Bill Text: IL HB0927 | 2009-2010 | 96th General Assembly | Enrolled

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Bill Title: Amends the State Employees Group Insurance Act of 1971, the Illinois Insurance Code, and the Health Maintenance Organization Act. Provides that a policy or plan that provides coverage for hospital or medical treatment on an expense-incurred basis, may offer wellness coverage that allows for a reward, a health spending account contribution, a reduction in premiums or reduced medical, prescription drug or equipment copayments, coinsurance, or deductibles, or a combination of these incentives. Provides that "wellness coverage" means health care coverage with the primary purpose to engage and motivate the insured or enrollee through: incentives; provision of health education, counseling, and self-management skills; identification of modifiable health risks; and other activities to influence health behavior changes. Provides that the insured or enrollee may be required to provide evidence of participation in a program, or demonstrative compliance with treatment recommendations as determined by the health insurer or managed care plan. Sets forth requirements concerning (1) opportunities for participants to qualify for incentives, (2) alternatives for participants to satisfy applicable wellness program standards where it is unreasonably difficult due to the participant's medical condition, and (3) the ratio of the total incentive monetary amount to the cost of employee-only coverage. Imposes conditions on any rulemaking authority. Makes other changes. Effective January 1, 2010.

Sponsorship: Bipartisan Bill

Status: (Vetoed) 2009-10-21 - Bill Dead - No Positive Action Taken - Amendatory Veto [HB0927 Detail]

Download: Illinois-2009-HB0927-Enrolled.html

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AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The State Employees Group Insurance Act of 1971
is amended by changing Section 6.11 as follows:
(5 ILCS 375/6.11)
(Text of Section before amendment by P.A. 95-958)
Sec. 6.11. Required health benefits; Illinois Insurance
Code requirements. The program of health benefits shall provide
the post-mastectomy care benefits required to be covered by a
policy of accident and health insurance under Section 356t of
the Illinois Insurance Code. The program of health benefits
shall provide the coverage required under Sections 356g.5,
356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10,
356z.13 356z.11, and 356z.14, and 356z.15 of the Illinois
Insurance Code. The program of health benefits must comply with
Section 155.37 of the Illinois Insurance Code.
(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-978, eff.
1-1-09; 95-1005, eff. 12-12-08; revised 12-15-08.)
(Text of Section after amendment by P.A. 95-958)
Sec. 6.11. Required health benefits; Illinois Insurance

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Code requirements. The program of health benefits shall provide
the post-mastectomy care benefits required to be covered by a
policy of accident and health insurance under Section 356t of
the Illinois Insurance Code. The program of health benefits
shall provide the coverage required under Sections 356g.5,
356u, 356w, 356x, 356z.2, 356z.4, 356z.6, 356z.9, 356z.10,
356z.11, and 356z.12, 356z.13 356z.11, and 356z.14, and 356z.15
of the Illinois Insurance Code. The program of health benefits
must comply with Section 155.37 of the Illinois Insurance Code.
(Source: P.A. 95-189, eff. 8-16-07; 95-422, eff. 8-24-07;
95-520, eff. 8-28-07; 95-876, eff. 8-21-08; 95-958, eff.
6-1-09; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised
12-15-08.)
Section 10. The Illinois Insurance Code is amended by
adding Section 356z.15 as follows:
(215 ILCS 5/356z.15 new)
Sec. 356z.15. Wellness coverage.
(a) A group or individual policy of accident and health
insurance or managed care plan amended, delivered, issued, or
renewed after the effective date of this amendatory Act of the
96th General Assembly that provides coverage for hospital or
medical treatment on an expense incurred basis may offer a
reasonably designed program for wellness coverage that allows
for a reward, a contribution, a reduction in premiums or

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reduced medical, prescription drug, or equipment copayments,
coinsurance, or deductibles, or a combination of these
incentives, for participation in any health behavior wellness,
maintenance, or improvement program approved or offered by the
insurer or managed care plan. The insured or enrollee may be
required to provide evidence of participation in a program.
Individuals unable to participate in these incentives due to an
adverse health factor shall not be penalized based upon an
adverse health status.
(b) For purposes of this Section, "wellness coverage" means
health care coverage with the primary purpose to engage and
motivate the insured or enrollee through: incentives;
provision of health education, counseling, and self-management
skills; identification of modifiable health risks; and other
activities to influence health behavior changes.
For the purposes of this Section, "reasonably designed
program" means a program of wellness coverage that has a
reasonable chance of improving health or preventing disease; is
not overly burdensome; does not discriminate based upon factors
of health; and is not otherwise contrary to law.
(c) Incentives as outlined in this Section are specific and
unique to the offering of wellness coverage and have no
application to any other required or optional health care
benefit.
(d) Such wellness coverage must satisfy the requirements
for an exception from the general prohibition against

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discrimination based on a health factor under the federal
Health Insurance Portability and Accountability Act of 1996
(P.L. 104-191; 110 Stat. 1936), including any federal
regulations that are adopted pursuant to that Act.
(e) A plan offering wellness coverage must do the
following:
(i) give participants the opportunity to qualify for
offered incentives at least once a year;
(ii) allow a reasonable alternative to any individual
for whom it is unreasonably difficult, due to a medical
condition, to satisfy otherwise applicable wellness
program standards. Plans may seek physician verification
that health factors make it unreasonably difficult or
medically inadvisable for the participant to satisfy the
standards; and
(iii) not provide a total incentive that exceeds 20% of
the cost of employee-only coverage. The cost of
employee-only coverage includes both employer and employee
contributions. For plans offering family coverage, the 20%
limitation applies to cost of family coverage and applies
to the entire family.
(f) A reward, contribution, or reduction established under
this Section and included in the policy or certificate does not
violate Section 151 of this Code.
Section 15. The Health Maintenance Organization Act is

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amended by changing Section 5-3 as follows:
(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
(Text of Section before amendment by P.A. 95-958)
Sec. 5-3. Insurance Code provisions.
(a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10,
356z.13 356z.11, 356z.14, 356z.15, 364.01, 367.2, 367.2-5,
367i, 368a, 368b, 368c, 368d, 368e, 370c, 401, 401.1, 402, 403,
403A, 408, 408.2, 409, 412, 444, and 444.1, paragraph (c) of
subsection (2) of Section 367, and Articles IIA, VIII 1/2, XII,
XII 1/2, XIII, XIII 1/2, XXV, and XXVI of the Illinois
Insurance Code.
(b) For purposes of the Illinois Insurance Code, except for
Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
Maintenance Organizations in the following categories are
deemed to be "domestic companies":
(1) a corporation authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act;
(2) a corporation organized under the laws of this
State; or
(3) a corporation organized under the laws of another
state, 30% or more of the enrollees of which are residents

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of this State, except a corporation subject to
substantially the same requirements in its state of
organization as is a "domestic company" under Article VIII
1/2 of the Illinois Insurance Code.
(c) In considering the merger, consolidation, or other
acquisition of control of a Health Maintenance Organization
pursuant to Article VIII 1/2 of the Illinois Insurance Code,
(1) the Director shall give primary consideration to
the continuation of benefits to enrollees and the financial
conditions of the acquired Health Maintenance Organization
after the merger, consolidation, or other acquisition of
control takes effect;
(2)(i) the criteria specified in subsection (1)(b) of
Section 131.8 of the Illinois Insurance Code shall not
apply and (ii) the Director, in making his determination
with respect to the merger, consolidation, or other
acquisition of control, need not take into account the
effect on competition of the merger, consolidation, or
other acquisition of control;
(3) the Director shall have the power to require the
following information:
(A) certification by an independent actuary of the
adequacy of the reserves of the Health Maintenance
Organization sought to be acquired;
(B) pro forma financial statements reflecting the
combined balance sheets of the acquiring company and

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the Health Maintenance Organization sought to be
acquired as of the end of the preceding year and as of
a date 90 days prior to the acquisition, as well as pro
forma financial statements reflecting projected
combined operation for a period of 2 years;
(C) a pro forma business plan detailing an
acquiring party's plans with respect to the operation
of the Health Maintenance Organization sought to be
acquired for a period of not less than 3 years; and
(D) such other information as the Director shall
require.
(d) The provisions of Article VIII 1/2 of the Illinois
Insurance Code and this Section 5-3 shall apply to the sale by
any health maintenance organization of greater than 10% of its
enrollee population (including without limitation the health
maintenance organization's right, title, and interest in and to
its health care certificates).
(e) In considering any management contract or service
agreement subject to Section 141.1 of the Illinois Insurance
Code, the Director (i) shall, in addition to the criteria
specified in Section 141.2 of the Illinois Insurance Code, take
into account the effect of the management contract or service
agreement on the continuation of benefits to enrollees and the
financial condition of the health maintenance organization to
be managed or serviced, and (ii) need not take into account the
effect of the management contract or service agreement on

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competition.
(f) Except for small employer groups as defined in the
Small Employer Rating, Renewability and Portability Health
Insurance Act and except for medicare supplement policies as
defined in Section 363 of the Illinois Insurance Code, a Health
Maintenance Organization may by contract agree with a group or
other enrollment unit to effect refunds or charge additional
premiums under the following terms and conditions:
(i) the amount of, and other terms and conditions with
respect to, the refund or additional premium are set forth
in the group or enrollment unit contract agreed in advance
of the period for which a refund is to be paid or
additional premium is to be charged (which period shall not
be less than one year); and
(ii) the amount of the refund or additional premium
shall not exceed 20% of the Health Maintenance
Organization's profitable or unprofitable experience with
respect to the group or other enrollment unit for the
period (and, for purposes of a refund or additional
premium, the profitable or unprofitable experience shall
be calculated taking into account a pro rata share of the
Health Maintenance Organization's administrative and
marketing expenses, but shall not include any refund to be
made or additional premium to be paid pursuant to this
subsection (f)). The Health Maintenance Organization and
the group or enrollment unit may agree that the profitable

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or unprofitable experience may be calculated taking into
account the refund period and the immediately preceding 2
plan years.
The Health Maintenance Organization shall include a
statement in the evidence of coverage issued to each enrollee
describing the possibility of a refund or additional premium,
and upon request of any group or enrollment unit, provide to
the group or enrollment unit a description of the method used
to calculate (1) the Health Maintenance Organization's
profitable experience with respect to the group or enrollment
unit and the resulting refund to the group or enrollment unit
or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and the
resulting additional premium to be paid by the group or
enrollment unit.
In no event shall the Illinois Health Maintenance
Organization Guaranty Association be liable to pay any
contractual obligation of an insolvent organization to pay any
refund authorized under this Section.
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
8-21-08; 95-978, eff. 1-1-09; 95-1005, eff. 12-12-08; revised
12-15-08.)
(Text of Section after amendment by P.A. 95-958)
Sec. 5-3. Insurance Code provisions.

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(a) Health Maintenance Organizations shall be subject to
the provisions of Sections 133, 134, 137, 140, 141.1, 141.2,
141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154, 154.5,
154.6, 154.7, 154.8, 155.04, 355.2, 356m, 356v, 356w, 356x,
356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10,
356z.11, 356z.12, 356z.13 356z.11, 356z.14, 356z.15, 364.01,
367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c, 401,
401.1, 402, 403, 403A, 408, 408.2, 409, 412, 444, and 444.1,
paragraph (c) of subsection (2) of Section 367, and Articles
IIA, VIII 1/2, XII, XII 1/2, XIII, XIII 1/2, XXV, and XXVI of
the Illinois Insurance Code.
(b) For purposes of the Illinois Insurance Code, except for
Sections 444 and 444.1 and Articles XIII and XIII 1/2, Health
Maintenance Organizations in the following categories are
deemed to be "domestic companies":
(1) a corporation authorized under the Dental Service
Plan Act or the Voluntary Health Services Plans Act;
(2) a corporation organized under the laws of this
State; or
(3) a corporation organized under the laws of another
state, 30% or more of the enrollees of which are residents
of this State, except a corporation subject to
substantially the same requirements in its state of
organization as is a "domestic company" under Article VIII
1/2 of the Illinois Insurance Code.
(c) In considering the merger, consolidation, or other

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acquisition of control of a Health Maintenance Organization
pursuant to Article VIII 1/2 of the Illinois Insurance Code,
(1) the Director shall give primary consideration to
the continuation of benefits to enrollees and the financial
conditions of the acquired Health Maintenance Organization
after the merger, consolidation, or other acquisition of
control takes effect;
(2)(i) the criteria specified in subsection (1)(b) of
Section 131.8 of the Illinois Insurance Code shall not
apply and (ii) the Director, in making his determination
with respect to the merger, consolidation, or other
acquisition of control, need not take into account the
effect on competition of the merger, consolidation, or
other acquisition of control;
(3) the Director shall have the power to require the
following information:
(A) certification by an independent actuary of the
adequacy of the reserves of the Health Maintenance
Organization sought to be acquired;
(B) pro forma financial statements reflecting the
combined balance sheets of the acquiring company and
the Health Maintenance Organization sought to be
acquired as of the end of the preceding year and as of
a date 90 days prior to the acquisition, as well as pro
forma financial statements reflecting projected
combined operation for a period of 2 years;

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(C) a pro forma business plan detailing an
acquiring party's plans with respect to the operation
of the Health Maintenance Organization sought to be
acquired for a period of not less than 3 years; and
(D) such other information as the Director shall
require.
(d) The provisions of Article VIII 1/2 of the Illinois
Insurance Code and this Section 5-3 shall apply to the sale by
any health maintenance organization of greater than 10% of its
enrollee population (including without limitation the health
maintenance organization's right, title, and interest in and to
its health care certificates).
(e) In considering any management contract or service
agreement subject to Section 141.1 of the Illinois Insurance
Code, the Director (i) shall, in addition to the criteria
specified in Section 141.2 of the Illinois Insurance Code, take
into account the effect of the management contract or service
agreement on the continuation of benefits to enrollees and the
financial condition of the health maintenance organization to
be managed or serviced, and (ii) need not take into account the
effect of the management contract or service agreement on
competition.
(f) Except for small employer groups as defined in the
Small Employer Rating, Renewability and Portability Health
Insurance Act and except for medicare supplement policies as
defined in Section 363 of the Illinois Insurance Code, a Health

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Maintenance Organization may by contract agree with a group or
other enrollment unit to effect refunds or charge additional
premiums under the following terms and conditions:
(i) the amount of, and other terms and conditions with
respect to, the refund or additional premium are set forth
in the group or enrollment unit contract agreed in advance
of the period for which a refund is to be paid or
additional premium is to be charged (which period shall not
be less than one year); and
(ii) the amount of the refund or additional premium
shall not exceed 20% of the Health Maintenance
Organization's profitable or unprofitable experience with
respect to the group or other enrollment unit for the
period (and, for purposes of a refund or additional
premium, the profitable or unprofitable experience shall
be calculated taking into account a pro rata share of the
Health Maintenance Organization's administrative and
marketing expenses, but shall not include any refund to be
made or additional premium to be paid pursuant to this
subsection (f)). The Health Maintenance Organization and
the group or enrollment unit may agree that the profitable
or unprofitable experience may be calculated taking into
account the refund period and the immediately preceding 2
plan years.
The Health Maintenance Organization shall include a
statement in the evidence of coverage issued to each enrollee

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describing the possibility of a refund or additional premium,
and upon request of any group or enrollment unit, provide to
the group or enrollment unit a description of the method used
to calculate (1) the Health Maintenance Organization's
profitable experience with respect to the group or enrollment
unit and the resulting refund to the group or enrollment unit
or (2) the Health Maintenance Organization's unprofitable
experience with respect to the group or enrollment unit and the
resulting additional premium to be paid by the group or
enrollment unit.
In no event shall the Illinois Health Maintenance
Organization Guaranty Association be liable to pay any
contractual obligation of an insolvent organization to pay any
refund authorized under this Section.
(Source: P.A. 94-906, eff. 1-1-07; 94-1076, eff. 12-29-06;
95-422, eff. 8-24-07; 95-520, eff. 8-28-07; 95-876, eff.
8-21-08; 95-958, eff. 6-1-09; 95-978, eff. 1-1-09; 95-1005,
eff. 12-12-08; revised 12-15-08.)
Section 95. No acceleration or delay. Where this Act makes
changes in a statute that is represented in this Act by text
that is not yet or no longer in effect (for example, a Section
represented by multiple versions), the use of that text does
not accelerate or delay the taking effect of (i) the changes
made by this Act or (ii) provisions derived from any other
Public Act.

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