ADMINISTRATIVE CODE

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE
PART 2007 MINIMUM STANDARDS OF INDIVIDUAL ACCIDENT AND HEALTH INSURANCE

Section 2007.10 Authority

Section 2007.20 Purpose

Section 2007.30 Applicability

Section 2007.40 Revision of Noncomplying Policy Form and Subscriber Contracts Certificate of Compliance Required

Section 2007.50 Definitions

Section 2007.60 Prohibited Policy Provisions

Section 2007.70 Accident and Health Minimum Standards for Benefits

Section 2007.80 Required Disclosure Provisions

Section 2007.90 Requirements for Replacement

Section 2007.100 Severability

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE
PART 2007 MINIMUM STANDARDS OF INDIVIDUAL ACCIDENT AND HEALTH INSURANCE
SECTION 2007.10 AUTHORITY

Section 2007.10 Authority

This Part is issued by the Director of Insurance pursuant to Section 401 of the Illinois Insurance Code [215 ILCS 5/401] which empowers the Director ". . . to make reasonable rules and regulations as may be necessary for making effective . . ." the insurance laws of this State. This Part implements Section 355a of the Illinois Insurance Code [215 ILCS 5/355a].

(Source: Amended at 19 Ill. Reg. 16555, effective December 5, 1995)

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE
PART 2007 MINIMUM STANDARDS OF INDIVIDUAL ACCIDENT AND HEALTH INSURANCE
SECTION 2007.20 PURPOSE

Section 2007.20 Purpose

The purpose of this Part is to define terms, establish minimum standards for benefits, prohibit certain policy provisions and require disclosure provisions and replacement procedures in relation to policies of individual accident and health insurance.

(Source: Amended at 19 Ill. Reg. 16555, effective December 5, 1995)

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE
PART 2007 MINIMUM STANDARDS OF INDIVIDUAL ACCIDENT AND HEALTH INSURANCE
SECTION 2007.30 APPLICABILITY

Section 2007.30 Applicability

a) This Part applies to all individual accident and health insurance policies except that it does not apply to individual policies issued pursuant to a conversion privilege under a policy of group or individual insurance when the individual policy includes provisions that are inconsistent with the requirements of this Part, nor to policies being issued to employees or members as additions to franchise plans in existence prior to July 17, 1978.

b) The requirements contained in this Part are in addition to any other applicable regulations.

(Source: Amended at 43 Ill. Reg. 388, effective December 21, 2018)

Section 2007.40 Revision of Noncomplying Policy Form and Subscriber Contracts Certificate of Compliance Required

a) Any policy as defined in Section 355a of the Illinois Insurance Code [215 ILCS 5/355a] previously filed and approved by the Director need not be refiled if such policy is in compliance with the requirements of this Part. Any previously approved policy which does not comply with the requirements of this Part shall be amended by rider or revised and resubmitted in duplicate with a duplicate letter of transmittal.

b) All forms and contracts required to be revised and resubmitted by this Part shall be accompanied by a Certificate of Compliance as required by 50 Ill. Adm. Code 916.Exhibit A.

(Source: Amended at 19 Ill. Reg. 16555, effective December 5, 1995)

TITLE 50: INSURANCE
CHAPTER I: DEPARTMENT OF INSURANCE
SUBCHAPTER z: ACCIDENT AND HEALTH INSURANCE
PART 2007 MINIMUM STANDARDS OF INDIVIDUAL ACCIDENT AND HEALTH INSURANCE
SECTION 2007.50 DEFINITIONS

Section 2007.50 Definitions

Except as provided hereafter, no individual accident or health insurance policy delivered or issued for delivery to any person in this State shall contain definitions respecting the matters set forth in this Part unless the definitions comply with the requirements of this Section.

"ACA" means the Patient Protection and Affordable Care Act (42 USC 18001 et seq.).

"Accident and Accidental Injury" shall be defined to employ "result" language and shall not include words that establish an accidental means test or use words such as "external", "violent", "visible" or similar words of description or characterization. The definition shall not be more restrictive than the following: "Injury or injuries, for which benefits are provided, means accidental bodily injuries sustained by the insured person which are the direct cause of loss, independent of disease cause of loss, independent of disease or bodily infirmity and occurring while the insurance is in force."

AGENCY NOTE: The fact that the injury combined with other factors to produce the loss does not necessarily relieve the insurer of liability. Each claim must be judged on the basis of its particular facts and in light of the court decisions, to determine whether the injury is to be considered as the cause of the loss.

The definition may provide that injuries shall not include injuries for which benefits are provided under any workers' compensation, employer's liability or similar law, motor vehicle no-fault plan, unless prohibited by law, or injuries occurring while the insured person is engaged in any activity pertaining to any trade, business, employment or occupation for wage or profit.

"Convalescent Nursing Home, Extended Care Facility, or Skilled Nursing Facility" shall be defined in relation to its status, facilities and available services.

A definition of the home or facility shall not be more restrictive than one requiring that it:

be operated pursuant to law;

be approved for payment of Medicare benefits or be qualified to receive approval, if so requested;

be primarily engaged in providing, in addition to room and board accommodations, skilled nursing care under the supervision of a duly licensed physician;

provide continuous 24 hours a day nursing service by or under the supervision of a registered graduate professional nurse (R.N.); and

maintains a daily medical record of each patient.

The definition of a home or facility may provide that the term shall not be inclusive of:

any home, facility or part thereof used primarily for rest;

a home or facility for the aged or for the care of drug addicts or alcoholics; or

a home or facility primarily used for the care and treatment of mental diseases or disorders, or custodial or educational care.

"Excepted Benefits", for purposes of this Part, means benefits under one or more (or any combination thereof) of the following:

Benefits not subject to requirements:

Coverage only for accident or disability income insurance, or any combination thereof;

Coverage issued as a supplement to liability insurance;

Liability insurance, including general liability insurance and automobile liability insurance;

Workers' compensation or similar insurance;

Automobile medical payment insurance;

Credit-only insurance;

Coverage for on-site medical clinics; or

Other similar insurance coverage under which benefits for medical care are secondary or incidental to other insurance benefits.

Benefits not subject to requirements if offered separately:

Limited scope dental or vision benefits; and

Benefits for long-term care, nursing home care, home health care, community-based care, or any combination thereof.

Benefits not subject to requirements if offered as independent, noncoordinated benefits:

Coverage only for a specified disease or illness; or

Hospital indemnity or other fixed indemnity insurance paid as a fixed dollar amount per day or other period, per event or service or upon benefits paid upon a basis other than period of time, regardless of the amount of expenses incurred.

Benefits not subject to requirements if offered as separate insurance policy

Medicare supplemental health insurance (as defined under section 1882(g)(1) of the Social Security Act (42 USC 1395ss(g)(1))), coverage supplemental to the coverage provided under 10 USC 55, and similar supplemental coverage provided to coverage under a group health plan. (26 USC 9832)

"Grandfathered Health Plan" means any group health plan or health insurance coverage in which an individual was enrolled on the date of the enactment of the ACA and shall have the same meaning as set forth in section 18011 of the Public Health and Welfare Act (42 USC 18011).

"Home Health Care Agency" shall not be defined more restrictively than a public agency or private organization that provides skilled nursing services and meets the following requirements:

It is primarily engaged in providing home health care services;

Its policies are established by a group of professional personnel (including at least one physician and one registered nurse (R.N.));

Supervision of home health care services is provided by a physician or a registered nurse (R.N.);

It maintains clinical records on all patients; and

It has a full time administrator.

"Home Health Care" shall not be defined more restrictively than skilled nursing care or services provided to a person at a residence according to a plan of treatment for illness or infirmity prescribed by a physician. These services shall include, but are not limited to, the following:

Part time and intermittent skilled nursing services − Services given to a patient at least once every 60 days or as frequently as a few hours per day, several days per week.

Therapeutic Services:

Physical Therapy;

Occupational Therapy;

Speech and Hearing Therapy;

Medical social services, medical supplies, drugs and medicines prescribed by a physician and related pharmaceutical services and laboratory services to the extent the charges or costs would have been covered under the policy if the insured person had remained in the hospital.

"Hospital" may be defined in relation to its status, facilities and available services or to reflect its accreditation by the Joint Commission.

The definition of the term "hospital" shall not be more restrictive than one requiring that the hospital:

be an institution operated pursuant to the law; and

be primarily and continuously engaged in providing or operating medical and diagnostic facilities, with major surgical facilities either on its premises or in facilities available to the hospital on a prearranged basis, under the supervision of a staff of duly licensed physicians, for the medical care and treatment of sick or injured persons on an in-patient basis for which a charge is made; and

provide 24 hours nursing service by or under the supervision of registered graduate professional nurses (R.N.s).

The definition of the term "hospital" may state that such term shall not be inclusive of:

convalescent, rest or nursing homes or facilities;

facilities primarily affording custodial or educational care or care or treatment for persons suffering from mental diseases or disorders;

facilities for the aged, mentally ill, drug addicts or alcoholics (except for a unit of a hospital dedicated to the treatment of drug addicts or alcoholics or the mentally ill); or

any military or veterans hospital or soldiers home or any hospital contracted for or operated by any national government or agency thereof for the treatment of members or ex-members of the armed forces, except for services rendered on an emergency basis where a legal liability exists for charges made to the individual for those services.

"Medicare" shall be defined in any hospital, surgical or medical expense policy that relates its coverage to eligibility for Medicare or Medicare benefits. Medicare may be substantially defined as "The Health Insurance for the Aged Act, Subchapter XVIII of the Social Security Amendments of 1965 as then constituted or later amended (42 USC 1395 et seq.)", or "Title I, Part I of Public Law 89-97, as enacted by the Eighty-Ninth Congress of the United States of America and popularly known as the Health Insurance for the Aged Act (42 USC 395 et seq.), as then constituted and any later amendments or substitutes thereof" or words of similar import.

"Mental or Nervous Disorders" shall not be defined more restrictively than a definition including neurosis, psychoneurosis, psychopathy, psychosis, or mental or emotional disease, disorder or condition, including serious mental illness and substance use disorder or condition.

"Nurses" may be defined so that the description of nurse is restricted to a type of nurse, such as a registered graduate professional nurse (R.N.), a licensed practical nurse (L.P.N.), or a licensed vocational nurse (L.V.N.). If the words "nurse", "trained nurse" or "registered nurse" are used without specific instruction, then the use of those terms requires the insurer to recognize the services of any individual who qualifies under that terminology in accordance with the applicable statutes or administrative rules of the state licensing or registry board.

"One Period of Confinement or Continuous Hospital Confinement " means consecutive days of in-hospital service received as an in-patient, or successive confinements when discharge from and readmission to the hospital occurs within a period of time not more than 90 days or three times the maximum number of days of in-hospital coverage provided by the policy to a maximum of 180 days, whichever is greater.

"Partial Disability" shall be defined in relation of the individual's inability to perform one or more, but not all, of the "major", "important", or "essential" duties of employment or occupation or may be related to a percentage of time worked, to a specified number of hours or to compensation. When a policy provides total disability benefits and partial disability benefits, only one elimination period may be required.

"Physician" may be defined by including words such as "duly qualified physician" or "duly licensed physician". The use of such terms requires an insurer to recognize and to accept, to the extent of its obligation under the contract, all providers of medical care and treatment when the services are within the scope of the provider's licensed authority and are provided pursuant to applicable laws dealing with physician licensure.

"Residual Disability" shall be defined in relation to the individual's reduction in earnings and may be related either to the inability to perform some part of the "major," "important," or "essential" duties of employment or occupation, or to the inability to perform all usual business for as long as is usually required. A policy that provides for residual disability benefits may require a qualification period, during which the insured must be continuously totally disabled before residual disability benefits are payable. The qualification period for residual benefits may be longer than the elimination period for total disability. In lieu of the term "residual disability", the insurer may use "proportionate disability" or other term of similar import that, in the opinion of the Director, adequately and fairly describes the benefit.

"Sickness" shall not be defined to be more restrictive than the following: "Sickness means sickness or disease of an insured person that first manifests itself after the effective date of insurance and while the insurance is in force." A definition of sickness may provide for a probationary period that will not exceed 30 days from the effective date of the coverage of the insured person. The definition may be further modified to exclude sickness or disease for which benefits are provided under any workers' compensation, occupational disease, employer's liability or similar law.

"Total Disability"

A general definition of total disability cannot be more restrictive than one requiring the individual to be totally disabled from engaging in any employment or occupation that he or she could, giving due consideration of his education, training or experience be reasonably expected to engage in and is not in fact engaged in any employment or occupation for wage or profit.

Total disability may be defined in relation to the inability of the person to perform duties but may not be based solely upon an individual's inability to:

Perform "any occupation whatsoever", "any occupational duty", or "any and every duty of his or her occupation";

Engage in any training or rehabilitation program.

An insurer may specify the requirement of the complete inability of the person to perform all of the substantial and material duties of his or her regular occupation or words of similar import. An insurer may require care by a physician other than the insured or a member of the insured's immediate family.

When through a specific provision of a policy, disability coverage is provided to a retired person, the definition shall not require more than the insured be completely unable to engage in the normal activities of a retired person of like age and good health.

(Source: Amended at 38 Ill. Reg. 23400, effective November 25, 2014)

Section 2007.60 Prohibited Policy Provisions

a) Except as provided in the Section 2007.50 definition of "sickness", no policy shall contain provisions establishing a probationary or waiting period during which no coverage is provided under the policy. An excepted benefit policy may specify a probationary or waiting period not to exceed six months for specified diseases or conditions and losses resulting therefrom for hernia, varicose veins, adenoids, appendix and tonsils. However, the permissible six months exception shall not be applicable when the specified diseases or conditions are treated on an emergency basis. Accident policies shall not contain a probationary or waiting period.

b) No policy or rider for additional coverage may be issued as a dividend unless an equivalent cash payment is offered to the policyholder as an alternative to the dividend policy or rider. No such dividend policy or rider shall be issued for an initial term of less than six months.

c) A disability policy, hospital confinement indemnity policy or specified disease policy may contain a "return of premium" or "cash value benefit" so long as:

1) The policy provides for a return of 100% of all premiums paid less the claims incurred by the time the insured attains age 65. A percentage of less than 100%, but greater than 50%, is permissible if the "return of premium" or "cash value benefit" has been in force for 10 years or less;

2) The policy contains a reasonable nonforfeiture benefit and provides for the value to be paid automatically upon lapse or death;

3) The surrender value percentages are not less than those calculated assuming 1958 Commissioners Standard Ordinary Mortality, 5% interest and 5 year preliminary term;

4) An acceptable method of reserving is approved by the Director concurrent with approval of the policy. Reserves should exceed or equal the cash value at all durations;

5) The surrender value percentages are calculated assuming a zero percent future claim offset;

6) The surrender value percentages are defined for all policy years (surrender value percentages may be shown only for the first 20 policy years, but under these conditions the contract shall define the method used to determine the surrender value percentages after the 20^th contract year);

7) The interim surrender value percentages are defined when premiums are paid within a contract year;

8) The policy does not tie the return of premium to anything less than 100% of the premiums paid less claims paid.

d) When a liability exists for charges made to or on behalf of the insured or covered dependents, Accident and Health policies shall not contain provisions excluding coverage for:

1) Confinement in a hospital operated by a federal, state or local government;

2) Charges for medical services provided by a federal, state or local government.

e) No policy shall limit or exclude coverage by type of illness, accident, treatment or medical condition, except as follows:

1) With respect to excepted benefit policies and grandfathered health plans, preexisting conditions or diseases;

2) With respect to excepted benefit policies and grandfathered health plans, mental or emotional disorders, alcoholism, intoxication and drug addiction (policies that exclude benefits for alcoholism or intoxication shall provide the following definition: "That which is defined and determined by the laws of the state where the loss or cause of the loss was incurred");

3) With respect to excepted benefit policies and grandfathered health plans, pregnancy, except for complications of pregnancy;

4) With respect to excepted benefit policies and grandfathered health plans, rehabilitative care, except that when benefits, in whole or in part, would be payable for the care under the terms of coverage, those benefits shall not be denied on the basis that the care or treatment was provided, in whole or in part, in a rehabilitation institution, if the institution was a fully accredited hospital as defined in Section 2007.50 at the time care or treatment was provided;

5) Injury, illness, treatment or medical condition arising out of:

A) war or act of war (whether declared or undeclared); participation in a felony, riot or insurrection; service in the armed forces or auxiliary units;

B) with respect to excepted benefit policies and grandfathered health plans, suicide (sane or insane), attempted suicide or intentionally self-inflicted injury;

C) aviation;

D) with respect to short-term nonrenewable policies, interscholastic sports;

6) Cosmetic surgery, except that "cosmetic surgery" shall not include reconstructive surgery when the service is incidental to or follows surgery resulting from trauma, infection or other diseases of the involved part;

7) With respect to excepted benefit policies and grandfathered health plans, foot care in connection with corns, calluses, flat feet, fallen arches, weak feet, chronic foot strain, or symptomatic complaints of the feet;

8) Benefits provided under Medicare, any state or federal worker's compensation, employer's liability or occupational disease law, or any motor vehicle no-fault law; services rendered by employees of hospitals, laboratories or other institutions; services performed by a member of the covered person's immediate family; and services for which no charge is normally made in the absence of insurance;

9) Dental care or treatment for adults;

10) Eye glasses, hearing aids and examination for the prescription or fitting of eye glasses or hearing aids for adults;

11) Rest cures, custodial care, transportation and routine physical examinations;

12) Territorial limitations;

13) Sex change surgery, with respect to excepted benefit policies and grandfathered health plans, or surgical sterilization;

14) Tests or x-rays not related to diagnosis;

15) With respect to excepted benefit policies and grandfathered health plans, infertility;

16) Drugs, therapies, procedures or treatments that are determined in coordination with the attending physician to not be medically necessary;

17) With respect to excepted benefit policies and grandfathered health plans, weight reduction procedures, treatments or classes (except for morbid obesity);

18) With respect to excepted benefit policies and grandfathered health plans, smoking cessation classes or patches.

f) No provision of this Part shall prohibit the use of any policy provision that is required or permitted by statute. With respect to excepted benefit policies and grandfathered health plans, other provisions of this Part shall not impair or limit the use of waivers to exclude, limit or reduce coverage or benefits for specifically named or described preexisting diseases, physical condition or extra hazardous activity. When waivers are required as a condition of issuance, renewal or reinstatement, signed acceptance by the insured is required unless on initial issuance the full text of the waiver is contained either on the first page or specification page of the policy, or unless notice of the waiver appears on the first page or specification page.

g) No policy, rider or endorsement providing benefits for loss due to an accident or accidental injury shall contain a provision or clause limiting, reducing or excluding liability for a loss resulting from purely accidental circumstances (e.g., involuntary or unintentional ingestion of poison or inhalation of poisonous gases or fumes). This restriction shall not preclude approval of a benefit for loss from defined accidents, such as travel, sport and student accident insurance.

h) No policy, rider or endorsement shall limit or exclude coverage for illness, accident, treatment or medical condition by using a general exclusion for complications arising from a covered condition or the treatment of a covered condition. This restriction shall not preclude the exclusion of loss due to complications that are specifically named.

i) Policy provisions precluded in this Section shall not be construed as a limitation on the authority of the Director to disapprove other policy provisions in accordance with Section 143(1) of the Illinois Insurance Code [215 ILCS 5/143(1)] that, in the opinion of the Director, are unjust, unfair or unfairly discriminatory to the policyholder, beneficiary, or any person insured under the policy.

(Source: Amended at 38 Ill. Reg. 23400, effective November 25, 2014)

Section 2007.70 Accident and Health Minimum Standards for Benefits

a) The following minimum standards for benefits are prescribed for the categories of coverage noted in subsection (b). No individual policy of accident and health insurance shall be delivered or issued for delivery in this State that does not meet the required minimum standards for the specified categories, except that, if the Director finds that the policies are Limited Benefit Health Insurance, the Outline of Coverage shall comply with Section 2007.80(c).

b) Nothing in this Section shall preclude the issuance of any policy combining two or more categories of coverage as set forth in Section 355a(4) of the Illinois Insurance Code [215 ILCS 5/355a(4)].

1) General Rules

A) With respect to excepted benefit policies and grandfathered health plans, a "noncancellable", "guaranteed renewable", or "noncancellable and guaranteed renewable" policy shall not provide for termination of coverage of the spouse solely because of the occurrence of an event specified for termination of coverage of the insured, other than nonpayment of premium. The policy shall provide that in the event of the insured's death the spouse of the insured, if covered under the policy, shall become the insured.

B) With respect to excepted benefit policies and grandfathered health plans, the terms "noncancellable", "guaranteed renewable", or "noncancellable and guaranteed renewable" shall not be used without further explanatory language in accordance with the disclosure requirements of Section 2007.80(a)(1). The terms "noncancellable" or "noncancellable and guaranteed renewable" shall be defined as in 50 Ill. Adm. Code 2003.

C) With respect to excepted benefit policies and grandfathered health plans, in a family policy covering both husband and wife, the age of the younger spouse shall be used as the basis for meeting the age and durational requirements of the definitions of "noncancellable" or "guaranteed renewable." However, this requirement shall not prevent termination of coverage of the older spouse upon attainment of the stated age limit (e.g., age 65) so long as the policy may be continued in force by the younger spouse to the age or for the durational period as specified in the definition.

D) With respect to excepted benefit policies and grandfathered health plans, if a policy contains a status-type military service exclusion of a provision that suspends coverage during military service, the policy shall provide, upon receipt of written request, for refund of premiums as applicable to that person on a pro rata basis.

E) Policies providing normal pregnancy benefits shall provide that, in the event the insurer cancels or refuses to renew the policy, there shall be an extension of benefits for pregnancy commencing while the policy is in force and at the same level for which benefits would have been payable had the policy remained in force.

F) Policies providing convalescent or extended care benefits following hospitalization shall not condition those benefits upon admission to the convalescent or extended care facility within a period of less than 14 days after discharge from the hospital.

G) With respect to excepted benefit policies and grandfathered health plans, any medical, surgical or other expense benefit for the recipient insured in a transplant operation may specify the limits for the specific benefit relating to donors, or shall provide reimbursement of the expense of the live donor to the extent that the benefits remain and are available under the recipient's policy, after benefits for the recipient's own expenses have been paid.

H) Preexisting condition exclusions are only allowed with respect to excepted benefits and grandfathered health plans. Any such preexisting condition exclusion shall be administered in accordance with 50 Ill. Adm. Code 2005. When a definition of preexisting conditions is required by 50 Ill. Adm. Code 2005.50, for purposes of readability, it may be summarized in the appropriate policy provision by a definition reading substantially as follows:

"A preexisting illness (condition) means any condition that was diagnosed or treated by a physician within 24 months prior to the effective date of the coverage, or produced symptoms within 12 months prior to the effective date of coverage that would have caused an ordinarily prudent person to seek medical diagnosis or treatment."

I) Accidental death and dismemberment benefits shall be payable if the loss occurs within 90 days from the date of the accident, irrespective of total disability. Disability income benefits, if provided, shall not require the loss to commence less than 30 days after the date of accident, nor shall any policy that the insurer cancels or refuses to renew require that it be in force at the time the disability commences if the accident occurred while the policy was in force.

J) Specific dismemberment benefits shall not be in lieu of other benefits unless the specific dismemberment benefit equals or exceeds the other benefits.

K) Any accident only policy providing benefits that vary according to the type of accidental cause shall prominently set forth in the outline of coverage the circumstances under which benefits payable are less than the maximum amount payable under the policy.

L) With respect to excepted benefit policies and grandfathered health plans, nonrenewal of the policy shall be without prejudice to any continuous loss that commenced while the accident and sickness policy was in force, but the extension of benefits beyond the period the policy was in force may be predicated upon the continuous total disability of the covered person limited to a period of one year for health care benefits, limited to the duration of the policy benefit period (if any), and/or limited to the payment of the maximum benefits. The extension of benefits requirement does not apply to single premium nonrenewal policies.

M) "Total Disability" or "Totally Disabled", for the purposes of this Section, means the complete incapacity of the covered person as the result of an injury or sickness:

i) to engage in any occupation for pay or profit, or if not employed, to engage in the normal activities of a person of the same age; and

ii) that requires the regular care of a physician other than a covered person.

N) Extension and limitation of coverage means if a covered person is totally disabled on his/her coverage termination date the coverage provided for that covered person by the policy and any attached riders will be extended. During the extended coverage the applicable policy and rider provisions, exclusions, exceptions and limitations will be the same as would have applied had coverage not terminated for the covered person. This extension is limited to confinement and/or expenses incurred:

i) for the injury or sickness that caused the total disability;

ii) during the uninterrupted continuance of the total disability; and

iii) during the 12 months following the covered person's coverage termination date.

O) All policies issued, whether or not the policy contains the refund provision, shall be administered to provide a refund of any unearned premiums upon death of any insured member from date of death if the company receives a written request for unearned premium from the policy owner or the person entitled to the unearned premium.

2) Basic Hospital Expense Coverage

"Basic Hospital Expense Coverage" is a policy of accident and health insurance that provides coverage for a period of not less than 31 days during any continuous hospital confinement for each person insured under the policy, for expense incurred for necessary treatment and services rendered as a result of accident or sickness. Coverage shall be for at least the following:

A) Daily hospital room and board in an amount not less than the lesser of:

i) 80% of the charges for semi-private room accommodations; or

ii) $1,000 per day; except that $1,000 may be reduced to $700 outside the metropolitan area.

B) Miscellaneous charges made by the hospital for services and supplies that are customarily rendered by the hospital and provided for use only during any one period of confinement in an amount not less than either 80% of the charges incurred up to at least $1,000 or 10 times the daily hospital room and board benefits.

C) Hospital outpatient services consisting of:

i) hospital services on the day surgery is performed;

ii) hospital services rendered within 72 hours after accidental injury, in an amount not less than $50; and

iii) X-ray and laboratory tests for the purpose of a diagnosis and treatment of an accidental injury or a sickness, in an amount not less than $100, but only to the extent that benefits for x-ray and laboratory tests would have been provided if rendered to an in-patient of the hospital.

D) Benefits provided under subsection (b)(2)(A) and (B), may be provided subject to a combined deductible amount not in excess of $100.

E) When combined with the basic medical-surgical expense coverage in subsection (b)(3), basic hospital expense coverage is an essential health benefit subject to the requirements described in 50 Ill. Adm. Code 2001.11.

3) Basic Medical-Surgical Expense Coverage

"Basic Medical-Surgical Expense Coverage" is a policy of accident and health insurance that provides coverage for each person insured under the policy for the expenses incurred for the necessary services rendered by a physician for treatment of an injury or sickness. Coverage shall be for at least the following:

A) Surgical services:

i) in amounts not less than those provided on a fee schedule based on the relative values contained in the state of New York certified surgical fee schedule, or the 1964 California Relative Value Schedule or other acceptable relative value scale of surgical procedures, up to a maximum of at least $500 for any one procedure; or

ii) not less than 80% of the reasonable charges.

B) Anesthesia services, consisting of administration of necessary general anesthesia and related procedures in connection with covered surgical service rendered by a physician other than the physician (or his or her assistant) performing the surgical services:

i) in an amount not less than 80% of the reasonable charges; or

ii) 15% of the surgical service benefit.

C) In-hospital medical services, consisting of physician services rendered to a person who is a bed patient in a hospital for treatment of sickness or injury, other than that for which surgical care is required, in an amount not less than 80% of the reasonable charges; or $5.00 per day for not less than 21 days during one period of confinement.

D) When combined with the basic hospital expense coverage in subsection (b)(2), basic medical expense coverage is an essential health benefit subject to the requirements of 50 Ill. Adm. Code 2001.11.

4) With respect to excepted benefit policies, "Hospital Confinement Indemnity Coverage" is a policy of accident and health insurance that provides for not less than $30 per day and for not less than 31 days during any one period of confinement for each person insured under the policy. The policy may contain a benefit limit less than $30 per day if the policy benefit period is extended to reflect a maximum amount payable under a $30 per day policy with a 31 day maximum confinement period for any one period of confinement.

5) "Major Medical Expense Coverage" is an accident and health insurance policy that provides hospital, medical and surgical expense coverage to an aggregate maximum of not less than $10,000; co-payment by the covered person not to exceed 25% of covered charges; a deductible stated on a per person, per family, per illness, per benefit period, or per year basis, or a combination of those bases not to exceed 5% of the aggregate maximum limit under the policy, unless the policy is written to complement underlying hospital and medical insurance in which case the deductible may be increased by the amount of the benefits provided by the underlying insurance, for each covered person. The aggregate maximum shall be increased not less than $3.00 for each $1.00 by which the deductible exceeds the minimum. Major medical expense insurance shall provide for each covered person coverage of:

A) Daily hospital room and board expenses, prior to application of the co-payment percentage, for not less than $50 daily or, in lieu thereof, the average daily cost of semi-private room rate in the area where the insured resides, for a period of not less than 31 days during any period of continuous hospital confinement;

B) Miscellaneous Hospital Services, prior to application of the co-payment percentage, for an aggregate maximum of not less than $1,500 or 15 times the daily room and board rate if specified in dollar amount;

C) Surgical Services, prior to application of the co-payment percentage, to a maximum of not less than $600 for the most severe operation with the amounts provided for other operations reasonably related to that maximum amount; anesthetic services, prior to application of the co-payment percentage, of at least 15% of the covered surgical fees or, alternatively, if the surgical schedule is based on relative values, not less than the amount provided therein for anesthetic services at the same unit value as used for surgical schedule;

D) Physician visits, in or out of the hospital with minimum dollar amounts per visit, prior to application of the co-payment percentage, equal to not less than $8.00 per visit, covering not less than one visit per day and for an aggregate maximum of the covered charges of not less than $600;

E) Out of Hospital Diagnostic X-rays and Tests, prior to application of the co-payment percentage, for an aggregate maximum of the covered charges of not less than $600;

F) Not fewer than 3 of the following additional benefits, prior to application of the co-payment percentage, for an aggregate maximum of the covered charges of not less than $1,000:

i) private duty registered, or if not available, licensed practical nurse services performed by other than a family member while the insured is hospital confined;

ii) convalescent nursing home care;

iii) diagnosis and treatment by a radiologist or physiotherapist;

iv) rental of special medical equipment, as defined by the insurer in the policy;

v) artificial limbs or eyes, casts, splints, trusses or braces;

vi) treatment for functional nervous disorders, and mental or emotional disorders;

vii) out of hospital prescription drugs and medications;

G) Major medical expense coverage is an essential health benefit subject to the requirements of 50 Ill. Adm. Code 2001.11.

6) With respect to excepted benefit policies and grandfathered health plans, "Disability Income Protection Coverage" is a policy that provides for periodic payments, weekly or monthly, for a specified period during the continuance of disability resulting from either sickness or injury or a combination of sickness and injury that has a maximum period of time for which it is payable during disability of at least six months. A disability income protection policy may provide for reduction by the amount of Social Security benefits at inception of any claim but no benefit reduction shall be permitted to offset a Social Security benefit increase during a benefit period.

7) With respect to excepted benefit policies and grandfathered health plans, "Accident Only Coverage" is a policy of accident insurance that provides coverage, singly or in combination, for death, dismemberment, disability or hospital and medical care caused by accident. Accidental death and double dismemberment amounts under such a policy shall be at least $1,000 and a single dismemberment shall be at least $500.

8) With respect to excepted benefit policies and grandfathered health plans, "Specified Disease Coverage" pays benefits for the diagnosis and treatment of a specifically named disease or diseases. Any such policy shall meet the following general requirements and one of the following sets of minimum standards for benefits. Insurance covering cancer, whether cancer only or in conjunction with other conditions or diseases, shall meet the standards of subsection (b)(8)(C) or (D). Insurance covering specified diseases other than cancer shall meet the standards of subsections (b)(8)(B) or (D).

A) General Requirements:

i) All advertising materials used in conjunction with a specified disease policy shall accompany the policy filing.

ii) Policies covering a single specified disease or combination of specified diseases shall not be sold or offered for sale other than as specified disease covered under this Section.

iii) Any policy issued pursuant to this Section that conditions payment upon pathological diagnosis of a covered disease shall also provide that, if such a pathological diagnosis is medically inappropriate, a clinical diagnosis will be accepted in lieu thereof.

iv) Notwithstanding any other provision of this Part, specified disease policies shall provide benefits to any covered person not only for the specified diseases, but also for any other conditions or diseases directly caused or aggravated by the specified diseases or the treatment of the specified diseases.

v) Policies containing specified disease coverage shall be at least Guaranteed Renewable.

vi) No policy issued pursuant to this Section shall contain a waiting or probationary period greater than 30 days.

vii) Payment may be conditioned upon a covered person receiving medically necessary care or treatment.

viii) Except for the uniform policy provision regarding other insurance with this insurer, benefits for specified disease coverage shall be paid regardless of other coverage available through individual health insurance.

ix) After the effective date of the coverage (or applicable waiting period, if any) benefits shall begin with the first day of medical care or hospital confinement if the care or confinement is for a covered disease, even though the diagnosis is made at some later date.

x) Skin cancer benefits within a cancer policy shall not be limited as it is a minimum standard of specified disease coverage and is a risk purported to be assumed. Skin cancer may only be excluded if it is in an additional benefit provision added to compliment underlying coverage not required by this Section.

B) The following minimum benefit standards apply to noncancer coverages: A policy that provides coverage for each person insured under the policy for a specifically named disease (or diseases) with a deductible amount not in excess of ($250) and an overall aggregate benefit limit, per person, of not less than ($10,000) and a benefit period of not less than two years for at least the following incurred expenses:

i) Hospital room and board and any other hospital furnished medical services or supplies;

ii) Treatment by a legally qualified physician or surgeon;

iii) Private duty services of a registered nurse (R.N.);

iv) X-ray, radium, cobalt, nuclear medicine, and other therapeutic procedures used in diagnosis and treatment;

v) Professional ambulance for local service to or from a local hospital;

vi) Blood transfusions, including expense incurred for blood donors;

vii) Drugs and medicines prescribed by a physician;

viii) The rental of an iron lung or similar mechanical apparatus;

ix) Braces, crutches and wheel chairs as are deemed necessary by the attending physician;

x) Emergency transportation if in the opinion of the attending physician it is necessary to transport the insured to another locality for treatment of the disease; and

xi) May include coverage of any other expenses necessarily incurred for treatment of the disease.

C) A policy that provides coverage for each person insured under the policy for cancer-only coverage or in combination with one or more other specified diseases on an expense incurred basis for services, supplies, care and treatment that are prescribed by a physician as necessary for the treatment of cancer, in amounts not in excess of the usual and customary charges, with a deductible amount not in excess of $250 and an overall aggregate benefit limit, per person, of not less than $10,000 and a benefit period of not less than two years for at least the following:

i) Treatment by, or under the direction of, a legally qualified physician or surgeon;

ii) X-ray, radium, cobalt, chemotherapy, nuclear medicine, and other therapeutic procedures used in diagnosis and treatment;

iii) Hospital room and board and any other hospital furnished medical services or supplies;

iv) Blood transfusions and their administration, including expense incurred for blood donors;

v) Drugs and medicines prescribed by a physician;

vi) Professional ambulance for local service to or from a local hospital;

vii) Private duty services of a registered nurse (R.N.) provided in a hospital;

viii) May include coverage of any other expenses necessarily incurred in the treatment of the disease; however, subsections (b)(8)(C)(i), (ii), (iv), (v) and (vi) plus at least subsections (b)(8)(C)(ix) through (b)(8)(C)(xvi) shall be included, but may be subject to copayment not to exceed 20% of covered charges when rendered on an out-patient basis;

ix) Braces, crutches and wheel chairs as are deemed necessary by the attending physician for the treatment of the disease;

x) Emergency transportation if in the opinion of the attending physician it is necessary to transport the insured to another locality for treatment of the disease;

xi) Home Health Care, that is necessary care and treatment provided at the covered person's residence by a home health care agency or by others under arrangements made with a home health care agency. The program of treatment must be prescribed in writing by the covered person's attending physician, who must approve the program prior to its start. The physician must certify that hospital confinement would be otherwise required;

xii) Physical, speech, hearing and occupational therapy;

xiii) Special equipment including hospital bed, toilette, pulleys, aspirator, incontinence pants, oxygen, surgical dressings, rubber shields, colostomy and ileostomy appliances;

xiv) Reconstructive surgery when deemed necessary by the attending physician;

xv) Prosthetic devices; and

xvi) Nursing home care for non-custodial services.

D) The following minimum benefit standards apply to specified disease coverages written on a per diem indemnity basis. These coverages shall offer covered persons:

i) A fixed sum payment of at least $100 for each day of the hospital confinement for at least 365 days.

ii) A fixed sum payment equal to one-half of the hospital in-patient benefit for each day of hospital or non-hospital out-patient surgery, chemotherapy and radiation therapy for at least 365 days of treatment.

iii) Benefits tied to confinement in a skilled nursing home or to receipt of home health care are optional; if a policy offers these benefits, they must equal the following:

A fixed sum payment equal to one-fourth the hospital in-patient benefit for each day of skilled nursing home confinement for at least 100 days (approximately $25 per day or $2,500 minimum benefit). A fixed sum payment equal to one-fourth the hospital in-patient benefit for each day of home health care for at least 100 days ($2,500). Notwithstanding any other provision of this regulation, any restriction or limitation applied to the benefits in the above requirements, whether by definition or otherwise, shall be no more restrictive than those under Medicare.

E) "Specified Accident Coverage" is an accident insurance policy that provides coverage for a specifically identified kind of accident (or accidents) for each person insured under the policy for accidental death or dismemberment combined, with a benefit amount not less than $1,000 for double dismemberment and $500 for single dismemberment.

9) With respect to excepted benefit policies and grandfathered health plans, "Limited Benefit Health Insurance Coverage" is any policy or policies other than a policy or contract covering only a specified disease or diseases that provide benefits that are less than the minimum standards for benefits required under Section 2007.50(b)(2) through (7). The policies or contracts may be delivered or issued for delivery in this State only if the outline of coverage required by Section 2007.80(k) is completed and delivered as required by Section 2007.80(b).

10) Non-Conventional Coverage: With respect to excepted benefit policies and grandfathered health plans, nothing contained in this subsection (b) shall prohibit the issuance of a policy that does not fall within subsections (b)(1) through (9) if the policy is experimental in nature and is appropriately and prominently described in the outline of coverage required by Section 2007.80(l).

11) The requirements of this Section do not apply to policies issued in compliance with Section 363 of the Illinois Insurance Code [215 ILCS 5/363].

(Source: Amended at 38 Ill. Reg. 2138, effective January 2, 2014)

Section 2007.80 Required Disclosure Provisions

a) General Rules

1) Each individual policy of accident and health insurance shall include a renewal, continuation or nonrenewal provision. The language or specifications of the provision must be consistent with the requirements of 50 Ill. Adm. Code 2001.Subpart A and the type of plan issued. The provision shall be appropriately captioned, shall appear on the first page of the policy, and shall clearly state the duration, when limited, of renewability and the duration of the term of coverage for which the policy is issued and for which it may be renewed.

2) Except for riders or endorsements by which the insurer effectuates a request made in writing by the policyholder or exercises a specifically reserved right under the policy, all riders or endorsements added to a policy after date of issue or at reinstatement or renewal that reduce or eliminate benefits or coverage in the policy shall require signed acceptance by the policyholder. After date of policy issue, any rider or endorsement that increases benefits or coverage with a concomitant increase in premium during the policy term must be agreed to by the insured, except if the increased benefits or coverage is required by law.

3) When a separate additional premium is charged for benefits provided in connection with riders or endorsements, the premium charge shall be set forth in the policy.

4) A policy that provides for the payment of benefits based on standards described as "usual and customary", "reasonable and customary", or words of similar import shall include a definition of those terms and an explanation of those terms in its accompanying outline of coverage.

5) If a policy providing excepted benefits or a grandfathered health plan contains any limitations with respect to preexisting conditions, those limitations must appear as a separate paragraph of the policy and be labeled as "Preexisting Condition Limitations".

6) All accident only policies shall contain a prominent statement on the first page of the policy or attached to the policy in either contrasting color or in boldface type at least equal to the size of type used for policy captions, a prominent statement as follows:

"This is an accident only policy and it does not pay benefits for loss from sickness."

7) All policies, except single premium nonrenewal policies, shall have a notice prominently printed on the first page of the policy or attached thereto stating in substance, that the policyholder shall have the right to return the policy within 10 days after its delivery and to have the premium refunded if after examination of the policy the policyholder is not satisfied for any reason.

8) If age is to be used as a determining factor for reducing the maximum aggregate benefits made available in the policy as originally issued, that fact must be prominently set forth in the outline of coverage.

9) If a policy contains a conversion privilege, it shall comply, in substance, with the following: the caption of the provision shall be "Conversion Privilege", or words of similar import. The provision shall indicate the persons eligible for conversion, the circumstances applicable to the conversion privilege, including any limitations on the conversion, and the person by whom the conversion privilege may be exercised. The provision shall specify the benefits to be provided on conversion or may state that the converted coverage will be as provided on a policy form then being used by the insurer for that purpose.

10) All specified disease policies shall contain a prominent statement on the first page of the policy in contrasting color and in bold face type at least equal to the size of type used for policy captions, a prominent statement as follows: "This is a limited policy. Read it carefully."

11) Notice Requirements:

A) At the time of purchase of fixed indemnity contracts, the fixed indemnity insurer must provide notice within the application indicating that the fixed indemnity is not minimum essential coverage (MEC) within the meaning of 26 USC 5000A(f) and does not satisfy the ACA individual mandate. That notice must contain the following verbiage displayed prominently in the plan materials in at least 14-point type that has the following language:

"THIS IS A SUPPLEMENT TO HEALTH INSURANCE AND IS NOT A SUBSTITUTE FOR MAJOR MEDICAL COVERAGE. LACK OF MAJOR MEDICAL COVERAGE (OR OTHER MINIMUM ESSENTIAL COVERAGE) MAY RESULT IN AN ADDITIONAL PAYMENT WITH YOUR TAXES."

B) The notice requirement of subsection (a)(11)(A) applies to all hospital or other fixed indemnity insurance policy years beginning on or after January 1, 2015.

C) These notice requirements do not apply to individual hospital indemnity or other fixed indemnity insurance policies issued before January 1, 2015 that do not require an application as a condition of renewal, are guaranteed renewable or non-cancelable, and only condition renewal on the timely payment of premiums with no renewal application form required.

D) These notice requirements apply only to hospital indemnity or other fixed indemnity insurance policies sold in the individual market. They do not apply to any other type or category of insurance that is listed separately as an excepted benefit in the federal Public Health Service Act (42 USC ch. 6A) (e.g., disability income insurance, specified disease insurance, accident only insurance, etc.), regardless of whether the benefits under that coverage are paid as a fixed dollar amount per day or other period, or per service.

E) These notice requirements do not apply to individual hospital indemnity or other fixed indemnity insurance policyholders who are age 65 or older and are enrolled in Medicare.

b) Outline of Coverage Requirements for Individual Coverages

1) No individual accident and health insurance policy shall be delivered or issued for delivery in this State unless an appropriate Summary of Benefits, in accordance with 50 Ill. Adm. Code 2001.10, that includes an outline of coverage as prescribed in subsections (c) through (l) is completed as to the policy and is delivered in accordance with Section 355a(5)(a) of the Illinois Insurance Code [215 ILCS 5/355a(5)(a)].

2) In the event that a policy is issued on a basis other than that applied for, an outline of coverage properly describing the policy must accompany the policy when it is delivered and, if an outline of coverage was delivered earlier, contain the following statement, in not less than 12 point type, immediately above the company name:

NOTICE

Read this outline of coverage carefully. It is not identical to the outline of coverage provided upon application and the coverage originally applied for has not been issued.

3) In those cases in which a policy designed to supplement existing coverage is approved, the outline of coverage shall prominently state that coverage is designed to supplement other health insurance policies owned by the insured.

4) The appropriate outline of coverage for policies providing hospital coverage that only meets the standards of Section 2007.70(b)(2) shall be that statement contained in subsection (c) of this Section. The appropriate outline of coverage for policies providing coverage that meets the standards of both Section 2007.70(b)(2) and (3) shall be the statement contained in subsection (e) of this Section. The appropriate outline of coverage for policies providing coverage that meets the standards of Section 2007.70(b)(2) and (5), (b)(3) and (5), or (b)(2), (3) and (5) shall be the statement contained in subsection (g) of this Section.

c) Basic Hospital Expense Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed in this subsection (c), shall be issued in connection with policies meeting the standards of Section 2007.70(b)(2). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

BASIC HOSPITAL EXPENSE COVERAGE

OUTLINE OF COVERAGE

1) Read Your Policy Carefully – This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!

2) Basic Hospital Expense Coverage – Policies of this category are designed to provide to persons insured coverage for hospital expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, and hospital outpatient services, subject to any limitations, deductibles and co-payment requirements set forth in the policy. Coverage is not provided for physicians or surgeons fees or unlimited hospital expenses.

3) (A brief specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy in the following order:

A) daily hospital room and board;

B) miscellaneous hospital services;

C) hospital out-patient services; and

D) other benefits, if any.)

AGENCY NOTE: The above description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (c)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to charge premiums.)

d) Basic Medical-Surgical Expense Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed in this subsection (d), shall be issued in connection with policies meeting the standards of Section 2007.70(b)(3). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

BASIC MEDICAL-SURGICAL EXPENSE COVERAGE

OUTLINE OF COVERAGE

1) Read Your Policy Carefully – This outline of coverage provides a very brief description of the important features of your policy. This is not the insurance contract and only the actual policy provisions will control your policy. The policy itself sets forth in detail the rights and obligations of both you and your insurance company. It is, therefore, important that you READ YOUR POLICY CAREFULLY!

2) Basic Medical-Surgical Expense Coverage – Policies of this category are designed to provide to persons insured coverage for medical-surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for surgical services, anesthesia services, and in-hospital medical services, subject to any limitations, deductibles and co-payment requirements set forth in the policy. Coverage is not provided for hospital expenses or unlimited medical surgical expenses.

3) (A brief specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order:

A) surgical services;

B) anesthesia services;

C) in-hospital medical services; and

D) other benefits, if any.)

AGENCY NOTE: The description of benefits in this subsection (d)(3) shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (d)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

e) Basic Hospital and Medical Surgical Expense Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed in this subsection (e), shall be issued in connection with policies meeting the standards of Section 2007.70(b)(2) and (3). The items included in the outline of coverage must appear in the sequence prescribed.

(COMPANY NAME)

BASIC HOSPITAL AND MEDIAL SURGICAL

EXPENSE COVERAGE OUTLINE OF COVERAGE

2) Basic Hospital and Medical Surgical Expense Coverage – Policies of this category are designed to provide, to persons insured, coverage for hospital and medical-surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, hospital out-patient services, surgical services, anesthesia services, and in-hospital medical services, subject to any limitations, deductibles and co-payment requirements set forth in the policy. Coverage is not provided for unlimited hospital or medical-surgical expenses.

3) (A brief specific description of the benefits, including dollar amounts and number of days duration where applicable, contained in this policy, in the following order:

A) daily hospital room and board;

B) miscellaneous hospital services;

C) hospital out-patient services;

D) surgical services;

E) anesthesia services;

F) in-hospital medical services; and

G) other benefits, if any.)

AGENCY NOTE: The description of benefits in this subsection (e)(3) shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (e)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

f) Hospital Confinement Indemnity Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed below, shall be issued in connection with policies meeting the standards of Section 2007.70(b)(4). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

HOSPITAL CONFINEMENT INDEMNITY COVERAGE

OUTLINE OF COVERAGE

2) Hospital Confinement Indemnity Coverage – Policies of this category are designed to provide to persons insured, coverage in the form of a fixed daily benefit during periods of hospitalization resulting from a covered accident or sickness, subject to any limitations set forth in the policy. These policies do not provide any benefits other than the fixed daily indemnity for hospital confinement and any additional benefit described in subsections (f)(3) through (f)(6).

3) (A brief specific description of the benefits contained in this policy, in the following order:

A) daily benefit payable during hospital confinement; and

B) duration of benefit described in (A).)

AGENCY NOTE: The description of benefits in this subsection (f)(3) shall be stated clearly and concisely.

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in (f)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

6) (Any benefits provided in addition to the daily hospital benefit.)

g) Major Medical Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed in this subsection (g), shall be issued in connection with policies meeting the standards of Section 2007.70(b)(5). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

MAJOR MEDICAL EXPENSE COVERAGE

OUTLINE OF COVERAGE

2) Major Medical Expense Coverage – Policies of this category are designed to provide, to persons insured, coverage for major hospital, medical, and surgical expenses incurred as a result of a covered accident or sickness. Coverage is provided for daily hospital room and board, miscellaneous hospital services, surgical services, anesthesia services, in-hospital medical services, and out of hospital care, subject to any deductibles, co-payment provisions, or other limitations that may be set forth in the policy. Basic hospital or basic medical insurance coverage is not provided.

3) (A brief specific description of the benefits, including dollar amounts, contained in this policy, in the following order:

A) daily hospital room and board;

B) miscellaneous hospital services;

C) surgical services;

D) anesthesia services;

E) in-hospital medical services;

F) out of hospital care;

G) maximum dollar amount for covered charges; and

H) other benefits, if any.)

AGENCY NOTE: The description of benefits in this subsection (g)(3) shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described.

4) (A description of policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (g)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

h) Disability Income Protection Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed in this subsection (h), shall be issued in connection with policies meeting the standards of Section 2007.70(b)(6). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

DISABILITY INCOME PROTECTION COVERAGE

OUTLINE OF COVERAGE

2) Disability Income Protection Coverage – Policies of this category are designed to provide, to persons insured, coverage for disabilities resulting from a covered accident or sickness, subject to any limitations set forth in the policy. Coverage is not provided for basic hospital, basic medical-surgical, or major medical expenses.

3) (A brief specific description of the benefits contained in this policy:)

AGENCY NOTE: The description of benefits shall be stated clearly and concisely.

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (h)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

i) Accident Only Coverage (Outline of Coverage)

An outline of coverage in the form prescribed in this subsection (i) shall be issued in connection with policies meeting the standards of Section 2007.70(b)(7). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY)

ACCIDENT ONLY COVERAGE

OUTLINE OF COVERAGE

2) Accident Only Coverage – Policies of this category are designed to provide, to persons insured, coverage for certain losses resulting from a covered accident ONLY, subject to any limitations contained in the policy. Coverage is not provided for basic hospital, basic medical-surgical, or major medical expenses.

3) (A brief specific description of the benefits contained in this policy:)

AGENCY NOTE: The description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provision applicable to the benefits described. Proper disclosure of benefits that vary according to accidental cause shall be made in accordance with Section 2007.70(e).

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (i)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

j) Specified Disease or Specified Accident Coverage (Outline of Coverage)

An outline of coverage in the form prescribed in this subsection (j), shall be issued in connection with policies meeting the standards of Section 2007.70(b)(8). The coverage shall be identified by the appropriate bracketed title. The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

(SPECIFIED DISEASE) (SPECIFIED ACCIDENT COVERAGE)

OUTLINE OF COVERAGE

2) (Specified Disease) (Specified Accident) Coverage – Policies of this category are designed to provide, to persons insured, restricted coverage paying benefits ONLY when certain losses occur as a result of (specified diseases) or (specified accidents). Coverage is not provided for basic hospital, basic medical-surgical, or major medical expenses.

3) (A brief specific description of the benefits, including dollar amounts, contained in this policy:)

AGENCY NOTE: The description of benefits shall be stated clearly and concisely, and shall include a description of any deductible or co-payment provisions applicable to the benefits described. Proper disclosure of benefits that vary according to accidental cause shall be made in accordance with Section 2007.70(b)(1)(L).

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (j)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restriction or any reservation of right to change premiums.)

k) Limited Benefit Health Coverage (Outline of Coverage)

An outline of coverage, in the form prescribed in this subsection (k), shall be issued in connection with policies that do not meet the minimum standards of Section 2007.70(b)(2) through (b)(7). The items included in the outline of coverage must appear in the sequence prescribed:

(COMPANY NAME)

LIMITED BENEFIT HEALTH COVERAGE

OUTLINE OF COVERAGE

2) Limited Benefit Health Coverage – Policies of this category are designed to provide, to persons insured, limited or supplemental coverage.

3) (A brief specific description of the benefits, including dollar amounts, contained in this policy:)

4) (A description of any policy provisions that exclude, eliminate, restrict, reduce, limit, delay, or in any other manner operate to qualify payment of the benefits described in subsection (k)(3).)

5) (A description of policy provisions respecting renewability or continuation of coverage, including age restrictions or any reservation of right to change premiums.)

l) Non-Conventional Coverage (Outline of Coverage)

The outline of coverage shall include the following information:

1) The name and principal address of the insurer.

2) An appropriate statement of identification of the type of coverage provided by the policy.

3) A description of each of the principal benefits and coverages, including the benefit amounts, duration or limits, elimination periods, inner limits and any other items appropriate to the coverage provided.

4) A description of the terms and conditions of renewability of the policy, including any limitations by age, time or event, rights to change premium, status requirements and any other matters appropriate to the terms and conditions of renewability (including any rights of cancellation reserved to the insurer).

5) A description of the principal exceptions, reductions and limitations contained in the policy, including the preexisting conditions, if any, and the circumstances under which any reduction provisions become operative.

6) A statement that the Outline of Coverage is only a brief summary of the policy and is not the contract of insurance. The policy itself sets forth the rights and obligations of the insured and insurer.

(Source: Amended at 43 Ill. Reg. 388, effective December 21, 2018)

Section 2007.90 Requirements for Replacement

a) Application forms shall include a question designed to elicit information as to whether the insurance to be issued is intended to replace any other accident and health insurance presently in force. A supplementary application or other form to be signed by the applicant containing such a question may be used.

b) Upon determining that a sale will involve replacement, an insurer, other than a direct response insurer, or its agent shall furnish the applicant, prior to issuance or delivery of the policy, the notice described in subsection (d). One copy of the notice shall be retained by the applicant and an additional copy signed by the applicant shall be retained by the insurer. A direct response insurer shall deliver to the applicant upon issuance of the policy, the notice described in subsection (e).

c) In no event, however, will such a notice be required in the solicitation of the following types of policies: accident only and single premium nonrenewable policies.

d) The notice required by subsection (b) for an insurer, other than a direct response insurer, shall provide, in substantially the following form:

NOTICE TO APPLICANT REGARDING REPLACEMENT

OF ACCIDENT AND HEALTH INSURANCE

According to (your application) (information you have furnished), you intend to lapse or otherwise terminate existing accident and health insurance and replace it with a policy to be issued by (Company Name) Insurance Company. For your own information and protection, you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.

1) Health conditions that you may presently have (preexisting conditions) may not be immediately or fully covered under the new policy insofar as excepted benefit policies and grandfathered health plans are concerned. Generally, excepted benefits involve coverage only for accident or disability income insurance, or coverage issued as a supplement to liability insurance, or other separately offered coverage such as dental or vision benefits. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.

2) You may wish to secure the advice of your present insurer or its agent regarding the proposed replacement of your present policy. This is not only your right, but it is also in your best interests to make sure you understand all the relevant factors involved in replacing your present coverage.

3) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, be certain to truthfully and completely answer all questions on the application concerning your medical/health history. Failure to include all material medical information on an application may provide a basis for the Company to deny any future claims and to refund your premium as though your policy had never been in force. After the application has been completed and before you sign it, re-read it carefully to be certain that all information has been properly recorded.

The above "Notice to Applicant" was delivered to me on:

Date

Applicant's Signature

e) The notice required by subsection (b) for a direct response insurer shall be as follows:

According to (your application) (information you have furnished) you intend to lapse or otherwise terminate existing accident and health insurance and replace it with the policy delivered herewith issued by (Company Name) Insurance Company. Your new policy provides 10 days within which you may decide without cost whether you desire to keep the policy. For your own information and protection you should be aware of and seriously consider certain factors which may affect the insurance protection available to you under the new policy.

1) Health conditions that you may presently have (preexisting conditions), may not be immediately or fully covered under the new policy insofar as excepted benefit policies and grandfathered health plans are concerned. Generally, excepted benefits involve coverage only for accident or disability income insurance, or coverage issued as a supplement to liability insurance, or other separately offered coverage such as dental or vision benefits. This could result in denial or delay of a claim for benefits under the new policy, whereas a similar claim might have been payable under your present policy.

3) (To be included only if the application is attached to the policy.) If, after due consideration, you still wish to terminate your present policy and replace it with new coverage, read the copy of the application attached to your new policy and be sure that all questions are answered fully and correctly. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to (Company Name and Address) within 10 days if any information is not correct and complete, or if any past medical history has been left out of the application.

Company Name

(Source: Amended at 38 Ill. Reg. 2138, effective January 2, 2014)

Section 2007.100 Severability

If any provision of this Part or the application thereof to any person or circumstances is for any reason held to be invalid, the remainder of the Part and the application of such provision to other persons or circumstances shall not be affected thereby.

AUTHORITY: Implementing Section 355a and authorized by Section 401 of the Illinois Insurance Code [215 ILCS 5/355a and 401] and 42 USC 300gg-22; 45 CFR 150.101(b)(2) and 150.201.

SOURCE: Adopted at 2 Ill. Reg. 30, p. 41, effective August 1, 1978; amended at 4 Ill. Reg. 45, p. 102, effective March 1, 1981; amended at 6 Ill. Reg. 7072, effective May 27, 1982; codified at 7 Ill. Reg. 10591; amended at 12 Ill. Reg. 6921, effective April 1, 1988; amended at 15 Ill. Reg. 7658, effective May 7, 1991; amended at 19 Ill. Reg. 16555, effective December 5, 1995; amended at 38 Ill. Reg. 2138, effective January 2, 2014; amended at 38 Ill. Reg. 23400, effective November 25, 2014; amended at 43 Ill. Reg. 388, effective December 21, 2018.