215 ILCS 125/5-3
2021 Illinois Compiled Statutes|Chapter 215 - INSURANCE|215 ILCS 125/ - Health Maintenance Organization Act.|Article V - General Provisions

 (from Ch. 111 1/2, par. 1411.2)(Text of Section from P.A. 102-30)Sec. 5-3. Insurance Code provisions.(a) Health Maintenance Organizations  shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,  141.2, 141.3, 143, 143c, 147, 148, 149, 151,  152, 153, 154, 154.5, 154.6,  154.7, 154.8, 155.04, 155.22a, 355.2, 355.3, 355b, 356g.5-1, 356m, 356q, 356v, 356w, 356x, 356y,  356z.2, 356z.4, 356z.4a, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30, 356z.30a, 356z.32, 356z.33, 356z.35, 356z.36, 356z.41, 364, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,  370c.1, 401, 401.1, 402, 403, 403A,  408, 408.2, 409, 412, 444,  and  444.1,  paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2,  XII,  XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB of the Illinois Insurance Code.(b) For purposes of the Illinois Insurance Code, except for Sections 444  and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in  the following categories are deemed to be "domestic companies":(1) a corporation authorized under the Dental Service     Plan Act or the Voluntary Health Services Plans Act;(2) a corporation organized under the laws of this     State; or(3) a corporation organized under the laws of another     state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a "domestic company" under Article VIII 1/2 of the Illinois Insurance Code.(c) In considering the merger, consolidation, or other acquisition of  control of a Health Maintenance Organization pursuant to Article VIII 1/2  of the Illinois Insurance Code,(1) the Director shall give primary consideration to     the continuation of benefits to enrollees and the financial conditions of the acquired Health Maintenance Organization after the merger, consolidation, or other acquisition of control takes effect;(2)(i) the criteria specified in subsection (1)(b) of     Section 131.8 of the Illinois Insurance Code shall not apply and (ii) the Director, in making his determination with respect to the merger, consolidation, or other acquisition of control, need not take into account the effect on competition of the merger, consolidation, or other acquisition of control;(3) the Director shall have the power to require the     following information:(A) certification by an independent actuary of         the adequacy of the reserves of the Health Maintenance Organization sought to be acquired;(B) pro forma financial statements reflecting the         combined balance sheets of the acquiring company and the Health Maintenance Organization sought to be acquired as of the end of the preceding year and as of a date 90 days prior to the acquisition, as well as pro forma financial statements reflecting projected combined operation for a period of 2 years;(C) a pro forma business plan detailing an         acquiring party's plans with respect to the operation of the Health Maintenance Organization sought to be acquired for a period of not less than 3 years; and(D) such other information as the Director shall         require.(d) The provisions of Article VIII 1/2 of the Illinois Insurance Code  and this Section 5-3 shall apply to the sale by any health maintenance  organization of greater than 10% of its  enrollee population (including without limitation the health maintenance  organization's right, title, and interest in and to its health care  certificates).(e) In considering any management contract or service agreement subject  to Section 141.1 of the Illinois Insurance Code, the Director (i) shall, in  addition to the criteria specified in Section 141.2 of the Illinois  Insurance Code, take into account the effect of the management contract or  service agreement on the continuation of benefits to enrollees and the  financial condition of the health maintenance organization to be managed or  serviced, and (ii) need not take into account the effect of the management  contract or service agreement on competition.(f) Except for small employer groups as defined in the Small Employer  Rating, Renewability and Portability Health Insurance Act and except for  medicare supplement policies as defined in Section 363 of the Illinois  Insurance Code, a Health Maintenance Organization may by contract agree with a  group or other enrollment unit to effect refunds or charge additional premiums  under the following terms and conditions:(i) the amount of, and other terms and conditions     with respect to, the refund or additional premium are set forth in the group or enrollment unit contract agreed in advance of the period for which a refund is to be paid or additional premium is to be charged (which period shall not be less than one year); and(ii) the amount of the refund or additional premium     shall not exceed 20% of the Health Maintenance Organization's profitable or unprofitable experience with respect to the group or other enrollment unit for the period (and, for purposes of a refund or additional premium, the profitable or unprofitable experience shall be calculated taking into account a pro rata share of the Health Maintenance Organization's administrative and marketing expenses, but shall not include any refund to be made or additional premium to be paid pursuant to this subsection (f)).  The Health Maintenance Organization and the group or enrollment unit may agree that the profitable or unprofitable experience may be calculated taking into account the refund period and the immediately preceding 2 plan years.The Health Maintenance Organization shall include a statement in the  evidence of coverage issued to each enrollee describing the possibility of a  refund or additional premium, and upon request of any group or enrollment unit,  provide to the group or enrollment unit a description of the method used to  calculate (1) the Health Maintenance Organization's profitable experience with  respect to the group or enrollment unit and the resulting refund to the group  or enrollment unit or (2) the Health Maintenance Organization's unprofitable  experience with respect to the group or enrollment unit and the resulting  additional premium to be paid by the group or enrollment unit.In no event shall the Illinois Health Maintenance Organization  Guaranty Association be liable to pay any contractual obligation of an  insolvent organization to pay any refund authorized under this Section.(g) Rulemaking authority to implement Public Act 95-1045, if any, is conditioned on the rules being adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so adopted, for whatever reason, is unauthorized. (Source: P.A. 101-13, eff. 6-12-19; 101-81, eff. 7-12-19; 101-281, eff. 1-1-20; 101-371, eff. 1-1-20; 101-393, eff. 1-1-20; 101-452, eff. 1-1-20; 101-461, eff. 1-1-20; 101-625, eff. 1-1-21; 102-30, eff. 1-1-22.)(Text of Section from P.A. 102-34, 102-304, 102-306, 102-443, 102-589, and 102-642)Sec. 5-3. Insurance Code provisions.(a) Health Maintenance Organizations  shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,  141.2, 141.3, 143, 143c, 147, 148, 149, 151,  152, 153, 154, 154.5, 154.6,  154.7, 154.8, 155.04, 155.22a, 355.2, 355.3, 355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y,  356z.2, 356z.4, 356z.4a, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30, 356z.30a, 356z.32, 356z.33, 356z.35, 356z.36, 356z.41, 356z.43, 364, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,  370c.1, 401, 401.1, 402, 403, 403A,  408, 408.2, 409, 412, 444,  and  444.1,  paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2,  XII,  XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB of the Illinois Insurance Code.(b) For purposes of the Illinois Insurance Code, except for Sections 444  and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in  the following categories are deemed to be "domestic companies":(1) a corporation authorized under the Dental Service     Plan Act or the Voluntary Health Services Plans Act;(2) a corporation organized under the laws of this     State; or(3) a corporation organized under the laws of another     state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a "domestic company" under Article VIII 1/2 of the Illinois Insurance Code.(c) In considering the merger, consolidation, or other acquisition of  control of a Health Maintenance Organization pursuant to Article VIII 1/2  of the Illinois Insurance Code,(1) the Director shall give primary consideration to     the continuation of benefits to enrollees and the financial conditions of the acquired Health Maintenance Organization after the merger, consolidation, or other acquisition of control takes effect;(2)(i) the criteria specified in subsection (1)(b) of     Section 131.8 of the Illinois Insurance Code shall not apply and (ii) the Director, in making his determination with respect to the merger, consolidation, or other acquisition of control, need not take into account the effect on competition of the merger, consolidation, or other acquisition of control;(3) the Director shall have the power to require the     following information:(A) certification by an independent actuary of         the adequacy of the reserves of the Health Maintenance Organization sought to be acquired;(B) pro forma financial statements reflecting the         combined balance sheets of the acquiring company and the Health Maintenance Organization sought to be acquired as of the end of the preceding year and as of a date 90 days prior to the acquisition, as well as pro forma financial statements reflecting projected combined operation for a period of 2 years;(C) a pro forma business plan detailing an         acquiring party's plans with respect to the operation of the Health Maintenance Organization sought to be acquired for a period of not less than 3 years; and(D) such other information as the Director shall         require.(d) The provisions of Article VIII 1/2 of the Illinois Insurance Code  and this Section 5-3 shall apply to the sale by any health maintenance  organization of greater than 10% of its  enrollee population (including without limitation the health maintenance  organization's right, title, and interest in and to its health care  certificates).(e) In considering any management contract or service agreement subject  to Section 141.1 of the Illinois Insurance Code, the Director (i) shall, in  addition to the criteria specified in Section 141.2 of the Illinois  Insurance Code, take into account the effect of the management contract or  service agreement on the continuation of benefits to enrollees and the  financial condition of the health maintenance organization to be managed or  serviced, and (ii) need not take into account the effect of the management  contract or service agreement on competition.(f) Except for small employer groups as defined in the Small Employer  Rating, Renewability and Portability Health Insurance Act and except for  medicare supplement policies as defined in Section 363 of the Illinois  Insurance Code, a Health Maintenance Organization may by contract agree with a  group or other enrollment unit to effect refunds or charge additional premiums  under the following terms and conditions:(i) the amount of, and other terms and conditions     with respect to, the refund or additional premium are set forth in the group or enrollment unit contract agreed in advance of the period for which a refund is to be paid or additional premium is to be charged (which period shall not be less than one year); and(ii) the amount of the refund or additional premium     shall not exceed 20% of the Health Maintenance Organization's profitable or unprofitable experience with respect to the group or other enrollment unit for the period (and, for purposes of a refund or additional premium, the profitable or unprofitable experience shall be calculated taking into account a pro rata share of the Health Maintenance Organization's administrative and marketing expenses, but shall not include any refund to be made or additional premium to be paid pursuant to this subsection (f)).  The Health Maintenance Organization and the group or enrollment unit may agree that the profitable or unprofitable experience may be calculated taking into account the refund period and the immediately preceding 2 plan years.The Health Maintenance Organization shall include a statement in the  evidence of coverage issued to each enrollee describing the possibility of a  refund or additional premium, and upon request of any group or enrollment unit,  provide to the group or enrollment unit a description of the method used to  calculate (1) the Health Maintenance Organization's profitable experience with  respect to the group or enrollment unit and the resulting refund to the group  or enrollment unit or (2) the Health Maintenance Organization's unprofitable  experience with respect to the group or enrollment unit and the resulting  additional premium to be paid by the group or enrollment unit.In no event shall the Illinois Health Maintenance Organization  Guaranty Association be liable to pay any contractual obligation of an  insolvent organization to pay any refund authorized under this Section.(g) Rulemaking authority to implement Public Act 95-1045, if any, is conditioned on the rules being adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so adopted, for whatever reason, is unauthorized. (Source: P.A. 101-13, eff. 6-12-19; 101-81, eff. 7-12-19; 101-281, eff. 1-1-20; 101-371, eff. 1-1-20; 101-393, eff. 1-1-20; 101-452, eff. 1-1-20; 101-461, eff. 1-1-20; 101-625, eff. 1-1-21; 102-34, eff. 6-25-21; 102-203, eff. 1-1-22; 102-306, eff. 1-1-22; 102-443, eff. 1-1-22; 102-589, eff. 1-1-22; 102-642, eff. 1-1-22.)(Text of Section from P.A. 102-665)Sec. 5-3. Insurance Code provisions.(a) Health Maintenance Organizations  shall be subject to the provisions of Sections 133, 134, 136, 137, 139, 140, 141.1,  141.2, 141.3, 143, 143c, 147, 148, 149, 151,  152, 153, 154, 154.5, 154.6,  154.7, 154.8, 155.04, 155.22a, 355.2, 355.3, 355b, 356g.5-1, 356m, 356v, 356w, 356x, 356y,  356z.2, 356z.4, 356z.4a, 356z.5, 356z.6, 356z.8, 356z.9, 356z.10, 356z.11, 356z.12, 356z.13, 356z.14, 356z.15, 356z.17, 356z.18, 356z.19, 356z.21, 356z.22, 356z.25, 356z.26, 356z.29, 356z.30, 356z.30a, 356z.32, 356z.33, 356z.35, 356z.36, 356z.40, 356z.41, 364, 364.01, 367.2, 367.2-5, 367i, 368a, 368b, 368c, 368d, 368e, 370c,  370c.1, 401, 401.1, 402, 403, 403A,  408, 408.2, 409, 412, 444,  and  444.1,  paragraph (c) of subsection (2) of Section 367, and Articles IIA, VIII 1/2,  XII,  XII 1/2, XIII, XIII 1/2, XXV, XXVI, and XXXIIB of the Illinois Insurance Code.(b) For purposes of the Illinois Insurance Code, except for Sections 444  and 444.1 and Articles XIII and XIII 1/2, Health Maintenance Organizations in  the following categories are deemed to be "domestic companies":(1) a corporation authorized under the Dental Service     Plan Act or the Voluntary Health Services Plans Act;(2) a corporation organized under the laws of this     State; or(3) a corporation organized under the laws of another     state, 30% or more of the enrollees of which are residents of this State, except a corporation subject to substantially the same requirements in its state of organization as is a "domestic company" under Article VIII 1/2 of the Illinois Insurance Code.(c) In considering the merger, consolidation, or other acquisition of  control of a Health Maintenance Organization pursuant to Article VIII 1/2  of the Illinois Insurance Code,(1) the Director shall give primary consideration to     the continuation of benefits to enrollees and the financial conditions of the acquired Health Maintenance Organization after the merger, consolidation, or other acquisition of control takes effect;(2)(i) the criteria specified in subsection (1)(b) of     Section 131.8 of the Illinois Insurance Code shall not apply and (ii) the Director, in making his determination with respect to the merger, consolidation, or other acquisition of control, need not take into account the effect on competition of the merger, consolidation, or other acquisition of control;(3) the Director shall have the power to require the     following information:(A) certification by an independent actuary of         the adequacy of the reserves of the Health Maintenance Organization sought to be acquired;(B) pro forma financial statements reflecting the         combined balance sheets of the acquiring company and the Health Maintenance Organization sought to be acquired as of the end of the preceding year and as of a date 90 days prior to the acquisition, as well as pro forma financial statements reflecting projected combined operation for a period of 2 years;(C) a pro forma business plan detailing an         acquiring party's plans with respect to the operation of the Health Maintenance Organization sought to be acquired for a period of not less than 3 years; and(D) such other information as the Director shall         require.(d) The provisions of Article VIII 1/2 of the Illinois Insurance Code  and this Section 5-3 shall apply to the sale by any health maintenance  organization of greater than 10% of its  enrollee population (including without limitation the health maintenance  organization's right, title, and interest in and to its health care  certificates).(e) In considering any management contract or service agreement subject  to Section 141.1 of the Illinois Insurance Code, the Director (i) shall, in  addition to the criteria specified in Section 141.2 of the Illinois  Insurance Code, take into account the effect of the management contract or  service agreement on the continuation of benefits to enrollees and the  financial condition of the health maintenance organization to be managed or  serviced, and (ii) need not take into account the effect of the management  contract or service agreement on competition.(f) Except for small employer groups as defined in the Small Employer  Rating, Renewability and Portability Health Insurance Act and except for  medicare supplement policies as defined in Section 363 of the Illinois  Insurance Code, a Health Maintenance Organization may by contract agree with a  group or other enrollment unit to effect refunds or charge additional premiums  under the following terms and conditions:(i) the amount of, and other terms and conditions     with respect to, the refund or additional premium are set forth in the group or enrollment unit contract agreed in advance of the period for which a refund is to be paid or additional premium is to be charged (which period shall not be less than one year); and(ii) the amount of the refund or additional premium     shall not exceed 20% of the Health Maintenance Organization's profitable or unprofitable experience with respect to the group or other enrollment unit for the period (and, for purposes of a refund or additional premium, the profitable or unprofitable experience shall be calculated taking into account a pro rata share of the Health Maintenance Organization's administrative and marketing expenses, but shall not include any refund to be made or additional premium to be paid pursuant to this subsection (f)).  The Health Maintenance Organization and the group or enrollment unit may agree that the profitable or unprofitable experience may be calculated taking into account the refund period and the immediately preceding 2 plan years.The Health Maintenance Organization shall include a statement in the  evidence of coverage issued to each enrollee describing the possibility of a  refund or additional premium, and upon request of any group or enrollment unit,  provide to the group or enrollment unit a description of the method used to  calculate (1) the Health Maintenance Organization's profitable experience with  respect to the group or enrollment unit and the resulting refund to the group  or enrollment unit or (2) the Health Maintenance Organization's unprofitable  experience with respect to the group or enrollment unit and the resulting  additional premium to be paid by the group or enrollment unit.In no event shall the Illinois Health Maintenance Organization  Guaranty Association be liable to pay any contractual obligation of an  insolvent organization to pay any refund authorized under this Section.(g) Rulemaking authority to implement Public Act 95-1045, if any, is conditioned on the rules being adopted in accordance with all provisions of the Illinois Administrative Procedure Act and all rules and procedures of the Joint Committee on Administrative Rules; any purported rule not so adopted, for whatever reason, is unauthorized. (Source: P.A. 101-13, eff. 6-12-19; 101-81, eff. 7-12-19; 101-281, eff. 1-1-20; 101-371, eff. 1-1-20; 101-393, eff. 1-1-20; 101-452, eff. 1-1-20; 101-461, eff. 1-1-20; 101-625, eff. 1-1-21; 102-665, eff. 10-8-21.)