Chapter 125-1 State Employee Health Benefit Fund

Pertaining to the state employee health benefit fund, the following definitions shall apply:

(A) “Benefits” means the payment of group health plan benefits covered under a program established by the director, including health, vision, medical, hospital, dental, surgical, and major medical charges.

(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, hospital service association organized under Chapter 1739. of the Revised Code or 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 sections 124.81 and 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.

R.C. 119.032 review dates: 06/16/2006 and 06/16/2011

Promulgated Under: 119.03

Statutory Authority: 124.09(A)

Rule Amplifies: 124.87

Prior Effective Dates: 3/18/82, 2/9/96

(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 sections 124.81 and 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 of administrative services or by the administrator and from which the administrator may deduct appropriate administratve fees.

(D) The director of administrative services 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, he or she 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.

R.C. 119.032 review dates: 06/16/2006 and 06/16/2011

Promulgated Under: 119.03

Statutory Authority: 124.09(A)

Rule Amplifies: 124.87

Prior Effective Dates: 3/18/82, 2/4/96

(A) Employees eligible to participate in the state employee health benefit fund are permanent full-time and permanent part-time employees of the state of Ohio who are paid by warrant of the director of budget and management, and who normally have earnings every pay period, including elected and appointed officials. Employees are eligible to enroll during the first thirty-one days of employment for benefit coverage, excluding vision and dental. For vision and dental coverage, employees become eligible on the first day of the month following completion of one year of continuous employment with the state. Employees and eligible dependents are requested to voluntarily provide their social security number on the enrollment and health care forms in order to be properly enrolled.

(B) Employees who elect to participate in the state employee health benefit fund may also enroll their eligible dependents.

(1) Eligible dependents include:

(a) An employee’s spouse;

(b) Unmarried children from the time of birth until the end of the month in which such children attain the age of nineteen; and

(c) Unmarried children who have attained the age nineteen but have not reached the end of the month in which they attain age twenty-three and who reside with and are wholly dependent upon the employee for their maintenance and support.

(2) Eligible dependents also include unmarried children who are incapable of self-support because of mental retardation or physical disability that commences prior to the end of the month in which he or she attains the appropriate limiting age described in paragraph (B)(1) of this rule and are primarily dependent upon the employee for maintenance and support. Written proof of the child’s incapacity and primary dependency shall be furnished by the employee within thirty-one days of employment with the state or within thirty-one days after the child’s attainment of the appropriate limiting age. Upon request, but not more frequently than annually, satisfactory proof of the continuance of such incapacity and dependency shall be provided.

(3) The term “children” includes the employee’s own or legally adopted children; any stepchild or foster child who depends upon the employee for support and who normally resides in the employee’s household; children or stepchildren of divorced or separated parents when the children are not residing with the employee but required by law to be supported by the employee; children for whom the employee has been appointed legal guardian; or children attending an accredited school even though not residing at home as long as he or she meets the other dependency requirements. No person will be considered a dependent while in the armed forces.

(4) When a husband and wife are both state employees, each may elect single coverage or one of them may elect family coverage through the state’s primary plan or through a health maintenance organization. A child who is eligible as an employee of the state is not eligible as the dependent of a parent who is also a state employee.

(C) Effective dates of coverage are determined as follows:

(1) Benefit coverage for employees who enroll in the state employee health benefit fund within thirty-one days of their day of hire will be effective on the first day of the month following the date on which they enrolled.

(2) Dependent coverage will be effective concurrent with the employee’s coverage provided the employee elected to cover his or her dependents when enrolling. Covered employees have thirty-one days from the date they acquire their eligible dependent in which to enroll for dependent coverage, as provided in paragraph (F)(1) of this rule. Such coverage will take effect on the first day of the month following the date of enrollment.

(3) Vision and dental care coverage for employees and their eligible dependents will become effective on the first day of the month following the employee’s completion of one year of continuous employment with the state. When a covered employee acquires his first eligible dependent, the dependent’s coverage will be effective on the first day of the following month.

(D) The director shall establish employee contribution levels for the benefits provided by the state employee health benefit fund.

(E) An open enrollment period shall be established by the director of administrative services. During such period, eligible employees and their eligible 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 second month following the open enrollment month. During the open enrollment period, employees will also have the right to exercise their dual choice option offered by the state of Ohio to its employees with respect to health maintenance organizations.

(F) In the following situations an employee may enroll in the state employee health benefit fund or increase coverage at a time other than during open enrollment.

(1) An employee with single coverage may change to family coverage, effective the first day of the month following the request, provided the request is within thirty-one days:

(a) After marriage;

(b) Prior to expected birth, or after the birth of child; or

(c) After the receipt of final papers of adoption or legal guardianship of a child.

(2) An employee who becomes divorced may enter the state employee health benefit fund effective the first day of the month following the date of the request provided the request is made within thirty-one days after the final divorce decree.

(3) A husband and wife who are both state employees may change their coverage as follows:

(a) From two single coverages to one-family coverage in either name;

(b) From family coverage in the name of one spouse to the name of the other spouse;

(c) From family coverage in either name to single coverage for both.

(4) An employee covered by his or her spouse’s employer’s group insurance plan may enter the state employee health benefit fund within thirty-one days of termination of the spouse’s coverage when the spouse dies, is laid off, resigns, or is removed involuntarily.

(5) An employee may change from family coverage to single coverage at any time.

(6) An employee covered by a health maintenance organization (HMO) who changes residence from the service area of the HMO may change coverage to the state employee health benefit fund if application is made within thirty-one days of the change in residence.

(7) An employee who has been on an approved leave of absence and did not continue health care coverage may enter the state employee health benefit fund effective on the first day of the month following the date of the request, provided the request is within thirty-one days of the return to work.

(G) Employees and dependents will cease to be covered by the fund as of the end of the last day of the month in which any of the following events occur: (1) termination of state employment by the employee; (2) withdrawal of the employee from the fund by means of written notice from the employee to the employee’s appointing authority indicating the employee’s desire to withdraw from the fund; or (3) cessation of the employee’s contributions to the fund. In the event of transfer of coverage to a health maintenance organization following an open enrollment period, coverage under the fund will cease immediately prior to coverage beginning under the health maintenance organization. Employees covered by the state employee health benefit fund, whose participation in the fund is terminated, may be eligible for conversion to coverage on a direct payment basis provided by the administrator.

(H) The department of administrative services shall determine eligibility of all employees and dependents, and termination of coverage.

(I) The director shall determine the health, vision, medical hospital, dental, surgical and major medical benefits and any deductibles, co-payments, conditions or limitations of such benefits to be provided for employees covered by the state employee health benefit fund, and to make such changes to the benefits from time to time as may be required to reasonably provide health care for such employees and dependents with funds available for such purposes.

Effective: 12/01/2006

R.C. 119.032 review dates: 09/14/2006 and 12/01/2011

Promulgated Under: 119.03

Statutory Authority: 124.09(A)

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

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 board 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 board, as recommended by the actuary, to be effective as of the first of any fiscal year thereafter.

R.C. 119.032 review dates: 06/16/2006 and 06/16/2011

Promulgated Under: 119.03

Statutory Authority: 124.09(A)

Rule Amplifies: 124.87

Prior Effective Dates: 3/18/82, 2/4/96

(A) The director of administrative services 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 these rules;

(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 these rules. Any new cost resulting from the enactment of these rules shall be included as part of the information required by paragraph (A) of this rule.

R.C. 119.032 review dates: 06/16/2006 and 06/16/2011

Promulgated Under: 119.03

Statutory Authority: 124.09(A)

Rule Amplifies: 124.87

Prior Effective Dates: 3/18/82, 2/4/96