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SB 1327

INS-HEALTH PARITY/DISABILITY

104th Regular Session Introduced by Christopher Belt and 9 co-sponsors

SB 1327 requires Illinois disability insurance to provide parity with other medical benefits for mental health/substance use disorders, preventing stricter payment or treatment lim

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Bill Summary · SB 1327

SB 1327 — Summary (INS — Health Parity / Disability)

Note: The packet provided contained multiple unrelated draft texts from different states that share the bill number “SB 1327” (Hawaii – historic preservation / affordable housing; Arizona – online instruction cost study). This summary focuses on the INS-HEALTH PARITY/DISABILITY version (Illinois), which amends the Illinois Insurance Code and matches the bill title and sponsor information provided.

Purpose / Intent

SB 1327 amends Section 370c.1 of the Illinois Insurance Code (215 ILCS 5/370c.1) to extend and clarify mental health/substance use parity requirements so they explicitly apply to group and individual disability insurance and disability income insurance. The bill aims to ensure parity between benefits for mental, emotional, nervous, or substance use disorders (collectively “mental health/substance use disorders”) and benefits for other medical conditions, including parity for payment limitations and treatment limitations.

Key Provisions

  • Adds disability insurance and disability income insurance to the scope of parity protections in 215 ILCS 5/370c.1.
  • Requires every insurer that amends, delivers, issues, or renews a group or individual policy or certificate in Illinois to ensure that:
    • Benefits for mental health/substance use disorders are no more restrictive than benefits for other medical conditions covered by the policy, and there are no separate requirements that apply only to mental health/substance use benefits.
    • For disability-only policies (disability insurance or disability income insurance), payment/treatment limitations applicable to mental health/substance use disorder benefits must not be more restrictive than limitations applied to other physical conditions covered by the policy. In other words, insurers may not impose separate or stricter payment caps, waiting periods, or other treatment/funding limitations specifically for mental health/substance use claims.
  • Explicitly modifies the statutory definition of “treatment limitation” to include benefit payments under disability insurance or disability income insurance.
  • Retains (and incorporates) existing parity-related rules in the statute addressing aggregate lifetime limits and annual limits for mental health/substance use benefits (including how to treat applicable lifetime/annual limits that apply “substantially” to hospital/medical benefits).
  • Authorizes the Director (insurance regulator) to issue rules to implement provisions such as computing applicable limits when policies have varying benefit categories.

Who Is Affected

  • Insurers issuing group or individual disability insurance and disability income insurance in Illinois.
  • Employers and plan sponsors offering disability coverage.
  • People with mental health, emotional, nervous, or substance use disorders who hold disability policies (public and private).
  • Mental health and substance use treatment providers who bill under disability policies.
  • Illinois Department of Insurance (rulemaking and enforcement responsibilities).

Potential Impact

  • Strengthens parity protections by preventing insurers from treating mental health/substance use disorder disability claims differently in payment and treatment limits compared with physical conditions.
  • May require insurers to revise policy forms, benefit designs, claims-processing rules, and actuarial assumptions for disability products to ensure parity—potential administrative costs and potential premium impacts, depending on insurers’ pricing adjustments.
  • Could increase access to disability benefits for covered mental health/substance use conditions and reduce discriminatory payment caps or separate treatment limits.

Procedural / Timeline Notes

  • Statutory target: amendment to 215 ILCS 5/370c.1 (Insurance Code).
  • Sponsor(s): Sen. Julie A. Morrison (primary); Chief co-sponsor added: Sen. Laura Fine (and others listed in packet).
  • Legislative status (as provided): introduced 1/28/2025 (first reading same day) and referred to Assignments. (Additional procedural entries in the packet reflect other states’ activity and are not related to the Illinois measure.)
  • Effective date: The bill text references “the effective date of this amendatory Act of the 104th General Assembly”; final effective date would be specified on enactment.

Related Legislation

  • Companion: HB 1008 (listed as companion in the materials).

If you’d like, I can:
- Produce a one-page comparison between existing 215 ILCS 5/370c.1 and the proposed changes, or
- Identify likely regulatory changes insurers would need to make to comply and estimate potential fiscal impacts.

Compiled from official sources — confirm details with the bill’s official record.

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