euclid managers legislative review

VOL. XXIII, ISSUE 8 – August 2018

Illinois Legislative Update

With Congress’ inability to “repeal and replace” the Affordable Care Act (ACA) and the Trump administration’s regulatory initiatives, states are taking notice and taking action. In some cases, the states are inoculating their citizens from retrenchment of the ACA. Yet, in others, states are acting to ensure the strength of their insurance market.

So, it’s no wonder that Illinois’ General Assembly has passed a number of bills that address health insurance.  This issue of Legislative Review provides a look at bills waiting action by the Governor.

SB 1737 is primarily a bill regarding Property and Casualty lines.  It is on the Governor’s desk. However, one section of the bill addresses short-term limited duration insurance (STLDI). HB 2624 is the stand-alone measure that addresses STLDI. It is titled the Short Term Limited-Duration Health Insurance Act. It mirrors the language in SB1737.  t was sent to the Governor’s desk on 6/29/18. If approved it will be effective January 1, 2019.

The bills require that any STLDI policy have an expiration date that is not less than 181 days after the effective date of the policy. The policy is not renewable or extendable within 365 days after the individual’s coverage ends.  Any short-term policy must include a prominent notice in the policy, application and sales and marketing materials that the policy doesn’t meet all the federal requirements to meet federal requirements to qualify as “minimum essential coverage.” The notice must also state that pre-existing conditions are not covered as well as other helpful admonitions that will ensure that someone understands the limits of these policies. A person selling STLDI coverage either face-to-face or on the telephone must read out loud the required disclosure.

HB 2617 passed both chambers and was sent to the Governor on 6/29/18. One provision in the bill corrects a problem that
was created when Illinois previously mandated first-dollar coverage of voluntary male sterilization. HB 2617 allows that first dollar coverage is not applicable “to the extent such male sterilization coverage would disqualify a high-deductible health plan from eligibility for a health savings account.”

HB 2617 also mandates coverage for fertility preservation services. The services are covered when there is an impairment of fertility directly or indirectly caused by medical treatment such as surgery, radiation, and chemotherapy. Insurers may not
consider an individual’s expected length of life, degree of medical dependency, quality of life or personal characteristics such as age or marital status when determining coverage. The bill includes language that makes the provision inoperative, if necessary, to absolve the state from any cost which could result from the Affordable Care Act’s language that assesses a state the cost of additional benefit mandates, if necessary.HB 4146 passed both Chambers and was sent to the Governor on 6/29/18.

The bill prohibits a health plan from removing a drug from its formulary or changing the cost-tier unless the plan provides a 60-day notice prior to the change.

The health plan must:
• Provide a general notice of the change in the
formulary to current and prospective enrollees
• Directly notify enrollees receiving coverage for the
drug and any steps needed to obtain an exception
• Directly notify the prescribing provider about the
change including how the provider can certify the
drug for the enrollee is medically necessary.

If the medical provider asserts that the drug is medically necessary, then the plan must authorize coverage based on the provider’s assertion. The plan is prohibited from making modifications to the coverage for the enrollee related to the drug including, but not limited to:

• Increasing out-of-pocket costs for the covered drug
• Moving the drug to a more restrictive tier
• Denying coverage of the drug.

This provision applies to plans that are issued, amended or delivered on or after January 1, 2019.  HB4165 was sent to the Governor on 6/29/18. This bill would preclude the Governor from taking action to apply for a federal waiver from provisions of the ACA unless the General Assembly has approved submission of the waiver. It also prohibits the State or an agency of the executive branch from applying for a federal Medicaid waiver without the approval of the General Assembly. Given this restriction on the Governor’s executive authority, it is unlikely that the Governor will sign the bill.  HB4516 landed on the Governor’s desk on 6/29/18. The bill mandates coverage for hearing aids and related services for individuals under the age of 18. The bill applies to individual and group coverage. It would be effective for plans that are amended, issued or renewed after the effective date of the Act.

The bill is effective upon becoming law.  Coverage would be subject to applicable co-payments, coinsurance, deductibles and out-of-pocket limits with these restrictions:

• One hearing instrument per ear every 36 months
• Related services as medically necessary by a
hearing care professional
• Hearing instrument repairs when deemed
medically necessary.

The bill includes language that makes the provision inoperative, if necessary, to absolve the state from any cost which could result from the Affordable Care Act’s language that assesses a state the cost of additional benefit mandates, if necessary.

HB4821 was sent to the Governor on 6/29/2018. The bill precludes an insurer from limiting or excluding coverage for a drug for stage 4 metastatic cancer by requiring that an insured must first fail to successfully respond to a different drug or prove a history of failure. The bill includes language that makes the provision inoperative, if necessary, to absolve the state from any cost which could result from the Affordable Care Act’s language that assesses a state the cost of additional benefit mandates, if necessary. HB5868 landed on the Governor’s desk on 6/28/18. The bill allows an individual or group health policy to cover residential extended care services for persons with substance abuse disorders. The bill establishes the conditions that must be met for the coverage.  SB682 was sent to the Governor on 6/29/18. The bill is titled the “Emergency Opioid and Addiction Treatment Access Act. ”It requires that every insurer that issues or renews group health policies must offer coverage for “reasonable and necessary treatment and services” for mental, emotional or nervous disorders. Prior authorization is not allowed for benefits enumerated in the bill. The provider is required to notify the insurers of the initiation of treatment.  The bill, if signed by the Governor, will be effective January 1, 2019.  SB1707 was sent to the Governor on June 29, 2018. It amends prior law to strengthen mental health parity requirements.  The bill is applicable to individual and group health plans and, if signed, becomes effective for plans issued, renewed or amended after the effective date of the Act. The Act would be effective on January 1, 2019. Group plans may not impose prior authorization requirements with some exceptions or impose step therapy requirements unless they have been established by the American Society of Addiction Medicine. The bill also requires that all prescription
medications approved by the FDA for treatment of substance use disorders be placed on the lowest tier of the drug formulary for generic and brand drugs.

The bill also establishes a work group to research and evaluate compliance with federal mental health parity requirements. Insurers are required to submit an annual report including:

• Pharmacy management for mental, emotional,
nervous or substance use disorder compared to
other medical benefits
• Internal processes for review of experimental
benefits for mental and nervous versus other
medical benefits
• The plan’s policies and procedures for utilization
management for each type of benefit
• Identification of all nonquantitative treatment
limitations.

SB 2513 passed the Illinois General Assembly and was sent to the Governor on 6/15/2018. It establishes an advisory council within the Department of Insurance
(DOI). The council is charged with making recommendations to the DOI regarding the rules for continuing education (CE).  The advice includes rules with respect to “course materials, curriculum, and credentials of instructors.

”The advisory council will have seven (7) voting members appointed by the Director. The makeup of the council is as follows:

• 1 member an instructor who has regularly provided
educational offerings for more than five (5) out of
the last (10) years
• 3 members from trade organizations whose
memberships are primarily composed of licensed
producers
• 3 members from a domestic insurer and;
• 1 non-voting department employee to serve as
chairperson of the advisory council.

Terms will be set for three (3) years with no person serving more than three (3) consecutive terms.  The bill takes effect upon becoming law.

Letter from Karen Knippen

It’s been a long time since we’ve had this much state legislative activity on health insurance bills. This new wave of action is a likely result of the tumult and uncertainty surrounding the ACA on the federal level.

In Illinois, the governor has 60 calendar days after a bill is presented to act on the bill. If the governor doesn’t take action within the 60 days, the bill becomes law without the governor’s signature.

So, within a month or so we’ll have a better picture of the changes to the insurance market since many of these bills landed on the governor’s desk at the end of June.

In the meantime, Congress is still in session. Whether the federal government issues new rules or passes legislation affecting health insurance remains to be seen! Hint: final rules regarding short-term plans are expected any day.

Sincerely yours,
Karen Knippen Signature
Karen Knippen, RHU, REBC Senior Vice President

EUCLID MANAGERS has been serving the independent agent since 1976 with a portfolio of group health, life, disability, dental and individual health. We proudly represent UnitedHealthcare of Illinois, Delta Dental of Illinois, MetLife and UnitedHealthOne Individual. We encourage your feedback and suggestions. Please call your EUCLID MANAGERS Marketing Representative or Marcy Graefen at (630) 238-2915 for more information.

The information contained in this publication is intended for the general information of our clients. It should not be construed as legal advice or legal opinion regarding any specific or factual situation.