-plan covered services" means non-emergency, self-referred covered limited health services obtained from providers who are not otherwise employed by, under contract with, or otherwise affiliated with the LHSO or services obtained without a referral from providers who have contracted to provide limited health services to the enrollee on behalf of the limited health care plan.

"Point-of-service product" (POS) means a group contract that includes both in-plan covered services and out-of-plan covered services as well as a POS contract in which the risk for out-of-plan covered services is borne through reinsurance. This term does not apply to indemnity benefits offered through an LHSO that are underwritten in whole by a licensed insurance carrier and offered in conjunction with the LHSO benefit package.

"Provider" means any physician, dentist, health facility, or other person or institution which is duly licensed or otherwise authorized to deliver or furnish limited health services and also includes any other entity that arranges for the delivery or furnishing of limited health service.

"Per capita prepaid" means a basis of payment by which a fixed amount of money is prepaid per individual or any other enrollment unit to the limited health service organization or for limited health services which are provided during a definite time period regardless of the frequency or extent of the services rendered, except for copayments of a fixed amount by the limited health service organization.

"Subscriber" means the person whose employment or other status, except for family dependency, is the basis for entitlement to limited health services pursuant to a contract with an organization authorized to provide or arrange for such services under this Act.

"Uncovered expense" means the cost of limited health services that are the obligation of a limited health service organization for which an enrollee may be liable in the event of the insolvency of the organization. Costs incurred by a provider who has agreed in writing not to bill enrollees, except for permissible supplemental charges, shall be considered covered expenses.

(Source: P.A. 87-1079; 88-568, eff. 8-5-94; 88-667, eff. 9-16-94.)

(215 ILCS 130/1003) (from Ch. 73, par. 1501-3)

Sec. 1003. Definition of admitted assets. "Admitted assets" of a limited health service organization shall only include the admitted assets and investments authorized or permitted for health maintenance organizations by Sections 1-3 and 3-1 of the Health Maintenance Organization Act, as now or hereafter amended.

(Source: P.A. 86-600.)

(215 ILCS 130/Art. 2 heading) ARTICLE 2. CERTIFICATE OF AUTHORITY; GENERAL CORPORATE AND FINANCIAL REQUIREMENTS

(215 ILCS 130/2001) (from Ch. 73, par. 1502-1)

Sec. 2001. Certificate of authority; exception for corporate employee programs; applications; material modification of operation.

(a) No organization shall establish or operate a limited health service organization in this State without obtaining and maintaining a certificate of authority under this Act. No person other than an organization may lawfully establish or operate a limited health service organization in this State. This Act shall not apply to the establishment and operation of a limited health service organization exclusively providing or arranging for limited health services to employees of a corporate affiliate of such limited health service organization. This exclusion shall be available only to those limited health service organizations which require employee contributions which equal less than 50% of the total cost of the limited health care plan, with the remainder of the cost being paid by the corporate affiliate which is the employer of the participants in the plan.

(b) Any organization may apply to the Director for and obtain a certificate of authority to establish and operate a limited health service organization in compliance with this Act. A foreign corporation may qualify under this Act, subject to its obtaining and maintaining authorization to do business in this State as a foreign corporation.

(c) Each application for certificate of authority shall be filed in triplicate and verified by an officer or authorized representative of the applicant, shall be in a form prescribed by the Director, and shall set forth, without limiting what may be required by the Director, the following:

(1) A copy of the organization document.

(2) A copy of the bylaws, rules and regulations, or similar document regulating the conduct of the internal affairs of the applicant.

(3) A list of the names, addresses, and official positions of the persons who are to be responsible for the conduct of the affairs of the applicant; including but not limited to, all members of the board of directors, executive committee, the principal officers, and any person or entity owning or having the right to acquire 10% or more of the voting securities or subordinated debt of the applicant.

(4) A statement generally describing the application, geographic area to be served, its facilities, personnel and the limited health service or services to be offered.

(5) A copy of the form of any contract made or be made between the applicant and any providers regarding the provision of limited health services to enrollees.

(6) A copy of the form of any contract made, or to be made between the applicant and any person listed in paragraph (3) of this subsection.

(7) A copy of the form of any contract made or to be made between the applicant and any person, corporation, partnership or other entity for the performance on the applicant's behalf of any functions including, but not limited to, marketing, administration, enrollment, investment management and subcontracting for the provision of limited health services to enrollees.

(8) A copy of the form of any group contract which is to be issued to employers, unions, trustees or other organizations and a copy of any form of evidence of coverage to be issued to any enrollee or subscriber and any advertising material.

(9) A copy of the applicant's most recent financial statements audited by an independent certified public accountant. If the financial affairs of the applicant's parent company are audited by an independent certified public account, but those of the applicant are not, then a copy of the most recent audited financial statement of the applicant's parent, attached to which shall be consolidating financial statements of the parent including separate unaudited financial statements of the applicant, unless the Director determines that additional or more recent financial information is required for the proper administration of this Act.

(10) A copy of the applicant's financial plan, including a 3 year projection of anticipated operating results, a statement of the sources of working capital and any other sources of funding and provisions for contingencies.

(11) A description of rate methodology.

(12) A description of the proposed method of marketing.

(13) Except in the case of a foreign applicant authorized to transact business in this State, a statement acknowledging that all lawful process in any legal action or proceeding against the applicant on a cause of action arising in this State is valid if served in accordance with Section 112 of the Illinois Insurance Code as now or hereafter amended.

(14) A description of the complaint procedures to be established and maintained as required under Section 3002 of this Act.

(15) A description of the quality assessment and utilization review procedures to be utilized by the applicant.

(16) The fee for filing an application for issuance of a certificate of authority provided in Section 408 of the Illinois Insurance Code as now or hereafter amended.

(17) Such other information as the Director may reasonably require to make the determinations required by this Act.

(Source: P.A. 86-600.)

(215 ILCS 130/2002) (from Ch. 73, par. 1502-2)

Sec. 2002. Issuance of certificate of authority.

(a) Issuance of a certificate of authority shall be granted if the following conditions are met:

(1) The requirements of subsection (c) of Section 2001 have been fulfilled.

(2) The persons responsible for conducting the applicant's affairs are competent and trustworthy, possess good reputations and have had appropriate experience, training or education.

(3) The applicant has demonstrated the willingness and potential ability to assure that such limited health service will be provided in a manner to insure both availability and accessibility of adequate personnel and facilities and in a manner enhancing availability, accessibility, and continuity of service.

(4) The applicant has arrangements for an ongoing quality of health care assessment program concerning health care processes and outcomes.

(5) The applicant is financially responsible and may reasonably be expected to meet its obligations to enrollees and to prospective enrollees. In making this determination, the Director shall consider:

(A) the financial soundness of the applicant's arrangements for limited health services and the minimum standard rates, copayments and other patient charges used in connection therewith.

(B) the adequacy of working capital, other sources of funding, and provisions for contingencies.

(6) The limited health care plan furnishes limited health services on a prepaid basis, through insurance or otherwise, except to the extent of reasonable requirements for copayments of a fixed amount.

(7) The agreements with providers for the provision of limited health services contain the provisions required by Section 2008 of this Act.

(8) Any deficiencies identified by the Director have been corrected.

(b) No certificate of authority shall be issued if the initial minimum net worth of the applicant is less than $100,000. The initial net worth shall be provided in cash and securities in combination and form acceptable to the Director.

(Source: P.A. 86-600.)

(215 ILCS 130/2003) (from Ch. 73, par. 1502-3)

Sec. 2003. Powers of limited health service organizations. The powers of a limited health service organization include, but are not limited to the following:

(1) The purchase, lease, construction, renovation, operation or maintenance of limited health service facilities and their ancillary equipment, and such property as may reasonably be required for its principal office or for such other purposes as may be necessary in the transaction of the business of the organization.

(2) The making of loans to a provider group under contract with it and in furtherance of its program or the making of loans to a corporation or corporations under its control for the purpose of acquiring or constructing limited health service facilities or in furtherance of a program providing limited health services for enrollees.

(3) The furnishing of limited health services through providers which are under contract with or employed by the limited health service organization.

(4) The contracting with any person for the performance on its behalf of certain functions such as marketing, enrollment and administration.

(5) The contracting with an insurance company licensed in this State, or with a hospital, medical, voluntary, dental, vision or pharmaceutical service corporation authorized to do business in this State, for the provision of insurance, indemnity or reimbursement against the cost of limited health service provided by the limited health service organization.

(6) Rendering services related to the functions involved in the operation of its limited health service business including, but not limited to, providing limited health services, data processing, accounting, claims.

(7) Indemnity benefits covering out of area or emergency services directly related to the provision of limited health service.

(8) The offering of point-of-service products as authorized under Section 3009.

(9) Any other business activity reasonably complementary or supplementary to its limited health service business to the extent approved by the Director.

(Source: P.A. 97-813, eff. 7-13-12.)

(215 ILCS 130/2004) (from Ch. 73, par. 1502-4)

Sec. 2004. Required minimum net worth; impairment.

(a) A limited health service organization issued a certificate of authority shall have and at all times maintain net worth of not less than the greater of:

(1) $50,000; or

(2) 2% of the organization's annual gross premium income, up to a maximum of $500,000.

(b) A limited health service organization that has annual uncovered expenses in excess of $50,000, as reported on the most recent annual financial statement filed with the Director, shall maintain additional net worth equal to 25% of such uncovered expenses in excess of $50,000 in addition to the net worth required by subsection (a), subject to the maximum net worth set forth in item (2) of subsection (a).

(c) A limited health service organization that has been approved by the Director to offer a POS contract shall have and at all times maintain net worth of not less than the greater of:

(1) $100,000 if the LHSO's expenditures for out-of-plan covered services do not exceed 10% of its total limited health expenditure in any calendar quarter; or

(2) $100,000 plus an additional $10,000 for each percentage point that the LHSO's expenditures for out-of-plan covered services exceeds 10% of its total limited health service expenditure in any calendar quarter up to $200,000; or

(3) the amount set forth in item (2) of subsection (a).

(d) A deficiency in meeting amounts required in subsection (a), (b), or (c) shall require (1) filing with the Director a plan of correction of the deficiency, acceptable to the Director and (2) correction of the deficiency within a reasonable time, not to exceed 60 days unless an extension of time, not to exceed 60 additional days, is granted by the Director. Such a deficiency will be deemed an impairment, and failure to correct the deficiency in the prescribed time shall be grounds for suspension or revocation pursuant to subsection (h) of Section 4005 of this Act.

(e) Unless allowed by the Director, no limited health service organization, officer, director, trustee, producer or employee of such organization may renew, issue, or deliver, or cause to be renewed, issued or delivered, any evidence of coverage in this State, for which a premium is charged or collected, when the organization writing such coverage is insolvent or impaired, and the fact of such insolvency or impairment is known to the organization, officer, director, producer or employee of such organization. An organization is impaired when a deficiency exists in meeting the amounts required in subsection (a), (b), or (c) of this Section. However, the existence of an impairment does not prevent the issuance or renewal of any evidence of coverage when the enrollee exercises an option granted under the plan to obtain new, renewed or converted coverage. Any organization, officer, director, producer or employee of such organization violating this subsection shall be guilty of a Class A misdemeanor.

(Source: P.A. 87-1079; 88-667, eff. 9-16-94.)

(215 ILCS 130/2005) (from Ch. 73, par. 1502-5)

Sec. 2005. Claims liabilities.

(a) Every limited health service organization shall, at all times, maintain liabilities in an amount estimated in the aggregate to provide for the payment of all claims incurred and any due and unpaid provider capitation, whether reported or unreported, which are unpaid and for which such organization is or may be liable, and to provide for the expense of adjustment or settlement of such claims. Such liabilities shall be computed in accordance with regulations promulgated by the Director upon reasonable consideration of the ascertained experience and character of such business for the purpose of adequately protecting enrollees and securing the solvency of such organizations.

(b) Whenever the claim and claim expense experience of any such organization shows the liabilities calculated in accordance with such regulations to be inadequate, the Director may require such organization to maintain additional liabilities.

(Source: P.A. 86-600.)

(215 ILCS 130/2006) (from Ch. 73, par. 1502-6)

Sec. 2006. Statutory deposits.

(a) An organization subject to the provisions of this Act shall make and maintain with the Director, for the protection of enrollees of the organization, a deposit of securities that are in the form authorized under Section 2-6 of the Health Maintenance Organization Act having a fair market value equal to the minimum net worth required under subsection (a) of Section 2004. The amount on deposit shall remain as an admitted asset of the organization in the determination of its net worth. The Director may release the required deposit of securities required by this Section upon receipt of an order of a court having proper jurisdiction or upon: (i) certification by the organization that it has no outstanding enrollee creditors, enrollees, certificate holders, or enrollee obligations in effect and no plans to engage in the business of insurance as a limited health service organization; (ii) receipt of a lawful resolution of the organization's governing body effecting the surrender of its certificate of authority, articles of incorporation, or other organizational documents to their issuing governmental officer for voluntary or administrative dissolution; and (iii) receipt of the name and forwarding address for each of the final officers and directors of the organization, together with a plan of dissolution approved by the Director.

(b) An LHSO that offers a POS contract shall, in addition to the deposit required by subsection (a), deposit and maintain with the Director cash or securities that are authorized investments under Section 1003 having a fair market value equal to the greater of:

(1) $50,000 if the LHSO's expenditures for out-of-plan covered services do not exceed 10% of its total limited health expenditures in any calendar quarter; or

(2) $100,000 if the LHSO's expenditures for out-of-plan covered services exceeds 10% but are less than 20% of its total limited health services expenditure in any calendar quarter; or

(3) 120% of its current actual monthly out-of-plan covered service claims expense plus incurred but not reported balances for out-of-plan covered services.

(c) The combined deposit amount required in subsections (a) and (b) shall not exceed $200,000.

(Source: P.A. 92-75, eff. 7-12-01.)

(215 ILCS 130/2007)

Sec. 2007. (Repealed).

(Source: P.A. 91-549, eff. 8-14-99. Repealed by P.A. 97-486, eff. 1-1-12.)

(215 ILCS 130/2008) (from Ch. 73, par. 1502-8)

Sec. 2008. Provider contracts.

(a) All contracts with providers or with entities which subcontract for the provision of limited health services to enrollees on a prepayment or other basis and any contract with any subcontractor thereof shall contain the following hold-harmless clause: "The provider agrees that in no event including, but not limited to, nonpayment by the organization of amounts due the provider under this contract, insolvency of the organization or any breach of this contract by the organization, shall the provider or its assignees or subcontractors have a right to seek any type of payment from, bill, charge, collect a deposit from or have any recourse against the enrollee, persons acting on the enrollee's behalf (other than the organization), the employer or group contractholder for services provided pursuant to this contract except for the payment of applicable copayments for services covered by the organization or fees for services not covered by the organization. The requirements of this clause shall survive any termination of this contract for services rendered prior to such termination, regardless of the cause of such termination. The organization's enrollees shall be third party beneficiaries of this clause. This clause supersedes any oral or written agreement now existing or hereafter entered into between the provider and the enrollee or persons acting on the enrollee's behalf (other than the organization).". To the extent that any provider or subcontractor's contract, fails to incorporate such provisions, such provisions shall be deemed incorporated into such contracts by operation of law.

(b) All provider and subcontractor contracts must contain provisions whereby the provider or subcontractor shall provide, arrange for or participate in the quality assessment programs mandated by this Act, unless the Department of Insurance certifies that such programs will be fully implemented without any participation or action from such contracting provider.

(c) The Director may promulgate rules requiring that provider contracts contain provisions concerning reasonable notices to be given between the parties and for the organization to provide reasonable notice to its enrollees and to the Director. Notice shall be given for such events as, but not limited to, termination of insurance protection, quality assessment or availability of medical area.

(Source: P.A. 86-600; 86-1408.)

(215 ILCS 130/2009) (from Ch. 73, par. 1502-9)

Sec. 2009. Subordinated indebtedness. An organization having a certificate of authority under this Act may borrow or assume a liability for the repayment of a sum of money upon a written agreement that the loan or advance with interest thereon not exceeding a reasonable rate shall be repaid only out of net worth of the organization in excess of such minimum net worth as is stipulated in and by the agreement. The agreement shall first be submitted to and approved by the appropriate authoritative body of the organization and the Director. Repayment of principal or payment of interest may be made only with the approval of the Director when he is satisfied that the financial condition of the organization warrants such action, but such approval may not be withheld if the organization shall have and submit satisfactory evidence of net worth of not less than the amount stipulated in the repayment of principal or interest payment clause of the agreement. No loan or advance made under this Section or interest accruing thereon shall form a part of the legal liabilities of the organization until authorized for payment by the Director, but until such authorization all statements published by the organization or filed with the Director shall show the amount thereof then remaining unpaid as a special surplus account. Nothing in this Section shall be construed to mean that an organization may not otherwise borrow money, but the amount so borrowed with accrued interest thereon shall be carried by the company as a liability.

(Source: P.A. 86-600.)

(215 ILCS 130/Art. 3 heading) ARTICLE 3. DELIVERY OF SERVICES; REQUIRED PROVISIONS AND MARKETING

(215 ILCS 130/3001) (from Ch. 73, par. 1503-1)

Sec. 3001. Description and securing of services. The limited health service organization shall issue to each subscriber or enrollee a group contract or evidence of coverage. Any such group contract or evidence of coverage shall provide for the rendering of limited health services as defined therein for a period of 12 months from the date of issuance; and shall provide that it shall be renewed from year to year unless there has been 31 days written notice of termination prior to the annual renewal of the contract by the subscriber, enrollee or the limited health service organization. The group contract, evidence of coverage and related material shall be delivered or issued for delivery to an enrollee within 30 days from the later of the effective date of coverage or the date on which the limited health service organization is notified of enrollment.

(Source: P.A. 86-600.)

(215 ILCS 130/3002) (from Ch. 73, par. 1503-2)

Sec. 3002. Complaint system. Every limited health service organization shall establish and maintain a complaint system providing reasonable procedures for resolving complaints initiated by enrollees. Nothing herein shall be construed to preclude an enrollee or a provider from filing a complaint with the Director or as limiting the Director's ability to investigate such complaints.

(Source: P.A. 86-600.)

(215 ILCS 130/3003) (from Ch. 73, par. 1503-3)

Sec. 3003. Department complaint handling procedure. (a) When a complaint is received by the Department of Insurance (Department) against a limited health service organization (respondent) or producer (respondent), the respondent shall be notified of the complaint. The Department in its notification shall specify the date when a report is to be received from the respondent, which shall be no later than 21 days after notification is sent to the respondent. A failure to reply by the date specified may be followed by a collect telephone call or collect telegram. Repeated instances of failing to reply by the date specified may result in further regulatory action.

(b) Contents of response or report.

(1) Each respondent shall supply adequate documentation which explains all actions taken or not taken and which were the basis for the complaint.

(2) Documents necessary to support the respondent's position and information requested by the Department, shall be furnished with the respondent's reply.

(3) The respondent's reply shall be duplicate, but duplicate copies of supporting documents shall not be required.

(4) The respondent's reply shall include the name, telephone number and address of the individual assigned to the complaint.

(5) The Department shall respect the confidentiality of medical reports and other documents which by law are confidential. Any other information furnished by a respondent shall be marked "confidential" if the respondent does not wish it to be released to the complainant.

(c) Follow-up conclusion. Upon receipt of the respondent's report, the investigating deputy shall evaluate the material submitted; and

(1) advise the complainant of the action taken and disposition of his complaint;

(2) pursue further investigation with respondent or complainant; or

(3) refer the investigation report to the appropriate unit within the Department of Insurance for further regulatory action.

(Source: P.A. 86-600.)

(215 ILCS 130/3004) (from Ch. 73, par. 1503-4)

Sec. 3004. Solicitations of enrollees. (a) Solicitations of enrollees by a limited health service organization authorized under this Act, or its representatives shall not be construed to be violative of any provisions of law relating to solicitation or advertising by health professionals. Nothing in this Section precludes a limited health service organization from providing to a particular potential enrollee the names of health providers. No limited health service organization, or representative thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading or any form of evidence of coverage which is deceptive. Limited health service organizations shall be subject to Section 143c or the Illinois Insurance Code as now or hereafter amended.

(b) If the Director finds that any advertisement of a plan has materially failed to comply with the provisions of this Act or the rules hereunder, the Director may, by order, require the plan to publish in the same or similar medium, an approved correction or retraction of any untrue, misleading or deceptive statement contained in the advertising and may prohibit such plan from publishing, distributing or allowing to be published or distributed on its behalf such advertisement or any new materially revised advertisement without first having filed a copy thereof with the Director 30 days prior to the publication or distribution thereof, or any shorter period specified in such order. An order issued under this Section shall be effective for 12 months from its issuance and may be renewed by order if the advertisements submitted under this Section indicate difficulties of voluntary compliance with the applicable provisions of this Act and the rules hereunder.

(Source: P.A. 86-600.)

(215 ILCS 130/3005) (from Ch. 73, par. 1503-5)

Sec. 3005. Producers. No person may apply, procure, solicit, negotiate, or place for others any evidence of coverage of a limited health service organization unless that person holds a valid limited insurance representative license or producers license to sell accident and health insurance policies pursuant to Article XXXI of the Illinois Insurance Code, as now and hereafter amended.

(Source: P.A. 86-600.)

(215 ILCS 130/3006) (from Ch. 73, par. 1503-6)

(Text of Section before amendment by P.A. 103-650)

Sec. 3006. Changes in rate methodology and benefits; material modifications; addition of limited health services.

(a) A limited health service organization shall file with the Director prior to use, a notice of any change in rate methodology, charges, or benefits and of any material modification of any matter or document furnished pursuant to Section 2001, together with such supporting documents as are necessary to fully explain the change or modification.

(1) Contract modifications described in paragraphs (5) and (6) of subsection (c) of Section 2001 shall include all agreements between the organization and enrollees, providers, administrators of services, and insurers of limited health services; also other material transactions or series of transactions, the total annual value of which exceeds the greater of $100,000 or 5% of net earned subscription revenue for the most current 12-month period as determined from filed financial statements.

(2) Contract modification for reinsurance. Any agreement between the organization and an insurer shall be subject to the provisions of Article XI of the Illinois Insurance Code, as now or hereafter amended. All reinsurance agreements must be filed with the Director. Approval of the Director in required agreements must be filed. Approval of the director is required for all agreements except individual stop loss, aggregate excess, hospitalization benefits, or out-of-area of the participating providers, unless 20% or more of the organization's total risk is reinsured, in which case all reinsurance agreements shall require approval.

(b) If a limited health service organization desires to add one or more additional limited health services, it shall file a notice with the Director and, at the same time, submit the information required by Section 2001 if different from that filed with the prepaid limited health service organization's application. Issuance of such an amended certificate of authority shall be subject to the conditions of Section 2002 of this Act.

(c) In addition to any applicable provisions of this Act, premium rate filings shall be subject to subsection (i) of Section 355 of the Illinois Insurance Code.

(Source: P.A. 103-106, eff. 1-1-24; 103-605, eff. 7-1-24.)

(Text of Section after amendment by P.A. 103-650)

Sec. 3006. Changes in rate methodology and benefits; material modifications; addition of limited health services.

(a) A limited health service organization shall file with the Director prior to use, a notice of any change in rate methodology, charges, or benefits and of any material modification of any matter or document furnished pursuant to Section 2001, together with such supporting documents as are necessary to fully explain the change or modification.

(1) Contract modifications described in paragraphs (5) and (6) of subsection (c) of Section 2001 shall include all agreements between the organization and enrollees, providers, administrators of services, and insurers of limited health services; also other material transactions or series of transactions, the total annual value of which exceeds the greater of $100,000 or 5% of net earned subscription revenue for the most current 12-month period as determined from filed financial statements.

(2) Contract modification for reinsurance. Any agreement between the organization and an insurer shall be subject to the provisions of Article XI of the Illinois Insurance Code, as now or hereafter amended. All reinsurance agreements must be filed with the Director. Approval of the Director in required agreements must be filed. Approval of the director is required for all agreements except individual stop loss, aggregate excess, hospitalization benefits, or out-of-area of the participating providers, unless 20% or more of the organization's total risk is reinsured, in which case all reinsurance agreements shall require approval.

(b) If a limited health service organization desires to add one or more additional limited health services, it shall file a notice with the Director and, at the same time, submit the information required by Section 2001 if different from that filed with the prepaid limited health service organization's application. Issuance of such an amended certificate of authority shall be subject to the conditions of Section 2002 of this Act.

(c) In addition to any applicable provisions of this Act, premium rate filings shall be subject to subsection (i) and, for pharmaceutical policies, subsection (j) of Section 355 of the Illinois Insurance Code.

(Source: P.A. 103-106, eff. 1-1-24; 103-605, eff. 7-1-24; 103-650, eff. 1-1-25.)

(215 ILCS 130/3007) (from Ch. 73, par. 1503-7)

Sec. 3007. Prior approval of policy forms.

(a) No limited health service organization shall issue or deliver, in this State, a group contract or evidence of coverage, attach an endorsement or rider thereto, incorporate by reference, bylaws or other matter therein or use an application blank in this State until the form and content of such group contract or evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank has been filed with and approved by the Director and, provided further, except that any such endorsement or rider which is to be attached to a group contract or evidence of coverage subsequent to the date the group contract or evidence of coverage is issued must be filed with, reviewed and approved by the Director prior to the date it is attached to a group contract or evidence of coverage issued or delivered in this State. The Director shall withhold approval of any such group contract, evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank if it contains provisions which may encourage misrepresentation or are unjust, unfair, inequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or to the public policy of this State, or contains exceptions and conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the group contract or evidence of coverage. In all cases the Director shall approve or disapprove any such form within 60 days after submission unless the Director extends, by not more than an additional 30 days, the period within which he shall approve or disapprove any such form by giving written notice to the organization of such extension before expiration of the initial 60 day period. The Director shall withdraw his approval of a group contract or evidence of coverage, endorsement rider, bylaw or other matter incorporated by reference or application blank if he subsequently determines that such group contract or evidence of coverage, endorsement, rider, bylaw, other matter incorporated by reference or application blank is misrepresentative, unjust, unfair, unequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or public policy of this State, or contains exceptions or conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the group contract or evidence of coverage.

(b) If a previously approved group contract or evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank is withdrawn from use, the Director shall serve upon the company an order of withdrawal of use, either personally or by mail, and if by mail, such service shall be completed if such notice is deposited in the post office, postage prepaid, addressed to the limited health service organization's last known address specified in the records of the Department of Insurance. The order of withdrawal of use shall take effect 30 days from the date of mailing, but shall be stayed if within the 30 day period a written request for hearing is filed with the Director. Such hearing shall be held at such time and place as designated in the order given by the Director. The hearing may be held either in the City of Springfield, the City of Chicago or in the county where the principal business address of the limited health service organization is located. The action of the Director in disapproving or withdrawing such form shall be subject to judicial review under the Administrative Review Law, as now or hereafter amended.

(Source: P.A. 86-600.)

(215 ILCS 130/3008) (from Ch. 73, par. 1503-8)

Sec. 3008. Evidence of coverage. (a) Every subscriber shall be issued an evidence of coverage, which shall contain a clear and complete statement of:

(1) The limited health services to which each enrollee is entitled.

(2) Eligibility requirements indicating the conditions which must be met to enroll in a limited health care plan.

(3) Any limitation of the services or benefits to be provided, and exclusions, including any copayment, or other charges.

(4) The terms or conditions upon which coverage may be cancelled or otherwise terminated.

(5) Where and in what manner information is available as to where and how services may be obtained.

(6) The method for resolving complaints.

(b) Any amendment to the evidence of coverage may be provided to the subscriber in a separate document.

(Source: P.A. 86-600.)

(215 ILCS 130/3009) (from Ch. 73, par. 1503-9)

Sec. 3009. Point-of-service limited health service contracts.

(a) An LHSO that offers a POS contract:

(1) shall include as in-plan covered services all services required by law to be provided by an LHSO;

(2) shall provide incentives, which shall include financial incentives, for enrollees to use in-plan covered services;

(3) shall not offer services out-of-plan without providing those services on an in-plan basis;

(4) may limit or exclude specific types of services from coverage when obtained out-of-plan;

(5) may include annual out-of-pocket limits and lifetime maximum benefits allowances for out-of-plan services that are separate from any limits or allowances applied to in-plan services;

(6) shall include an annual maximum benefit allowance not to exceed $2,500 per year that is separate from any limits or allowances applied to in-plan services;

(7) may limit the groups to which a POS product is offered, however, if a POS product is offered to a group, then it must be offered to all eligible members of that group, when an LHSO provider is available;

(8) shall not consider emergency services, authorized referral services, or non-routine services obtained out of the service area to be POS services; and

(9) may treat as out-of-plan services those services that an enrollee obtains from a participating provider, but for which the proper authorization was not given by the LHSO.

(b) An LHSO offering a POS contract shall be subject to the following limitations:

(1) The LHSO shall not expend in any calendar quarter more than 20% of its total limited health services expenditures for all its members for out-of-plan covered services.

(2) If the amount specified in paragraph (1) is exceeded by 2% in a quarter, the LHSO shall effect compliance with paragraph (1) by the end of the following quarter.

(3) If compliance with the amount specified in paragraph (1) is not demonstrated in the LHSO's next quarterly report, the LHSO may not offer the POS contract to new groups or include the POS option in the renewal of an existing group until compliance with the amount specified in paragraph (1) is demonstrated or otherwise allowed by the Director.

(4) Any LHSO failing, without just cause, to comply with the provisions of this subsection shall be required, after notice and hearing, to pay a penalty of $250 for each day out of compliance, to be recovered by the Director of Insurance. Any penalty recovered shall be paid into the General Revenue Fund. The Director may reduce the penalty if the LHSO demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the LHSO.

(c) Any LHSO that offers a POS product shall:

(1) File a quarterly financial statement detailing compliance with the requirements of subsection (b).

(2) Track out-of-plan POS utilization separately from in-plan or non-POS out-of-plan emergency care, referral care, and urgent care out of the service area utilization.

(3) Record out-of-plan utilization in a manner that will permit such utilization and cost reporting as the Director may, by regulation, require.

(4) Demonstrate to the Director's satisfaction that the LHSO has the fiscal, administrative, and marketing capacity to control its POS enrollment, utilization, and costs so as not to jeopardize the financial security of the LHSO.

(5) Maintain the deposit required by subsection (b) of Section 2006 in addition to any other deposit required under this Act.

(d) An LHSO shall not issue a POS contract until it has filed and had approved by the Director a plan to comply with the provisions of this Section. The compliance plan shall at a minimum include provisions demonstrating that the LHSO will do all of the following:

(1) Design the benefit levels and conditions of coverage for in-plan covered services and out-of-plan covered services as required by this Article.

(2) Provide or arrange for the provision of adequate systems to:

(A) process and pay claims for all out-of-plan covered services;

(B) meet the requirements for a POS contract set forth in this Section and any additional requirements that may be set forth by the Director; and

(C) generate accurate data and financial and regulatory reports on a timely basis so that the Department can evaluate the LHSO's experience with the POS contract and monitor compliance with POS contract provisions.

(3) Comply initially and on an ongoing basis with the requirements of subsections (b) and (c).

(e) A limited health service organization that offers a POS contract must comply with Sections 356w and 356x of the Illinois Insurance Code.

(Source: P.A. 90-741, eff. 1-1-99.)

(215 ILCS 130/3010)

Sec. 3010. Purchase of ophthalmic goods or services. An organization may not require a provider, as a condition of participation in the organization's limited health care plan, to purchase ophthalmic goods or services, including but not limited to eyeglass frames, in a quantity or dollar amount in excess of the quantity or dollar amount an enrollee purchases under the terms of the limited health care plan.

(Source: P.A. 93-1077, eff. 1-18-05.)

(215 ILCS 130/Art. 4 heading) ARTICLE 4. GENERAL PROVISIONS

(215 ILCS 130/4001) (from Ch. 73, par. 1504-1)

Sec. 4001. Applicability of Section 155 of the Illinois Insurance Code to limited health service organizations. Section 155 of the Illinois Insurance Code, as now or hereafter amended, shall apply to limited health service organizations; except that no actions shall be brought for an unreasonable delay in the settling of a claim if the delay is caused by the failure of the enrollee to execute a lien as requested by the health care plan.

(Source: P.A. 86-600.)

(215 ILCS 130/4002) (from Ch. 73, par. 1504-2)

Sec. 4002. Health Maintenance Organization Act. Limited health service organizations shall be subject to the provisions of Sections 1-3 and 3-1 of the Health Maintenance Organization Act, as now or hereafter amended.

(Source: P.A. 86-600.)

(215 ILCS 130/4002.1)

Sec. 4002.1. Access to obstetrical and gynecological care. Limited health service organizations are subject to the provisions of Section 356r of the Illinois Insurance Code.

(Source: P.A. 103-718, eff. 7-19-24.)

(215 ILCS 130/4002.5)

Sec. 4002.5. Illinois Health Insurance Portability and Accountability Act. The provisions of this Act are subject to the Illinois Health Insurance Portability and Accountability Act as provided in Section 15 of that Act.

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

(215 ILCS 130/4002.6)

Sec. 4002.6. Managed Care Reform and Patient Rights Act. Except for health care plans offering only dental services or only vision services, limited health service organizations are subject to the provisions of the Managed Care Reform and Patient Rights Act.

(Source: P.A. 91-617, eff. 1-1-00.)

(215 ILCS 130/4003) (from Ch. 73, par. 1504-3)

(Text of Section from P.A. 103-605)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-605, eff. 7-1-24.)

(Text of Section from P.A. 103-649)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 352c, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-649, eff. 1-1-25.)

(Text of Section from P.A. 103-656)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143.31, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-656, eff. 1-1-25.)

(Text of Section from P.A. 103-700, 103-758, and 103-1024)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 356z.71, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-700, eff. 1-1-25; 103-758, eff. 1-1-25; 103-1024, eff. 1-1-25.)

(Text of Section from P.A. 103-718)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-718, eff. 7-19-24.)

(Text of Section from P.A. 103-751)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 356m, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 356z.71, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-751, eff. 8-2-24.)

(Text of Section from P.A. 103-832)

Sec. 4003. Illinois Insurance Code provisions. Limited health service organizations shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2, 355.3, 355b, 355d, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32, 356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54, 356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois Insurance Code. Nothing in this Section shall require a limited health care plan to cover any service that is not a limited health service. For purposes of the Illinois Insurance Code, except for Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited health service organizations in the following categories are deemed to be domestic companies:

(1) a corporation under the laws of this State; or

(2) a corporation organized under the laws of another state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a domestic company under Article VIII 1/2 of the Illinois Insurance Code.

(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816, eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff. 1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445, eff. 1-1-24; 103-832, eff. 1-1-25.)

(215 ILCS 130/4004) (from Ch. 73, par. 1504-4)

Sec. 4004. Examination of affairs and quality of services by the Director; books and records.

(a) The Director shall have, with respect to limited health service organizations, the powers of examination conferred upon him pursuant to Sections 132 through 132.7 of the Illinois Insurance Code. The Director shall make an examination concerning the quality of limited health services of any limited health service organization and providers with whom the organization has contracts, agreements, or other arrangements pursuant to its limited health care plan as often as he deems it necessary for the protection of the interests of the people of this State. The cost of any examination shall be paid by the limited health service organization being examined.

(b) Every limited health service organization and provider shall submit its books and records relating to the limited health care plan to examination and in every way facilitate it. For the purpose of examination, the Director may administer an oath to and examine the officers, agents, employees, and producers of the limited health service organization and the principals of providers concerning their business.

(Source: P.A. 89-97, eff. 7-7-95.)

(215 ILCS 130/4005) (from Ch. 73, par. 1504-5)

Sec. 4005. Suspension or revocation or denial of certification of authority. (a) The Director may suspend or revoke any certificate of authority issued to a limited health service organization under this Act or deny an application for a certificate of authority if he finds:

(1) That the limited health service organization is operating significantly in contravention of its basic organizational document, its health care plan or in a manner contrary to that described in any information submitted under Sections 2001 or 3006.

(2) The limited health service organization issues contracts or evidences of coverage or uses a schedule of charges for health care services which do not comply with the requirements of Sections 2001 or 3006.

(3) The limited health care plan does not provide or arrange for limited health services.

(4) That the limited health service organization has failed to meet the requirements for issuance of a certificate of authority as set forth in Section 2002.

(5) That the limited health service organization is unable to fulfill its obligation to furnish limited health services as required under its limited health care plan.

(6) The limited health service organization is no longer financially responsible and may reasonably be expected to be unable to meet its obligations to enrollees or prospective enrollees.

(7) The limited health service organization, or any person on its behalf, has advertised or merchandised its services in an untrue, misrepresentative, misleading, deceptive or unfair manner.

(8) The continued operation of the limited health service organization would be hazardous to its enrollees.

(9) The limited health service organization has neglected to correct, within the time prescribed by subsection (c) of Section 2004, any deficiency occurring due to such organization's prescribed minimum net worth.

(10) The limited health service organization has otherwise failed to substantially comply with this Act.

(b) When the certificate of authority of a limited health service organization is revoked, such organization shall proceed, immediately following the effective date of the order of revocation, to wind up its affairs and shall conduct no further business except as may be essential to the orderly conclusion of the affairs of such organization. The Director may permit such further operation of the organization as he may find to be in the best interest of enrollees to the end that the enrollees will be afforded the greatest practical opportunity to obtain limited health services.

(Source: P.A. 86-600.)

(215 ILCS 130/4006) (from Ch. 73, par. 1504-6)

Sec. 4006. Supervision of rehabilitation, liquidation or conservation by the Director.

(a) For purposes of the rehabilitation, liquidation or conservation of a limited health service organization, the operation of a limited health service organization in this State constitutes a form of insurance protection which should be governed by the same provisions governing the rehabilitation, liquidation or conservation of insurance companies. Any rehabilitation, liquidation or conservation of a limited health service organization shall be based upon the grounds set forth in and subject to the provisions of the laws of this State regarding the rehabilitation, liquidation or conservation of an insurance company and shall be conducted under the supervision of the Director. Insolvency, as a ground for rehabilitation, liquidation or conservation of a limited health service organization, shall be recognized when a limited health service organization cannot be expected to satisfy its financial obligations when such obligations are to become due or when the limited health service organization has neglected to correct, within the time prescribed by subsection (c) of Section 2004, a deficiency occurring due to such organization's prescribed minimum net worth being impaired. For purpose of determining the priority of distribution of general assets, claims of enrollees and enrollees' beneficiaries shall have the same priority as established by Section 205 of the Illinois Insurance Code, for policyholders and beneficiaries of insureds of insurance companies. If an enrollee is liable to any provider for services provided pursuant to and covered by the limited health care plan, that liability shall have the status of an enrollee claim for distribution of general assets.

Any provider who is obligated by statute or agreement to hold enrollees harmless from liability for services provided pursuant to and covered by a limited health care plan shall have a priority of distribution of the general assets immediately following that of enrollees and enrollees' beneficiaries as described herein, and immediately preceding the priority of distribution described in paragraph (e) of subsection (1) of Section 205 of the Illinois Insurance Code.

(b) For purposes of Articles XIII and XIII 1/2 of the Illinois Insurance Code, organizations in the following categories shall be deemed to be a domestic company and a domiciliary company:

(1) a corporation organized under the laws of this State; or

(2) a corporation organized under the laws of another state, 20% or more of the enrollees of which are residents of this State, except where such a corporation is, in its state of incorporation, subject to rehabilitation, liquidation and conservation under the laws relating to insurance companies.

(Source: P.A. 100-201, eff. 8-18-17.)

(215 ILCS 130/4007) (from Ch. 73, par. 1504-7)

Sec. 4007. Rules and regulations. (a) The Director may promulgate reasonable rules and regulations as are necessary and proper to establish specific standards, including standards for the full and fair disclosure of limited health services provided by group contracts and evidences of coverage, which may cover, but shall not be limited to:

(1) Coordination of benefits.

(2) Conversion.

(3) Cancellation and termination.

(b) The Director may promulgate reasonable rules and regulations as are necessary and proper to otherwise carry out the provisions of this Act.

(Source: P.A. 86-600.)

(215 ILCS 130/4008) (from Ch. 73, par. 1504-8)

Sec. 4008. Grounds for denial, suspension or revocation of certificate of authority under Administrative Review Law. (a) When the Director has cause to believe that grounds for the denial of an application for a certificate of authority exist or that grounds for the suspension or revocation of a certificate of authority exist, he shall issue an order to the organization or applicant stating the grounds upon which the suspension, revocation or denial is based. The order shall be sent to the organization or applicant by certified or registered mail. The organization or applicant may in writing request a hearing within 30 days from the date of mailing of the order. If no written request is made, the order shall be final upon the expiration of said 30 days.

(b) If the organization or applicant requests a hearing pursuant to this Section the Director shall issue a written notice of hearing sent to the organization or applicant by certified or registered mail stating:

(1) A specific time for the hearing, which may not be less than 20 nor more than 30 days after mailing of the notice of hearing.

(2) A specific place for the hearing, which may be either in the City of Springfield or in the county where the organization's or applicant's principal place of business is located.

(c) After such hearing, or upon the failure of the limited health service organization to appear at such hearing, the Director shall take action as is deemed advisable on written findings which shall be mailed to the organization or applicant. The action of the Director shall be subject to review under the Administrative Review Law, as now or hereafter amended.

(Source: P.A. 86-600.)

(215 ILCS 130/4009) (from Ch. 73, par. 1504-9)

Sec. 4009. Violations; cease and desist order; corrective orders. (a) Any organization which violates this Act shall be guilty of a Class B misdemeanor.

(b) The Director may issue to any organization subject to this Act, a cease and desist order as provided in Article XXIV of the Illinois Insurance Code, as now or hereafter amended.

(c) The Director may issue corrective orders to any organization subject to this Act, as provided in Article XII 1/2 of the Illinois Insurance Code, as now or hereafter amended.

(Source: P.A. 86-600.)