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Article 3 - Delivery Of Services; Required Provisions And Marketing

      (215 ILCS 130/Art. 3 heading)ARTICLE 3. DELIVERY OF SERVICES; REQUIRED PROVISIONS AND MARKETING

(215 ILCS 130/3001) (from Ch. 73, par. 1503‑1)     Sec. 3001. Description and securing of services. The limited health service organization shall issue to each subscriber or enrollee a group contract or evidence of coverage. Any such group contract or evidence of coverage shall provide for the rendering of limited health services as defined therein for a period of 12 months from the date of issuance; and shall provide that it shall be renewed from year to year unless there has been 31 days written notice of termination prior to the annual renewal of the contract by the subscriber, enrollee or the limited health service organization. The group contract, evidence of coverage and related material shall be delivered or issued for delivery to an enrollee within 30 days from the later of the effective date of coverage or the date on which the limited health service organization is notified of enrollment. (Source: P.A. 86‑600.)

(215 ILCS 130/3002) (from Ch. 73, par. 1503‑2)     Sec. 3002. Complaint system. Every limited health service organization shall establish and maintain a complaint system providing reasonable procedures for resolving complaints initiated by enrollees. Nothing herein shall be construed to preclude an enrollee or a provider from filing a complaint with the Director or as limiting the Director's ability to investigate such complaints. (Source: P.A. 86‑600.)

(215 ILCS 130/3003) (from Ch. 73, par. 1503‑3)     Sec. 3003. Department complaint handling procedure. (a) When a complaint is received by the Department of Insurance (Department) against a limited health service organization (respondent) or producer (respondent), the respondent shall be notified of the complaint. The Department in its notification shall specify the date when a report is to be received from the respondent, which shall be no later than 21 days after notification is sent to the respondent. A failure to reply by the date specified may be followed by a collect telephone call or collect telegram. Repeated instances of failing to reply by the date specified may result in further regulatory action.     (b) Contents of response or report.         (1) Each respondent shall supply adequate

documentation which explains all actions taken or not taken and which were the basis for the complaint.

(2) Documents necessary to support the respondent's

position and information requested by the Department, shall be furnished with the respondent's reply.

(3) The respondent's reply shall be duplicate, but

duplicate copies of supporting documents shall not be required.

(4) The respondent's reply shall include the name,

telephone number and address of the individual assigned to the complaint.

(5) The Department shall respect the confidentiality

of medical reports and other documents which by law are confidential. Any other information furnished by a respondent shall be marked "confidential" if the respondent does not wish it to be released to the complainant.

(c) Follow‑up conclusion. Upon receipt of the respondent's report, the investigating deputy shall evaluate the material submitted; and         (1) advise the complainant of the action taken and

disposition of his complaint;

(2) pursue further investigation with respondent or

complainant; or

(3) refer the investigation report to the

appropriate unit within the Department of Insurance for further regulatory action.

(Source: P.A. 86‑600.)

(215 ILCS 130/3004) (from Ch. 73, par. 1503‑4)     Sec. 3004. Solicitations of enrollees. (a) Solicitations of enrollees by a limited health service organization authorized under this Act, or its representatives shall not be construed to be violative of any provisions of law relating to solicitation or advertising by health professionals. Nothing in this Section precludes a limited health service organization from providing to a particular potential enrollee the names of health providers. No limited health service organization, or representative thereof, may cause or knowingly permit the use of advertising which is untrue or misleading, solicitation which is untrue or misleading or any form of evidence of coverage which is deceptive. Limited health service organizations shall be subject to Section 143c or the Illinois Insurance Code as now or hereafter amended.     (b) If the Director finds that any advertisement of a plan has materially failed to comply with the provisions of this Act or the rules hereunder, the Director may, by order, require the plan to publish in the same or similar medium, an approved correction or retraction of any untrue, misleading or deceptive statement contained in the advertising and may prohibit such plan from publishing, distributing or allowing to be published or distributed on its behalf such advertisement or any new materially revised advertisement without first having filed a copy thereof with the Director 30 days prior to the publication or distribution thereof, or any shorter period specified in such order. An order issued under this Section shall be effective for 12 months from its issuance and may be renewed by order if the advertisements submitted under this Section indicate difficulties of voluntary compliance with the applicable provisions of this Act and the rules hereunder. (Source: P.A. 86‑600.)

(215 ILCS 130/3005) (from Ch. 73, par. 1503‑5)     Sec. 3005. Producers. No person may apply, procure, solicit, negotiate, or place for others any evidence of coverage of a limited health service organization unless that person holds a valid limited insurance representative license or producers license to sell accident and health insurance policies pursuant to Article XXXI of the Illinois Insurance Code, as now and hereafter amended. (Source: P.A. 86‑600.)

(215 ILCS 130/3006) (from Ch. 73, par. 1503‑6)     Sec. 3006. Changes in rate methodology and benefits; material modifications; addition of limited health services.     (a) A limited health service organization shall file with the Director prior to use, a notice of any change in rate methodology, charges or benefits and of any material modification of any matter or document furnished pursuant to Section 2001, together with such supporting documents as are necessary to fully explain the change or modification.         (1) Contract modifications described in paragraphs

(5) and (6) of subsection (c) of Section 2001 shall include all agreements between the organization and enrollees, providers, administrators of services and insurers of limited health services; also other material transactions or series of transactions, the total annual value of which exceeds the greater of $100,000 or 5% of net earned subscription revenue for the most current 12 month period as determined from filed financial statements.

(2) Contract modification for reinsurance. Any

agreement between the organization and an insurer shall be subject to the provisions of Article XI of the Illinois Insurance Code, as now or hereafter amended. All reinsurance agreements must be filed with the Director. Approval of the Director in required agreements must be filed. Approval of the director is required for all agreements except 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 shall require approval.

(b) If a limited health service organization desires to add one or more additional limited health services, it shall file a notice with the Director and, at the same time, submit the information required by Section 2001 if different from that filed with the prepaid limited health service organization's application. Issuance of such an amended certificate of authority shall be subject to the conditions of Section 2002 of this Act. (Source: P.A. 86‑600.)

(215 ILCS 130/3007) (from Ch. 73, par. 1503‑7)     Sec. 3007. Prior approval of policy forms.     (a) No limited health service organization shall issue or deliver, in this State, a group contract or evidence of coverage, attach an endorsement or rider thereto, incorporate by reference, bylaws or other matter therein or use an application blank in this State until the form and content of such group contract or evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank has been filed with and approved by the Director and, provided further, except that any such endorsement or rider which is to be attached to a group contract or evidence of coverage subsequent to the date the group contract or evidence of coverage is issued must be filed with, reviewed and approved by the Director prior to the date it is attached to a group contract or evidence of coverage issued or delivered in this State. The Director shall withhold approval of any such group contract, evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank if it contains provisions which may encourage misrepresentation or are unjust, unfair, inequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or to the public policy of this State, or contains exceptions and conditions that unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the group contract or evidence of coverage. In all cases the Director shall approve or disapprove any such form within 60 days after submission unless the Director extends, by not more than an additional 30 days, the period within which he shall approve or disapprove any such form by giving written notice to the organization of such extension before expiration of the initial 60 day period. The Director shall withdraw his approval of a group contract or evidence of coverage, endorsement rider, bylaw or other matter incorporated by reference or application blank if he subsequently determines that such group contract or evidence of coverage, endorsement, rider, bylaw, other matter incorporated by reference or application blank is misrepresentative, unjust, unfair, unequitable, ambiguous, misleading, inconsistent, deceptive, contrary to law or public policy of this State, or contains exceptions or conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the group contract or evidence of coverage.     (b) If a previously approved group contract or evidence of coverage, endorsement, rider, bylaw or other matter incorporated by reference or application blank is withdrawn from use, the Director shall serve upon the company an order of withdrawal of use, either personally or by mail, and if by mail, such service shall be completed if such notice is deposited in the post office, postage prepaid, addressed to the limited health service organization's last known address specified in the records of the Department of Insurance. The order of withdrawal of use shall take effect 30 days from the date of mailing, but shall be stayed if within the 30 day period a written request for hearing is filed with the Director. Such hearing shall be held at such time and place as designated in the order given by the Director. The hearing may be held either in the City of Springfield, the City of Chicago or in the county where the principal business address of the limited health service organization is located. The action of the Director in disapproving or withdrawing such form shall be subject to judicial review under the Administrative Review Law, as now or hereafter amended. (Source: P.A. 86‑600.)

(215 ILCS 130/3008) (from Ch. 73, par. 1503‑8)     Sec. 3008. Evidence of coverage. (a) Every subscriber shall be issued an evidence of coverage, which shall contain a clear and complete statement of:         (1) The limited health services to which each

enrollee is entitled.

(2) Eligibility requirements indicating the

conditions which must be met to enroll in a limited health care plan.

(3) Any limitation of the services or benefits to be

provided, and exclusions, including any copayment, or other charges.

(4) The terms or conditions upon which coverage may

be cancelled or otherwise terminated.

(5) Where and in what manner information is

available as to where and how services may be obtained.

(6) The method for resolving complaints.     (b) Any amendment to the evidence of coverage may be provided to the subscriber in a separate document. (Source: P.A. 86‑600.)

(215 ILCS 130/3009) (from Ch. 73, par. 1503‑9)     Sec. 3009. Point‑of‑service limited health service contracts.     (a) An LHSO that offers a POS contract:         (1) shall include as in‑plan covered services all

services required by law to be provided by an LHSO;

(2) shall provide incentives, which shall include

financial incentives, for enrollees to use in‑plan covered services;

(3) shall not offer services out‑of‑plan without

providing those services on an in‑plan basis;

(4) may limit or exclude specific types of services

from coverage when obtained out‑of‑plan;

(5) may include annual out‑of‑pocket limits and

lifetime maximum benefits allowances for out‑of‑plan services that are separate from any limits or allowances applied to in‑plan services;

(6) shall include an annual maximum benefit

allowance not to exceed $2,500 per year that is separate from any limits or allowances applied to in‑plan services;

(7) may limit the groups to which a POS product is

offered, however, if a POS product is offered to a group, then it must be offered to all eligible members of that group, when an LHSO provider is available;

(8) shall not consider emergency services,

authorized referral services, or non‑routine services obtained out of the service area to be POS services; and

(9) may treat as out‑of‑plan services those services

that an enrollee obtains from a participating provider, but for which the proper authorization was not given by the LHSO.

(b) An LHSO offering a POS contract shall be subject to the following limitations:         (1) The LHSO shall not expend in any calendar

quarter more than 20% of its total limited health services expenditures for all its members for out‑of‑plan covered services.

(2) If the amount specified in paragraph (1) is

exceeded by 2% in a quarter, the LHSO shall effect compliance with paragraph (1) by the end of the following quarter.

(3) If compliance with the amount specified in

paragraph (1) is not demonstrated in the LHSO's next quarterly report, the LHSO may not offer the POS contract to new groups or include the POS option in the renewal of an existing group until compliance with the amount specified in paragraph (1) is demonstrated or otherwise allowed by the Director.

(4) Any LHSO failing, without just cause, to comply

with the provisions of this subsection shall be required, after notice and hearing, to pay a penalty of $250 for each day out of compliance, to be recovered by the Director of Insurance. Any penalty recovered shall be paid into the General Revenue Fund. The Director may reduce the penalty if the LHSO demonstrates to the Director that the imposition of the penalty would constitute a financial hardship to the LHSO.

(c) Any LHSO that offers a POS product shall:         (1) File a quarterly financial statement detailing

compliance with the requirements of subsection (b).

(2) Track out‑of‑plan POS utilization separately

from in‑plan or non‑POS out‑of‑plan emergency care, referral care, and urgent care out of the service area utilization.

(3) Record out‑of‑plan utilization in a manner that

will permit such utilization and cost reporting as the Director may, by regulation, require.

(4) Demonstrate to the Director's satisfaction that

the LHSO has the fiscal, administrative, and marketing capacity to control its POS enrollment, utilization, and costs so as not to jeopardize the financial security of the LHSO.

(5) Maintain the deposit required by subsection (b)

of Section 2006 in addition to any other deposit required under this Act.

(d) An LHSO shall not issue a POS contract until it has filed and had approved by the Director a plan to comply with the provisions of this Section. The compliance plan shall at a minimum include provisions demonstrating that the LHSO will do all of the following:         (1) Design the benefit levels and conditions of

coverage for in‑plan covered services and out‑of‑plan covered services as required by this Article.

(2) Provide or arrange for the provision of adequate

systems to:

(A) process and pay claims for all out‑of‑plan

covered services;

(B) meet the requirements for a POS contract set

forth in this Section and any additional requirements that may be set forth by the Director; and

(C) generate accurate data and financial and

regulatory reports on a timely basis so that the Department can evaluate the LHSO's experience with the POS contract and monitor compliance with POS contract provisions.

(3) Comply initially and on an ongoing basis with

the requirements of subsections (b) and (c).

(e) A limited health service organization that offers a POS contract must comply with Sections 356w and 356x of the Illinois Insurance Code. (Source: P.A. 90‑741, eff. 1‑1‑99.)

    (215 ILCS 130/3010)
    Sec. 3010. Purchase of ophthalmic goods or services. An organization may not require a provider, as a condition of participation in the organization's limited health care plan, to purchase ophthalmic goods or services, including but not limited to eyeglass frames, in a quantity or dollar amount in excess of the quantity or dollar amount an enrollee purchases under the terms of the limited health care plan.
(Source: P.A. 93‑1077, eff. 1‑18‑05.)