NAIFA Illinois Legislative Update

    NAIFA IL Election Results Report
    By: Phil Lackman
    Feb. 14, 2019

    The new legislative session is beginning to take shape as thousands of bills have been introduced and committees have been formed. The chairmanships of both the Senate and House of Representatives have been named. In the Senate, Napoleon Harris III heads the Insurance Committee. The Senate Insurance Committee is comprised of 15 Democrats and 7 Republicans. In the House, Thaddeus Jones has been named chair of the Insurance Committee. The breakdown of the House Insurance Committee is 12 Democrats and 7 Republicans. In addition, Kevin Fry, the current Deputy Director, Financial/Corporate Regulation with over 20 years with the department, has been named Acting Director of the Illinois Department of Insurance. IIA of IL CEO Phil Lackman and Government Relations Manager Evan Manning met with Acting Director Fry last week. Meetings were also held with both Insurance Committee Chairs.

    Last week, the Senate passed SB 1 (Lightford), the $15 per hour minimum wage bill. The House is poised to pass the bill today and the Governor will sign it shortly. The current legislation sets the following schedule for a minimum wage hike: 

    • January 1, 2020         $ 9.25
    • July 1, 2020               $10.00
    • January 1, 2021         $11.00
    • January 1, 2022         $12.00
    • January 1, 2023         $13.00
    • January 1, 2024         $14.00
    • January 1, 2025         $15.00

    Senate Bill 1 provides that businesses with 50 or fewer full-time employees total may take a tax credit to assist with the implementation of the higher minimum wages. Senate Bill 1 is similar to Senate Bill 81, which Senator Kimberly Lightford introduced last year. It would have raised the minimum wage to $15 per hour by 2022. Former Gov. Bruce Rauner vetoed that bill.

    The current minimum wage in Illinois is $8.25 per hour, which amounts to about $16,500 per year for a full-time employee. For reference, the U.S. poverty line for a household of two is $16,910 per year. At $15 per hour, a full-time employee would make approximately $31,200 per year. The bill has been sent to the House of Representatives for consideration. The House of Representatives is scheduled to meet Wednesday through Friday this week. The Senate is off this week they will return for session Tuesday, February 19. This Friday, February 15th, is the deadline to file House and Senate Substantive bills. While the influx of new bills may appear to end, legislation can still be amended to existing substantive and shell bills.

    Most of the bills introduced to date impact health insurance and benefits. Those include:

    SB 27 – “Telehealth Services” Requires Health Care providers providing services through Telehealth to be licensed in Illinois. States the Interactive Telecommunication system “includes, at a minimum, audio and video equipment.” Added verbiage “applies to individual or group policy of insurance issues, amended, renewed, delivered, continued or executed.” There is no definition provided for continued or executed, which is a diversion from historical language included in the mandates.

    HB 207 – “Healthcare for All” It states that all Illinois have coverage for a laundry list of medically necessary items with no deductible, copay, or other cost sharing under the plan.  It creates the Illinois Health Services Program, defines provider responsibilities and reimbursement, requires all providers in the state to participate, and is completely separate from the Department of Insurance.  The Act also provides for assistance for those who lose their jobs as a result of the Act.

    This Act prohibits private insurers to duplicate coverages that are available under the Act but doesn’t definitively list all coverages and allows the board to determine specificity of coverage, which would make those coverages subject to change without any limitations on changing the program specified. This would completely destroy the commercial health insurance markets in Illinois.

    HB 815 – “Freedom from Aggressive Insurance Increases Act” Requires the formation of a board, appointed by the Governor with 2/3 approval by the Senate, which acts independently from the Department of Insurance. The health carriers will be responsible for filing all current and proposed rates and rate schedules, proposed rate changes with an explanation of the changes, financial information describing the reasons and the average increase or decrease, companies’ nonmedical expenditures, supplementary rating information, and any other information that the Board deems necessary by rule. The issuer is not allowed to sell the plan until the rates are approved and all rates in Illinois will be approved or disapproved by the board.  If the rate has not been approved or disapproved within 30 days of receipt by the board, then the rate can be used; however, the board may do one 30-day extension if they deem fit before the default usage date. This bill was originally introduced in the 100th General Assembly under HB 2624 under the title Health Insurance Rate Review Act.

    HB 2178 – This bill increases the minimum mandatory coverage amounts for liability insurance policies in this State and doubles the amounts sufficient to justify a judgement following a motor vehicle accident as follows: bodily injury or death to any one person from $25,000 to $50,000; bodily injury or death to more than one person from $50,000 to $100,000; and injury or destruction of property of others from $20,000 to $40,000.

    HB 272 – Imposes an assessment of 1% on claims paid by a health insurance carrier or third-party administrator. Revenue received will be deposited into the Healthcare Provider Relief Fund and used solely for funding Medicaid services. This is gaining traction in the Capitol as revenue can be used to obtain matching federal Medicaid funds. We, insurers and business groups, will be largely opposed to this bill as it will drive up insurance costs.

    More on Health Insurance
    The administration’s Healthy Children and Families Transition Committee reported on short- and long-term goals for Illinois Healthcare. In the long-term, the transition committee stated that “the new administration should be bold in exploring a Medicaid buy-in option to bring down consumer costs and move towards a system of universal healthcare. Allowing higher-income Illinoisans to enroll in Medicaid through a buy-in program provides opportunity to control insurance costs, stabilize health insurance markets and provide consumers with more coverage options. The new administration should also explore federal Medicaid match opportunities we are not currently leveraging to connect more people with the individualized, community-based care they need.” There are no further details, but this is what the administration has put out to this point.