All Health Insurance Issuers and Stop-Loss Insurance Issuers : Emergency Rulemaking at 50 Ill. Adm. Code 2040, Effective Immediately

Springfield Office 320 W. Washington St., Fl. 4 Springfield, Illinois 62767-0002 (217) 782-4515 1 Chicago Office 122 S. Michigan Ave., Fl. 19 Chicago, Illinois 60603-6137 (312) 814-2420 Illinois Department of Insurance JB PRITZKER Governor ROBERT H. MURIEL Director M E M O R A N D U M TO: All Health Insurance Issuers and Stop-Loss Insurance Issuers FROM: Robert H. Muriel, Director of Insurance DATE: April 20, 2020 RE: Company Bulletin 2020-11 Emergency Rulemaking at 50 Ill. Adm. Code 2040, Effective Immediately On March 9, 2020, Governor JB Pritzker proclaimed a statewide disaster due to the Coronavirus Disease 2019 (COVID-19) outbreak within the State of Illinois, and again on April 1, 2020 declared a statewide disaster in response to the exponential spread of COVID-19 (the “Gubernatorial Disaster Proclamations”). On March 20, 2020, the Governor issued Executive Order 2020-10 ordering Illinois residents to stay at home unless otherwise permitted under the order and that all non-essential business and operations within the State cease for the remainder of the Gubernatorial Disaster Proclamations. On April 1, 2020, the Governor issued Executive Order 2020-18 continuing and extending Executive Order 2020-10 in its entirety for the duration of the Gubernatorial Disaster Proclamations. Today, the Illinois Department of Insurance (“Department”) filed an emergency rulemaking with the Secretary of State to address financial, coverage, and prescription drug supply concerns arising from the COVID-19 pandemic. Pursuant to Section 5-45(b) of the Illinois Administrative Procedure Act (5 ILCS 100/5-45(b)), these emergency rules are effective immediately. The rules will be reviewed by the Joint Committee on Administrative Rules at an upcoming meeting yet to be assigned. The emergency rules will be published in a forthcoming edition of the Illinois Register. Until that time, please consult the text of the filed rules attached to this bulletin. In brief, the rules: • provide for 30 or 60-day extensions on premium payment deadlines, depending on circumstances; • prohibit an issuer of group HMO coverage from interfering with an employer that wants to keep their employees on their existing health coverage despite a reduction in hours or temporary lay-off; • restrict the ability of an issuer of group HMO coverage to prevent a person whose employment-based coverage was terminated from electing COBRA or state continuation coverage; Springfield Office 320 W. Washington St., Fl. 4 Springfield, Illinois 62767-0002 (217) 782-4515 2 Chicago Office 122 S. Michigan Ave., Fl. 19 Chicago, Illinois 60603-6137 (312) 814-2420 • allow persons who qualify for a special enrollment period (“SEP”) due to loss of employmentbased coverage to have their new coverage retroactively begin the day after their loss of the previous coverage; • require coverage of off-formulary prescriptions if there is a shortage of a covered formulary drug; and • require coverage of a 90-day supply of covered maintenance medications, other than those prone to misuse. Group PPO, non-network group indemnity, and group voluntary health services plans are mostly exempt from the rule, except for the provision relating to coverage of off-formulary prescriptions. However, it should be noted that an employee’s loss of coverage under any of these group policies would still be the sort of trigger for an SEP that would require an issuer of new coverage that is subject to the SEP section to allow the employee to have a retroactive effective date. Regardless, the Department urges issuers of these group policies to voluntarily comply with all provisions affecting group health insurance coverage. These emergency rules also do not apply to short-term, limited-duration health insurance coverage, excepted benefit policies (other than the premium payment extensions for dental benefits), or stop-loss insurance. However, stop-loss insurance plays a significant role in protecting self-insured employers and in incentivizing and restricting those employers’ decisions about the extent of coverage they will offer to their employees. The Department urges issuers of stop-loss insurance to comply with these rules as though they were issuers of group health insurance coverage to the maximum extent possible, and to avoid restricting or disincentivizing self-insured employers from making similar allowances for their employees. Finally, the Department notes that, under normal circumstances, an issuer might raise a group’s premiums based on a drop in enrollment or participation. The Department urges issuers not to raise premiums on account of these drops occurring during the Gubernatorial Disaster Proclamations. Questions about the emergency rulemaking may be directed to Robert Planthold at Robert.Planthold@illinois.gov. The text of the filed emergency rulemaking begins on the next page.