Bill Text: IL HB1424 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Provides that no company may determine the premium rate or underwriting through a method that is in any way based upon the gender of any person. Amends the Health Maintenance Organization Act to provide that health maintenance organizations shall be subject to the provisions of the Illinois Insurance Code prohibiting gender rating. Effective immediately.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Failed) 2013-01-08 - Session Sine Die [HB1424 Detail]

Download: Illinois-2011-HB1424-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 HB1424 Introduced , by Rep. Sara Feigenholtz SYNOPSIS AS INTRODUCED:
215 ILCS 5/364a new
215 ILCS 125/5-3 from Ch. 111 1/2, par. 1411.2
Amends the Illinois Insurance Code. Provides that no company may determine the premium rate or underwriting through a method that is in any way based upon the gender of any person. Amends the Health Maintenance Organization Act to provide that health maintenance organizations shall be subject to the provisions of the Illinois Insurance Code prohibiting gender rating. Effective immediately.
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A BILL FOR
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AN ACT concerning insurance.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Illinois Insurance Code is amended by adding
Section 364a as follows:
(215 ILCS 5/364a new)
Sec. 364a. Gender rating prohibited. No company, in any
individual or group policy of accident and health insurance
issued in this State, may determine the premium rate or any
other underwriting decision, including initial issuance,
through a method that is in any way based upon the gender of
any person covered or to be covered under the policy.
Section 10. The Health Maintenance Organization Act is
amended by changing Section 5-3 as follows:
(215 ILCS 125/5-3) (from Ch. 111 1/2, par. 1411.2)
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, 356g.5-1, 356m, 356v, 356w,
356x, 356y, 356z.2, 356z.4, 356z.5, 356z.6, 356z.8, 356z.9,

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356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17,
356z.18, 364a, 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
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

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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;
(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

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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
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

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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
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

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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.
(g) Rulemaking authority to implement Public Act 95-1045,
if any, is conditioned on the rules being adopted in accordance
with all provisions of the Illinois Administrative Procedure
Act and all rules and procedures of the Joint Committee on
Administrative Rules; any purported rule not so adopted, for
whatever reason, is unauthorized.
(Source: P.A. 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; 95-1045, eff. 3-27-09; 95-1049, eff.
1-1-10; 96-328, eff. 8-11-09; 96-639, eff. 1-1-10; 96-833, eff.
6-1-10; 96-1000, eff. 7-2-10.)
Section 99. Effective date. This Act takes effect upon
becoming law.