101ST GENERAL ASSEMBLY State of Illinois 2019 and 2020 HB5181

Introduced , by Rep. Sam Yingling

SYNOPSIS AS INTRODUCED: 215 ILCS 97/5

Amends the Illinois Health Insurance Portability and Accountability Act. Revises the definition of "small employer" to mean an employer who employs an average of at least one but not more than 50 employees on business days during the preceding calendar year and who employs at least one employee on the first day of the plan year (rather than an employer who employs an average of at least 2 employees on business days during the preceding calendar year and who employs at least 2 employees on the first day of the plan year). Effective immediately. LRB101 16648 BMS 66035 b

A BILL FOR

HB5181LRB101 16648 BMS 66035 b 1 AN ACT concerning regulation. 2 Be it enacted by the People of the State of Illinois, 3represented in the General Assembly: 4 Section 5. The Illinois Health Insurance Portability and 5Accountability Act is amended by changing Section 5 as follows: 6 (215 ILCS 97/5) 7 Sec. 5. Definitions. 8 "Affiliate" means a person that directly, or indirectly 9through one or more intermediaries, controls, is controlled by, 10or is under common control with the person specified. 11 "Beneficiary" has the meaning given such term under Section 123(8) of the Employee Retirement Income Security Act of 1974. 13 "Bona fide association" means, with respect to health 14insurance coverage offered in a State, an association which: 15 (1) has been actively in existence for at least 5 16 years; 17 (2) has been formed and maintained in good faith for 18 purposes other than obtaining insurance; 19 (3) does not condition membership in the association on 20 any health status-related factor relating to an individual 21 (including an employee of an employer or a dependent of an 22 employee); 23 (4) makes health insurance coverage offered through

HB5181- 2 -LRB101 16648 BMS 66035 b 1 the association available to all members regardless of any 2 health status-related factor relating to such members (or 3 individuals eligible for coverage through a member); 4 (5) does not make health insurance coverage offered 5 through the association available other than in connection 6 with a member of the association; and 7 (6) meets such additional requirements as may be 8 imposed under State law. 9 "Church plan" has the meaning given that term under Section 103(33) of the Employee Retirement Income Security Act of 1974. 11 "COBRA continuation provision" means any of the following: 12 (1) Section 4980B of the Internal Revenue Code of 1986, 13 other than subsection (f)(1) of that Section insofar as it 14 relates to pediatric vaccines. 15 (2) Part 6 of subtitle B of title I of the Employee 16 Retirement Income Security Act of 1974, other than Section 17 609 of that Act. 18 (3) Title XXII of federal Public Health Service Act. 19 "Control" means the possession, direct or indirect, of the 20power to direct or cause the direction of the management and 21policies of a person, whether through the ownership of voting 22securities, the holding of policyholders' proxies by contract 23other than a commercial contract for goods or non-management 24services, or otherwise, unless the power is solely the result 25of an official position with or corporate office held by the 26person. Control is presumed to exist if any person, directly or

HB5181- 3 -LRB101 16648 BMS 66035 b 1indirectly, owns, controls, holds with the power to vote, or 2holds shareholders' proxies representing 10% or more of the 3voting securities of any other person or holds or controls 4sufficient policyholders' proxies to elect the majority of the 5board of directors of the domestic company. This presumption 6may be rebutted by a showing made in a manner as the Secretary 7may provide by rule. The Secretary may determine, after 8furnishing all persons in interest notice and opportunity to be 9heard and making specific findings of fact to support such 10determination, that control exists in fact, notwithstanding 11the absence of a presumption to that effect. 12 "Department" means the Department of Insurance. 13 "Employee" has the meaning given that term under Section 143(6) of the Employee Retirement Income Security Act of 1974. 15 "Employer" has the meaning given that term under Section 163(5) of the Employee Retirement Income Security Act of 1974, 17except that the term shall include only employers of 2 or more 18employees. 19 "Enrollment date" means, with respect to an individual 20covered under a group health plan or group health insurance 21coverage, the date of enrollment of the individual in the plan 22or coverage, or if earlier, the first day of the waiting period 23for enrollment. 24 "Federal governmental plan" means a governmental plan 25established or maintained for its employees by the government 26of the United States or by any agency or instrumentality of

HB5181- 4 -LRB101 16648 BMS 66035 b 1that government. 2 "Governmental plan" has the meaning given that term under 3Section 3(32) of the Employee Retirement Income Security Act of 41974 and any federal governmental plan. 5 "Group health insurance coverage" means, in connection 6with a group health plan, health insurance coverage offered in 7connection with the plan. 8 "Group health plan" means an employee welfare benefit plan 9(as defined in Section 3(1) of the Employee Retirement Income 10Security Act of 1974) to the extent that the plan provides 11medical care (as defined in paragraph (2) of that Section and 12including items and services paid for as medical care) to 13employees or their dependents (as defined under the terms of 14the plan) directly or through insurance, reimbursement, or 15otherwise. 16 "Health insurance coverage" means benefits consisting of 17medical care (provided directly, through insurance or 18reimbursement, or otherwise and including items and services 19paid for as medical care) under any hospital or medical service 20policy or certificate, hospital or medical service plan 21contract, or health maintenance organization contract offered 22by a health insurance issuer. 23 "Health insurance issuer" means an insurance company, 24insurance service, or insurance organization (including a 25health maintenance organization, as defined herein) which is 26licensed to engage in the business of insurance in a state and

HB5181- 5 -LRB101 16648 BMS 66035 b 1which is subject to Illinois law which regulates insurance 2(within the meaning of Section 514(b)(2) of the Employee 3Retirement Income Security Act of 1974). The term does not 4include a group health plan. 5 "Health maintenance organization (HMO)" means: 6 (1) a Federally qualified health maintenance 7 organization (as defined in Section 1301(a) of the Public 8 Health Service Act.); 9 (2) an organization recognized under State law as a 10 health maintenance organization; or 11 (3) a similar organization regulated under State law 12 for solvency in the same manner and to the same extent as 13 such a health maintenance organization. 14 "Individual health insurance coverage" means health 15insurance coverage offered to individuals in the individual 16market, but does not include short-term limited duration 17insurance. 18 "Individual market" means the market for health insurance 19coverage offered to individuals other than in connection with a 20group health plan. 21 "Large employer" means, in connection with a group health 22plan with respect to a calendar year and a plan year, an 23employer who employed an average of at least 51 employees on 24business days during the preceding calendar year and who 25employs at least 2 employees on the first day of the plan year. 26 (1) Application of aggregation rule for large

HB5181- 6 -LRB101 16648 BMS 66035 b 1 employers. All persons treated as a single employer under 2 subsection (b), (c), (m), or (o) of Section 414 of the 3 Internal Revenue Code of 1986 shall be treated as one 4 employer. 5 (2) Employers not in existence in preceding year. In 6 the case of an employer which was not in existence 7 throughout the preceding calendar year, the determination 8 of whether the employer is a large employer shall be based 9 on the average number of employees that it is reasonably 10 expected the employer will employ on business days in the 11 current calendar year. 12 (3) Predecessors. Any reference in this Act to an 13 employer shall include a reference to any predecessor of 14 such employer. 15 "Large group market" means the health insurance market 16under which individuals obtain health insurance coverage 17(directly or through any arrangement) on behalf of themselves 18(and their dependents) through a group health plan maintained 19by a large employer. 20 "Late enrollee" means with respect to coverage under a 21group health plan, a participant or beneficiary who enrolls 22under the plan other than during: 23 (1) the first period in which the individual is 24 eligible to enroll under the plan; or 25 (2) a special enrollment period under subsection (F) of 26 Section 20.

HB5181- 7 -LRB101 16648 BMS 66035 b 1 "Medical care" means amounts paid for: 2 (1) the diagnosis, cure, mitigation, treatment, or 3 prevention of disease, or amounts paid for the purpose of 4 affecting any structure or function of the body; 5 (2) amounts paid for transportation primarily for and 6 essential to medical care referred to in item (1); and 7 (3) amounts paid for insurance covering medical care 8 referred to in items (1) and (2). 9 "Nonfederal governmental plan" means a governmental plan 10that is not a federal governmental plan. 11 "Network plan" means health insurance coverage of a health 12insurance issuer under which the financing and delivery of 13medical care (including items and services paid for as medical 14care) are provided, in whole or in part, through a defined set 15of providers under contract with the issuer. 16 "Participant" has the meaning given that term under Section 173(7) of the Employee Retirement Income Security Act of 1974. 18 "Person" means an individual, a corporation, a 19partnership, an association, a joint stock company, a trust, an 20unincorporated organization, any similar entity, or any 21combination of the foregoing acting in concert, but does not 22include any securities broker performing no more than the usual 23and customary broker's function or joint venture partnership 24exclusively engaged in owning, managing, leasing, or 25developing real or tangible personal property other than 26capital stock.

HB5181- 8 -LRB101 16648 BMS 66035 b 1 "Placement" or being "placed" for adoption, in connection 2with any placement for adoption of a child with any person, 3means the assumption and retention by the person of a legal 4obligation for total or partial support of the child in 5anticipation of adoption of the child. The child's placement 6with the person terminates upon the termination of the legal 7obligation. 8 "Plan sponsor" has the meaning given that term under 9Section 3(16)(B) of the Employee Retirement Income Security Act 10of 1974. 11 "Preexisting condition exclusion" means, with respect to 12coverage, a limitation or exclusion of benefits relating to a 13condition based on the fact that the condition was present 14before the date of enrollment for such coverage, whether or not 15any medical advice, diagnosis, care, or treatment was 16recommended or received before such date. 17 "Small employer" means, in connection with a group health 18plan with respect to a calendar year and a plan year, an 19employer who employed an average of at least one 2 but not more 20than 50 employees on business days during the preceding 21calendar year and who employs at least one employee 2 employees 22on the first day of the plan year. 23 (1) Application of aggregation rule for small 24 employers. All persons treated as a single employer under 25 subsection (b), (c), (m), or (o) of Section 414 of the 26 Internal Revenue Code of 1986 shall be treated as one

HB5181- 9 -LRB101 16648 BMS 66035 b 1 employer. 2 (2) Employers not in existence in preceding year. In 3 the case of an employer which was not in existence 4 throughout the preceding calendar year, the determination 5 of whether the employer is a small employer shall be based 6 on the average number of employees that it is reasonably 7 expected the employer will employ on business days in the 8 current calendar year. 9 (3) Predecessors. Any reference in this Act to a small 10 employer shall include a reference to any predecessor of 11 that employer. 12 "Small group market" means the health insurance market 13under which individuals obtain health insurance coverage 14(directly or through any arrangement) on behalf of themselves 15(and their dependents) through a group health plan maintained 16by a small employer. 17 "State" means each of the several States, the District of 18Columbia, Puerto Rico, the Virgin Islands, Guam, American 19Samoa, and the Northern Mariana Islands. 20 "Waiting period" means with respect to a group health plan 21and an individual who is a potential participant or beneficiary 22in the plan, the period of time that must pass with respect to 23the individual before the individual is eligible to be covered 24for benefits under the terms of the plan. 25(Source: P.A. 94-502, eff. 8-8-05.) 26 Section 99. Effective date. This Act takes effect upon

HB5181- 10 -LRB101 16648 BMS 66035 b 1becoming law.