Section 2025.10  Purpose

 

The purpose of this Part is to set forth requirements the Director deems necessary to implement the Health Insurance Portability and Accountability Act.  This Part will provide uniformity for the health insurance issuer by defining notice requirements, as well as requirements for modification, termination, discontinuance and rescission provisions to which all health insurance issuers must adhere.  In addition, this Part also establishes penalty provisions for health insurance issuers who fail to comply with the certification requirements for creditable coverage found in Section 2025.100 of this Part.

 

(Source:  Amended at 32 Ill. Reg. 4732, effective March 24, 2008)

 

Section 2025.20  Applicability and Scope

 

This Part is applicable to all accident and health insurance policies and health maintenance organization contracts subject to the Illinois Health Insurance Portability and Accountability Act (IHIPAA) [215 ILCS 97], except those excluded by Section 45 of the Act that are issued, amended, delivered or renewed in this State on or after May 1, 2006.

 

Section 2025.30  Definitions

 

"Act" means the Illinois Health Insurance Portability and Accountability Act [215 ILCS 97].

 

"Anniversary Date" means the annually recurring date of the initial issuance of the policy.

 

"COBRA" means the federal Consolidated Omnibus Budget Reconciliation Act of 1985 (29 U.S. C. 1161 through 1168 and 42 U.S.C. 300bb-1 through 300bb- 8).

 

"Code" means the Illinois Insurance Code [215 ILCS 5].

 

"Department" means the Department of Insurance.

 

"Director" means the Director of the Department of Insurance.

 

"Employee" means any individual employed by an employer.  (29 U.S.C. 1002(6))

 

"Employer" means any person acting directly as an employer, or indirectly in the interest of an employer, in relation to an employee benefit plan, and includes a group or association of employers acting for an employer in such capacity.  Employer shall include only employers of 2 or more employees.  (29 U.S.C. 1002(5))

 

"Group Health Plan" means an employee welfare benefit plan (as defined in section 3(1) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1002)) to the extent that the plan provides medical care (as defined in paragraph (2) of that section and including items and services paid for as medical care) to employees or their dependents (as defined under the terms of the plan) directly or through insurance, reimbursement, or otherwise.  [215 ILCS 97/5]

 

"Health Insurance Issuer" means an insurance company, insurance service, or insurance organization (including a health maintenance organization) which is licensed to engage in the business of insurance in a state and which is subject to Illinois law that regulates insurance (within the meaning of section 514(b)(2) of the Employee Retirement Income Security Act of 1974 (29 U.S.C. 1144)).  This term does not include a group health plan.  [215 ILCS 97/5]

 

"Renewal Date" means each annual anniversary date unless otherwise specifically defined by the contract.  A renewal date may not be defined to a period shorter than the underwriting and benefit time frames established by the contract.

 

(Source:  Amended at 48 Ill. Reg. 7234, effective April 30, 2024)

 

Section 2025.40  Notice Requirement to the Department

 

In any case where a health insurance issuer elects to uniformly modify coverage, uniformly terminate coverage, or discontinue coverage in a marketplace, the health insurance issuer shall provide notice to the Department prior to notifying the plan sponsors, participants, beneficiaries and covered individuals.  The notice shall be sent by certified mail to the Department 90 days in advance of any notification of the company's actions.  The notice shall include a complete description of the action to be taken, a specific description of the type of coverage affected, the total number of covered lives affected, a draft of the letter being sent to the plan sponsors and participants, beneficiaries or covered individuals, time frames for the actions being taken and any options the plan sponsors, participants, beneficiaries or covered individuals may have available to them under the Act.

 

Section 2025.50  Uniform Modification of Coverage

 

Uniform modification to group or individual health insurance coverage may occur only at the time of coverage renewal.  The modification of the health insurance coverage may include any changes to the health insurance coverage, including deductibles and copayments.  Changes to the premium are not considered modifications of health insurance coverage.  Any uniform modifications made to the health insurance coverage as provided by Sections 30(D) and 50(D) of the Act that have not previously been approved by the Department as required by Section 143(1) of the Code and consistent with the requirements of 50 Ill. Adm. Code 916 must first be filed with the Department for approval as required by Section 143(1) of the Code [215 ILCS 5/143(1)].

 

Section 2025.60  Uniform Termination of Coverage

 

When a health insurance issuer decides to discontinue offering a particular type of health insurance coverage, the health insurance issuer must adhere to the following requirements:

 

a)         The health insurance issuer may only discontinue a particular type of health insurance coverage upon the renewal date of the coverage.  The statutory 90 day notice given to plan sponsors, participants, beneficiaries and covered individuals must be 90 days prior to the renewal date of the health insurance coverage.

 

b)         The notice of discontinuance of coverage must be sent to all the following:  the plan sponsor, participant and beneficiaries, or, if the coverage is an individual policy, the covered individual.

 

c)         The health insurance issuer must offer to be purchased all products being marketed in that market.  The health insurance issuer may not limit which products are to be offered for purchase.

 

d)         The health insurance issuer discontinuing the coverage must be the same company required to offer other health insurance coverage in the market to the plan sponsor or covered individual.  It may not be an affiliated company unless approved by the Director.

 

Section 2025.70  Discontinuance of a Market

 

When a health insurance issuer elects to discontinue offering all health insurance coverage in the small group market, large group market or individual market, (see Section 5 of the Act), the health insurance issuer must adhere to the following requirements:

 

a)         Provide notice to the Department of Insurance as outlined in Section 2025.40 of this Part.

 

b)         The notice of discontinuation of coverage must be sent to all the following:  the plan sponsor, participant, and beneficiaries, or, if the coverage is an individual policy, the covered individual.

 

c)         The health insurance issuer may only discontinue the health insurance coverage upon the renewal date of the coverage.  The 180-day notice given to plan sponsors, participants, beneficiaries, and covered individuals must be 180 days prior to the renewal date of the health insurance coverage.

 

(Source:  Amended at 48 Ill. Reg. 7234, effective April 30, 2024)

 

Section 2025.80  Rescission in the Small Group Market

 

a)         A health insurance issuer in the small group market may not rescind an individual's health insurance coverage based on health conditions.  The health insurance issuer may adjust the premium if a lower than appropriate premium resulted from the misrepresentation of health conditions, by either the employer or employee.  The premium may be adjusted to reflect the current rating for the group.

 

b)         The health insurance issuer may rescind a small employer policy or employee certificate if fraud is proven in a court of law.

 

Section 2025.90  Certificates of Creditable Coverage

 

a)         A health insurance issuer shall issue a written certification, as required by Section 20(E) of the Act, that states:

 

1)         The period of creditable coverage of the individual, including the coverage (if any) under the COBRA continuation provision; and

 

2)         The waiting period (if any) (and affiliation period, if applicable) imposed with respect to the individual for any coverage.

 

b)         Issuance of a Certificate

 

1)         The certification shall be issued by a health insurance issuer offering group health insurance coverage, in the following circumstances:

 

A)        When an individual ceases to be covered or otherwise becomes covered under a COBRA continuation provision;

 

B)        When an individual becomes covered under a COBRA continuation provision, at the time the individual ceases to be covered under that provision; and

 

C)        When a request is made on behalf of an individual, no later than 24 months after the date of cessation of the coverage described in subsection (b)(1) or (2), whichever is later.

 

2)         The certification may be provided, to the extent practicable, consistent with notices required under any applicable COBRA continuation provision.

 

c)         Failure of a health insurance issuer to issue a certificate of creditable coverage, or the inability of an individual to produce a certificate of creditable coverage, shall not limit an individual from obtaining the rights and protections provided by the Act, as long as the individual can provide reasonable proof of prior creditable coverage under the following circumstances:

 

1)         An entity has failed to provide a certificate within the required time;

 

2)         The individual has creditable coverage provided by an entity that is not required to provide a certificate of the coverage pursuant to the Act;

 

3)         The individual has an urgent medical condition that necessitates a determination before the individual can deliver a certificate; or

 

4)         The individual lost a certificate that the individual had previously received and is unable to obtain another certificate.

 

d)         A health insurance issuer shall treat the individual as having furnished a certificate of creditable coverage under subsection (a) of this Section if:

 

1)         The individual attests to the period of creditable coverage;

 

2)         The individual also presents relevant corroborating evidence of some creditable coverage during the period.  Relevant corroborating evidence may include, but is not limited to, the following:

 

A)        Explanation of benefits claims;

 

B)        Payroll stubs showing a payroll deduction for health coverage;

 

C)        A health insurance identification card;

 

D)        A certificate of coverage under a group health plan;

 

E)        Records from medical care providers that indicate health coverage;

 

F)         Third party statements verifying the period of coverage.

 

3)         The individual cooperates with the health insurance issuer's efforts to verify the individual's coverage.

 

(Source:  Added at 32 Ill. Reg. 4732, effective March 24, 2008)

 

Section 2025.100  Penalty Provisions

 

The Director may take any appropriate regulatory action authorized by Article XXIV of the Code [215 ILCS 5/Art. XXIV] or any other provision of the Code or rule against a health insurance issuer if it fails to provide a certification of creditable coverage as required by Section 2025.90 of this Part.

 

(Source:  Added at 32 Ill. Reg. 4732, effective March 24, 2008)