Bill Text: IL SB3004 | 2009-2010 | 96th General Assembly | Enrolled

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Bill Title: Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that continuation of and notice concerning group hospital, surgical, and major medical coverage and group HMO coverage, with respect to an employee or member who is involuntarily terminated between September 1, 2008 and the end of the period set forth in the federal American Recovery and Reinvestment Act of 2009 (instead of December 31, 2009), shall be available if the employee or member was insured under the group policy or group contract on the day prior to the termination. Makes other changes. Effective immediately.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2010-05-17 - Public Act . . . . . . . . . 96-0894 [SB3004 Detail]

Download: Illinois-2009-SB3004-Enrolled.html

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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
changing Section 367e as follows:
(215 ILCS 5/367e) (from Ch. 73, par. 979e)
Sec. 367e. Continuation of Group Hospital, Surgical and
Major Medical Coverage After Termination of Employment or
Membership. A group policy delivered, issued for delivery,
renewed or amended in this state which insures employees or
members for hospital, surgical or major medical insurance on an
expense incurred or service basis, other than for specific
diseases or for accidental injuries only, shall provide that
employees or members whose insurance under the group policy
would otherwise terminate because of termination of employment
or membership or because of a reduction in hours below the
minimum required by the group plan shall be entitled to
continue their hospital, surgical and major medical insurance
under that group policy, for themselves and their eligible
dependents, subject to all of the group policy's terms and
conditions applicable to those forms of insurance and to the
following conditions:
1. Continuation shall only be available to an employee

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or member who has been continuously insured under the group
policy (and for similar benefits under any group policy
which it replaced) during the entire 3 months period ending
with such termination or reduction in hours below the
minimum required by the group plan. With respect to an
employee or member who is involuntarily terminated between
September 1, 2008 and the end of the period set forth in
Section 3001(a)(3)(A) of Title III of Division B of the
federal American Recovery and Reinvestment Act of 2009, as
now or hereafter amended December 31, 2009, continuation
shall be available if the employee or member was insured
under the group policy on the day prior to the termination.
2. Continuation shall not be available for any person
who is covered by Medicare, except for those individuals
who have been covered under a group Medicare supplement
policy. Neither shall continuation be available for any
person who is covered by any other insured or uninsured
plan which provides hospital, surgical or medical coverage
for individuals in a group and under which the person was
not covered immediately prior to such termination or
reduction in hours below the minimum required by the group
plan or who exercises his conversion privilege under the
group policy.
3. Continuation need not include dental, vision care,
prescription drug benefits, disability income, specified
disease, or similar supplementary benefits which are

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provided under the group policy in addition to its
hospital, surgical or major medical benefits.
4. Within 10 days after the employee's or member's
termination or reduction in hours below the minimum
required by the group plan written notice of continuation
shall be presented to the employee or member by the
employer. If the employee or member is unavailable, written
notice shall be mailed by the employer to the last known
address of the employee or member within 10 days after the
employee's or member's termination or reduction in hours
below the minimum required by the group plan. The employer
shall also send a copy of the notice to the insurer. An
employee or member who wishes continuation of coverage must
request such continuation in writing within the 30 day
period following the later of: (i) the date of such
termination or reduction in hours below the minimum
required by the group plan, or (ii) the date the employee
is presented or mailed written notice of the right of
continuation by either the employer or the group
policyholder. In no event, however, may the employee or
member elect continuation more than 60 days after the date
of such termination or reduction in hours below the minimum
required by the group plan. Written notice of continuation
presented to the employee or member by the policyholder, or
mailed by the policyholder to the last known address of the
employee, shall constitute the giving of notice for the

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purpose of this provision.
The insurer shall not deny coverage to the employee or
member due to the employer's failure to provide notice
pursuant to this Section to the employee or member. Until
the end of the period set forth in Section 3001(a)(3)(A) of
Title III of Division B of the federal American Recovery
and Reinvestment Act of 2009, as now or hereafter amended
January 1, 2010, in the event the employee or member
contacts the insurer regarding continuation rights and
advises that notice has not been provided by the employer
or group policyholder, the insurer shall provide a written
explanation to the employee or member of the employee's or
member's continuation rights pursuant to this Section.
4a. Unless contrary to the provisions of, or any rules
promulgated pursuant to, Section 3001(a)(7) of Title III of
Division B of the federal American Recovery and
Reinvestment Act of 2009, with respect to employees or
members of health plans that are subject solely to State
continuation coverage and who are terminated or whose
reduction in hours below the minimum required by the group
occurs between the effective date of this amendatory Act of
the 96th General Assembly and the end of the period set
forth in Section 3001(a)(3)(A) of Title III of Division B
of the federal American Recovery and Reinvestment Act of
2009, as now or hereafter amended December 31, 2009, the
notice requirements of this Section are not satisfied

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unless notice is presented or mailed to the employee or
member by the insurer informing the employee or member of
the availability of premium reduction with respect to such
coverage under the American Recovery and Reinvestment Act
of 2009. Such written notice shall conform to all
applicable requirements set forth in Section 3001(a)(7) of
Title III of Division B of the federal American Recovery
and Reinvestment Act of 2009. The Department shall publish
models for the notification that shall be provided by
insurers pursuant to this paragraph 4a.
4b. Unless contrary to the provisions of, or any rules
promulgated pursuant to, Section 3001(a)(7) of Title III of
Division B of the federal American Recovery and
Reinvestment Act of 2009, with respect to employees or
members of health plans that are subject solely to State
continuation coverage who were terminated or whose
reduction in hours below the minimum required by the group
occurred between September 1, 2008 and the effective date
of this amendatory Act of the 96th General Assembly and who
have an election of continuation of coverage pursuant to
this Section in effect, notice shall be presented or mailed
to the employee or member by the insurer informing the
employee or member of the availability of premium reduction
with respect to such coverage under the federal American
Recovery and Reinvestment Act of 2009. Such written notice
shall conform to all applicable requirements set forth in

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Section 3001(a)(7) of Title III of Division B of the
federal American Recovery and Reinvestment Act of 2009 and
shall be presented or mailed to the employee or member
within 14 days of the effective date of this amendatory Act
of the 96th General Assembly. The Department shall publish
models for the notification that shall be provided by
insurers pursuant to this paragraph 4b.
5. An employee or member electing continuation must pay
to the group policyholder or his employer, on a monthly
basis in advance, the total amount of premium required by
the insurer, including that portion of the premium
contributed by the policyholder or employer, if any, but
not more than the group rate for the insurance being
continued with appropriate reduction in premium for any
supplementary benefits which have been discontinued under
paragraph (3) of this Section. The premium rate required by
the insurer shall be the applicable premium required on the
due date of each payment.
6. Continuation of insurance under the group policy for
any person shall terminate when he becomes eligible for
Medicare or is covered by any other insured or uninsured
plan which provides hospital, surgical or medical coverage
for individuals in a group and under which the person was
not covered immediately prior to such termination or
reduction in hours below the minimum required by the group
plan as provided in condition 2 above or, if earlier, at

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the first to occur of the following:
(a) The date 12 months after the date the
employee's or member's insurance under the policy
would otherwise have terminated because of termination
of employment or membership or reduction in hours below
the minimum required by the group plan or, with respect
to an employee or member who is an assistance eligible
individual as defined in Section 3001(a)(3) of Title
III of Division B of the federal American Recovery and
Reinvestment Act of 2009, the date that the individual
ceases to be eligible for premium assistance under
Section 3001(a)(2)(A)(ii)(I) of Title III of Division
B of the federal American Recovery and Reinvestment Act
of 2009, as now or hereafter amended.
(b) If the employee or member fails to make timely
payment of a required contribution, the end of the
period for which contributions were made.
(c) The date on which the group policy is
terminated or, in the case of an employee, the date his
employer terminates participation under the group
policy. However, if this (c) applies and the coverage
ceasing by reason of such termination is replaced by
similar coverage under another group policy, the
following shall apply:
(i) The employee or member shall have the right
to become covered under that other group policy,

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for the balance of the period that he would have
remained covered under the prior group policy in
accordance with condition 6 had a termination
described in this (c) not occurred.
(ii) The prior group policy shall continue to
provide benefits to the extent of its accrued
liabilities and extensions of benefits as if the
replacement had not occurred.
7. A notification of the continuation privilege shall
be included in each certificate of coverage.
8. Continuation shall not be available for any employee
who was discharged because of the commission of a felony in
connection with his work, or because of theft in connection
with his work, for which the employer was in no way
responsible; provided the employee admitted his commission
of the felony or theft or such act has resulted in a
conviction or order of supervision by a court of competent
jurisdiction.
9. An employee or member without an election of
continuation of coverage pursuant to this Section in effect
on the effective date of this amendatory Act of the 96th
General Assembly may elect continuation pursuant to this
paragraph 9 if the employee or member: (i) would be an
assistance eligible individual as defined in Section
3001(a)(3) of Title III of Division B of the federal
American Recovery and Reinvestment Act of 2009, if such an

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election were in effect and (ii) at the time of termination
was eligible for continuation pursuant to paragraphs 1 and
2 of this Section.
Unless contrary to the provisions of, or any rules
promulgated pursuant to, Section 3001(a)(7) of Title III of
Division B of the federal American Recovery and
Reinvestment Act of 2009, written notice of continuation
pursuant to this paragraph 9 shall be presented to the
employee or member by the insurer or mailed by the insurer
to the last known address of the employee or member within
30 days after the effective date of this amendatory Act of
the 96th General Assembly. Such written notice shall
conform to all applicable requirements set forth in Section
3001(a)(7) of Title III of Division B of the federal
American Recovery and Reinvestment Act of 2009. The
Department shall publish models for the notification that
shall be provided by insurers pursuant to this paragraph 9.
An employee or member electing continuation of
coverage under this paragraph 9 must request such
continuation in writing within 60 days after the date the
employee or member receives written notice of the right of
continuation by the insurer.
Continuation of coverage elected pursuant to this
paragraph 9 shall commence with the first period of
coverage beginning on or after February 17, 2009, the
effective date of the federal American Recovery and

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Reinvestment Act of 2009, and shall not extend beyond the
period of continuation that would have been required if the
coverage had been elected pursuant to paragraph 4 of this
Section.
With respect to an employee or member who elects
continuation of coverage under this paragraph 9, the period
beginning on the date of the employee's or member's
involuntary termination of employment and ending on the
date of the first period of coverage on or after February
17, 2009 shall be disregarded for purposes of determining
the 63-day period referred to in Section 20 of the Illinois
Health Insurance Portability and Accountability Act.
The requirements of this amendatory Act of 1983 shall apply
to any group policy as defined in this Section, delivered or
issued for delivery on or after 180 days following the
effective date of this amendatory Act of 1983.
The requirements of this amendatory Act of 1985 shall apply
to any group policy as defined in this Section, delivered,
issued for delivery, renewed or amended on or after 180 days
following the effective date of this amendatory Act of 1985.
(Source: P.A. 96-13, eff. 6-18-09.)
Section 10. The Health Maintenance Organization Act is
amended by changing Section 4-9.2 as follows:
(215 ILCS 125/4-9.2) (from Ch. 111 1/2, par. 1409.2-2)

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Sec. 4-9.2. Continuation of group HMO coverage after
termination of employee or membership. A group contract
delivered, issued for delivery, renewed, or amended in this
State that covers employees or members for health care services
shall provide that employees or members whose coverage under
the group contract would otherwise terminate because of
termination of employment or membership or because of a
reduction in hours below the minimum required by the group
contract shall be entitled to continue their coverage under
that group contract, for themselves and their eligible
dependents, subject to all of the group contract's terms and
conditions applicable to those forms of coverage and to the
following conditions:
(1) Continuation shall only be available to an employee
or member who has been continuously covered under the group
contract (and for similar benefits under any group contract
that it replaced) during the entire 3 month period ending
with the termination of employment or membership or
reduction in hours below the minimum required by the group
contract. With respect to an employee or member who is
involuntarily terminated between September 1, 2008 and the
end of the period set forth in Section 3001(a)(3)(A) of
Title III of Division B of the federal American Recovery
and Reinvestment Act of 2009, as now or hereafter amended
December 31, 2009, continuation shall be available if the
employee or member was covered under the group contract the

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day prior to such termination.
(2) Continuation shall not be available for any
enrollee who is covered by Medicare, except for those
individuals who have been covered under a group Medicare
supplement policy. Continuation shall not be available for
any enrollee who is covered by any other insured or
uninsured plan that provides hospital, surgical, or
medical coverage for individuals in a group and under which
the enrollee was not covered immediately before
termination or reduction in hours below the minimum
required by the group contract or who exercises his or her
conversion privilege under the group policy.
(3) Continuation need not include dental, vision care,
prescription drug, or similar supplementary benefits that
are provided under the group contract in addition to its
basic health care services.
(4) Within 10 days after the employee's or member's
termination or reduction in hours below the minimum
required by the group contract, written notice of
continuation shall be presented to the employee or member
by the employer. If the employee or member is unavailable,
written notice shall be mailed by the employer to the last
known address of the employee or member within 10 days
after the employee's or member's termination or reduction
in hours below the minimum required by the group plan. The
employer shall also send a copy of the notice to the HMO.

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An employee or member who wishes continuation of coverage
must request continuation in writing within the 30 day
period following the later of (i) the date of termination
or reduction in hours below the minimum required by the
group contract or (ii) the date the employee is presented
or mailed written notice of the right of continuation by
either the employer or the group policyholder. In no event,
however, shall the employee or member elect continuation
more than 60 days after the date of termination or
reduction in hours below the minimum required by the group
contract. Written notice of continuation presented to the
employee or member by the policyholder, or mailed by the
policyholder to the last known address of the employee,
shall constitute the giving of notice for the purpose of
this paragraph.
The HMO shall not deny coverage to the employee or
member due to the employer's failure to provide notice
pursuant to this Section to the employee or member. Until
the end of the period set forth in Section 3001(a)(3)(A) of
Title III of Division B of the federal American Recovery
and Reinvestment Act of 2009, as now or hereafter amended
January 1, 2010, in the event the employee or member
contacts the HMO regarding continuation rights and advises
that notice has not been provided by the employer or group
policyholder, the HMO shall provide a written explanation
to the employee or member of the employee's or member's

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continuation rights pursuant to this Section.
(4a) Unless contrary to the provisions of, or any rules
promulgated pursuant to, Section 3001(a)(7) of Title III of
Division B of the federal American Recovery and
Reinvestment Act of 2009, with respect to employees or
members of health plans that are subject solely to State
continuation coverage and who are terminated or whose
reduction in hours below the minimum required by the group
occurs between the effective date of this amendatory Act of
the 96th General Assembly and the end of the period set
forth in Section 3001(a)(3)(A) of Title III of Division B
of the federal American Recovery and Reinvestment Act of
2009, as now or hereafter amended December 31, 2009, the
notice requirements of this Section are not satisfied
unless notice is presented or mailed to the employee or
member by the HMO informing the employee or member of the
availability of premium reduction with respect to such
coverage under the federal American Recovery and
Reinvestment Act of 2009. Such written notice shall conform
to all applicable requirements set forth in Section
3001(a)(7) of Title III of Division B of the federal
American Recovery and Reinvestment Act of 2009. The
Department shall publish models for the notification that
shall be provided by HMOs pursuant to this paragraph (4a).
(4b) Unless contrary to the provisions of, or any rules
promulgated pursuant to, Section 3001(a)(7) of Title III of

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Division B of the federal American Recovery and
Reinvestment Act of 2009, with respect to employees or
members of health plans that are subject solely to State
continuation coverage who were terminated or whose
reduction in hours below the minimum required by the group
occurred between September 1, 2008, and the effective date
of this amendatory Act of the 96th General Assembly and who
have an election of continuation of coverage pursuant to
this Section in effect, notice shall be presented or mailed
to the employee or member by the HMO informing the employee
or member of the availability of premium reduction with
respect to such coverage under the federal American
Recovery and Reinvestment Act of 2009. Such written notice
shall conform to all applicable requirements set forth in
Section 3001(a)(7) of Title III of Division B of the
federal American Recovery and Reinvestment Act of 2009 and
shall be presented or mailed to the employee or member
within 14 days of the effective date of this amendatory Act
of the 96th General Assembly. The Department shall publish
models for the notification that shall be provided by HMOs
pursuant to this paragraph (4b).
(5) An employee or member electing continuation must
pay to the group policyholder or his employer, on a monthly
basis in advance, the total amount of premium required by
the HMO, including that portion of the premium contributed
by the policyholder or employer, if any, but not more than

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the group rate for the coverage being continued with
appropriate reduction in premium for any supplementary
benefits that have been discontinued under paragraph (3) of
this Section. The premium rate required by the HMO shall be
the applicable premium required on the due date of each
payment.
(6) Continuation of coverage under the group contract
for any person shall terminate when the person becomes
eligible for Medicare or is covered by any other insured or
uninsured plan that provides hospital, surgical, or
medical coverage for individuals in a group and under which
the person was not covered immediately before termination
or reduction in hours below the minimum required by the
group contract as provided in paragraph (2) of this Section
or, if earlier, at the first to occur of the following:
(a) The expiration of 12 months after the
employee's or member's coverage because of termination
of employment or membership or reduction in hours below
the minimum required by the group contract.
(b) If the employee or member fails to make timely
payment of a required contribution, the end of the
period for which contributions were made or, with
respect to an employee or member who is an assistance
eligible individual as defined in Section 3001(a)(3)
of Title III of Division B of the federal American
Recovery and Reinvestment Act of 2009, the date that

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the individual ceases to be eligible for premium
assistance under Section 3001(a)(2)(A)(ii)(I) of Title
III of Division B of the federal American Recovery and
Reinvestment Act of 2009, as now or hereafter amended.
(c) The date on which the group contract is
terminated or, in the case of an employee, the date his
or her employer terminates participation under the
group contract. If, however, this paragraph applies
and the coverage ceasing by reason of termination is
replaced by similar coverage under another group
contract, then (i) the employee or member shall have
the right to become covered under the replacement group
contract for the balance of the period that he or she
would have remained covered under the prior group
contract in accordance with paragraph (6) had a
termination described in this item (c) not occurred and
(ii) the prior group contract shall continue to provide
benefits to the extent of its accrued liabilities and
extensions of benefits as if the replacement had not
occurred.
(7) A notification of the continuation privilege shall
be included in each evidence of coverage.
(8) Continuation shall not be available for any
employee who was discharged because of the commission of a
felony in connection with his or her work, or because of
theft in connection with his or her work, for which the

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employer was in no way responsible if the employee (i)
admitted to committing the felony or theft or (ii) was
convicted or placed under supervision by a court of
competent jurisdiction.
(9) An employee or member without an election of
continuation of coverage pursuant to this Section in effect
on the effective date of this amendatory Act of the 96th
General Assembly may elect continuation pursuant to this
paragraph (9) if the employee or member: (i) would be an
assistance eligible individual as defined in Section
3001(a)(3) of Title III of Division B of the federal
American Recovery and Reinvestment Act of 2009 if such an
election were in effect and (ii) at the time of termination
was eligible for continuation pursuant to paragraphs (1)
and (2) of this Section.
Unless contrary to the provisions of, or any rules
promulgated pursuant to, Section 3001(a)(7) of Title III of
Division B of the federal American Recovery and
Reinvestment Act of 2009, written notice of continuation
pursuant to this paragraph (9) shall be presented to the
employee or member by the HMO or mailed by the HMO to the
last known address of the employee or member within 30 days
after the effective date of this amendatory Act of the 96th
General Assembly. The written notice shall conform to all
applicable requirements set forth in Section 3001(a)(7) of
Title III of Division B of the federal American Recovery

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and Reinvestment Act of 2009. The Department shall publish
models for the notification that shall be provided by HMOs
pursuant to this paragraph (9).
An employee or member electing continuation of
coverage under this paragraph (9) must request such
continuation in writing within 60 days after the date the
employee or member receives written notice of the right of
continuation by the HMO.
Continuation of coverage elected pursuant to this
paragraph (9) shall commence with the first period of
coverage beginning on or after February 17, 2009, the
effective date of the federal American Recovery and
Reinvestment Act of 2009, and shall not extend beyond the
period of continuation that would have been required if the
coverage had been elected pursuant to paragraph (4) of this
Section.
With respect to an employee or member who elects
continuation of coverage under this paragraph (9), the
period beginning on the date of the employee or member's
involuntary termination of employment and ending on the
date of the first period of coverage on or after February
17, 2009 shall be disregarded for purposes of determining
the 63-day period referred to in Section 20 of the Illinois
Health Insurance Portability and Accountability Act.
The requirements of this amendatory Act of 1992 shall apply
to any group contract, as defined in this Section, delivered or

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issued for delivery on or after 180 days following the
effective date of this amendatory Act of 1992.
(Source: P.A. 96-13, eff. 6-18-09.)
Section 99. Effective date. This Act takes effect upon
becoming law.