Bill Text: IL HB5258 | 2023-2024 | 103rd General Assembly | Engrossed

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Bill Title: Reinserts the provisions of the introduced bill with the following changes. Removes the definition of "dependent". Amends the Health Maintenance Organization Act and the Limited Health Service Organization Act to provide that health maintenance organizations and limited health service organizations are subject to the provisions of the Illinois Insurance Code added by the amendatory Act.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Engrossed) 2024-04-24 - Referred to Assignments [HB5258 Detail]

Download: Illinois-2023-HB5258-Engrossed.html

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HB5258 Engrossed LRB103 38992 RPS 69129 b
AN ACT concerning regulation.
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 356z.71 as follows:
(215 ILCS 5/356z.71 new)
Sec. 356z.71. Insurance coverage for dependent parents.
(a) A group or individual policy of accident and health
insurance issued, amended, delivered, or renewed after January
1, 2026 that provides dependent coverage shall make that
dependent coverage available to the parent or stepparent of
the insured if the parent or stepparent meets the definition
of a qualifying relative under 26 U.S.C. 152(d) and lives or
resides within the accident and health insurance policy's
service area.
(b) This Section does not apply to specialized health care
service plans, Medicare supplement insurance, hospital-only
policies, accident-only policies, or specified disease
insurance policies that reimburse for hospital, medical, or
surgical expenses.
Section 10. The Health Maintenance Organization Act is
amended by changing Section 5-3 as follows:

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(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, 136, 137, 139, 140,
141.1, 141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153,
154, 154.5, 154.6, 154.7, 154.8, 155.04, 155.22a, 155.49,
355.2, 355.3, 355b, 355c, 356f, 356g.5-1, 356m, 356q, 356v,
356w, 356x, 356z.2, 356z.3a, 356z.4, 356z.4a, 356z.5, 356z.6,
356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14,
356z.15, 356z.17, 356z.18, 356z.19, 356z.20, 356z.21, 356z.22,
356z.23, 356z.24, 356z.25, 356z.26, 356z.28, 356z.29, 356z.30,
356z.30a, 356z.31, 356z.32, 356z.33, 356z.34, 356z.35,
356z.36, 356z.37, 356z.38, 356z.39, 356z.40, 356z.41, 356z.44,
356z.45, 356z.46, 356z.47, 356z.48, 356z.49, 356z.50, 356z.51,
356z.53, 356z.54, 356z.55, 356z.56, 356z.57, 356z.58, 356z.59,
356z.60, 356z.61, 356z.62, 356z.64, 356z.65, 356z.67, 356z.68,
356z.71, 364, 364.01, 364.3, 367.2, 367.2-5, 367i, 368a, 368b,
368c, 368d, 368e, 370c, 370c.1, 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, XXVI, and XXXIIB 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

HB5258 Engrossed - 3 - LRB103 38992 RPS 69129 b
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 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;

HB5258 Engrossed - 4 - LRB103 38992 RPS 69129 b
(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
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

HB5258 Engrossed - 5 - LRB103 38992 RPS 69129 b
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
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

HB5258 Engrossed - 6 - LRB103 38992 RPS 69129 b
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
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.

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(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. 102-30, eff. 1-1-22; 102-34, eff. 6-25-21;
102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-443, eff.
1-1-22; 102-589, eff. 1-1-22; 102-642, eff. 1-1-22; 102-665,
eff. 10-8-21; 102-731, eff. 1-1-23; 102-775, eff. 5-13-22;
102-804, eff. 1-1-23; 102-813, eff. 5-13-22; 102-816, eff.
1-1-23; 102-860, eff. 1-1-23; 102-901, eff. 7-1-22; 102-1093,
eff. 1-1-23; 102-1117, eff. 1-13-23; 103-84, eff. 1-1-24;
103-91, eff. 1-1-24; 103-123, eff. 1-1-24; 103-154, eff.
6-30-23; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445,
eff. 1-1-24; 103-551, eff. 8-11-23; revised 8-29-23.)
Section 15. The Limited Health Service Organization Act is
amended by changing Section 4003 as follows:
(215 ILCS 130/4003) (from Ch. 73, par. 1504-3)
Sec. 4003. Illinois Insurance Code provisions. Limited
health service organizations shall be subject to the
provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,
141.2, 141.3, 143, 143c, 147, 148, 149, 151, 152, 153, 154,
154.5, 154.6, 154.7, 154.8, 155.04, 155.37, 155.49, 355.2,

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355.3, 355b, 356q, 356v, 356z.4, 356z.4a, 356z.10, 356z.21,
356z.22, 356z.25, 356z.26, 356z.29, 356z.30a, 356z.32,
356z.33, 356z.41, 356z.46, 356z.47, 356z.51, 356z.53, 356z.54,
356z.57, 356z.59, 356z.61, 356z.64, 356z.67, 356z.68, 356z.71,
364.3, 368a, 401, 401.1, 402, 403, 403A, 408, 408.2, 409, 412,
444, and 444.1 and Articles IIA, VIII 1/2, XII, XII 1/2, XIII,
XIII 1/2, XXV, and XXVI of the Illinois Insurance Code.
Nothing in this Section shall require a limited health care
plan to cover any service that is not a limited health service.
For purposes of the Illinois Insurance Code, except for
Sections 444 and 444.1 and Articles XIII and XIII 1/2, limited
health service organizations in the following categories are
deemed to be domestic companies:
(1) a corporation under the laws of this State; or
(2) a corporation organized under the laws of another
state, 30% or more of the enrollees of which are residents
of this State, except a corporation subject to
substantially the same requirements in its state of
organization as is a domestic company under Article VIII
1/2 of the Illinois Insurance Code.
(Source: P.A. 102-30, eff. 1-1-22; 102-203, eff. 1-1-22;
102-306, eff. 1-1-22; 102-642, eff. 1-1-22; 102-731, eff.
1-1-23; 102-775, eff. 5-13-22; 102-813, eff. 5-13-22; 102-816,
eff. 1-1-23; 102-860, eff. 1-1-23; 102-1093, eff. 1-1-23;
102-1117, eff. 1-13-23; 103-84, eff. 1-1-24; 103-91, eff.
1-1-24; 103-420, eff. 1-1-24; 103-426, eff. 8-4-23; 103-445,

HB5258 Engrossed - 9 - LRB103 38992 RPS 69129 b