Bill Text: IL SB1618 | 2011-2012 | 97th General Assembly | Introduced

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Bill Title: Amends the Illinois Insurance Code. Provides that a health insurance issuer offering group or individual health insurance coverage shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, if the medical loss ratio for the plan year meets specified criteria. Sets forth guidelines for calculating the medical loss ratio. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Failed) 2013-01-08 - Session Sine Die [SB1618 Detail]

Download: Illinois-2011-SB1618-Introduced.html

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97TH GENERAL ASSEMBLY State of Illinois 2011 and 2012 SB1618 Introduced 2/9/2011, by Sen. Heather A. Steans SYNOPSIS AS INTRODUCED:
215 ILCS 5/356Z.26 new
Amends the Illinois Insurance Code. Provides that a health insurance issuer offering group or individual health insurance coverage shall, with respect to each plan year, provide an annual rebate to each enrollee under such coverage, on a pro rata basis, if the medical loss ratio for the plan year meets specified criteria. Sets forth guidelines for calculating the medical loss ratio. 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 356Z.26 as follows:
(215 ILCS 5/356Z.26 new)
Sec. 356Z.26. Requirement to provide value for premium
payments.
(a) Beginning January 1, 2011, except as provided in
subsection (c) of this Section, a health insurance issuer
offering group or individual health insurance coverage shall,
with respect to each plan year, provide an annual rebate to
each enrollee under such coverage, on a pro rata basis, if the
medical loss ratio for the plan year is:
(1) with respect to a health insurance issuer offering
coverage in the large group market, less than 85% or such
higher percentage as established by the Department; or
(2) with respect to a health insurance issuer offering
coverage in the small group market or in the individual
market, less than 80% or such higher percentage as
established by the Department. The Director may request an
adjustment to the 80% standard in this paragraph (2) from
the Secretary of the U.S. Department of Health and Human

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Services if the Director determines that requiring
insurers to meet the 80% standard has a likelihood of
destabilizing the individual market and could result in
fewer choices for consumers.
(b) The total amount of an annual rebate required under
this Section shall be in an amount equal to the product of the
amount by which the percentage described in paragraph (1) or
(2) of subsection (a) of this Section exceeds the ratio
described in such paragraph and the total amount of premium
revenue for such plan year.
(c) Beginning on January 1, 2014, the determination made
under subsection (a) of this Section for the year involved
shall be based on the averages of the premiums expended on the
costs described in such subsection and total premium revenue
for each of the previous 3 years for the plan.
(d) In determining the percentages under subsection (a) of
this Section, the Department shall seek to ensure adequate
participation by health insurance issuers, competition in the
Illinois health insurance market, and value for consumers so
that premiums are used for clinical services and quality
improvements.
(e) The medical loss ratio described in subsection (a) of
this Section shall be calculated pursuant to the NAIC Patient
Protection and Affordable Care Act Medical Loss Ratio
Regulation as certified by the Secretary of the U.S. Department
of Health and Human Services under subsection (c) of Section

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2718 of the federal Public Health Service Act, as amended by
the Patient Protection and Affordable Care Act.
(f) A health insurance issuer offering group or individual
health insurance coverage shall provide to the Department any
information required to be submitted to the Secretary of the
U.S. Department of Health and Human Services under Section 2718
of the Public Health Service Act, as amended by the Patient
Protection and Affordable Care Act, or under regulations
promulgated pursuant thereto.
(g) As used in this Section "health insurance issuer",
"health insurance coverage", "group health insurance", and
"individual health insurance" shall have the same meaning given
those terms in the Illinois Health Insurance Portability and
Accountability Act.
Section 99. Effective date. This Act takes effect upon
becoming law.