Chapter 123:1-71 Health Benefit Fund
For purposes of Chapter 123:1-71 of the Administrative Code:
(A) "Benefits" means health plan benefits covered under a program established by the director, which may include medical, vision, dental, behavioral health, wellness, and pharmacy services.
(B) "Contributions" means amounts withheld from employees' pay, amounts directly contributed by employees, amounts contributed by the state or from federal funds, amounts contributed by any state authority, and income derived from dividends, interest earned, rate adjustments, interim and final settlement amounts, and other refunds.
(C) "Administrator" means a company, authorized to do the business of sickness and accident insurance under Title XXXIX of the Revised Code or a professional claim administrator with which the director has contracted to administer the program of health care benefits pursuant to section 124.87 of the Revised Code.
(D) "State authority" means every organized body, office and agency established by the laws of the state for the exercise of any function of state government.
(E) "State employee health benefit fund" means a fund established by the director pursuant to section 124.87 of the Revised Code to provide state employees with benefits equivalent to those that may be paid under a policy or contract of insurance as specified in division (A) of section 124.82 of the Revised Code.
(F) "Professional claim administrator" means any person with experience in the handling of insurance claims and determined by the director to be fully qualified, financially sound, and capable of meeting all of the service requirements of the contract or administration under such criteria as may be established by the director.
(G) "Director" means the director of administrative services.
(A) The director shall enter into a contract with an administrator to administer the portion of the fund set aside to provide benefits specified in division (A) of section 124.82 of the Revised Code. Determination as to the qualifications of the administrator shall be made by the director in consultation with the superintendent of insurance, and in consideration of the following factors:
(1) Cost of providing required administrative service;
(2) Claim service capability, including location of claim office, nature of claim processing system, claim payment turn-around time, and productivity of claim processors;
(3) Evidence of the effective exercise of claim control and cost containment capability;
(4) Experience with other large groups;
(5) Financial strength;
(6) Non-claim service provided; and
(7) The availability and cost of conversion rights for employees and stop-loss coverage for the state.
(B) The state employee health benefit fund shall be available without fiscal year limitation for the payment of benefits, premiums, subscription charges, and administrative costs as specified in section 124.87 of the Revised Code. The fund shall be under the custody and supervision of the director, who shall be responsible, under approved bonds, for all monies coming into and paid out of the fund in accordance with section 124.87 of the Revised Code, and shall ensure that the fund is actuarially sound.
(C) The following accounts shall be maintained within the state employee health benefit fund:
(1) Administrative special account in the department of administrative services into which all contributions and other income shall be credited and from which administrative costs, premiums, subscription charges, amounts available for investment or claims for benefits may be paid;
(2) Investment trust account to be maintained by the treasurer of state in the manner provided in paragraph (F) of this rule; and
(3) A claims payment account in the department of administrative services or in a financial institution or with the administrator from which claims for benefits may be paid by the director or by the administrator and from which the administrator may deduct appropriate administrative fees.
(D) The director shall transfer monies among the various accounts and shall instruct the treasurer of state to make investments in the manner provided for in paragraph (F) of this rule.
(E) Contributions shall be credited to and constitute the state employee health benefit fund. Any amounts remaining in the state employee health benefit fund after all premiums, subscription charges, and other expenses have been paid shall be retained in the fund as a special reserve for adverse claim fluctuation.
(F) Any amounts held by the state employee health benefit fund that are available for investment shall be invested by the treasurer of the state. The amount in the investment trust account shall be invested for a period not to exceed one year, for credit only to the state employee health benefit fund. Investments shall be subject to the terms, conditions, limitations, and restrictions imposed under Chapter 3907. of the Revised Code upon domestic life insurance companies in the investment of their capital, surplus, and accumulations.
(G) All income derived from investments shall accrue to the fund. When monies are paid to the treasurer of state, the director shall submit an estimate of the date such monies are no longer available for investment. When the director wishes to withdraw monies from the trust account, the director shall submit a request for the withdrawal in writing to the treasurer of state, and such funds shall be available to the director within thirty days after the treasurer's receipt of the request.
(H) Any necessary and reasonable cost incurred by the treasurer of state or the department of administrative services in administering these rules shall be charged against the administrative special account established under paragraph (C)(1) of this rule.
(1) Persons eligible to participate in the state employee health benefit fund are:
(a) Permanent full-time and permanent part-time employees of the state of Ohio who are paid by warrant of the director of the office of budget and management, and who normally have earnings every pay period, including elected and appointed officials;
(b) Any other employees of the state of Ohio who are paid by warrant of the director of the office of budget and management who are eligible to participate in the state employee health benefit fund pursuant to any applicable state or federal law; and
(c) Eligible dependents of persons described in paragraphs (A)(1)(a) to (A)(1)(b) of this rule who have elected to participate in the fund.
(2) The director shall determine eligibility of all employees of the state and dependents.
The director shall establish criteria for determining the eligibility of dependents.
(1) Employees, elected, and appointed officials are eligible to enroll during the first thirty-one days of employment or term of office for benefit coverage, excluding vision and dental coverage. Employees, elected, and appointed officials are eligible to enroll in vision and dental coverage during the first thirty-one days following the completion of one year of continuous employment with the state or completion of the one year of the term in office, as appropriate.
(2) An open enrollment period shall be established by the director. During such period, eligible employees, elected and appointed officials, and their dependents who are not covered by the state employee health benefit fund may enroll without imposition of any limitations or waiting periods. Coverage for those persons enrolling during an open enrollment period shall be effective on the first day of the new benefit year.
(3) The director, in compliance with applicable state and federal law, shall determine qualifying events that allow an employee, elected, or appointed official to make coverage changes outside of an open enrollment period.
(C) The director shall determine the effective dates of coverage for employees, elected and appointed officials, and their dependents.
(D) The director shall establish employee, elected, and appointed official contribution levels for the benefits provided by the state employee health benefit fund.
(E) Termination of coverage.
(1) Employees, elected and appointed officials, and their dependents will cease to be covered by the fund due to:
(a) Termination of state employment by the employee or the elected or appointed officials term of office;
(b) A qualifying event, as determined by applicable state or federal law; or
(c) Cessation of the employee's, elected or appointed official's contributions to the fund, unless such contributions are waived by statute or rule.
(2) Any coverage will cease at the end of the last day of the month of separation from service.
(F) The director shall determine the benefits, any deductibles, co-payments, co-insurance, and conditions or limitations of such benefits to be provided to employees, elected, and appointed officials covered by the state employee health benefit fund. The director may also make such changes to the benefits from time to time as may be required to reasonably provide health care for such employees, elected and appointed officials, and their dependents with funds available for such purposes.
Five Year Review (FYR) Dates:
Promulgated Under: 119.03
Statutory Authority: 124.09
Rule Amplifies: 124.87
Prior Effective Dates: 3/18/82, 5/18/87 (Emer.), 8/2/87, 8/22/88 (Emer.), 11/13/88, 2/4/96, 7/1/97, 9/28/97, 5/24/98, 12/1/06, 8/26/12, 6/13/13, 10/25/15
Every year, the director shall have prepared, by an accredited actuary familiar with life and health insurance, a report showing a complete actuarial evaluation of the fund and the adequacy of the rates of contribution and reserves. The report shall contain such recommendations as the actuary considers advisable. The director may at any time request the actuary to conduct studies or evaluations to determine the adequacy of the rates of contribution. Such rates may be adjusted by the director, as recommended by the actuary, to be effective as of the first of any fiscal year thereafter.
(A) The director shall file annually, by the first day of March, a complete report of the state employee health benefit fund for the preceding fiscal year with the governor, the general assembly, and the superintendent of insurance. The report shall include a detailed financial statement of the fund and the expenses incurred pursuant to section 124.87 of the Revised Code so that the cost of the fund can be determined and identified. The report shall include, but not be limited to, the following information:
(1) Assets and liabilities;
(2) Income and expenditures;
(3) Benefits paid and reserves established for losses incurred but not yet paid, including potential losses and unreported losses;
(4) Costs of any excess insurance or conversion coverage or of any other kind of insurance obtained to cover potential losses or provide supplemental benefits;
(5) Direct and indirect costs attributable to the use of outside consultants, independent contractors, and any other persons who are not state employees;
(6) The cost of developing, monitoring, and evaluating cost containment plans as required by the department of administrative services and the savings derived from those plans. The financial information required by this rule shall be certified by an independent certified public accountant or independent public accountant who, by reason of knowledge and experience, is especially qualified in insurance accounting; such accountant shall be selected by the director of administrative services;
(7) The actuarial report for the preceding fiscal year and any other studies or evaluations prepared in the preceding year pursuant to this chapter;
(8) A description of the benefits provided by the fund and the number of state employees covered under the state employee health benefit fund;
(9) The rights of state employees who terminate their employment and the extent of benefits or coverage thereafter available to those persons and their dependents; and
(10) Any other information which is relevant in order to make full, fair, and effective disclosure of the operations of the state employee health benefit fund.
(B) The department of administrative services shall provide such personnel as is necessary to carry out the purposes of this chapter. Any new cost resulting from the enactment of this chapter shall be included as part of the information required by paragraph (A) of this rule.