Bill Text: IL SB0092 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Provides that the Director of Insurance shall issue rules to establish specific standards which may cover, but shall not be limited to, alignment of an accident and health insurance policy's coverage year and deductible year for the purpose of determining patient out-of-pocket cost-sharing limits. Defines "coverage year" and "deductible year".

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2023-01-20 - Referred to Assignments [SB0092 Detail]

Download: Illinois-2023-SB0092-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB0092 Introduced 1/20/2023, by Sen. Laura Fine SYNOPSIS AS INTRODUCED:
215 ILCS 5/355a from Ch. 73, par. 967a
Amends the Illinois Insurance Code. Provides that the Director of Insurance shall issue rules to establish specific standards which may cover, but shall not be limited to, alignment of an accident and health insurance policy's coverage year and deductible year for the purpose of determining patient out-of-pocket cost-sharing limits. Defines "coverage year" and "deductible year".
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A BILL FOR
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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 Illinois Insurance Code is amended by
changing Section 355a as follows:
(215 ILCS 5/355a) (from Ch. 73, par. 967a)
Sec. 355a. Standardization of terms and coverage.
(1) The purposes of this Section shall be (a) to provide
reasonable standardization and simplification of terms and
coverages of individual accident and health insurance policies
to facilitate public understanding and comparisons; (b) to
eliminate provisions contained in individual accident and
health insurance policies which may be misleading or
unreasonably confusing in connection either with the purchase
of such coverages or with the settlement of claims; and (c) to
provide for reasonable disclosure in the sale of accident and
health coverages.
(2) Definitions applicable to this Section are as follows:
(a) "Policy" means all or any part of the forms
constituting the contract between the insurer and the
insured, including the policy, certificate, subscriber
contract, riders, endorsements, and the application if
attached, which are subject to filing with and approval by

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the Director.
(b) "Service corporations" means voluntary health and
dental corporations organized and operating respectively
under the Voluntary Health Services Plans Act and the
Dental Service Plan Act.
(c) "Accident and health insurance" means insurance
written under Article XX of this Code, other than credit
accident and health insurance, and coverages provided in
subscriber contracts issued by service corporations. For
purposes of this Section such service corporations shall
be deemed to be insurers engaged in the business of
insurance.
(d) "Coverage year" means the 12-month period during
which coverage is provided by an accident and health
insurance policy.
(e) "Deductible year" means the 12-month period used
for the purpose of determining the accrual of deductibles
and out-of-pocket cost-sharing limits under an accident
and health insurance policy.
(3) The Director shall issue such rules as he shall deem
necessary or desirable to establish specific standards,
including standards of full and fair disclosure that set forth
the form and content and required disclosure for sale, of
individual policies of accident and health insurance, which
rules and regulations shall be in addition to and in
accordance with the applicable laws of this State, and which

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may cover but shall not be limited to: (a) terms of
renewability; (b) initial and subsequent conditions of
eligibility; (c) non-duplication of coverage provisions; (d)
coverage of dependents; (e) pre-existing conditions; (f)
termination of insurance; (g) probationary periods; (h)
limitation, exceptions, and reductions; (i) elimination
periods; (j) requirements regarding replacements; (k)
recurrent conditions; and (l) the definition of terms,
including, but not limited to, the following: hospital,
accident, sickness, injury, physician, accidental means, total
disability, partial disability, nervous disorder, guaranteed
renewable, and non-cancellable; and (m) alignment of an
accident and health insurance policy's coverage year and
deductible year for the purpose of determining patient
out-of-pocket cost-sharing limits.
The Director may issue rules that specify prohibited
policy provisions not otherwise specifically authorized by
statute which in the opinion of the Director are unjust,
unfair or unfairly discriminatory to the policyholder, any
person insured under the policy, or beneficiary.
(4) The Director shall issue such rules as he shall deem
necessary or desirable to establish minimum standards for
benefits under each category of coverage in individual
accident and health policies, other than conversion policies
issued pursuant to a contractual conversion privilege under a
group policy, including but not limited to the following

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categories: (a) basic hospital expense coverage; (b) basic
medical-surgical expense coverage; (c) hospital confinement
indemnity coverage; (d) major medical expense coverage; (e)
disability income protection coverage; (f) accident only
coverage; and (g) specified disease or specified accident
coverage.
Nothing in this subsection (4) shall preclude the issuance
of any policy which combines two or more of the categories of
coverage enumerated in subparagraphs (a) through (f) of this
subsection.
No policy shall be delivered or issued for delivery in
this State which does not meet the prescribed minimum
standards for the categories of coverage listed in this
subsection unless the Director finds that such policy is
necessary to meet specific needs of individuals or groups and
such individuals or groups will be adequately informed that
such policy does not meet the prescribed minimum standards,
and such policy meets the requirement that the benefits
provided therein are reasonable in relation to the premium
charged. The standards and criteria to be used by the Director
in approving such policies shall be included in the rules
required under this Section with as much specificity as
practicable.
The Director shall prescribe by rule the method of
identification of policies based upon coverages provided.
(5) (a) In order to provide for full and fair disclosure in

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the sale of individual accident and health insurance policies,
no such policy shall be delivered or issued for delivery in
this State unless the outline of coverage described in
paragraph (b) of this subsection either accompanies the
policy, or is delivered to the applicant at the time the
application is made, and an acknowledgment signed by the
insured, of receipt of delivery of such outline, is provided
to the insurer. In the event the policy is issued on a basis
other than that applied for, the outline of coverage properly
describing the policy must accompany the policy when it is
delivered and such outline shall clearly state that the policy
differs, and to what extent, from that for which application
was originally made. All policies, except single premium
nonrenewal policies, shall have a notice prominently printed
on the first page of the policy or attached thereto stating in
substance, that the policyholder shall have the right to
return the policy within 10 days of its delivery and to have
the premium refunded if after examination of the policy the
policyholder is not satisfied for any reason.
(b) The Director shall issue such rules as he shall deem
necessary or desirable to prescribe the format and content of
the outline of coverage required by paragraph (a) of this
subsection. "Format" means style, arrangement, and overall
appearance, including such items as the size, color, and
prominence of type and the arrangement of text and captions.
"Content" shall include without limitation thereto, statements

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relating to the particular policy as to the applicable
category of coverage prescribed under subsection (4);
principal benefits; exceptions, reductions and limitations;
and renewal provisions, including any reservation by the
insurer of a right to change premiums. Such outline of
coverage shall clearly state that it constitutes a summary of
the policy issued or applied for and that the policy should be
consulted to determine governing contractual provisions.
(c) (Blank).
(d) (Blank).
(e) (Blank).
(f) (Blank).
(6) Prior to the issuance of rules pursuant to this
Section, the Director shall afford the public, including the
companies affected thereby, reasonable opportunity for
comment. Such rulemaking is subject to the provisions of the
Illinois Administrative Procedure Act.
(7) When a rule has been adopted, pursuant to this
Section, all policies of insurance or subscriber contracts
which are not in compliance with such rule shall, when so
provided in such rule, be deemed to be disapproved as of a date
specified in such rule not less than 120 days following its
effective date, without any further or additional notice other
than the adoption of the rule.
(8) When a rule adopted pursuant to this Section so
provides, a policy of insurance or subscriber contract which

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does not comply with the rule shall, not less than 120 days
from the effective date of such rule, be construed, and the
insurer or service corporation shall be liable, as if the
policy or contract did comply with the rule.
(9) Violation of any rule adopted pursuant to this Section
shall be a violation of the insurance law for purposes of
Sections 370 and 446 of this Code.
(Source: P.A. 102-775, eff. 5-13-22.)