Bill Text: IL SB1912 | 2023-2024 | 103rd General Assembly | Introduced

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Bill Title: Amends the Department of Insurance Law. Provides that the Department of Insurance shall establish the Office of the Healthcare Advocate. Provides that the Office shall be administered by the Chief Health Care Advocate, who shall report to the Director of Insurance. Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that all individual and small group accident and health policies written subject to certain federal standards must file rates with the Department for approval. Provides that unreasonable rate increases or inadequate rates shall be modified or disapproved. Provides that when an insurer files a schedule or table of premium rates for individual or small group health benefit plans, the insurer shall post notice of the premium rate filings and a filing summary in plain language on the insurer's website. Provides that the Department shall post all insurers' rate filings and summaries on the Department's website. Provides that the Department shall open a 30-day public comment period on the date that a rate filing is posted on the website. Provides that the Department shall hold a public hearing during the 30-day comment period. Provides that the Director shall adopt affordability standards that must be considered in any decision to approve, disapprove, or modify rate filings. Provides that after the close of the public comment period, the Department shall issue a decision to approve, disapprove, or modify a rate filing, and post the decision on the Department's website. Provides that the Department shall adopt rules implementing specified procedures. Defines "inadequate rate", "plain language", and "unreasonable rate increase".

Spectrum: Partisan Bill (Democrat 5-0)

Status: (Introduced - Dead) 2023-05-09 - Added as Chief Co-Sponsor Sen. David Koehler [SB1912 Detail]

Download: Illinois-2023-SB1912-Introduced.html

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103RD GENERAL ASSEMBLY State of Illinois 2023 and 2024 SB1912 Introduced 2/9/2023, by Sen. Laura Fine SYNOPSIS AS INTRODUCED:
20 ILCS 1405/1405-26 new
215 ILCS 5/355 from Ch. 73, par. 967
215 ILCS 125/4-12 from Ch. 111 1/2, par. 1409.5
Amends the Department of Insurance Law. Provides that the Department of Insurance shall establish the Office of the Healthcare Advocate. Provides that the Office shall be administered by the Chief Health Care Advocate, who shall report to the Director of Insurance. Amends the Illinois Insurance Code and the Health Maintenance Organization Act. Provides that all individual and small group accident and health policies written subject to certain federal standards must file rates with the Department for approval. Provides that unreasonable rate increases or inadequate rates shall be modified or disapproved. Provides that when an insurer files a schedule or table of premium rates for individual or small group health benefit plans, the insurer shall post notice of the premium rate filings and a filing summary in plain language on the insurer's website. Provides that the Department shall post all insurers' rate filings and summaries on the Department's website. Provides that the Department shall open a 30-day public comment period on the date that a rate filing is posted on the website. Provides that the Department shall hold a public hearing during the 30-day comment period. Provides that the Director shall adopt affordability standards that must be considered in any decision to approve, disapprove, or modify rate filings. Provides that after the close of the public comment period, the Department shall issue a decision to approve, disapprove, or modify a rate filing, and post the decision on the Department's website. Provides that the Department shall adopt rules implementing specified procedures. Defines "inadequate rate", "plain language", and "unreasonable rate increase".
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A BILL FOR
SB1912 LRB103 25851 BMS 57008 b
AN ACT concerning regulation.
Be it enacted by the People of the State of Illinois,
represented in the General Assembly:
Section 5. The Department of Insurance Law is amended by
adding Section 1405-26 as follows:
(20 ILCS 1405/1405-26 new)
Sec. 1405-26. Office of the Healthcare Advocate.
(a) The Department of Insurance shall establish the Office
of the Healthcare Advocate. The Office shall be administered
by the Chief Health Care Advocate, who shall report to the
Director. The Advocate shall be an individual with expertise
and experience in the fields of health insurance and consumer
advocacy. The Advocate may employ legal counsel, independent
actuaries, and other employees and contractors as needed to
carry out the duties of the Office.
(b) The Advocate shall evaluate data, in consultation with
an actuary, to assess individual and small group health
benefit plan rate filings, networks, and affordability; and
represent the interests of individuals and small business
owners in public hearings held pursuant to subsection (e) of
Section 355 of the Illinois Insurance Code and subsection (f)
of Section 4-12 of the Health Maintenance Organization Act.
(c) The Advocate shall have access to the unredacted

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actuarial memos that insurers send to the Department as part
of the rate filings.
(d) In the performance of the Advocate's duties, the
Advocate shall act independently of the Department. Any
recommendations made or positions taken by the Advocate do not
reflect those of the Department.
(e) The Department may adopt reasonable rules necessary to
implement this Section.
Section 10. The Illinois Insurance Code is amended by
changing Section 355 as follows:
(215 ILCS 5/355) (from Ch. 73, par. 967)
Sec. 355. Accident and health policies; provisions.
policies-Provisions.)
(a) As used in this Section:
"Inadequate rate" means a rate:
(1) that is insufficient to sustain projected losses
and expenses to which the rate applies; and
(2) the continued use of which endangers the solvency
of an insurer using that rate.
"Plain language" shall have the same meaning as "plain
writing" as used in the federal Plain Writing Act of 2010, and
subsequent guidance documents, including the Federal Plain
Language Guidelines.
"Unreasonable rate increase" means a rate increase that

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the Director determines to be excessive, unjustified, or
unfairly discriminatory in accordance with 45 CFR 154.205.
(b) No policy of insurance against loss or damage from the
sickness, or from the bodily injury or death of the insured by
accident shall be issued or delivered to any person in this
State until a copy of the form thereof and of the
classification of risks and the premium rates pertaining
thereto have been filed with the Director; nor shall it be so
issued or delivered until the Director shall have approved
such policy pursuant to the provisions of Section 143. If the
Director disapproves the policy form he shall make a written
decision stating the respects in which such form does not
comply with the requirements of law and shall deliver a copy
thereof to the company and it shall be unlawful thereafter for
any such company to issue any policy in such form.
(c) Rate increases for all individual and small group
accident and health insurance policies subject to the
standards of 45 CFR Part 154 must be filed with the Department
for approval. Unreasonable rate increases or inadequate rates
shall be modified or disapproved.
(d) When an insurer files a schedule or table of premium
rates for individual or small group health benefit plans, the
insurer shall post notice of the rate filing and a filing
summary in plain language on the insurer's website. The
Department shall post all insurers' rate filings and summaries
on the Department's website. All summaries shall include a

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brief justification of any rate increase or decrease
requested, including the number of individual members, the
medical loss ratio, medical trend, administrative costs, and
any other information requested by the Director. The plain
language summary shall include notification of the public
comment period established in subsection (e).
(e) The Department shall open a 30-day public comment
period on the rate filing beginning on the date that the rate
filing is posted on the website. The Department shall post all
of the comments received to the Department's website within 5
business days after the comment period ends. The Department
shall hold a public hearing during the 30-day comment period.
(f) The Director shall adopt affordability standards that
must be considered in any decision to approve, disapprove, or
modify rate filings. These affordability standards include,
but are not limited to, the following:
(1) trends, including historical rates for existing
products and national and regional medical and health
insurance trends;
(2) inflation;
(3) price comparisons to other market rates for
similar products;
(4) the ability of low-income individuals to pay for
health insurance;
(5) the ability of small businesses to pay for health
insurance;

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(6) health insurers' efforts to control administrative
costs; and
(7) effective strategies implemented by health
insurers to increase affordability, including payment
reform across the delivery system.
(g) After the close of the public comment period described
in subsection (e), the Department shall issue a decision to
approve, disapprove, or modify a rate filing. The Department
shall notify the insurer of the decision, and make the
decision available to the public by posting it on the
Department's website, and include the following information:
(1) an explanation of the findings and rationale that
are the basis for the decision; and
(2) any actuarial or other analyses, calculations, or
evaluations relied upon by the Department in arriving at
the decision.
(h) If, following the issuance of a decision but before
the effective date of the premium rates approved by the
decision, an event occurs that materially affects the
Director's decision to approve, deny, or modify the rates, the
Director may consider supplemental facts or data reasonably
related to the event.
(i) The Department shall adopt rules implementing the
procedures described in subsections (d) through (h).
(Source: P.A. 79-777.)

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Section 15. The Health Maintenance Organization Act is
amended by changing Section 4-12 as follows:
(215 ILCS 125/4-12) (from Ch. 111 1/2, par. 1409.5)
Sec. 4-12. Changes in Rate Methodology and Benefits,
Material Modifications. A health maintenance organization
shall file with the Director, prior to use, a notice of any
change in rate methodology, or benefits and of any material
modification of any matter or document furnished pursuant to
Section 2-1, together with such supporting documents as are
necessary to fully explain the change or modification.
(a) Contract modifications described in subsections
(c)(5), (c)(6) and (c)(7) of Section 2-1 shall include all
form agreements between the organization and enrollees,
providers, administrators of services and insurers of health
maintenance organizations.
(b) Material transactions or series of transactions other
than those described in subsection (a) of this Section, the
total annual value of which exceeds the greater of $100,000 or
5% of net earned subscription revenue for the most current
twelve month period as determined from filed financial
statements.
(c) Any agreement between the organization and an insurer
shall be subject to the provisions of the laws of this State
regarding reinsurance as provided in Article XI of the
Illinois Insurance Code. All reinsurance agreements must be

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filed. Approval of the Director is required for all agreements
except the following: individual stop loss, aggregate excess,
hospitalization benefits or out-of-area of the participating
providers unless 20% or more of the organization's total risk
is reinsured, in which case all reinsurance agreements require
approval.
(d) Rate increases for all individual and small group
accident and health insurance policies subject to the
standards of 45 CFR Part 154 must be filed with the Department
for approval. Unreasonable rate increases in relation to
benefits under the policy provided or inadequate rates shall
be modified or disapproved.
(e) When a health maintenance organization files a
schedule or table of premium rates for individual or small
group health benefit plans, the health maintenance
organization shall post notice of the rate filing and a filing
summary in plain language on the organization's website. The
Department shall post all insurers' rate filings and summaries
on the Department's website. All summaries shall include a
brief justification of any rate increase or decrease
requested, including the number of individual members, the
medical loss ratio, medical trend, administrative costs, and
any other information requested by the Director. The plain
language summary shall include notification of the public
comment period established in subsection (f).
(f) The Department shall open a 30-day public comment

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period on the rate filing beginning on the date that the rate
filing is posted on the website. The Department shall post all
of the comments received to the Department's website within 5
business days after the comment period ends. The Department
shall hold a public hearing during the 30-day comment period.
(g) The Director shall adopt affordability standards that
must be considered in any decision to approve, disapprove, or
modify rate filings. These affordability standards include,
but are not limited to, the following:
(1) trends, including historical rates for existing
products and national and regional medical and health
insurance trends;
(2) inflation;
(3) price comparisons to other market rates for
similar products;
(4) the ability of low-income individuals to pay for
health insurance;
(5) the ability of small businesses to pay for health
insurance;
(6) health insurers' efforts to control administrative
costs; and
(7) effective strategies implemented by health
insurers to increase affordability, including payment
reform across the delivery system.
(h) After the close of the public comment period described
in subsection (f), the Department shall issue a decision to

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approve, disapprove, or modify a rate filing. The Department
shall notify the health maintenance organization of the
decision, and make the decision available to the public by
posting it on the Department's website, and include the
following information:
(1) an explanation of the findings and rationale that
are the basis for the decision; and
(2) any actuarial or other analyses, calculations, or
evaluations relied upon by the Department in arriving at
the decision.
(i) If, following the issuance of a decision but before
the effective date of the premium rates approved by the
decision, an event occurs that materially affects the
Director's decision to approve, deny, or modify the rates, the
Director may consider supplemental facts or data reasonably
related to the event.
(j) The Department shall adopt rules implementing the
procedures described in subsections (e) through (i).
(k) As used in this Section:
"Inadequate rate" means a rate:
(1) that is insufficient to sustain projected losses
and expenses to which the rate applies; and
(2) the continued use of which endangers the solvency
of an insurer using that rate.
"Plain language" shall have the same meaning as "plain
writing" as used in the federal Plain Writing Act of 2010, and

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subsequent guidance documents, including the Federal Plain
Language Guidelines.
"Unreasonable rate increase" means a rate increase that
the Director determines to be excessive, unjustified, or
unfairly discriminatory in accordance with 45 CFR 154.205.
(Source: P.A. 86-620.)