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91_SB0251ham002
LRB9102764JSpcam01
1 AMENDMENT TO SENATE BILL 251
2 AMENDMENT NO. . Amend Senate Bill 251 by replacing
3 the title with the following:
4 "AN ACT concerning the delivery of health care services,
5 amending named Acts."; and
6 by replacing everything after the enacting clause with the
7 following:
8 "Section 1. Short title. This Act may be cited as the
9 Managed Care Reform and Patient Rights Act.
10 Section 5. Health care patient rights.
11 (a) The General Assembly finds that:
12 (1) A patient has the right to care consistent with
13 professional standards of practice to assure quality
14 nursing and medical practices, to choose the
15 participating physician responsible for coordinating his
16 or her care, to receive information concerning his or her
17 condition and proposed treatment, to refuse any treatment
18 to the extent permitted by law, and to privacy and
19 confidentiality of records except as otherwise provided
20 by law.
21 (2) A patient has the right, regardless of source
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1 of payment, to examine and to receive a reasonable
2 explanation of his or her total bill for health care
3 services rendered by his or her physician or other health
4 care provider, including the itemized charges for
5 specific health care services received. A physician or
6 other health care provider has responsibility only for a
7 reasonable explanation of those specific health care
8 services provided by the health care provider.
9 (3) A patient has the right to timely prior notice
10 of the termination whenever a health care plan cancels or
11 refuses to renew an enrollee's participation in the plan.
12 (4) A patient has the right to privacy and
13 confidentiality in health care. This right may be
14 expressly waived in writing by the patient or the
15 patient's guardian.
16 (5) An individual has the right to purchase any
17 health care services with that individual's own funds.
18 (b) Nothing in this Section shall preclude the health
19 care plan from sharing information for plan quality
20 assessment and improvement purposes as required by Section
21 80.
22 Section 10. Definitions:
23 "Adverse determination" means a determination by a health
24 care plan under Section 45 or by a utilization review program
25 under Section 85 that a health care service is not medically
26 necessary.
27 "Clinical peer" means a health care professional who is
28 in the same profession and the same or similar specialty as
29 the health care provider who typically manages the medical
30 condition, procedures, or treatment under review.
31 "Department" means the Department of Insurance.
32 "Emergency medical condition" means a medical condition
33 manifesting itself by acute symptoms of sufficient severity
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1 (including, but not limited to, severe pain) such that a
2 prudent layperson, who possesses an average knowledge of
3 health and medicine, could reasonably expect the absence of
4 immediate medical attention to result in:
5 (1) placing the health of the individual (or, with
6 respect to a pregnant woman, the health of the woman or
7 her unborn child) in serious jeopardy;
8 (2) serious impairment to bodily functions; or
9 (3) serious dysfunction of any bodily organ or
10 part.
11 "Emergency medical screening examination" means a medical
12 screening examination and evaluation by a physician licensed
13 to practice medicine in all its branches, or to the extent
14 permitted by applicable laws, by other appropriately licensed
15 personnel under the supervision of or in collaboration with a
16 physician licensed to practice medicine in all its branches
17 to determine whether the need for emergency services exists.
18 "Emergency services" means, with respect to an enrollee
19 of a health care plan, transportation services, including but
20 not limited to ambulance services, and covered inpatient and
21 outpatient hospital services furnished by a provider
22 qualified to furnish those services that are needed to
23 evaluate or stabilize an emergency medical condition.
24 "Emergency services" does not refer to post-stabilization
25 medical services.
26 "Enrollee" means any person and his or her dependents
27 enrolled in or covered by a health care plan.
28 "Health care plan" means a plan that establishes,
29 operates, or maintains a network of health care providers
30 that has entered into an agreement with the plan to provide
31 health care services to enrollees to whom the plan has the
32 ultimate obligation to arrange for the provision of or
33 payment for services through organizational arrangements for
34 ongoing quality assurance, utilization review programs, or
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1 dispute resolution. Nothing in this definition shall be
2 construed to mean that an independent practice association or
3 a physician hospital organization that subcontracts with a
4 health care plan is, for purposes of that subcontract, a
5 health care plan.
6 For purposes of this definition, "health care plan" shall
7 not include the following:
8 (1) indemnity health insurance policies including
9 those using a contracted provider network;
10 (2) health care plans that offer only dental or
11 only vision coverage;
12 (3) preferred provider administrators, as defined
13 in Section 370g(g) of the Illinois Insurance Code;
14 (4) employee or employer self-insured health
15 benefit plans under the federal Employee Retirement
16 Income Security Act of 1974;
17 (5) health care provided pursuant to the Workers'
18 Compensation Act or the Workers' Occupational Diseases
19 Act; and
20 (6) not-for-profit voluntary health services plans
21 with health maintenance organization authority in
22 existence as of January 1, 1999 that are affiliated with
23 a union and that only extend coverage to union members
24 and their dependents.
25 "Health care professional" means a physician, a
26 registered professional nurse, or other individual
27 appropriately licensed or registered to provide health care
28 services.
29 "Health care provider" means any physician, hospital
30 facility, or other person that is licensed or otherwise
31 authorized to deliver health care services. Nothing in this
32 Act shall be construed to define Independent Practice
33 Associations or Physician-Hospital Organizations as health
34 care providers.
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1 "Health care services" means any services included in the
2 furnishing to any individual of medical care, or the
3 hospitalization incident to the furnishing of such care, as
4 well as the furnishing to any person of any and all other
5 services for the purpose of preventing, alleviating, curing,
6 or healing human illness or injury including home health and
7 pharmaceutical services and products.
8 "Medical director" means a physician licensed in any
9 state to practice medicine in all its branches appointed by a
10 health care plan.
11 "Person" means a corporation, association, partnership,
12 limited liability company, sole proprietorship, or any other
13 legal entity.
14 "Physician" means a person licensed under the Medical
15 Practice Act of 1987.
16 "Post-stabilization medical services" means health care
17 services provided to an enrollee that are furnished in a
18 licensed hospital by a provider that is qualified to furnish
19 such services, and determined to be medically necessary and
20 directly related to the emergency medical condition following
21 stabilization.
22 "Stabilization" means, with respect to an emergency
23 medical condition, to provide such medical treatment of the
24 condition as may be necessary to assure, within reasonable
25 medical probability, that no material deterioration of the
26 condition is likely to result.
27 "Utilization review" means the evaluation of the medical
28 necessity, appropriateness, and efficiency of the use of
29 health care services, procedures, and facilities.
30 "Utilization review program" means a program established
31 by a person to perform utilization review.
32 Section 15. Provision of information.
33 (a) A health care plan shall provide annually to
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1 enrollees and prospective enrollees, upon request, a complete
2 list of participating health care providers in the health
3 care plan's service area and a description of the following
4 terms of coverage:
5 (1) the service area;
6 (2) the covered benefits and services with all
7 exclusions, exceptions, and limitations;
8 (3) the pre-certification and other utilization
9 review procedures and requirements;
10 (4) a description of the process for the selection
11 of a primary care physician, any limitation on access to
12 specialists, and the plan's standing referral policy;
13 (5) the emergency coverage and benefits, including
14 any restrictions on emergency care services;
15 (6) the out-of-area coverage and benefits, if any;
16 (7) the enrollee's financial responsibility for
17 copayments, deductibles, premiums, and any other
18 out-of-pocket expenses;
19 (8) the provisions for continuity of treatment in
20 the event a health care provider's participation
21 terminates during the course of an enrollee's treatment
22 by that provider;
23 (9) the appeals process, forms, and time frames for
24 health care services appeals, complaints, and external
25 independent reviews, administrative complaints, and
26 utilization review complaints, including a phone number
27 to call to receive more information from the health care
28 plan concerning the appeals process; and
29 (10) a statement of all basic health care services
30 and all specific benefits and services mandated to be
31 provided to enrollees by any State law or administrative
32 rule.
33 In the event of an inconsistency between any separate
34 written disclosure statement and the enrollee contract or
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1 certificate, the terms of the enrollee contract or
2 certificate shall control.
3 (b) Upon written request, a health care plan shall
4 provide to enrollees a description of the financial
5 relationships between the health care plan and any health
6 care provider and, if requested, the percentage of
7 copayments, deductibles, and total premiums spent on
8 healthcare related expenses and the percentage of copayments,
9 deductibles, and total premiums spent on other expenses,
10 including administrative expenses, except that no health care
11 plan shall be required to disclose specific provider
12 reimbursement.
13 (c) A participating health care provider shall provide
14 all of the following, where applicable, to enrollees upon
15 request:
16 (1) Information related to the health care
17 provider's educational background, experience, training,
18 specialty, and board certification, if applicable.
19 (2) The names of licensed facilities on the
20 provider panel where the health care provider presently
21 has privileges for the treatment, illness, or procedure
22 that is the subject of the request.
23 (3) Information regarding the health care
24 provider's participation in continuing education
25 programs and compliance with any licensure,
26 certification, or registration requirements, if
27 applicable.
28 (d) A health care plan shall provide the information
29 required to be disclosed under this Act upon enrollment and
30 annually thereafter in a legible and understandable format.
31 The Department shall promulgate rules to establish the format
32 based, to the extent practical, on the standards developed
33 for supplemental insurance coverage under Title XVIII of the
34 federal Social Security Act as a guide, so that a person can
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1 compare the attributes of the various health care plans.
2 (e) The written disclosure requirements of this Section
3 may be met by disclosure to one enrollee in a household.
4 Section 20. Notice of nonrenewal or termination. A
5 health care plan must give at least 60 days notice of
6 nonrenewal or termination of a health care provider to the
7 health care provider and to the enrollees served by the
8 health care provider. The notice shall include a name and
9 address to which an enrollee or health care provider may
10 direct comments and concerns regarding the nonrenewal or
11 termination. Immediate written notice may be provided without
12 60 days notice when a health care provider's license has been
13 disciplined by a State licensing board.
14 Section 25. Transition of services.
15 (a) A health care plan shall provide for continuity of
16 care for its enrollees as follows:
17 (1) If an enrollee's physician leaves the health
18 care plan's network of health care providers for reasons
19 other than termination of a contract in situations
20 involving imminent harm to a patient or a final
21 disciplinary action by a State licensing board and the
22 physician remains within the health care plan's service
23 area, the health care plan shall permit the enrollee to
24 continue an ongoing course of treatment with that
25 physician during a transitional period:
26 (A) of 90 days from the date of the notice of
27 physician's termination from the health care plan to
28 the enrollee of the physician's disaffiliation from
29 the health care plan if the enrollee has an ongoing
30 course of treatment; or
31 (B) if the enrollee has entered the third
32 trimester of pregnancy at the time of the
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1 physician's disaffiliation, that includes the
2 provision of post-partum care directly related to
3 the delivery.
4 (2) Notwithstanding the provisions in item (1) of
5 this subsection, such care shall be authorized by the
6 health care plan during the transitional period only if
7 the physician agrees:
8 (A) to continue to accept reimbursement from
9 the health care plan at the rates applicable prior
10 to the start of the transitional period;
11 (B) to adhere to the health care plan's
12 quality assurance requirements and to provide to the
13 health care plan necessary medical information
14 related to such care; and
15 (C) to otherwise adhere to the health care
16 plan's policies and procedures, including but not
17 limited to procedures regarding referrals and
18 obtaining preauthorizations for treatment.
19 (b) A health care plan shall provide for continuity of
20 care for new enrollees as follows:
21 (1) If a new enrollee whose physician is not a
22 member of the health care plan's provider network, but is
23 within the health care plan's service area, enrolls in
24 the health care plan, the health care plan shall permit
25 the enrollee to continue an ongoing course of treatment
26 with the enrollee's current physician during a
27 transitional period:
28 (A) of 90 days from the effective date of
29 enrollment if the enrollee has an ongoing course of
30 treatment; or
31 (B) if the enrollee has entered the third
32 trimester of pregnancy at the effective date of
33 enrollment, that includes the provision of
34 post-partum care directly related to the delivery.
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1 (2) If an enrollee elects to continue to receive
2 care from such physician pursuant to item (1) of this
3 subsection, such care shall be authorized by the health
4 care plan for the transitional period only if the
5 physician agrees:
6 (A) to accept reimbursement from the health
7 care plan at rates established by the health care
8 plan; such rates shall be the level of reimbursement
9 applicable to similar physicians within the health
10 care plan for such services;
11 (B) to adhere to the health care plan's
12 quality assurance requirements and to provide to the
13 health care plan necessary medical information
14 related to such care; and
15 (C) to otherwise adhere to the health care
16 plan's policies and procedures including, but not
17 limited to procedures regarding referrals and
18 obtaining preauthorization for treatment.
19 (c) In no event shall this Section be construed to
20 require a health care plan to provide coverage for benefits
21 not otherwise covered or to diminish or impair preexisting
22 condition limitations contained in the enrollee's contract.
23 Section 30. Prohibitions.
24 (a) No health care plan or its subcontractors may
25 prohibit or discourage health care providers by contract or
26 policy from discussing any health care services and health
27 care providers, utilization review and quality assurance
28 policies, terms and conditions of plans and plan policy with
29 enrollees, prospective enrollees, providers, or the public.
30 (b) No health care plan by contract, written policy, or
31 procedure may permit or allow an individual or entity to
32 dispense a different drug in place of the drug or brand of
33 drug ordered or prescribed without the express permission of
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1 the person ordering or prescribing the drug, except as
2 provided under Section 3.14 of the Illinois Food, Drug and
3 Cosmetic Act.
4 (c) Any violation of this Section shall be subject to
5 the penalties under this Act.
6 Section 35. Medically appropriate health care
7 protection.
8 (a) No health care plan or its subcontractors shall
9 retaliate against a physician or other health care provider
10 who advocates for appropriate health care services for
11 patients.
12 (b) It is the public policy of the State of Illinois
13 that a physician or any other health care provider be
14 encouraged to advocate for medically appropriate health care
15 services for his or her patients. For purposes of this
16 Section, "to advocate for medically appropriate health care
17 services" means to appeal a decision to deny payment for a
18 health care service pursuant to the reasonable grievance or
19 appeal procedure established by a health care plan or to
20 protest a decision, policy, or practice that the physician or
21 other health care provider, consistent with that degree of
22 learning and skill ordinarily possessed by physicians or
23 other health care providers practicing in the same or a
24 similar locality and under similar circumstances, reasonably
25 believes impairs the physician's or other health care
26 provider's ability to provide appropriate health care
27 services to his or her patients.
28 (c) This Section shall not be construed to prohibit a
29 health care plan or its subcontractors from making a
30 determination not to pay for a particular health care service
31 or to prohibit a medical group, independent practice
32 association, preferred provider organization, foundation,
33 hospital medical staff, hospital governing body or health
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1 care plan from enforcing reasonable peer review or
2 utilization review protocols or determining whether a
3 physician or other health care provider has complied with
4 those protocols.
5 (d) Nothing in this Section shall be construed to
6 prohibit the governing body of a hospital or the hospital
7 medical staff from taking disciplinary actions against a
8 physician as authorized by law.
9 (e) Nothing in this Section shall be construed to
10 prohibit the Department of Professional Regulation from
11 taking disciplinary actions against a physician or other
12 health care provider under the appropriate licensing Act.
13 (f) Any violation of this Section shall be subject to
14 the penalties under this Act.
15 Section 40. Access to specialists.
16 (a) All health care plans that require each enrollee to
17 select a health care provider for any purpose including
18 coordination of care shall permit an enrollee to choose any
19 available primary care physician licensed to practice
20 medicine in all its branches participating in the health care
21 plan for that purpose. The health care plan shall provide the
22 enrollee with a choice of licensed health care providers who
23 are accessible and qualified. Nothing in this Act shall be
24 construed to prohibit a health care plan from requiring a
25 health care provider to meet the health care plan's criteria
26 in order to coordinate access to health care.
27 (b) A health care plan shall establish a procedure by
28 which an enrollee who has a condition that requires ongoing
29 care from a specialist physician or other health care
30 provider may apply for a standing referral to a specialist
31 physician or other health care provider if a referral to a
32 specialist physician or other health care provider is
33 required for coverage. The application shall be made to the
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1 enrollee's primary care physician. This procedure for a
2 standing referral must specify the necessary criteria and
3 conditions that must be met in order for an enrollee to
4 obtain a standing referral. A standing referral shall be
5 effective for the period necessary to provide the referred
6 services or one year, except in the event of termination of a
7 contract or policy in which case Section 25 on transition of
8 services shall apply, if applicable. A primary care physician
9 may renew and re-renew a standing referral.
10 (c) The enrollee may be required by the health care plan
11 to select a specialist physician or other health care
12 provider who has a referral arrangement with the enrollee's
13 primary care physician or to select a new primary care
14 physician who has a referral arrangement with the specialist
15 physician or other health care provider chosen by the
16 enrollee. If a health care plan requires an enrollee to
17 select a new physician under this subsection, the health care
18 plan must provide the enrollee with both options provided in
19 this subsection. When a participating specialist with a
20 referral arrangement is not available, the primary care
21 physician, in consultation with the enrollee, shall arrange
22 for the enrollee to have access to a qualified participating
23 health care provider, and the enrollee shall be allowed to
24 stay with his or her primary care physician. If a secondary
25 referral is necessary, the specialist physician or other
26 health care provider shall advise the primary care physician.
27 The primary care physician shall be responsible for making
28 the secondary referral. In addition, the health care plan
29 shall require the specialist physician or other health care
30 provider to provide regular updates to the enrollee's primary
31 care physician.
32 (d) When the type of specialist physician or other
33 health care provider needed to provide ongoing care for a
34 specific condition is not represented in the health care
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1 plan's provider network, the primary care physician shall
2 arrange for the enrollee to have access to a qualified
3 non-participating health care provider within a reasonable
4 distance and travel time at no additional cost beyond what
5 the enrollee would otherwise pay for services received within
6 the network. The referring physician shall notify the plan
7 when a referral is made outside the network.
8 (e) The enrollee's primary care physician shall remain
9 responsible for coordinating the care of an enrollee who has
10 received a standing referral to a specialist physician or
11 other health care provider. If a secondary referral is
12 necessary, the specialist physician or other health care
13 provider shall advise the primary care physician. The
14 primary care physician shall be responsible for making the
15 secondary referral. In addition, the health care plan shall
16 require the specialist physician or other health care
17 provider to provide regular updates to the enrollee's primary
18 care physician.
19 (f) If an enrollee's application for any referral is
20 denied, an enrollee may appeal the decision through the
21 health care plan's external independent review process in
22 accordance with subsection (f) of Section 45 of this Act.
23 (g) Nothing in this Act shall be construed to require an
24 enrollee to select a new primary care physician when no
25 referral arrangement exists between the enrollee's primary
26 care physician and the specialist selected by the enrollee
27 and when the enrollee has a long-standing relationship with
28 his or her primary care physician.
29 (h) In promulgating rules to implement this Act, the
30 Department shall define "standing referral" and "ongoing
31 course of treatment".
32 Section 45. Health care services appeals, complaints,
33 and external independent reviews.
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1 (a) A health care plan shall establish and maintain an
2 appeals procedure as outlined in this Act. Compliance with
3 this Act's appeals procedures shall satisfy a health care
4 plan's obligation to provide appeal procedures under any
5 other State law or rules. All appeals of a health care plan's
6 administrative determinations and complaints regarding its
7 administrative decisions shall be handled as required under
8 Section 50.
9 (b) When an appeal concerns a decision or action by a
10 health care plan, its employees, or its subcontractors that
11 relates to (i) health care services, including, but not
12 limited to, procedures or treatments, for an enrollee with an
13 ongoing course of treatment ordered by a health care
14 provider, the denial of which could significantly increase
15 the risk to an enrollee's health, or (ii) a treatment
16 referral, service, procedure, or other health care service,
17 the denial of which could significantly increase the risk to
18 an enrollee's health, the health care plan must allow for the
19 filing of an appeal either orally or in writing. Upon
20 submission of the appeal, a health care plan must notify the
21 party filing the appeal, as soon as possible, but in no event
22 more than 24 hours after the submission of the appeal, of all
23 information that the plan requires to evaluate the appeal.
24 The health care plan shall render a decision on the appeal
25 within 24 hours after receipt of the required information.
26 The health care plan shall notify the party filing the appeal
27 and the enrollee, enrollee's primary care physician, and any
28 health care provider who recommended the health care service
29 involved in the appeal of its decision orally followed-up by
30 a written notice of the determination.
31 (c) For all appeals related to health care services
32 including, but not limited to, procedures or treatments for
33 an enrollee and not covered by subsection (b) above, the
34 health are plan shall establish a procedure for the filing of
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1 such appeals. Upon submission of an appeal under this
2 subsection, a health care plan must notify the party filing
3 an appeal, within 3 business days, of all information that
4 the plan requires to evaluate the appeal. The health care
5 plan shall render a decision on the appeal within 15 business
6 days after receipt of the required information. The health
7 care plan shall notify the party filing the appeal, the
8 enrollee, the enrollee's primary care physician, and any
9 health care provider who recommended the health care service
10 involved in the appeal orally of its decision followed-up by
11 a written notice of the determination.
12 (d) An appeal under subsection (b) or (c) may be filed
13 by the enrollee, the enrollee's designee or guardian, the
14 enrollee's primary care physician, or the enrollee's health
15 care provider. A health care plan shall designate a clinical
16 peer to review appeals, because these appeals pertain to
17 medical or clinical matters and such an appeal must be
18 reviewed by an appropriate health care professional. No one
19 reviewing an appeal may have had any involvement in the
20 initial determination that is the subject of the appeal. The
21 written notice of determination required under subsections
22 (b) and (c) shall include (i) clear and detailed reasons for
23 the determination, (ii) the medical or clinical criteria for
24 the determination, which shall be based upon sound clinical
25 evidence and reviewed on a periodic basis, and (iii) in the
26 case of an adverse determination, the procedures for
27 requesting an external independent review under subsection
28 (f).
29 (e) If an appeal filed under subsection (b) or (c) is
30 denied for a reason including, but not limited to, the
31 service, procedure, or treatment is not viewed as medically
32 necessary, denial of specific tests or procedures, denial of
33 referral to specialist physicians or denial of
34 hospitalization requests or length of stay requests, any
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1 involved party may request an external independent review
2 under subsection (f) of the adverse determination.
3 (f) External independent review.
4 (1) The party seeking an external independent
5 review shall so notify the health care plan. The health
6 care plan shall seek to resolve all external independent
7 reviews in the most expeditious manner and shall make a
8 determination and provide notice of the determination no
9 more than 24 hours after the receipt of all necessary
10 information when a delay would significantly increase the
11 risk to an enrollee's health or when extended health care
12 services for an enrollee undergoing a course of treatment
13 prescribed by a health care provider are at issue.
14 (2) Within 30 days after the enrollee receives
15 written notice of an adverse determination, if the
16 enrollee decides to initiate an external independent
17 review, the enrollee shall send to the health care plan a
18 written request for an external independent review,
19 including any information or documentation to support the
20 enrollee's request for the covered service or claim for a
21 covered service.
22 (3) Within 30 days after the health care plan
23 receives a request for an external independent review
24 from an enrollee, the health care plan shall:
25 (A) provide a mechanism for joint selection of
26 an external independent reviewer by the enrollee,
27 the enrollee's physician or other health care
28 provider, and the health care plan; and
29 (B) forward to the independent reviewer all
30 medical records and supporting documentation
31 pertaining to the case, a summary description of the
32 applicable issues including a statement of the
33 health care plan's decision, the criteria used, and
34 the medical and clinical reasons for that decision.
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1 (4) Within 5 days after receipt of all necessary
2 information, the independent reviewer shall evaluate and
3 analyze the case and render a decision that is based on
4 whether or not the health care service or claim for the
5 health care service is medically appropriate. The
6 decision by the independent reviewer is final. If the
7 external independent reviewer determines the health care
8 service to be medically appropriate, the health care plan
9 shall pay for the health care service.
10 (5) The health care plan shall be solely
11 responsible for paying the fees of the external
12 independent reviewer who is selected to perform the
13 review.
14 (6) An external independent reviewer who acts in
15 good faith shall have immunity from any civil or criminal
16 liability or professional discipline as a result of acts
17 or omissions with respect to any external independent
18 review, unless the acts or omissions constitute wilful
19 and wanton misconduct. For purposes of any proceeding,
20 the good faith of the person participating shall be
21 presumed.
22 (7) Future contractual or employment action by the
23 health care plan regarding the patient's physician or
24 other health care provider shall not be based solely on
25 the physician's or other health care provider's
26 participation in this procedure.
27 (8) For the purposes of this Section, an external
28 independent reviewer shall:
29 (A) be a clinical peer;
30 (B) have no direct financial interest in
31 connection with the case; and
32 (C) have not been informed of the specific
33 identity of the enrollee.
34 (g) Nothing in this Section shall be construed to
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1 require a health care plan to pay for a health care service
2 not covered under the enrollee's certificate of coverage or
3 policy.
4 Section 50. Administrative complaints and Departmental
5 review.
6 (a) Administrative complaint process.
7 (1) A health care plan shall accept and review
8 appeals of its determinations and complaints related to
9 administrative issues initiated by enrollees or their
10 health care providers (complainant). All appeals of a
11 health care plan's determinations and complaints related
12 to health care services shall be handled as required
13 under Section 45. Nothing in this Act shall be construed
14 to preclude an enrollee from filing a complaint with the
15 Department or as limiting the Department's ability to
16 investigate complaints. In addition, any enrollee not
17 satisfied with the plan's resolution of any complaint may
18 appeal that final plan decision to the Department.
19 (2) When a complaint against a health care plan
20 (respondent) is received by the Department, the
21 respondent shall be notified of the complaint. The
22 Department shall, in its notification, specify the date
23 when a report is to be received from the respondent,
24 which shall be no later than 21 days after notification
25 is sent to the respondent. A failure to reply by the date
26 specified may be followed by a collect telephone call or
27 collect telegram. Repeated instances of failing to reply
28 by the date specified may result in further regulatory
29 action.
30 (3) The respondent's report shall supply adequate
31 documentation that explains all actions taken or not
32 taken and that were the basis for the complaint. The
33 report shall include documents necessary to support the
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1 respondent's position and any information requested by
2 the Department. The respondent's reply shall be in
3 duplicate, but duplicate copies of supporting documents
4 shall not be required. The respondent's reply shall
5 include the name, telephone number, and address of the
6 individual assigned to investigate or process the
7 complaint. The Department shall respect the
8 confidentiality of medical reports and other documents
9 that by law are confidential. Any other information
10 furnished by a respondent shall be marked "confidential"
11 if the respondent does not wish it to be released to the
12 complainant.
13 (b) Departmental review. The Department shall review
14 the plan decision to determine whether it is consistent with
15 the plan and Illinois law and rules. Upon receipt of the
16 respondent's report, the Department shall evaluate the
17 material submitted and:
18 (1) advise the complainant of the action taken and
19 disposition of the complaint;
20 (2) pursue further investigation with the
21 respondent or complainant; or
22 (3) refer the investigation report to the
23 appropriate branch within the Department for further
24 regulatory action.
25 (c) The Department of Insurance and the Department of
26 Public Health shall coordinate the complaint review and
27 investigation process. The Department of Insurance and the
28 Department of Public Health shall jointly establish rules
29 under the Illinois Administrative Procedure Act implementing
30 this complaint process.
31 Section 55. Record of complaints.
32 (a) The Department shall maintain records concerning the
33 complaints filed against health care plans. To that end, the
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1 Department shall require health care plans to annually report
2 complaints made to and resolutions by health care plans in a
3 manner determined by rule. The Department shall make a
4 summary of all data collected available upon request and
5 publish the summary on the World Wide Web.
6 (b) The Department shall maintain records on the number
7 of complaints filed against each health care plan.
8 (c) The Department shall maintain records classifying
9 each complaint by whether the complaint was filed by:
10 (1) a consumer or enrollee;
11 (2) a provider; or
12 (3) any other individual.
13 (d) The Department shall maintain records classifying
14 each complaint according to the nature of the complaint as it
15 pertains to a specific function of the health care plan. The
16 complaints shall be classified under the following
17 categories:
18 (1) denial of care or treatment;
19 (2) denial of a diagnostic procedure;
20 (3) denial of a referral request;
21 (4) sufficient choice and accessibility of health
22 care providers;
23 (5) underwriting;
24 (6) marketing and sales;
25 (7) claims and utilization review;
26 (8) member services;
27 (9) provider relations; and
28 (10) miscellaneous.
29 (e) The Department shall maintain records classifying
30 the disposition of each complaint. The disposition of the
31 complaint shall be classified in one of the following
32 categories:
33 (1) complaint referred to the health care plan and
34 no further action necessary by the Department;
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1 (2) no corrective action deemed necessary by the
2 Department; or
3 (3) corrective action taken by the Department.
4 (f) No Department publication or release of information
5 shall identify any enrollee, health care provider, or
6 individual complainant.
7 Section 60. Choosing a physician.
8 (a) A health care plan may also offer other arrangements
9 under which enrollees may access health care services from
10 contracted providers without a referral or authorization from
11 their primary care physician.
12 (b) The enrollee may be required by the health care plan
13 to select a specialist physician or other health care
14 provider who has a referral arrangement with the enrollee's
15 primary care physician or to select a new primary care
16 physician who has a referral arrangement with the specialist
17 physician or other health care provider chosen by the
18 enrollee. If a health care plan requires an enrollee to
19 select a new physician under this subsection, the health care
20 plan must provide the enrollee with both options provided in
21 this subsection.
22 (c) The Director of Insurance and the Department of
23 Public Health each may promulgate rules to ensure appropriate
24 access to and quality of care for enrollees in any plan that
25 allows enrollees to access health care services from
26 contractual providers without a referral or authorization
27 from the primary care physician. The rules may include, but
28 shall not be limited to, a system for the retrieval and
29 compilation of enrollees' medical records.
30 Section 65. Emergency services prior to stabilization.
31 (a) A health care plan that provides or that is required
32 by law to provide coverage for emergency services shall
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1 provide coverage such that payment under this coverage is not
2 dependent upon whether the services are performed by a plan
3 or non-plan health care provider and without regard to prior
4 authorization. This coverage shall be at the same benefit
5 level as if the services or treatment had been rendered by
6 the health care plan physician licensed to practice medicine
7 in all its branches or health care provider.
8 (b) Prior authorization or approval by the plan shall
9 not be required for emergency services.
10 (c) Coverage and payment shall only be retrospectively
11 denied under the following circumstances:
12 (1) upon reasonable determination that the
13 emergency services claimed were never performed;
14 (2) upon timely determination that the emergency
15 evaluation and treatment were rendered to an enrollee who
16 sought emergency services and whose circumstance did not
17 meet the definition of emergency medical condition;
18 (3) upon determination that the patient receiving
19 such services was not an enrollee of the health care
20 plan; or
21 (4) upon material misrepresentation by the enrollee
22 or health care provider; "material" means a fact or
23 situation that is not merely technical in nature and
24 results or could result in a substantial change in the
25 situation.
26 (d) When an enrollee presents to a hospital seeking
27 emergency services, the determination as to whether the need
28 for those services exists shall be made for purposes of
29 treatment by a physician licensed to practice medicine in
30 all its branches or, to the extent permitted by applicable
31 law, by other appropriately licensed personnel under the
32 supervision of or in collaboration with a physician licensed
33 to practice medicine in all its branches. The physician or
34 other appropriate personnel shall indicate in the patient's
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1 chart the results of the emergency medical screening
2 examination.
3 (e) The appropriate use of the 911 emergency telephone
4 system or its local equivalent shall not be discouraged or
5 penalized by the health care plan when an emergency medical
6 condition exists. This provision shall not imply that the use
7 of 911 or its local equivalent is a factor in determining the
8 existence of an emergency medical condition.
9 (f) The medical director's or his or her designee's
10 determination of whether the enrollee meets the standard of
11 an emergency medical condition shall be based solely upon the
12 presenting symptoms documented in the medical record at the
13 time care was sought. Only a clinical peer may make an
14 adverse determination.
15 (g) Nothing in this Section shall prohibit the
16 imposition of deductibles, copayments, and co-insurance.
17 Nothing in this Section alters the prohibition on billing
18 enrollees contained in the Health Maintenance Organization
19 Act.
20 Section 70. Post-stabilization medical services.
21 (a) If prior authorization for covered post-stabilization
22 services is required by the health care plan, the plan shall
23 provide access 24 hours a day, 7 days a week to persons
24 designated by the plan to make such determinations, provided
25 that any determination made under this Section must be made
26 by a health care professional. The review shall be resolved
27 in accordance with the provisions of Section 85 and the time
28 requirements of this Section.
29 (b) The treating physician licensed to practice medicine
30 in all its branches or health care provider shall contact
31 the health care plan or delegated health care provider as
32 designated on the enrollee's health insurance card to obtain
33 authorization, denial, or arrangements for an alternate plan
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1 of treatment or transfer of the enrollee.
2 (c) The treating physician licensed to practice
3 medicine in all its branches or health care provider shall
4 document in the enrollee's medical record the enrollee's
5 presenting symptoms; emergency medical condition; and time,
6 phone number dialed, and result of the communication for
7 request for authorization of post-stabilization medical
8 services. The health care plan shall provide reimbursement
9 for covered post-stabilization medical services if:
10 (1) authorization to render them is received from
11 the health care plan or its delegated health care
12 provider, or
13 (2) after 2 documented good faith efforts, the
14 treating health care provider has attempted to contact
15 the enrollee's health care plan or its delegated health
16 care provider, as designated on the enrollee's health
17 insurance card, for prior authorization of
18 post-stabilization medical services and neither the plan
19 nor designated persons were accessible or the
20 authorization was not denied within 60 minutes of the
21 request. "Two documented good faith efforts" means the
22 health care provider has called the telephone number on
23 the enrollee's health insurance card or other available
24 number either 2 times or one time and an additional call
25 to any referral number provided. "Good faith" means
26 honesty of purpose, freedom from intention to defraud,
27 and being faithful to one's duty or obligation. For the
28 purpose of this Act, good faith shall be presumed.
29 (d) After rendering any post-stabilization medical
30 services, the treating physician licensed to practice
31 medicine in all its branches or health care provider shall
32 continue to make every reasonable effort to contact the
33 health care plan or its delegated health care provider
34 regarding authorization, denial, or arrangements for an
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1 alternate plan of treatment or transfer of the enrollee until
2 the treating health care provider receives instructions from
3 the health care plan or delegated health care provider for
4 continued care or the care is transferred to another health
5 care provider or the patient is discharged.
6 (e) Payment for covered post-stabilization services may
7 be denied:
8 (1) if the treating health care provider does not
9 meet the conditions outlined in subsection (c);
10 (2) upon determination that the post-stabilization
11 services claimed were not performed;
12 (3) upon timely determination that the
13 post-stabilization services rendered were contrary to the
14 instructions of the health care plan or its delegated
15 health care provider if contact was made between those
16 parties prior to the service being rendered;
17 (4) upon determination that the patient receiving
18 such services was not an enrollee of the health care
19 plan; or
20 (5) upon material misrepresentation by the enrollee
21 or health care provider; "material" means a fact or
22 situation that is not merely technical in nature and
23 results or could result in a substantial change in the
24 situation.
25 (f) Nothing in this Section prohibits a health care plan
26 from delegating tasks associated with the responsibilities
27 enumerated in this Section to the health care plan's
28 contracted health care providers or another entity. Only a
29 clinical peer may make an adverse determination. However,
30 the ultimate responsibility for coverage and payment
31 decisions may not be delegated.
32 (g) Coverage and payment for post-stabilization medical
33 services for which prior authorization or deemed approval is
34 received shall not be retrospectively denied.
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1 (h) Nothing in this Section shall prohibit the
2 imposition of deductibles, copayments, and co-insurance.
3 Nothing in this Section alters the prohibition on billing
4 enrollees contained in the Health Maintenance Organization
5 Act.
6 Section 72. Pharmacy providers.
7 (a) Before entering into an agreement with pharmacy
8 providers, a health care plan must establish terms and
9 conditions that must be met by pharmacy providers desiring to
10 contract with the health care plan. The terms and conditions
11 shall not discriminate against a pharmacy provider. A health
12 care plan may not refuse to contract with a pharmacy provider
13 that meets the terms and conditions established by the health
14 care plan. If a pharmacy provider rejects the terms and
15 conditions established, the health care plan may offer other
16 terms and conditions necessary to comply with network
17 adequacy requirements.
18 (b) A health care plan shall apply the same coinsurance,
19 copayment, and deductible factors to all drug prescriptions
20 filled by a pharmacy provider that participates in the health
21 care plan's network. Nothing in this subsection, however,
22 prohibits a health care plan from applying different
23 coinsurance, copayment, and deductible factors between brand
24 name drugs and generic drugs when a generic equivalent exists
25 for the brand name drug.
26 (c) A health care plan may not set a limit on the
27 quantity of drugs that an enrollee may obtain at one time
28 with a prescription unless the limit is applied uniformly to
29 all pharmacy providers in the health care plan's network.
30 Section 75. Consumer advisory committee.
31 (a) A health care plan shall establish a consumer
32 advisory committee. The consumer advisory committee shall
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1 have the authority to identify and review consumer concerns
2 and make advisory recommendations to the health care plan.
3 The health care plan may also make requests of the consumer
4 advisory committee to provide feedback to proposed changes in
5 plan policies and procedures which will affect enrollees.
6 However, the consumer advisory committee shall not have the
7 authority to hear or resolve specific complaints or
8 grievances, but instead shall refer such complaints or
9 grievances to the health care plan's grievance committee.
10 (b) The health care plan shall randomly select 8
11 enrollees meeting the requirements of this Section to serve
12 on the consumer advisory committee. The health care plan must
13 continue to randomly select enrollees until 8 enrollees have
14 agreed to serve on the consumer advisory committee. Upon
15 initial formation of the consumer advisory committee, the
16 health care plan shall appoint 4 enrollees to a 2 year term
17 and 4 enrollees to a one year term. Thereafter, as an
18 enrollee's term expires, the health care plan shall
19 re-appoint or appoint an enrollee to serve on the consumer
20 advisory committee for a 2 year term. Members of the consumer
21 advisory committee shall by majority vote elect a member of
22 the committee to serve as chair of the committee.
23 (c) An enrollee may not serve on the consumer advisory
24 committee if during the 2 years preceding service the
25 enrollee:
26 (1) has been an employee, officer, or director of
27 the plan, an affiliate of the plan, or a provider or
28 affiliate of a provider that furnishes health care
29 services to the plan or affiliate of the plan; or
30 (2) is a relative of a person specified in item
31 (1).
32 (d) A health care plan's consumer advisory committee
33 shall meet not less than quarterly.
34 (e) All meetings shall be held within the State of
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1 Illinois. The costs of the meetings shall be borne by the
2 health care plan.
3 Section 80. Quality assessment program.
4 (a) A health care plan shall develop and implement a
5 quality assessment and improvement strategy designed to
6 identify and evaluate accessibility, continuity, and quality
7 of care. The health care plan shall have:
8 (1) an ongoing, written, internal quality
9 assessment program;
10 (2) specific written guidelines for monitoring and
11 evaluating the quality and appropriateness of care and
12 services provided to enrollees requiring the health care
13 plan to assess:
14 (A) the accessibility to health care
15 providers;
16 (B) appropriateness of utilization;
17 (C) concerns identified by the health care
18 plan's medical or administrative staff and
19 enrollees; and
20 (D) other aspects of care and service directly
21 related to the improvement of quality of care;
22 (3) a procedure for remedial action to correct
23 quality problems that have been verified in accordance
24 with the written plan's methodology and criteria,
25 including written procedures for taking appropriate
26 corrective action;
27 (4) follow-up measures implemented to evaluate the
28 effectiveness of the action plan.
29 (b) The health care plan shall establish a committee
30 that oversees the quality assessment and improvement strategy
31 which includes physician and enrollee participation.
32 (c) Reports on quality assessment and improvement
33 activities shall be made to the governing body of the health
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1 care plan not less than quarterly.
2 (d) The health care plan shall make available its
3 written description of the quality assessment program to the
4 Department of Public Health.
5 (e) With the exception of subsection (d), the Department
6 of Public Health shall accept evidence of accreditation with
7 regard to the health care network quality management and
8 performance improvement standards of:
9 (1) the National Commission on Quality Assurance
10 (NCQA);
11 (2) the American Accreditation Healthcare
12 Commission (URAC);
13 (3) the Joint Commission on Accreditation of
14 Healthcare Organizations (JCAHO); or
15 (4) any other entity that the Director of Public
16 Health deems has substantially similar or more stringent
17 standards than provided for in this Section.
18 (f) If the Department of Public Health determines that a
19 health care plan is not in compliance with the terms of this
20 Section, it shall certify the finding to the Department of
21 Insurance. The Department of Insurance shall subject a health
22 care plan to penalties, as provided in this Act, for such
23 non-compliance.
24 Section 85. Utilization review program registration.
25 (a) No person may conduct a utilization review program
26 in this State unless once every 2 years the person registers
27 the utilization review program with the Department and
28 certifies compliance with the Health Utilization Management
29 Standards of the American Accreditation Healthcare Commission
30 (URAC) sufficient to achieve American Accreditation
31 Healthcare Commission (URAC) accreditation or submits
32 evidence of accreditation by the American Accreditation
33 Healthcare Commission (URAC) for its Health Utilization
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1 Management Standards. Nothing in this Act shall be construed
2 to require a health care plan or its subcontractors to become
3 American Accreditation Healthcare Commission (URAC)
4 accredited.
5 (b) In addition, the Director of the Department, in
6 consultation with the Director of the Department of Public
7 Health, may certify alternative utilization review standards
8 of national accreditation organizations or entities in order
9 for plans to comply with this Section. Any alternative
10 utilization review standards shall meet or exceed those
11 standards required under subsection (a).
12 (c) The provisions of this Section do not apply to:
13 (1) persons providing utilization review program
14 services only to the federal government;
15 (2) self-insured health plans under the federal
16 Employee Retirement Income Security Act of 1974, however,
17 this Section does apply to persons conducting a
18 utilization review program on behalf of these health
19 plans;
20 (3) hospitals and medical groups performing
21 utilization review activities for internal purposes
22 unless the utilization review program is conducted for
23 another person.
24 Nothing in this Act prohibits a health care plan or other
25 entity from contractually requiring an entity designated in
26 item (3) of this subsection to adhere to the utilization
27 review program requirements of this Act.
28 (d) This registration shall include submission of all of
29 the following information regarding utilization review
30 program activities:
31 (1) The name, address, and telephone number of the
32 utilization review programs.
33 (2) The organization and governing structure of the
34 utilization review programs.
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1 (3) The number of lives for which utilization
2 review is conducted by each utilization review program.
3 (4) Hours of operation of each utilization review
4 program.
5 (5) Description of the grievance process for each
6 utilization review program.
7 (6) Number of covered lives for which utilization
8 review was conducted for the previous calendar year for
9 each utilization review program.
10 (7) Written policies and procedures for protecting
11 confidential information according to applicable State
12 and federal laws for each utilization review program.
13 (e) (1) A utilization review program shall have written
14 procedures for assuring that patient-specific information
15 obtained during the process of utilization review will be:
16 (A) kept confidential in accordance with applicable
17 State and federal laws; and
18 (B) shared only with the enrollee, the enrollee's
19 designee, the enrollee's health care provider, and those
20 who are authorized by law to receive the information.
21 Summary data shall not be considered confidential if it
22 does not provide information to allow identification of
23 individual patients or health care providers.
24 (2) Only a health care professional may make
25 determinations regarding the medical necessity of health
26 care services during the course of utilization review.
27 (3) When making retrospective reviews, utilization
28 review programs shall base reviews solely on the medical
29 information available to the attending physician or
30 ordering provider at the time the health care services
31 were provided.
32 (4) When making prospective, concurrent, and
33 retrospective determinations, utilization review programs
34 shall collect only information that is necessary to make
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1 the determination and shall not routinely require health
2 care providers to numerically code diagnoses or
3 procedures to be considered for certification, unless
4 required under State or federal Medicare or Medicaid
5 rules or regulations, but may request such code if
6 available, or routinely request copies of medical records
7 of all enrollees reviewed. During prospective or
8 concurrent review, copies of medical records shall only
9 be required when necessary to verify that the health care
10 services subject to review are medically necessary. In
11 these cases, only the necessary or relevant sections of
12 the medical record shall be required.
13 (f) If the Department finds that a utilization review
14 program is not in compliance with this Section, the
15 Department shall issue a corrective action plan and allow a
16 reasonable amount of time for compliance with the plan. If
17 the utilization review program does not come into compliance,
18 the Department may issue a cease and desist order. Before
19 issuing a cease and desist order under this Section, the
20 Department shall provide the utilization review program with
21 a written notice of the reasons for the order and allow a
22 reasonable amount of time to supply additional information
23 demonstrating compliance with requirements of this Section
24 and to request a hearing. The hearing notice shall be sent
25 by certified mail, return receipt requested, and the hearing
26 shall be conducted in accordance with the Illinois
27 Administrative Procedure Act.
28 (g) A utilization review program subject to a corrective
29 action may continue to conduct business until a final
30 decision has been issued by the Department.
31 (h) Any adverse determination made by a health care plan
32 or its subcontractors may be appealed in accordance with
33 subsection (f) of Section 45.
34 (i) The Director may by rule establish a registration
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1 fee for each person conducting a utilization review program.
2 All fees paid to and collected by the Director under this
3 Section shall be deposited into the Insurance Producer
4 Administration Fund.
5 Section 90. Office of Consumer Health Insurance.
6 (a) The Director of Insurance shall establish the Office
7 of Consumer Health Insurance within the Department of
8 Insurance to provide assistance and information to all health
9 care consumers within the State. Within the appropriation
10 allocated, the Office shall provide information and
11 assistance to all health care consumers by:
12 (1) assisting consumers in understanding health
13 insurance marketing materials and the coverage provisions
14 of individual plans;
15 (2) educating enrollees about their rights within
16 individual plans;
17 (3) assisting enrollees with the process of filing
18 formal grievances and appeals;
19 (4) establishing and operating a toll-free "800"
20 telephone number line to handle consumer inquiries;
21 (5) making related information available in
22 languages other than English that are spoken as a primary
23 language by a significant portion of the State's
24 population, as determined by the Department;
25 (6) analyzing, commenting on, monitoring, and
26 making publicly available reports on the development and
27 implementation of federal, State, and local laws,
28 regulations, and other governmental policies and actions
29 that pertain to the adequacy of health care plans,
30 facilities, and services in the State;
31 (7) filing an annual report with the Governor, the
32 Director, and the General Assembly, which shall contain
33 recommendations for improvement of the regulation of
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1 health insurance plans, including recommendations on
2 improving health care consumer assistance and patterns,
3 abuses, and progress that it has identified from its
4 interaction with health care consumers; and
5 (8) performing all duties assigned to the Office by
6 the Director.
7 (b) The report required under subsection (a)(7) shall be
8 filed by January 31, 2001 and each January 31 thereafter.
9 (c) Nothing in this Section shall be interpreted to
10 authorize access to or disclosure of individual patient or
11 health care professional or provider records.
12 Section 95. Prohibited activity. No health care plan or
13 its subcontractors by contract, written policy, or procedure
14 shall contain any clause attempting to transfer or
15 transferring to a health care provider by indemnification,
16 hold harmless, or contribution requirements concerning any
17 liability relating to activities, actions, or omissions of
18 the health care plan or its officers, employees, or agents.
19 Nothing in this Section shall relieve any person or health
20 care provider from liability for his, her, or its own
21 negligence in the performance of his, her, or its duties
22 arising from treatment of a patient. The Illinois General
23 Assembly finds it to be against public policy for a person to
24 transfer liability in such a manner.
25 Section 100. Prohibition of waiver of rights. No health
26 care plan or contract shall contain any provision, policy, or
27 procedure that limits, restricts, or waives any of the rights
28 set forth in this Act. Any such policy or procedure shall be
29 void and unenforceable.
30 Section 105. Administration and enforcement. The
31 Director of Insurance may adopt rules necessary to implement
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1 the Department's responsibilities under this Act.
2 To enforce the provisions of this Act, the Director may
3 issue a cease and desist order or require a health care plan
4 to submit a plan of correction for violations of this Act, or
5 both. Subject to the provisions of the Illinois
6 Administrative Procedure Act, the Director may, pursuant to
7 Section 403A of the Illinois Insurance Code, impose upon a
8 health care plan an administrative fine not to exceed
9 $250,000 for failure to submit a requested plan of
10 correction, failure to comply with its plan of correction, or
11 repeated violations of the Act.
12 Any person who believes that his or her health care plan
13 is in violation of the provisions of this Act may file a
14 complaint with the Department. The Department shall review
15 all complaints received and investigate all of those
16 complaints that it deems to state a potential violation. The
17 Department shall establish rules to fairly, efficiently, and
18 timely review and investigate complaints. Health care plans
19 found to be in violation of this Act shall be penalized in
20 accordance with this Section.
21 Section 110. Applicability and scope. This Act applies
22 to policies and contracts amended, delivered, issued, or
23 renewed on or after the effective date of this Act. This Act
24 does not diminish a health care plan's duties and
25 responsibilities under other federal or State law or rules
26 promulgated thereunder.
27 Section 115. Effect on benefits under Workers'
28 Compensation Act and Workers' Occupational Diseases Act.
29 Nothing in this Act shall be construed to expand, modify, or
30 restrict the health care benefits provided to employees under
31 the Workers' Compensation Act and Workers' Occupational
32 Diseases Act.
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1 Section 120. Severability. The provisions of this Act
2 are severable under Section 1.31 of the Statute on Statutes.
3 Section 200. The State Employees Group Insurance Act of
4 1971 is amended by changing Sections 3 and 10 and adding
5 Section 6.12 as follows:
6 (5 ILCS 375/3) (from Ch. 127, par. 523)
7 Sec. 3. Definitions. Unless the context otherwise
8 requires, the following words and phrases as used in this Act
9 shall have the following meanings. The Department may define
10 these and other words and phrases separately for the purpose
11 of implementing specific programs providing benefits under
12 this Act.
13 (a) "Administrative service organization" means any
14 person, firm or corporation experienced in the handling of
15 claims which is fully qualified, financially sound and
16 capable of meeting the service requirements of a contract of
17 administration executed with the Department.
18 (b) "Annuitant" means (1) an employee who retires, or
19 has retired, on or after January 1, 1966 on an immediate
20 annuity under the provisions of Articles 2, 14, 15 (including
21 an employee who has retired under the optional retirement
22 program established under Section 15-158.2), paragraphs (2),
23 (3), or (5) of Section 16-106, or Article 18 of the Illinois
24 Pension Code; (2) any person who was receiving group
25 insurance coverage under this Act as of March 31, 1978 by
26 reason of his status as an annuitant, even though the annuity
27 in relation to which such coverage was provided is a
28 proportional annuity based on less than the minimum period of
29 service required for a retirement annuity in the system
30 involved; (3) any person not otherwise covered by this Act
31 who has retired as a participating member under Article 2 of
32 the Illinois Pension Code but is ineligible for the
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1 retirement annuity under Section 2-119 of the Illinois
2 Pension Code; (4) the spouse of any person who is receiving a
3 retirement annuity under Article 18 of the Illinois Pension
4 Code and who is covered under a group health insurance
5 program sponsored by a governmental employer other than the
6 State of Illinois and who has irrevocably elected to waive
7 his or her coverage under this Act and to have his or her
8 spouse considered as the "annuitant" under this Act and not
9 as a "dependent"; or (5) an employee who retires, or has
10 retired, from a qualified position, as determined according
11 to rules promulgated by the Director, under a qualified local
12 government or a qualified rehabilitation facility or a
13 qualified domestic violence shelter or service. (For
14 definition of "retired employee", see (p) post).
15 (b-5) "New SERS annuitant" means a person who, on or
16 after January 1, 1998, becomes an annuitant, as defined in
17 subsection (b), by virtue of beginning to receive a
18 retirement annuity under Article 14 of the Illinois Pension
19 Code, and is eligible to participate in the basic program of
20 group health benefits provided for annuitants under this Act.
21 (b-6) "New SURS annuitant" means a person who, on or
22 after January 1, 1998, becomes an annuitant, as defined in
23 subsection (b), by virtue of beginning to receive a
24 retirement annuity under Article 15 of the Illinois Pension
25 Code, and is eligible to participate in the basic program of
26 group health benefits provided for annuitants under this Act.
27 (b-7) "New TRS State annuitant" means a person who, on
28 or after July 1, 1998, becomes an annuitant, as defined in
29 subsection (b), by virtue of beginning to receive a
30 retirement annuity under Article 16 of the Illinois Pension
31 Code based on service as a teacher as defined in paragraph
32 (2), (3), or (5) of Section 16-106 of that Code, and is
33 eligible to participate in the basic program of group health
34 benefits provided for annuitants under this Act.
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1 (c) "Carrier" means (1) an insurance company, a
2 corporation organized under the Limited Health Service
3 Organization Act or the Voluntary Health Services Plan Act, a
4 partnership, or other nongovernmental organization, which is
5 authorized to do group life or group health insurance
6 business in Illinois, or (2) the State of Illinois as a
7 self-insurer.
8 (d) "Compensation" means salary or wages payable on a
9 regular payroll by the State Treasurer on a warrant of the
10 State Comptroller out of any State, trust or federal fund, or
11 by the Governor of the State through a disbursing officer of
12 the State out of a trust or out of federal funds, or by any
13 Department out of State, trust, federal or other funds held
14 by the State Treasurer or the Department, to any person for
15 personal services currently performed, and ordinary or
16 accidental disability benefits under Articles 2, 14, 15
17 (including ordinary or accidental disability benefits under
18 the optional retirement program established under Section
19 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
20 Article 18 of the Illinois Pension Code, for disability
21 incurred after January 1, 1966, or benefits payable under the
22 Workers' Compensation or Occupational Diseases Act or
23 benefits payable under a sick pay plan established in
24 accordance with Section 36 of the State Finance Act.
25 "Compensation" also means salary or wages paid to an employee
26 of any qualified local government or qualified rehabilitation
27 facility or a qualified domestic violence shelter or service.
28 (e) "Commission" means the State Employees Group
29 Insurance Advisory Commission authorized by this Act.
30 Commencing July 1, 1984, "Commission" as used in this Act
31 means the Illinois Economic and Fiscal Commission as
32 established by the Legislative Commission Reorganization Act
33 of 1984.
34 (f) "Contributory", when referred to as contributory
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1 coverage, shall mean optional coverages or benefits elected
2 by the member toward the cost of which such member makes
3 contribution, or which are funded in whole or in part through
4 the acceptance of a reduction in earnings or the foregoing of
5 an increase in earnings by an employee, as distinguished from
6 noncontributory coverage or benefits which are paid entirely
7 by the State of Illinois without reduction of the member's
8 salary.
9 (g) "Department" means any department, institution,
10 board, commission, officer, court or any agency of the State
11 government receiving appropriations and having power to
12 certify payrolls to the Comptroller authorizing payments of
13 salary and wages against such appropriations as are made by
14 the General Assembly from any State fund, or against trust
15 funds held by the State Treasurer and includes boards of
16 trustees of the retirement systems created by Articles 2, 14,
17 15, 16 and 18 of the Illinois Pension Code. "Department"
18 also includes the Illinois Comprehensive Health Insurance
19 Board, the Board of Examiners established under the Illinois
20 Public Accounting Act, and the Illinois Rural Bond Bank.
21 (h) "Dependent", when the term is used in the context of
22 the health and life plan, means a member's spouse and any
23 unmarried child (1) from birth to age 19 including an adopted
24 child, a child who lives with the member from the time of the
25 filing of a petition for adoption until entry of an order of
26 adoption, a stepchild or recognized child who lives with the
27 member in a parent-child relationship, or a child who lives
28 with the member if such member is a court appointed guardian
29 of the child, or (2) age 19 to 23 enrolled as a full-time
30 student in any accredited school, financially dependent upon
31 the member, and eligible as a dependent for Illinois State
32 income tax purposes, or (3) age 19 or over who is mentally or
33 physically handicapped as defined in the Illinois Insurance
34 Code. For the health plan only, the term "dependent" also
-41- LRB9102764JSpcam01
1 includes any person enrolled prior to the effective date of
2 this Section who is dependent upon the member to the extent
3 that the member may claim such person as a dependent for
4 Illinois State income tax deduction purposes; no other such
5 person may be enrolled.
6 (i) "Director" means the Director of the Illinois
7 Department of Central Management Services.
8 (j) "Eligibility period" means the period of time a
9 member has to elect enrollment in programs or to select
10 benefits without regard to age, sex or health.
11 (k) "Employee" means and includes each officer or
12 employee in the service of a department who (1) receives his
13 compensation for service rendered to the department on a
14 warrant issued pursuant to a payroll certified by a
15 department or on a warrant or check issued and drawn by a
16 department upon a trust, federal or other fund or on a
17 warrant issued pursuant to a payroll certified by an elected
18 or duly appointed officer of the State or who receives
19 payment of the performance of personal services on a warrant
20 issued pursuant to a payroll certified by a Department and
21 drawn by the Comptroller upon the State Treasurer against
22 appropriations made by the General Assembly from any fund or
23 against trust funds held by the State Treasurer, and (2) is
24 employed full-time or part-time in a position normally
25 requiring actual performance of duty during not less than 1/2
26 of a normal work period, as established by the Director in
27 cooperation with each department, except that persons elected
28 by popular vote will be considered employees during the
29 entire term for which they are elected regardless of hours
30 devoted to the service of the State, and (3) except that
31 "employee" does not include any person who is not eligible by
32 reason of such person's employment to participate in one of
33 the State retirement systems under Articles 2, 14, 15 (either
34 the regular Article 15 system or the optional retirement
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1 program established under Section 15-158.2) or 18, or under
2 paragraph (2), (3), or (5) of Section 16-106, of the Illinois
3 Pension Code, but such term does include persons who are
4 employed during the 6 month qualifying period under Article
5 14 of the Illinois Pension Code. Such term also includes any
6 person who (1) after January 1, 1966, is receiving ordinary
7 or accidental disability benefits under Articles 2, 14, 15
8 (including ordinary or accidental disability benefits under
9 the optional retirement program established under Section
10 15-158.2), paragraphs (2), (3), or (5) of Section 16-106, or
11 Article 18 of the Illinois Pension Code, for disability
12 incurred after January 1, 1966, (2) receives total permanent
13 or total temporary disability under the Workers' Compensation
14 Act or Occupational Disease Act as a result of injuries
15 sustained or illness contracted in the course of employment
16 with the State of Illinois, or (3) is not otherwise covered
17 under this Act and has retired as a participating member
18 under Article 2 of the Illinois Pension Code but is
19 ineligible for the retirement annuity under Section 2-119 of
20 the Illinois Pension Code. However, a person who satisfies
21 the criteria of the foregoing definition of "employee" except
22 that such person is made ineligible to participate in the
23 State Universities Retirement System by clause (4) of
24 subsection (a) of Section 15-107 of the Illinois Pension Code
25 is also an "employee" for the purposes of this Act.
26 "Employee" also includes any person receiving or eligible for
27 benefits under a sick pay plan established in accordance with
28 Section 36 of the State Finance Act. "Employee" also includes
29 each officer or employee in the service of a qualified local
30 government, including persons appointed as trustees of
31 sanitary districts regardless of hours devoted to the service
32 of the sanitary district, and each employee in the service of
33 a qualified rehabilitation facility and each full-time
34 employee in the service of a qualified domestic violence
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1 shelter or service, as determined according to rules
2 promulgated by the Director.
3 (l) "Member" means an employee, annuitant, retired
4 employee or survivor.
5 (m) "Optional coverages or benefits" means those
6 coverages or benefits available to the member on his or her
7 voluntary election, and at his or her own expense.
8 (n) "Program" means the group life insurance, health
9 benefits and other employee benefits designed and contracted
10 for by the Director under this Act.
11 (o) "Health plan" means a self-insured health insurance
12 program offered by the State of Illinois for the purposes of
13 benefiting employees by means of providing, among others,
14 wellness programs, utilization reviews, second opinions and
15 medical fee reviews, as well as for paying for hospital and
16 medical care up to the maximum coverage provided by the plan,
17 to its members and their dependents.
18 (p) "Retired employee" means any person who would be an
19 annuitant as that term is defined herein but for the fact
20 that such person retired prior to January 1, 1966. Such term
21 also includes any person formerly employed by the University
22 of Illinois in the Cooperative Extension Service who would be
23 an annuitant but for the fact that such person was made
24 ineligible to participate in the State Universities
25 Retirement System by clause (4) of subsection (a) of Section
26 15-107 of the Illinois Pension Code.
27 (p-6) "New SURS retired employee" means a person who, on
28 or after January 1, 1998, becomes a retired employee, as
29 defined in subsection (p), by virtue of being a person
30 formerly employed by the University of Illinois in the
31 Cooperative Extension Service who would be an annuitant but
32 for the fact that he or she was made ineligible to
33 participate in the State Universities Retirement System by
34 clause (4) of subsection (a) of Section 15-107 of the
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1 Illinois Pension Code, and who is eligible to participate in
2 the basic program of group health benefits provided for
3 retired employees under this Act.
4 (q) "Survivor" means a person receiving an annuity as a
5 survivor of an employee or of an annuitant. "Survivor" also
6 includes: (1) the surviving dependent of a person who
7 satisfies the definition of "employee" except that such
8 person is made ineligible to participate in the State
9 Universities Retirement System by clause (4) of subsection
10 (a) of Section 15-107 of the Illinois Pension Code; and (2)
11 the surviving dependent of any person formerly employed by
12 the University of Illinois in the Cooperative Extension
13 Service who would be an annuitant except for the fact that
14 such person was made ineligible to participate in the State
15 Universities Retirement System by clause (4) of subsection
16 (a) of Section 15-107 of the Illinois Pension Code.
17 (q-5) "New SERS survivor" means a survivor, as defined
18 in subsection (q), whose annuity is paid under Article 14 of
19 the Illinois Pension Code and is based on the death of (i) an
20 employee whose death occurs on or after January 1, 1998, or
21 (ii) a new SERS annuitant as defined in subsection (b-5).
22 (q-6) "New SURS survivor" means a survivor, as defined
23 in subsection (q), whose annuity is paid under Article 15 of
24 the Illinois Pension Code and is based on the death of (i) an
25 employee whose death occurs on or after January 1, 1998, (ii)
26 a new SURS annuitant as defined in subsection (b-6), or (iii)
27 a new SURS retired employee as defined in subsection (p-6).
28 (q-7) "New TRS State survivor" means a survivor, as
29 defined in subsection (q), whose annuity is paid under
30 Article 16 of the Illinois Pension Code and is based on the
31 death of (i) an employee who is a teacher as defined in
32 paragraph (2), (3), or (5) of Section 16-106 of that Code and
33 whose death occurs on or after July 1, 1998, or (ii) a new
34 TRS State annuitant as defined in subsection (b-7).
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1 (r) "Medical services" means the services provided
2 within the scope of their licenses by practitioners in all
3 categories licensed under the Medical Practice Act of 1987.
4 (s) "Unit of local government" means any county,
5 municipality, township, school district, special district or
6 other unit, designated as a unit of local government by law,
7 which exercises limited governmental powers or powers in
8 respect to limited governmental subjects, any not-for-profit
9 association with a membership that primarily includes
10 townships and township officials, that has duties that
11 include provision of research service, dissemination of
12 information, and other acts for the purpose of improving
13 township government, and that is funded wholly or partly in
14 accordance with Section 85-15 of the Township Code; any
15 not-for-profit corporation or association, with a membership
16 consisting primarily of municipalities, that operates its own
17 utility system, and provides research, training,
18 dissemination of information, or other acts to promote
19 cooperation between and among municipalities that provide
20 utility services and for the advancement of the goals and
21 purposes of its membership; the Southern Illinois Collegiate
22 Common Market, which is a consortium of higher education
23 institutions in Southern Illinois; and the Illinois
24 Association of Park Districts. "Qualified local government"
25 means a unit of local government approved by the Director and
26 participating in a program created under subsection (i) of
27 Section 10 of this Act.
28 (t) "Qualified rehabilitation facility" means any
29 not-for-profit organization that is accredited by the
30 Commission on Accreditation of Rehabilitation Facilities or
31 certified by the Department of Human Services (as successor
32 to the Department of Mental Health and Developmental
33 Disabilities) to provide services to persons with
34 disabilities and which receives funds from the State of
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1 Illinois for providing those services, approved by the
2 Director and participating in a program created under
3 subsection (j) of Section 10 of this Act.
4 (u) "Qualified domestic violence shelter or service"
5 means any Illinois domestic violence shelter or service and
6 its administrative offices funded by the Department of Human
7 Services (as successor to the Illinois Department of Public
8 Aid), approved by the Director and participating in a program
9 created under subsection (k) of Section 10.
10 (v) "TRS benefit recipient" means a person who:
11 (1) is not a "member" as defined in this Section;
12 and
13 (2) is receiving a monthly benefit or retirement
14 annuity under Article 16 of the Illinois Pension Code;
15 and
16 (3) either (i) has at least 8 years of creditable
17 service under Article 16 of the Illinois Pension Code, or
18 (ii) was enrolled in the health insurance program offered
19 under that Article on January 1, 1996, or (iii) is the
20 survivor of a benefit recipient who had at least 8 years
21 of creditable service under Article 16 of the Illinois
22 Pension Code or was enrolled in the health insurance
23 program offered under that Article on the effective date
24 of this amendatory Act of 1995, or (iv) is a recipient or
25 survivor of a recipient of a disability benefit under
26 Article 16 of the Illinois Pension Code.
27 (w) "TRS dependent beneficiary" means a person who:
28 (1) is not a "member" or "dependent" as defined in
29 this Section; and
30 (2) is a TRS benefit recipient's: (A) spouse, (B)
31 dependent parent who is receiving at least half of his or
32 her support from the TRS benefit recipient, or (C)
33 unmarried natural or adopted child who is (i) under age
34 19, or (ii) enrolled as a full-time student in an
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1 accredited school, financially dependent upon the TRS
2 benefit recipient, eligible as a dependent for Illinois
3 State income tax purposes, and either is under age 24 or
4 was, on January 1, 1996, participating as a dependent
5 beneficiary in the health insurance program offered under
6 Article 16 of the Illinois Pension Code, or (iii) age 19
7 or over who is mentally or physically handicapped as
8 defined in the Illinois Insurance Code.
9 (x) "Military leave with pay and benefits" refers to
10 individuals in basic training for reserves, special/advanced
11 training, annual training, emergency call up, or activation
12 by the President of the United States with approved pay and
13 benefits.
14 (y) "Military leave without pay and benefits" refers to
15 individuals who enlist for active duty in a regular component
16 of the U.S. Armed Forces or other duty not specified or
17 authorized under military leave with pay and benefits.
18 (z) "Community college benefit recipient" means a person
19 who:
20 (1) is not a "member" as defined in this Section;
21 and
22 (2) is receiving a monthly survivor's annuity or
23 retirement annuity under Article 15 of the Illinois
24 Pension Code; and
25 (3) either (i) was a full-time employee of a
26 community college district or an association of community
27 college boards created under the Public Community College
28 Act (other than an employee whose last employer under
29 Article 15 of the Illinois Pension Code was a community
30 college district subject to Article VII of the Public
31 Community College Act) and was eligible to participate in
32 a group health benefit plan as an employee during the
33 time of employment with a community college district
34 (other than a community college district subject to
-48- LRB9102764JSpcam01
1 Article VII of the Public Community College Act) or an
2 association of community college boards, or (ii) is the
3 survivor of a person described in item (i).
4 (aa) "Community college dependent beneficiary" means a
5 person who:
6 (1) is not a "member" or "dependent" as defined in
7 this Section; and
8 (2) is a community college benefit recipient's: (A)
9 spouse, (B) dependent parent who is receiving at least
10 half of his or her support from the community college
11 benefit recipient, or (C) unmarried natural or adopted
12 child who is (i) under age 19, or (ii) enrolled as a
13 full-time student in an accredited school, financially
14 dependent upon the community college benefit recipient,
15 eligible as a dependent for Illinois State income tax
16 purposes and under age 23, or (iii) age 19 or over and
17 mentally or physically handicapped as defined in the
18 Illinois Insurance Code.
19 (Source: P.A. 89-21, eff. 6-21-95; 89-25, eff. 6-21-95;
20 89-76, eff. 7-1-95; 89-324, eff. 8-13-95; 89-430, eff.
21 12-15-95; 89-502, eff. 7-1-96; 89-507, eff. 7-1-97; 89-628,
22 eff. 8-9-96; 90-14, eff. 7-1-97; 90-65, eff. 7-7-97; 90-448,
23 eff. 8-16-97; 90-497, eff. 8-18-97; 90-511, eff. 8-22-97;
24 90-582, eff. 5-27-98; 90-655, eff. 7-30-98.)
25 (5 ILCS 375/6.12 new)
26 Sec. 6.12. Managed Care Reform and Patient Rights Act.
27 The program of health benefits is subject to the provisions
28 of the Managed Care Reform and Patient Rights Act, except the
29 fee for service program shall only be required to comply with
30 Section 85 and the definition of "emergency medical
31 condition" in Section 10 of the Managed Care Reform and
32 Patient Rights Act.
-49- LRB9102764JSpcam01
1 (5 ILCS 375/10) (from Ch. 127, par. 530)
2 Sec. 10. Payments by State; premiums.
3 (a) The State shall pay the cost of basic
4 non-contributory group life insurance and, subject to member
5 paid contributions set by the Department or required by this
6 Section, the basic program of group health benefits on each
7 eligible member, except a member, not otherwise covered by
8 this Act, who has retired as a participating member under
9 Article 2 of the Illinois Pension Code but is ineligible for
10 the retirement annuity under Section 2-119 of the Illinois
11 Pension Code, and part of each eligible member's and retired
12 member's premiums for health insurance coverage for enrolled
13 dependents as provided by Section 9. The State shall pay the
14 cost of the basic program of group health benefits only after
15 benefits are reduced by the amount of benefits covered by
16 Medicare for all retired members and retired dependents aged
17 65 years or older who are entitled to benefits under Social
18 Security or the Railroad Retirement system or who had
19 sufficient Medicare-covered government employment except that
20 such reduction in benefits shall apply only to those retired
21 members or retired dependents who (1) first become eligible
22 for such Medicare coverage on or after July 1, 1992; or (2)
23 remain eligible for, but no longer receive Medicare coverage
24 which they had been receiving on or after July 1, 1992. The
25 Department may determine the aggregate level of the State's
26 contribution on the basis of actual cost of medical services
27 adjusted for age, sex or geographic or other demographic
28 characteristics which affect the costs of such programs.
29 The cost of participation in the basic program of group
30 health benefits for the dependent or survivor of a living or
31 deceased retired employee who was formerly employed by the
32 University of Illinois in the Cooperative Extension Service
33 and would be an annuitant but for the fact that he or she was
34 made ineligible to participate in the State Universities
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1 Retirement System by clause (4) of subsection (a) of Section
2 15-107 of the Illinois Pension Code shall not be greater than
3 the cost of participation that would otherwise apply to that
4 dependent or survivor if he or she were the dependent or
5 survivor of an annuitant under the State Universities
6 Retirement System.
7 (a-1) Beginning January 1, 1998, for each person who
8 becomes a new SERS annuitant and participates in the basic
9 program of group health benefits, the State shall contribute
10 toward the cost of the annuitant's coverage under the basic
11 program of group health benefits an amount equal to 5% of
12 that cost for each full year of creditable service upon which
13 the annuitant's retirement annuity is based, up to a maximum
14 of 100% for an annuitant with 20 or more years of creditable
15 service. The remainder of the cost of a new SERS annuitant's
16 coverage under the basic program of group health benefits
17 shall be the responsibility of the annuitant.
18 (a-2) Beginning January 1, 1998, for each person who
19 becomes a new SERS survivor and participates in the basic
20 program of group health benefits, the State shall contribute
21 toward the cost of the survivor's coverage under the basic
22 program of group health benefits an amount equal to 5% of
23 that cost for each full year of the deceased employee's or
24 deceased annuitant's creditable service in the State
25 Employees' Retirement System of Illinois on the date of
26 death, up to a maximum of 100% for a survivor of an employee
27 or annuitant with 20 or more years of creditable service.
28 The remainder of the cost of the new SERS survivor's coverage
29 under the basic program of group health benefits shall be the
30 responsibility of the survivor.
31 (a-3) Beginning January 1, 1998, for each person who
32 becomes a new SURS annuitant and participates in the basic
33 program of group health benefits, the State shall contribute
34 toward the cost of the annuitant's coverage under the basic
-51- LRB9102764JSpcam01
1 program of group health benefits an amount equal to 5% of
2 that cost for each full year of creditable service upon which
3 the annuitant's retirement annuity is based, up to a maximum
4 of 100% for an annuitant with 20 or more years of creditable
5 service. The remainder of the cost of a new SURS annuitant's
6 coverage under the basic program of group health benefits
7 shall be the responsibility of the annuitant.
8 (a-4) Beginning January 1, 1998, for each person who
9 becomes a new SURS retired employee and participates in the
10 basic program of group health benefits, the State shall
11 contribute toward the cost of the retired employee's coverage
12 under the basic program of group health benefits an amount
13 equal to 5% of that cost for each full year that the retired
14 employee was an employee as defined in Section 3, up to a
15 maximum of 100% for a retired employee who was an employee
16 for 20 or more years. The remainder of the cost of a new
17 SURS retired employee's coverage under the basic program of
18 group health benefits shall be the responsibility of the
19 retired employee.
20 (a-5) Beginning January 1, 1998, for each person who
21 becomes a new SURS survivor and participates in the basic
22 program of group health benefits, the State shall contribute
23 toward the cost of the survivor's coverage under the basic
24 program of group health benefits an amount equal to 5% of
25 that cost for each full year of the deceased employee's or
26 deceased annuitant's creditable service in the State
27 Universities Retirement System on the date of death, up to a
28 maximum of 100% for a survivor of an employee or annuitant
29 with 20 or more years of creditable service. The remainder
30 of the cost of the new SURS survivor's coverage under the
31 basic program of group health benefits shall be the
32 responsibility of the survivor.
33 (a-6) Beginning July 1, 1998, for each person who
34 becomes a new TRS State annuitant and participates in the
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1 basic program of group health benefits, the State shall
2 contribute toward the cost of the annuitant's coverage under
3 the basic program of group health benefits an amount equal to
4 5% of that cost for each full year of creditable service as a
5 teacher as defined in paragraph (2), (3), or (5) of Section
6 16-106 of the Illinois Pension Code upon which the
7 annuitant's retirement annuity is based, up to a maximum of
8 100% for an annuitant with 20 or more years of such
9 creditable service. The remainder of the cost of a new TRS
10 State annuitant's coverage under the basic program of group
11 health benefits shall be the responsibility of the annuitant.
12 (a-7) Beginning July 1, 1998, for each person who
13 becomes a new TRS State survivor and participates in the
14 basic program of group health benefits, the State shall
15 contribute toward the cost of the survivor's coverage under
16 the basic program of group health benefits an amount equal to
17 5% of that cost for each full year of the deceased employee's
18 or deceased annuitant's creditable service as a teacher as
19 defined in paragraph (2), (3), or (5) of Section 16-106 of
20 the Illinois Pension Code on the date of death, up to a
21 maximum of 100% for a survivor of an employee or annuitant
22 with 20 or more years of such creditable service. The
23 remainder of the cost of the new TRS State survivor's
24 coverage under the basic program of group health benefits
25 shall be the responsibility of the survivor.
26 (a-8) A new SERS annuitant, new SERS survivor, new SURS
27 annuitant, new SURS retired employee, new SURS survivor, new
28 TRS State annuitant, or new TRS State survivor may waive or
29 terminate coverage in the program of group health benefits.
30 Any such annuitant, survivor, or retired employee who has
31 waived or terminated coverage may enroll or re-enroll in the
32 program of group health benefits only during the annual
33 benefit choice period, as determined by the Director; except
34 that in the event of termination of coverage due to
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1 nonpayment of premiums, the annuitant, survivor, or retired
2 employee may not re-enroll in the program.
3 (a-9) No later than May 1 of each calendar year, the
4 Director of Central Management Services shall certify in
5 writing to the Executive Secretary of the State Employees'
6 Retirement System of Illinois the amounts of the Medicare
7 supplement health care premiums and the amounts of the health
8 care premiums for all other retirees who are not Medicare
9 eligible.
10 A separate calculation of the premiums based upon the
11 actual cost of each health care plan shall be so certified.
12 The Director of Central Management Services shall provide
13 to the Executive Secretary of the State Employees' Retirement
14 System of Illinois such information, statistics, and other
15 data as he or she may require to review the premium amounts
16 certified by the Director of Central Management Services.
17 (b) State employees who become eligible for this program
18 on or after January 1, 1980 in positions normally requiring
19 actual performance of duty not less than 1/2 of a normal work
20 period but not equal to that of a normal work period, shall
21 be given the option of participating in the available
22 program. If the employee elects coverage, the State shall
23 contribute on behalf of such employee to the cost of the
24 employee's benefit and any applicable dependent supplement,
25 that sum which bears the same percentage as that percentage
26 of time the employee regularly works when compared to normal
27 work period.
28 (c) The basic non-contributory coverage from the basic
29 program of group health benefits shall be continued for each
30 employee not in pay status or on active service by reason of
31 (1) leave of absence due to illness or injury, (2) authorized
32 educational leave of absence or sabbatical leave, or (3)
33 military leave with pay and benefits. This coverage shall
34 continue until expiration of authorized leave and return to
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1 active service, but not to exceed 24 months for leaves under
2 item (1) or (2). This 24-month limitation and the requirement
3 of returning to active service shall not apply to persons
4 receiving ordinary or accidental disability benefits or
5 retirement benefits through the appropriate State retirement
6 system or benefits under the Workers' Compensation or
7 Occupational Disease Act.
8 (d) The basic group life insurance coverage shall
9 continue, with full State contribution, where such person is
10 (1) absent from active service by reason of disability
11 arising from any cause other than self-inflicted, (2) on
12 authorized educational leave of absence or sabbatical leave,
13 or (3) on military leave with pay and benefits.
14 (e) Where the person is in non-pay status for a period
15 in excess of 30 days or on leave of absence, other than by
16 reason of disability, educational or sabbatical leave, or
17 military leave with pay and benefits, such person may
18 continue coverage only by making personal payment equal to
19 the amount normally contributed by the State on such person's
20 behalf. Such payments and coverage may be continued: (1)
21 until such time as the person returns to a status eligible
22 for coverage at State expense, but not to exceed 24 months,
23 (2) until such person's employment or annuitant status with
24 the State is terminated, or (3) for a maximum period of 4
25 years for members on military leave with pay and benefits and
26 military leave without pay and benefits (exclusive of any
27 additional service imposed pursuant to law).
28 (f) The Department shall establish by rule the extent
29 to which other employee benefits will continue for persons in
30 non-pay status or who are not in active service.
31 (g) The State shall not pay the cost of the basic
32 non-contributory group life insurance, program of health
33 benefits and other employee benefits for members who are
34 survivors as defined by paragraphs (1) and (2) of subsection
-55- LRB9102764JSpcam01
1 (q) of Section 3 of this Act. The costs of benefits for
2 these survivors shall be paid by the survivors or by the
3 University of Illinois Cooperative Extension Service, or any
4 combination thereof. However, the State shall pay the amount
5 of the reduction in the cost of participation, if any,
6 resulting from the amendment to subsection (a) made by this
7 amendatory Act of the 91st General Assembly.
8 (h) Those persons occupying positions with any
9 department as a result of emergency appointments pursuant to
10 Section 8b.8 of the Personnel Code who are not considered
11 employees under this Act shall be given the option of
12 participating in the programs of group life insurance, health
13 benefits and other employee benefits. Such persons electing
14 coverage may participate only by making payment equal to the
15 amount normally contributed by the State for similarly
16 situated employees. Such amounts shall be determined by the
17 Director. Such payments and coverage may be continued until
18 such time as the person becomes an employee pursuant to this
19 Act or such person's appointment is terminated.
20 (i) Any unit of local government within the State of
21 Illinois may apply to the Director to have its employees,
22 annuitants, and their dependents provided group health
23 coverage under this Act on a non-insured basis. To
24 participate, a unit of local government must agree to enroll
25 all of its employees, who may select coverage under either
26 the State group health insurance plan or a health maintenance
27 organization that has contracted with the State to be
28 available as a health care provider for employees as defined
29 in this Act. A unit of local government must remit the
30 entire cost of providing coverage under the State group
31 health insurance plan or, for coverage under a health
32 maintenance organization, an amount determined by the
33 Director based on an analysis of the sex, age, geographic
34 location, or other relevant demographic variables for its
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1 employees, except that the unit of local government shall not
2 be required to enroll those of its employees who are covered
3 spouses or dependents under this plan or another group policy
4 or plan providing health benefits as long as (1) an
5 appropriate official from the unit of local government
6 attests that each employee not enrolled is a covered spouse
7 or dependent under this plan or another group policy or plan,
8 and (2) at least 85% of the employees are enrolled and the
9 unit of local government remits the entire cost of providing
10 coverage to those employees. Employees of a participating
11 unit of local government who are not enrolled due to coverage
12 under another group health policy or plan may enroll at a
13 later date subject to submission of satisfactory evidence of
14 insurability and provided that no benefits shall be payable
15 for services incurred during the first 6 months of coverage
16 to the extent the services are in connection with any
17 pre-existing condition. A participating unit of local
18 government may also elect to cover its annuitants. Dependent
19 coverage shall be offered on an optional basis, with the
20 costs paid by the unit of local government, its employees, or
21 some combination of the two as determined by the unit of
22 local government. The unit of local government shall be
23 responsible for timely collection and transmission of
24 dependent premiums.
25 The Director shall annually determine monthly rates of
26 payment, subject to the following constraints:
27 (1) In the first year of coverage, the rates shall
28 be equal to the amount normally charged to State
29 employees for elected optional coverages or for enrolled
30 dependents coverages or other contributory coverages, or
31 contributed by the State for basic insurance coverages on
32 behalf of its employees, adjusted for differences between
33 State employees and employees of the local government in
34 age, sex, geographic location or other relevant
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1 demographic variables, plus an amount sufficient to pay
2 for the additional administrative costs of providing
3 coverage to employees of the unit of local government and
4 their dependents.
5 (2) In subsequent years, a further adjustment shall
6 be made to reflect the actual prior years' claims
7 experience of the employees of the unit of local
8 government.
9 In the case of coverage of local government employees
10 under a health maintenance organization, the Director shall
11 annually determine for each participating unit of local
12 government the maximum monthly amount the unit may contribute
13 toward that coverage, based on an analysis of (i) the age,
14 sex, geographic location, and other relevant demographic
15 variables of the unit's employees and (ii) the cost to cover
16 those employees under the State group health insurance plan.
17 The Director may similarly determine the maximum monthly
18 amount each unit of local government may contribute toward
19 coverage of its employees' dependents under a health
20 maintenance organization.
21 Monthly payments by the unit of local government or its
22 employees for group health insurance or health maintenance
23 organization coverage shall be deposited in the Local
24 Government Health Insurance Reserve Fund. The Local
25 Government Health Insurance Reserve Fund shall be a
26 continuing fund not subject to fiscal year limitations. All
27 expenditures from this fund shall be used for payments for
28 health care benefits for local government and rehabilitation
29 facility employees, annuitants, and dependents, and to
30 reimburse the Department or its administrative service
31 organization for all expenses incurred in the administration
32 of benefits. No other State funds may be used for these
33 purposes.
34 A local government employer's participation or desire to
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1 participate in a program created under this subsection shall
2 not limit that employer's duty to bargain with the
3 representative of any collective bargaining unit of its
4 employees.
5 (j) Any rehabilitation facility within the State of
6 Illinois may apply to the Director to have its employees,
7 annuitants, and their dependents provided group health
8 coverage under this Act on a non-insured basis. To
9 participate, a rehabilitation facility must agree to enroll
10 all of its employees and remit the entire cost of providing
11 such coverage for its employees, except that the
12 rehabilitation facility shall not be required to enroll those
13 of its employees who are covered spouses or dependents under
14 this plan or another group policy or plan providing health
15 benefits as long as (1) an appropriate official from the
16 rehabilitation facility attests that each employee not
17 enrolled is a covered spouse or dependent under this plan or
18 another group policy or plan, and (2) at least 85% of the
19 employees are enrolled and the rehabilitation facility remits
20 the entire cost of providing coverage to those employees.
21 Employees of a participating rehabilitation facility who are
22 not enrolled due to coverage under another group health
23 policy or plan may enroll at a later date subject to
24 submission of satisfactory evidence of insurability and
25 provided that no benefits shall be payable for services
26 incurred during the first 6 months of coverage to the extent
27 the services are in connection with any pre-existing
28 condition. A participating rehabilitation facility may also
29 elect to cover its annuitants. Dependent coverage shall be
30 offered on an optional basis, with the costs paid by the
31 rehabilitation facility, its employees, or some combination
32 of the 2 as determined by the rehabilitation facility. The
33 rehabilitation facility shall be responsible for timely
34 collection and transmission of dependent premiums.
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1 The Director shall annually determine quarterly rates of
2 payment, subject to the following constraints:
3 (1) In the first year of coverage, the rates shall
4 be equal to the amount normally charged to State
5 employees for elected optional coverages or for enrolled
6 dependents coverages or other contributory coverages on
7 behalf of its employees, adjusted for differences between
8 State employees and employees of the rehabilitation
9 facility in age, sex, geographic location or other
10 relevant demographic variables, plus an amount sufficient
11 to pay for the additional administrative costs of
12 providing coverage to employees of the rehabilitation
13 facility and their dependents.
14 (2) In subsequent years, a further adjustment shall
15 be made to reflect the actual prior years' claims
16 experience of the employees of the rehabilitation
17 facility.
18 Monthly payments by the rehabilitation facility or its
19 employees for group health insurance shall be deposited in
20 the Local Government Health Insurance Reserve Fund.
21 (k) Any domestic violence shelter or service within the
22 State of Illinois may apply to the Director to have its
23 employees, annuitants, and their dependents provided group
24 health coverage under this Act on a non-insured basis. To
25 participate, a domestic violence shelter or service must
26 agree to enroll all of its employees and pay the entire cost
27 of providing such coverage for its employees. A
28 participating domestic violence shelter may also elect to
29 cover its annuitants. Dependent coverage shall be offered on
30 an optional basis, with employees, or some combination of the
31 2 as determined by the domestic violence shelter or service.
32 The domestic violence shelter or service shall be responsible
33 for timely collection and transmission of dependent premiums.
34 The Director shall annually determine quarterly rates of
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1 payment, subject to the following constraints:
2 (1) In the first year of coverage, the rates shall
3 be equal to the amount normally charged to State
4 employees for elected optional coverages or for enrolled
5 dependents coverages or other contributory coverages on
6 behalf of its employees, adjusted for differences between
7 State employees and employees of the domestic violence
8 shelter or service in age, sex, geographic location or
9 other relevant demographic variables, plus an amount
10 sufficient to pay for the additional administrative costs
11 of providing coverage to employees of the domestic
12 violence shelter or service and their dependents.
13 (2) In subsequent years, a further adjustment shall
14 be made to reflect the actual prior years' claims
15 experience of the employees of the domestic violence
16 shelter or service.
17 (3) In no case shall the rate be less than the
18 amount normally charged to State employees or contributed
19 by the State on behalf of its employees.
20 Monthly payments by the domestic violence shelter or
21 service or its employees for group health insurance shall be
22 deposited in the Local Government Health Insurance Reserve
23 Fund.
24 (l) A public community college or entity organized
25 pursuant to the Public Community College Act may apply to the
26 Director initially to have only annuitants not covered prior
27 to July 1, 1992 by the district's health plan provided health
28 coverage under this Act on a non-insured basis. The
29 community college must execute a 2-year contract to
30 participate in the Local Government Health Plan. Those
31 annuitants enrolled initially under this contract shall have
32 no benefits payable for services incurred during the first 6
33 months of coverage to the extent the services are in
34 connection with any pre-existing condition. Any annuitant
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1 who may enroll after this initial enrollment period shall be
2 subject to submission of satisfactory evidence of
3 insurability and to the pre-existing conditions limitation.
4 The Director shall annually determine monthly rates of
5 payment subject to the following constraints: for those
6 community colleges with annuitants only enrolled, first year
7 rates shall be equal to the average cost to cover claims for
8 a State member adjusted for demographics, Medicare
9 participation, and other factors; and in the second year, a
10 further adjustment of rates shall be made to reflect the
11 actual first year's claims experience of the covered
12 annuitants.
13 (m) The Director shall adopt any rules deemed necessary
14 for implementation of this amendatory Act of 1989 (Public Act
15 86-978).
16 (Source: P.A. 89-53, eff. 7-1-95; 89-236, eff. 8-4-95;
17 89-324, eff. 8-13-95; 89-626, eff. 8-9-96; 90-65, eff.
18 7-7-97; 90-582, eff. 5-27-98; 90-655, eff. 7-30-98; revised
19 8-3-98.)
20 Section 205. The State Mandates Act is amended by adding
21 Section 8.23 as follows:
22 (30 ILCS 805/8.23 new)
23 Sec. 8.23. Exempt mandate. Notwithstanding Sections 6
24 and 8 of this Act, no reimbursement by the State is required
25 for the implementation of any mandate created by this
26 amendatory Act of the 91st General Assembly.
27 Section 210. The Counties Code is amended by adding
28 Section 5-1069.8 as follows:
29 (55 ILCS 5/5-1069.8 new)
30 Sec. 5-1069.8. Managed Care Reform and Patient Rights
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1 Act. All counties, including home rule counties, are subject
2 to the provisions of the Managed Care Reform and Patient
3 Rights Act. The requirement under this Section that health
4 care benefits provided by counties comply with the Managed
5 Care Reform and Patient Rights Act is an exclusive power and
6 function of the State and is a denial and limitation of home
7 rule county powers under Article VII, Section 6, subsection
8 (h) of the Illinois Constitution.
9 Section 215. The Illinois Municipal Code is amended by
10 adding Section 10-4-2.8 as follows:
11 (65 ILCS 5/10-4-2.8 new)
12 Sec. 10-4-2.8. Managed Care Reform and Patient Rights
13 Act. The corporate authorities of all municipalities are
14 subject to the provisions of the Managed Care Reform and
15 Patient Rights Act. The requirement under this Section that
16 health care benefits provided by municipalities comply with
17 the Managed Care Reform and Patient Rights Act is an
18 exclusive power and function of the State and is a denial and
19 limitation of home rule municipality powers under Article
20 VII, Section 6, subsection (h) of the Illinois Constitution.
21 Section 220. The Illinois Insurance Code is amended by
22 changing Section 370g and adding Sections 155.36, 370s, and
23 511.118 as follows:
24 (215 ILCS 5/155.36 new)
25 Sec. 155.36. Managed Care Reform and Patient Rights Act.
26 Insurance companies that transact the kinds of insurance
27 authorized under Class 1(b) or Class 2(a) of Section 4 of
28 this Code shall comply with Section 85 and the definition of
29 the term "emergency medical condition" in Section 10 of the
30 Managed Care Reform and Patient Rights Act.
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1 (215 ILCS 5/370g) (from Ch. 73, par. 982g)
2 Sec. 370g. Definitions. As used in this Article, the
3 following definitions apply:
4 (a) "Health care services" means health care services or
5 products rendered or sold by a provider within the scope of
6 the provider's license or legal authorization. The term
7 includes, but is not limited to, hospital, medical, surgical,
8 dental, vision and pharmaceutical services or products.
9 (b) "Insurer" means an insurance company or a health
10 service corporation authorized in this State to issue
11 policies or subscriber contracts which reimburse for expenses
12 of health care services.
13 (c) "Insured" means an individual entitled to
14 reimbursement for expenses of health care services under a
15 policy or subscriber contract issued or administered by an
16 insurer.
17 (d) "Provider" means an individual or entity duly
18 licensed or legally authorized to provide health care
19 services.
20 (e) "Noninstitutional provider" means any person
21 licensed under the Medical Practice Act of 1987, as now or
22 hereafter amended.
23 (f) "Beneficiary" means an individual entitled to
24 reimbursement for expenses of or the discount of provider
25 fees for health care services under a program where the
26 beneficiary has an incentive to utilize the services of a
27 provider which has entered into an agreement or arrangement
28 with an administrator.
29 (g) "Administrator" means any person, partnership or
30 corporation, other than an insurer or health maintenance
31 organization holding a certificate of authority under the
32 "Health Maintenance Organization Act", as now or hereafter
33 amended, that arranges, contracts with, or administers
34 contracts with a provider whereby beneficiaries are provided
-64- LRB9102764JSpcam01
1 an incentive to use the services of such provider.
2 (h) "Emergency medical condition" means a medical
3 condition manifesting itself by acute symptoms of sufficient
4 severity (including severe pain) such that a prudent
5 layperson, who possesses an average knowledge of health and
6 medicine, could reasonably expect the absence of immediate
7 medical attention to result in:
8 (1) placing the health of the individual (or, with
9 respect to a pregnant woman, the health of the woman or
10 her unborn child) in serious jeopardy;
11 (2) serious impairment to bodily functions; or
12 (3) serious dysfunction of any bodily organ or
13 part. "Emergency" means an accidental bodily injury or
14 emergency medical condition which reasonably requires the
15 beneficiary or insured to seek immediate medical care
16 under circumstances or at locations which reasonably
17 preclude the beneficiary or insured from obtaining needed
18 medical care from a preferred provider.
19 (Source: P.A. 88-400.)
20 (215 ILCS 5/370s new)
21 Sec. 370s. Managed Care Reform and Patient Rights Act.
22 All administrators shall comply with Sections 55 and 85 of
23 the Managed Care Reform and Patient Rights Act.
24 (215 ILCS 5/511.118 new)
25 Sec. 511.118. Managed Care Reform and Patient Rights
26 Act. All administrators are subject to the provisions of
27 Sections 55 and 85 of the Managed Care Reform and Patient
28 Rights Act.
29 Section 225. The Comprehensive Health Insurance Plan Act
30 is amended by adding Section 8.6 as follows:
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1 (215 ILCS 105/8.6 new)
2 Sec. 8.6. Managed Care Reform and Patient Rights Act.
3 The plan is subject to the provisions of the Managed Care
4 Reform and Patient Rights Act.
5 Section 230. The Health Care Purchasing Group Act is
6 amended by changing Sections 15 and 20 as follows:
7 (215 ILCS 123/15)
8 Sec. 15. Health care purchasing groups; membership;
9 formation.
10 (a) An HPG may be an organization formed by 2 or more
11 employers with no more than 500 covered employees each 2,500
12 covered individuals, an HPG sponsor or a risk-bearer for
13 purposes of contracting for health insurance under this Act
14 to cover employees and dependents of HPG members. An HPG
15 shall not be prevented from supplementing health insurance
16 coverage purchased under this Act by contracting for services
17 from entities licensed and authorized in Illinois to provide
18 those services under the Dental Service Plan Act, the Limited
19 Health Service Organization Act, or Voluntary Health Services
20 Plans Act. An HPG may be a separate legal entity or simply a
21 group of 2 or more employers with no more than 500 covered
22 employees each 2,500 covered individuals aggregated under
23 this Act by an HPG sponsor or risk-bearer for insurance
24 purposes. There shall be no limit as to the number of HPGs
25 that may operate in any geographic area of the State. No
26 insurance risk may be borne or retained by the HPG. All
27 health insurance contracts issued to the HPG must be
28 delivered or issued for delivery in Illinois.
29 (b) Members of an HPG must be Illinois domiciled
30 employers, except that an employer domiciled elsewhere may
31 become a member of an Illinois HPG for the sole purpose of
32 insuring its employees whose place of employment is located
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1 within this State. HPG membership may include employers
2 having no more than 500 covered employees each 2,500 covered
3 individuals.
4 (c) If an HPG is formed by any 2 or more employers with
5 no more than 500 covered employees each 2,500 covered
6 individuals, it is authorized to negotiate, solicit, market,
7 obtain proposals for, and enter into group or master health
8 insurance contracts on behalf of its members and their
9 employees and employee dependents so long as it meets all of
10 the following requirements:
11 (1) The HPG must be an organization having the
12 legal capacity to contract and having its legal situs in
13 Illinois.
14 (2) The principal persons responsible for the
15 conduct of the HPG must perform their HPG related
16 functions in Illinois.
17 (3) No HPG may collect premium in its name or hold
18 or manage premium or claim fund accounts unless duly
19 licensed and qualified as a managing general agent
20 pursuant to Section 141a of the Illinois Insurance Code
21 or a third party administrator pursuant to Section
22 511.105 of the Illinois Insurance Code.
23 (4) If the HPG gives an offer, application, notice,
24 or proposal of insurance to an employer, it must disclose
25 to that employer the total cost of the insurance. Dues,
26 fees, or charges to be paid to the HPG, HPG sponsor, or
27 any other entity as a condition to purchasing the
28 insurance must be itemized. The HPG shall also disclose
29 to its members the amount of any dividends, experience
30 refunds, or other such payments it receives from the
31 risk-bearer.
32 (5) An HPG must register with the Director before
33 entering into a group or master health insurance contract
34 on behalf of its members and must renew the registration
-67- LRB9102764JSpcam01
1 annually on forms and at times prescribed by the Director
2 in rules specifying, at minimum, (i) the identity of the
3 officers and directors, trustees, or attorney-in-fact of
4 the HPG; (ii) a certification that those persons have not
5 been convicted of any felony offense involving a breach
6 of fiduciary duty or improper manipulation of accounts;
7 and (iii) the number of employer members then enrolled in
8 the HPG, together with any other information that may be
9 needed to carry out the purposes of this Act.
10 (6) At the time of initial registration and each
11 renewal thereof an HPG shall pay a fee of $100 to the
12 Director.
13 (d) If an HPG is formed by an HPG sponsor or risk-bearer
14 and the HPG performs no marketing, negotiation, solicitation,
15 or proposing of insurance to HPG members, exclusive of
16 ministerial acts performed by individual employers to service
17 their own employees, then a group or master health insurance
18 contract may be issued in the name of the HPG and held by an
19 HPG sponsor, risk-bearer, or designated employer member
20 within the State. In these cases the HPG requirements
21 specified in subsection (c) shall not be applicable, however:
22 (1) the group or master health insurance contract
23 must contain a provision permitting the contract to be
24 enforced through legal action initiated by any employer
25 member or by an employee of an HPG member who has paid
26 premium for the coverage provided;
27 (2) the group or master health insurance contract
28 must be available for inspection and copying by any HPG
29 member, employee, or insured dependent at a designated
30 location within the State at all normal business hours;
31 and
32 (3) any information concerning HPG membership
33 required by rule under item (5) of subsection (c) must be
34 provided by the HPG sponsor in its registration and
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1 renewal forms or by the risk-bearer in its annual
2 reports.
3 (Source: P.A. 90-337, eff. 1-1-98; 90-655, eff. 7-30-98.)
4 (215 ILCS 123/20)
5 Sec. 20. HPG sponsors. Except as provided by Sections 15
6 and 25 of this Act, only a corporation authorized by the
7 Secretary of State to transact business in Illinois may
8 sponsor one or more HPGs with no more than 100,000 10,000
9 covered individuals by negotiating, soliciting, or servicing
10 health insurance contracts for HPGs and their members. Such a
11 corporation may assert and maintain authority to act as an
12 HPG sponsor by complying with all of the following
13 requirements:
14 (1) The principal officers and directors
15 responsible for the conduct of the HPG sponsor must
16 perform their HPG sponsor related functions in Illinois.
17 (2) No insurance risk may be borne or retained by
18 the HPG sponsor; all health insurance contracts issued to
19 HPGs through the HPG sponsor must be delivered in
20 Illinois.
21 (3) No HPG sponsor may collect premium in its name
22 or hold or manage premium or claim fund accounts unless
23 duly qualified and licensed as a managing general agent
24 pursuant to Section 141a of the Illinois Insurance Code
25 or as a third party administrator pursuant to Section
26 511.105 of the Illinois Insurance Code.
27 (4) If the HPG gives an offer, application, notice,
28 or proposal of insurance to an employer, it must disclose
29 the total cost of the insurance. Dues, fees, or charges
30 to be paid to the HPG, HPG sponsor, or any other entity
31 as a condition to purchasing the insurance must be
32 itemized. The HPG shall also disclose to its members the
33 amount of any dividends, experience refunds, or other
-69- LRB9102764JSpcam01
1 such payments it receives from the risk-bearer.
2 (5) An HPG sponsor must register with the Director
3 before negotiating or soliciting any group or master
4 health insurance contract for any HPG and must renew the
5 registration annually on forms and at times prescribed by
6 the Director in rules specifying, at minimum, (i) the
7 identity of the officers and directors of the HPG sponsor
8 corporation; (ii) a certification that those persons have
9 not been convicted of any felony offense involving a
10 breach of fiduciary duty or improper manipulation of
11 accounts; (iii) the number of employer members then
12 enrolled in each HPG sponsored; (iv) the date on which
13 each HPG was issued a group or master health insurance
14 contract, if any; and (v) the date on which each such
15 contract, if any, was terminated.
16 (6) At the time of initial registration and each
17 renewal thereof an HPG sponsor shall pay a fee of $100 to
18 the Director.
19 (Source: P.A. 90-337, eff. 1-1-98.)
20 Section 235. The Health Maintenance Organization Act is
21 amended by changing Sections 2-2 and 6-7 and adding Section
22 5-3.6 as follows:
23 (215 ILCS 125/2-2) (from Ch. 111 1/2, par. 1404)
24 Sec. 2-2. Determination by Director; Health Maintenance
25 Advisory Board.
26 (a) Upon receipt of an application for issuance of a
27 certificate of authority, the Director shall transmit copies
28 of such application and accompanying documents to the
29 Director of the Illinois Department of Public Health. The
30 Director of the Department of Public Health shall then
31 determine whether the applicant for certificate of authority,
32 with respect to health care services to be furnished: (1) has
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1 demonstrated the willingness and potential ability to assure
2 that such health care service will be provided in a manner to
3 insure both availability and accessibility of adequate
4 personnel and facilities and in a manner enhancing
5 availability, accessibility, and continuity of service; and
6 (2) has arrangements, established in accordance with
7 regulations promulgated by the Department of Public Health
8 for an ongoing quality of health care assurance program
9 concerning health care processes and outcomes. Upon
10 investigation, the Director of the Department of Public
11 Health shall certify to the Director whether the proposed
12 Health Maintenance Organization meets the requirements of
13 this subsection (a). If the Director of the Department of
14 Public Health certifies that the Health Maintenance
15 Organization does not meet such requirements, he shall
16 specify in what respect it is deficient.
17 There is created in the Department of Public Health a
18 Health Maintenance Advisory Board composed of 11 members.
19 Nine 9 members shall who have practiced in the health field,
20 4 of which shall have been or are currently affiliated with a
21 Health Maintenance Organization. Two of the members shall be
22 members of the general public, one of whom is over 50 years
23 of age. Each member shall be appointed by the Director of
24 the Department of Public Health and serve at the pleasure of
25 that Director and shall receive no compensation for services
26 rendered other than reimbursement for expenses. Six Five
27 members of the Board shall constitute a quorum. A vacancy in
28 the membership of the Advisory Board shall not impair the
29 right of a quorum to exercise all rights and perform all
30 duties of the Board. The Health Maintenance Advisory Board
31 has the power to review and comment on proposed rules and
32 regulations to be promulgated by the Director of the
33 Department of Public Health within 30 days after those
34 proposed rules and regulations have been submitted to the
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1 Advisory Board.
2 (b) Issuance of a certificate of authority shall be
3 granted if the following conditions are met:
4 (1) the requirements of subsection (c) of Section
5 2-1 have been fulfilled;
6 (2) the persons responsible for the conduct of the
7 affairs of the applicant are competent, trustworthy, and
8 possess good reputations, and have had appropriate
9 experience, training or education;
10 (3) the Director of the Department of Public Health
11 certifies that the Health Maintenance Organization's
12 proposed plan of operation meets the requirements of this
13 Act;
14 (4) the Health Care Plan furnishes basic health
15 care services on a prepaid basis, through insurance or
16 otherwise, except to the extent of reasonable
17 requirements for co-payments or deductibles as authorized
18 by this Act;
19 (5) the Health Maintenance Organization is
20 financially responsible and may reasonably be expected to
21 meet its obligations to enrollees and prospective
22 enrollees; in making this determination, the Director
23 shall consider:
24 (A) the financial soundness of the applicant's
25 arrangements for health services and the minimum
26 standard rates, co-payments and other patient
27 charges used in connection therewith;
28 (B) the adequacy of working capital, other
29 sources of funding, and provisions for
30 contingencies; and
31 (C) that no certificate of authority shall be
32 issued if the initial minimum net worth of the
33 applicant is less than $2,000,000. The initial net
34 worth shall be provided in cash and securities in
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1 combination and form acceptable to the Director;
2 (6) the agreements with providers for the provision
3 of health services contain the provisions required by
4 Section 2-8 of this Act; and
5 (7) any deficiencies identified by the Director
6 have been corrected.
7 (Source: P.A. 86-620; 86-1475.)
8 (215 ILCS 125/5-3.6 new)
9 Sec. 5-3.6. Managed Care Reform and Patient Rights Act.
10 Health maintenance organizations are subject to the
11 provisions of the Managed Care Reform and Patient Rights Act.
12
13 (215 ILCS 125/6-7) (from Ch. 111 1/2, par. 1418.7)
14 Sec. 6-7. Board of Directors. The board of directors of
15 the Association consists of not less than 7 5 nor more than
16 11 9 members serving terms as established in the plan of
17 operation. The members of the board are to be selected by
18 member organizations subject to the approval of the Director,
19 except the Director shall name 2 members who are current
20 enrollees, one of whom is over 50 years of age. Vacancies on
21 the board must be filled for the remaining period of the term
22 in the manner described in the plan of operation. To select
23 the initial board of directors, and initially organize the
24 Association, the Director must give notice to all member
25 organizations of the time and place of the organizational
26 meeting. In determining voting rights at the organizational
27 meeting each member organization is entitled to one vote in
28 person or by proxy. If the board of directors is not
29 selected at the organizational meeting, the Director may
30 appoint the initial members.
31 In approving selections or in appointing members to the
32 board, the Director must consider, whether all member
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1 organizations are fairly represented.
2 Members of the board may be reimbursed from the assets of
3 the Association for expenses incurred by them as members of
4 the board of directors but members of the board may not
5 otherwise be compensated by the Association for their
6 services.
7 (Source: P.A. 85-20.)
8 Section 240. The Limited Health Service Organization Act
9 is amended by adding Section 4002.6 as follows:
10 (215 ILCS 130/4002.6 new)
11 Sec. 4002.6. Managed Care Reform and Patient Rights Act.
12 Except for health care plans offering only dental services or
13 only vision services, limited health service organizations
14 are subject to the provisions of the Managed Care Reform and
15 Patient Rights Act.
16 Section 245. The Voluntary Health Services Plans Act is
17 amended by adding Section 15.30 as follows:
18 (215 ILCS 165/15.30 new)
19 Sec. 15.30. Managed Care Reform and Patient Rights Act.
20 A health service plan corporation is subject to the
21 provisions of the Managed Care Reform and Patient Rights Act.
22
23 Section 250. The Illinois Public Aid Code is amended by
24 adding Section 5-16.12 as follows:
25 (305 ILCS 5/5-16.12 new)
26 Sec. 5-16.12. Managed Care Reform and Patient Rights
27 Act. The medical assistance program and other programs
28 administered by the Department are subject to the provisions
-74- LRB9102764JSpcam01
1 of the Managed Care Reform and Patient Rights Act. The
2 Department may adopt rules to implement those provisions.
3 These rules shall require compliance with that Act in the
4 medical assistance managed care programs and other programs
5 administered by the Department. The medical assistance
6 fee-for-service program is not subject to the provisions of
7 the Managed Care Reform and Patient Rights Act.
8 Nothing in the Managed Care Reform and Patient Rights Act
9 shall be construed to mean that the Department is a health
10 care plan as defined in that Act simply because the
11 Department enters into contractual relationships with health
12 care plans.
13 Section 299. Effective date. This Section and Section
14 200 of this Act take effect upon becoming law; Sections 25
15 and 85 take effect July 1, 2000; and the remaining Sections
16 of this Act take effect January 1, 2000.".