Bill Text: IL SB0056 | 2023-2024 | 103rd General Assembly | Enrolled

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Bill Title: Amends the Illinois Insurance Code. In provisions concerning Medicare supplement policy minimum standards, provides that if an individual is at least 65 years of age but no more than 75 years of age and has an existing Medicare supplement policy, then the individual is entitled to an annual open enrollment period lasting 45 days, commencing with the individual's birthday, and the individual may purchase any Medicare supplement policy with the same issuer or any affiliate authorized to transact business in the State (instead of only the same issuer) that offers benefits equal to or lesser than those provided by the previous coverage.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Enrolled) 2024-05-09 - Passed Both Houses [SB0056 Detail]

Download: Illinois-2023-SB0056-Enrolled.html

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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 363 as follows:
(215 ILCS 5/363) (from Ch. 73, par. 975)
Sec. 363. Medicare supplement policies; minimum standards.
(1) Except as otherwise specifically provided therein,
this Section and Section 363a of this Code shall apply to:
(a) all Medicare supplement policies and subscriber
contracts delivered or issued for delivery in this State
on and after January 1, 1989; and
(b) all certificates issued under group Medicare
supplement policies or subscriber contracts, which
certificates are issued or issued for delivery in this
State on and after January 1, 1989.
This Section shall not apply to "Accident Only" or
"Specified Disease" types of policies. The provisions of this
Section are not intended to prohibit or apply to policies or
health care benefit plans, including group conversion
policies, provided to Medicare eligible persons, which
policies or plans are not marketed or purported or held to be
Medicare supplement policies or benefit plans.

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(2) For the purposes of this Section and Section 363a, the
following terms have the following meanings:
(a) "Applicant" means:
(i) in the case of individual Medicare supplement
policy, the person who seeks to contract for insurance
benefits, and
(ii) in the case of a group Medicare policy or
subscriber contract, the proposed certificate holder.
(b) "Certificate" means any certificate delivered or
issued for delivery in this State under a group Medicare
supplement policy.
(c) "Medicare supplement policy" means an individual
policy of accident and health insurance, as defined in
paragraph (a) of subsection (2) of Section 355a of this
Code, or a group policy or certificate delivered or issued
for delivery in this State by an insurer, fraternal
benefit society, voluntary health service plan, or health
maintenance organization, other than a policy issued
pursuant to a contract under Section 1876 of the federal
Social Security Act (42 U.S.C. Section 1395 et seq.) or a
policy issued under a demonstration project specified in
42 U.S.C. Section 1395ss(g)(1), or any similar
organization, that is advertised, marketed, or designed
primarily as a supplement to reimbursements under Medicare
for the hospital, medical, or surgical expenses of persons
eligible for Medicare.

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(d) "Issuer" includes insurance companies, fraternal
benefit societies, voluntary health service plans, health
maintenance organizations, or any other entity providing
Medicare supplement insurance, unless the context clearly
indicates otherwise.
(e) "Medicare" means the Health Insurance for the Aged
Act, Title XVIII of the Social Security Amendments of
1965.
(3) No Medicare supplement insurance policy, contract, or
certificate, that provides benefits that duplicate benefits
provided by Medicare, shall be issued or issued for delivery
in this State after December 31, 1988. No such policy,
contract, or certificate shall provide lesser benefits than
those required under this Section or the existing Medicare
Supplement Minimum Standards Regulation, except where
duplication of Medicare benefits would result.
(4) Medicare supplement policies or certificates shall
have a notice prominently printed on the first page of the
policy or attached thereto stating in substance that the
policyholder or certificate holder shall have the right to
return the policy or certificate within 30 days of its
delivery and to have the premium refunded directly to him or
her in a timely manner if, after examination of the policy or
certificate, the insured person is not satisfied for any
reason.
(5) A Medicare supplement policy or certificate may not

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deny a claim for losses incurred more than 6 months from the
effective date of coverage for a preexisting condition. The
policy may not define a preexisting condition more
restrictively than a condition for which medical advice was
given or treatment was recommended by or received from a
physician within 6 months before the effective date of
coverage.
(6) An issuer of a Medicare supplement policy shall:
(a) not deny coverage to an applicant under 65 years
of age who meets any of the following criteria:
(i) becomes eligible for Medicare by reason of
disability if the person makes application for a
Medicare supplement policy within 6 months of the
first day on which the person enrolls for benefits
under Medicare Part B; for a person who is
retroactively enrolled in Medicare Part B due to a
retroactive eligibility decision made by the Social
Security Administration, the application must be
submitted within a 6-month period beginning with the
month in which the person received notice of
retroactive eligibility to enroll;
(ii) has Medicare and an employer group health
plan (either primary or secondary to Medicare) that
terminates or ceases to provide all such supplemental
health benefits;
(iii) is insured by a Medicare Advantage plan that

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includes a Health Maintenance Organization, a
Preferred Provider Organization, and a Private
Fee-For-Service or Medicare Select plan and the
applicant moves out of the plan's service area; the
insurer goes out of business, withdraws from the
market, or has its Medicare contract terminated; or
the plan violates its contract provisions or is
misrepresented in its marketing; or
(iv) is insured by a Medicare supplement policy
and the insurer goes out of business, withdraws from
the market, or the insurance company or agents
misrepresent the plan and the applicant is without
coverage;
(b) make available to persons eligible for Medicare by
reason of disability each type of Medicare supplement
policy the issuer makes available to persons eligible for
Medicare by reason of age;
(c) not charge individuals who become eligible for
Medicare by reason of disability and who are under the age
of 65 premium rates for any medical supplemental insurance
benefit plan offered by the issuer that exceed the
issuer's highest rate on the current rate schedule filed
with the Division of Insurance for that plan to
individuals who are age 65 or older; and
(d) provide the rights granted by items (a) through
(d), for 6 months after the effective date of this

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amendatory Act of the 95th General Assembly, to any person
who had enrolled for benefits under Medicare Part B prior
to this amendatory Act of the 95th General Assembly who
otherwise would have been eligible for coverage under item
(a).
(7) The Director shall issue reasonable rules and
regulations for the following purposes:
(a) To establish specific standards for policy
provisions of Medicare policies and certificates. The
standards shall be in accordance with the requirements of
this Code. No requirement of this Code relating to minimum
required policy benefits, other than the minimum standards
contained in this Section and Section 363a, shall apply to
Medicare supplement policies and certificates. The
standards may cover, but are not limited to the following:
(A) Terms of renewability.
(B) Initial and subsequent terms of eligibility.
(C) Non-duplication of coverage.
(D) Probationary and elimination periods.
(E) Benefit limitations, exceptions and
reductions.
(F) Requirements for replacement.
(G) Recurrent conditions.
(H) Definition of terms.
(I) Requirements for issuing rebates or credits to
policyholders if the policy's loss ratio does not

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comply with subsection (7) of Section 363a.
(J) Uniform methodology for the calculating and
reporting of loss ratio information.
(K) Assuring public access to loss ratio
information of an issuer of Medicare supplement
insurance.
(L) Establishing a process for approving or
disapproving proposed premium increases.
(M) Establishing a policy for holding public
hearings prior to approval of premium increases.
(N) Establishing standards for Medicare Select
policies.
(O) Prohibited policy provisions not otherwise
specifically authorized by statute that, in the
opinion of the Director, are unjust, unfair, or
unfairly discriminatory to any person insured or
proposed for coverage under a medicare supplement
policy or certificate.
(b) To establish minimum standards for benefits and
claims payments, marketing practices, compensation
arrangements, and reporting practices for Medicare
supplement policies.
(c) To implement transitional requirements of Medicare
supplement insurance benefits and premiums of Medicare
supplement policies and certificates to conform to
Medicare program revisions.

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(8) If an individual is at least 65 years of age but no
more than 75 years of age and has an existing Medicare
supplement policy, the individual is entitled to an annual
open enrollment period lasting 45 days, commencing with the
individual's birthday, and the individual may purchase any
Medicare supplement policy with the same issuer or any
affiliate authorized to transact business in this State that
offers benefits equal to or lesser than those provided by the
previous coverage. During this open enrollment period, an
issuer of a Medicare supplement policy shall not deny or
condition the issuance or effectiveness of Medicare
supplemental coverage, nor discriminate in the pricing of
coverage, because of health status, claims experience, receipt
of health care, or a medical condition of the individual. An
issuer shall provide notice of this annual open enrollment
period for eligible Medicare supplement policyholders at the
time that the application is made for a Medicare supplement
policy or certificate. The notice shall be in a form that may
be prescribed by the Department.
(Source: P.A. 102-142, eff. 1-1-22.)