Chapter 145-4 Health Care Coverage

As used in this chapter:

(A) “401(h) retiree medical account” means the retiree medical account of a benefit recipient within the account established by the public employees retirement board under rule 145-4-02 of the Administrative Code and described in rules 145-4-26, 145-4-28, and 145-4-30 of the Administrative Code.

(B) “Age and service retirant” means a former member who is receiving a retirement allowance pursuant to section 145.33, 145.331, 145.34, 145.37 or 145.46 of the Revised Code or section 9.03 of the combined plan document.

(C) “Benefit recipient” means the primary benefit recipient, if living. If the member or primary benefit recipient is deceased, “benefit recipient” shall mean the survivor benefit recipient.

(D) “Health care coverage” means the coverage authorized under sections 145.325 and 145.58 of the Revised Code, except for reimbursement of the medicare part B premium, and dental and vision coverage.

(E) “Initial benefit payment” has the same meaning as in rule 145-1-65 of the Administrative Code.

(F) “Ohio retirement system” means the public employees retirement system, state teachers retirement system, school employees retirement system, Ohio police and fire pension fund, or highway patrol retirement system.

(G) “Primary benefit recipient” means an age and service retirant or disability benefit recipient who is enrolled in health care coverage.

(H) “Qualified medical expense” means medical care, as defined in section 213(d) of the Internal Revenue Code and applicable regulations thereunder and are excludable from income in accordance with sections 105 and 106 of the Internal Revenue Code, as amended.

(I) “Retiree medical account” means the voluntary employees beneficiary association (VEBA) established by the public employees retirement board in accordance with section 501(c)(9) of the Internal Revenue Code and described in the document entitled the “public employees retirement system of Ohio VEBA health plan.”

(J) “Self-supporting rate” means the adjusted per capita cost for providing health care coverage for any given year, as determined by the board.

(K) “Service manager” means the individual or entity appointed by the public employees retirement system to administer the retiree medical accounts or the 401(h) retiree medical accounts.

(L) “Survivor benefit recipient” means a beneficiary receiving a benefit pursuant to section 145.45 or 145.46 of the Revised Code or section 9.03 of the combined plan document.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07

(A) Within the funds described in section 145.23 of the Revised Code, there shall be a separate account established pursuant to section 401(h) of the Internal Revenue Code for the purpose of funding the coverage authorized under sections 145.325 and 145.58 of the Revised Code. This account shall be known as the “401(h) account.” The assets in the 401(h) account shall be accounted for separately from the other assets of the public employees retirement system, but may be commingled with the other assets of the system for investment purposes. Investment earnings and expenses shall be allocated on a reasonable basis. All assets in the 401(h) account shall be held in trust for the exclusive benefit of members, benefit recipients, and eligible dependents.

(B) Contributions to the 401(h) account shall be funded by employer contributions as described in sections 145.325, 145.48, 145.51, and 145.58 of the Revised Code. Contributions to the 401(h) account are subordinate to the contributions to the funds for retirement benefits under the traditional pension plan and combined plan. At no time shall contributions to the 401(h) account be in excess of twenty-five percent of the total aggregate actual contributions made to the trust for the traditional pension plan and combined plan, excluding contributions to fund past service credit. In any event, such contributions shall be reasonable and ascertainable.

(C) Forfeitures shall be used to fund health care coverage, qualified medical expenses, dental and vision coverage, administrative expenses of the 401(h) account, and to reimburse the medicare part B premium, and as provided in rule 145-4-30 of the Administrative Code.

(D) The assets of the 401(h) account shall only be used for the payment of health care coverage, qualified medical expenses, dental and vision coverage, and to reimburse the medicare part B premium.

(E) At no time prior to the satisfaction of all liabilities under this rule and sections 145.325 and 145.58 of the Revised Code shall any assets in the 401(h) account be used for, or diverted to, any purpose other than as provided in paragraph (D) of this rule and for the payment of administrative expenses. Assets in the 401(h) account may not be used for retirement, disability, or survivor benefits, or for any other purpose for which the other funds of the system are used.

(F) Upon satisfaction of all liabilities under this rule, any assets in the 401(h) account, if any, that are not used as provided in paragraph (E) of this rule shall be returned to the employers, in accordance with section 401(h)(5) of the Internal Revenue Code.

(G) It is the intent of the public employees retirement board in adopting this rule to comply in all respects with sections 401(a) and 401(h) of the internal revenue code and regulations interpreting those sections. In applying this rule, the board will apply the interpretation that achieves compliance with those sections and preserves the qualified status of the system as a governmental plan in accordance with sections 401(a) and 414(d) of the Internal Revenue Code.

(H) This rule is intended to codify past practices and procedures of the system with respect to the funding and payment of health care coverage and does not confer any new rights to members, retirants, survivors, beneficiaries, or their dependents.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07

(A) Dental, vision, and health care coverage for an eligible primary benefit recipient may be available upon application on a form provided by the public employees retirement system. For dependent health care coverage that commences on and after January 1, 2007, a primary benefit recipient may enroll an eligible dependent as defined in rule 145-4-09 of the Administrative Code.

(B) Applications for health care coverage must be received by the public employees retirement system not later than sixty days after the benefit recipient’s initial benefit payment, unless the system determines that a physical or mental incapacity prevented the benefit recipient from making application within the initial sixty-day benefit period. Except as provided in this paragraph, if the application is received more than sixty days after the benefit recipient’s initial benefit payment, the retirement system shall not accept the application and enrollment may occur only during the next annual health care open enrollment period.

(C) Upon the recommendation of the actuary retained by the board, the board shall determine annually the portion of the self-supporting rate it shall pay for eligible benefit recipients and eligible dependents enrolled in health care coverage.

(D) If the monthly premium for dental, vision, or health care coverage exceeds the monthly benefit, the benefit recipient shall pay the premiums as directly billed by the retirement system or a third party under contract with the board to administer collection of monthly premiums. Billings shall conform to a monthly billing schedule.

(E) An ineligible individual, as defined in section 145.58 of the Revised Code, may be enrolled in a health care plan administered by a third party health care administrator(s). Such ineligible individual shall pay all required premiums directly to the health care administrator in the time and manner prescribed by the third party health care administrator. The retirement system shall not be responsible for any premiums, claims, or withholding of premiums for such health care plan.

(F) An eligible benefit recipient may waive health care coverage. The waiver is effective as to both the benefit recipient waiving coverage and the benefit recipient’s dependents.

(1) The effective date of the waiver shall be determined as follows:

(a) If the waiver is received by the retirement system not later than thirty days after issuance of the initial benefit payment, the waiver is effective on the effective date of benefits.

(b) If the waiver is received by the retirement system more than thirty days after the issuance of the initial benefit payment but not later than the tenth day of a month, the waiver is effective on the first day of the month following receipt of the waiver.

(c) If the waiver is received by the retirement system more than thirty days after the issuance of the initial benefit payment and after the tenth day of a month, the waiver is effective on the first day of the second month following receipt of the waiver.

(2) A benefit recipient may revoke the waiver by filing an application for enrollment in health care coverage during one of the following:

(a) The annual open enrollment period for health care coverage, except that the waiver remains effective until January first of the next year;

(b) Within thirty-one days of involuntary termination of coverage under another group plan, and with proof of such termination, except that the waiver remains effective until the first day of the month following receipt if the application is received by the tenth day of the preceding month, otherwise the waiver remains effective until the first day of the second month following receipt of the application.

(G) An individual who is eligible for health care coverage from more than one benefit may not enroll for health care coverage simultaneously under more than one benefit.

(H)

(1) Regardless of the reason for eligibility, all enrolled benefit recipients and dependents shall enroll in medicare part B at the benefit recipient or eligible dependent’s first eligible date.

(2) All enrolled benefit recipients and dependents shall enroll in medicare part A at the benefit recipient or eligible dependent’s first eligible date if the benefit recipient or dependent can do so without payment of a premium for the coverage.

(I) The retirement system shall offer continuation coverage, as applicable, in accordance with the requirements of the consolidated omnibus budget and reconciliation act of 1985 (“COBRA”), 42 United States Code 300gg-1.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07; 1/1/05; 4/15/04; 1/1/03; 8/8/02; 3/22/02; 10/9/00; 5/4/00; 6/29/96; 4/1/93; 12/9/88; 8/20/76

(A) Except as otherwise provided in this rule, the effective date of health care coverage shall be the effective benefit date of the benefit that is the basis of the health care coverage.

(B) If the retirement system or health care administrator has not paid claims for health care coverage for an eligible benefit recipient or eligible dependent, the benefit recipient may elect an effective date of health care coverage that is after the date described in paragraph (A) of this rule but is not later than sixty days after the initial benefit payment. An election under this paragraph shall be made not later than sixty days after the initial benefit payment.

(C) Notwithstanding paragraphs (A) and (B) of this rule, the effective date of health care coverage shall not be either of the following:

(1) More than one year prior to the date on which the retirement system receives an application for enrollment in health care coverage;

(2) A date that precedes the date described in paragraph (A) of this rule.

(D) The effective date of health care coverage shall be on the first day of a month.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58.

Rule Amplifies: 145.58.

Prior Effective Dates: 1/1/07; 1/1/05; 4/15/04; 1/1/03; 8/8/02; 3/22/02; 10/9/00; 5/4/00; 6/29/96; 4/1/93; 12/9/88; 8/20/76

(A) As used in this chapter, “monthly health care allowance” means the monthly amount that is allocated to each individual enrolled in health care coverage. This allowance is based on the self-supporting rate, as determined by the public employees retirement board, and as adjusted by the benefit recipient’s years and type of service credit.

(B) The monthly health care allowance shall only be used to purchase dental, vision, and health care coverage. The remaining portion of the allowance that is not used as described in this paragraph shall be credited to a 401(h) retiree medical account.

(C) The projected number of years and fractions thereof described in section 145.36 of the Revised Code shall not be included in determining the monthly health care allowance of a disability benefit recipient.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07

The public employees retirement board shall establish the circumstances under which an enrolled benefit recipient may select a different third-party health care administrator or plan to provide the benefit recipient’s dental, vision, or health care coverage.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58.

Rule Amplifies: 145.58.

Prior Effective Dates: 1/1/07

Rescinded eff 1-1-07

(A) Dental, vision, and health care coverage may be available to an eligible survivor benefit recipient or an eligible dependent upon application on a form provided by the public employees retirement system.

(B) Except as provided in this paragraph, an eligible survivor benefit recipient may enroll in health care coverage if the benefit recipient is an eligible dependent, as defined in rule 145-4-09 of the Administrative Code. A survivor benefit recipient receiving a benefit under section 145.46 of the Revised Code who is not an eligible dependent may enroll in health care coverage only if the effective date of the primary benefit recipient’s benefit is before October 27, 2006.

(C) The surviving spouse of an age and service retirant or member may enroll an eligible dependent as long as the surviving spouse is enrolled in health care coverage and the eligible dependent continues to meet the definition in rule 145-4-09 of the Administrative Code.

(D) A spouse of a primary benefit recipient shall cease to be eligible for health care coverage on the first day of the month following the date of the final decree of divorce or dissolution from the primary benefit recipient.

(E) An eligible dependent described in paragraph (B)(1)(b) of rule 145-4-09 of the Administrative Code shall cease to be eligible for health care coverage on the first day of the month following the last date of full-time attendance at the education organization or training program.

(F) Upon the death of a primary benefit recipient, any individual who would have been treated as an eligible dependent of the benefit recipient but for the recipient’s death shall be treated as an eligible dependent of the primary benefit recipient for purposes of this chapter until the individual reaches the age limitation set forth in paragraph (A)(2)(a) of rule 145-4-09 of the Administrative Code or provides more than one-half of his or her own support.

(G) A benefit recipient shall inform the retirement system, in writing, not later than thirty days after an eligible dependent no longer meets the requirements of this rule.

(H) The retirement system may require a benefit recipient to certify the status of an individual as an eligible dependent for purposes of health care coverage. Failure to provide certification within sixty days of the request by the retirement system shall result in the denial or withdrawal of health care coverage for such individual until the next annual health care open enrollment period.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.58

Prior Effective Dates: 10/27/06; 1/1/05

As used in this chapter, “eligible dependent” means any of the following:

(A) The spouse of a primary benefit recipient. The spouse shall be an individual of the opposite gender who establishes a marriage by a valid marriage certificate recognized by Ohio law.

(B) The biological or legally adopted child of a primary benefit recipient, provided the child has never been married and to whom all of the following apply:

(1) The child is one of the following:

(a) Under age eighteen;

(b) Under age twenty-two if the child is a full-time student at an education organization described in section 170(b)(1)(A)(ii) of the Internal Revenue Code or certain institutional on-farm training program pursuant to section 152(f)(2) of the Internal Revenue Code for at least five months of the calendar year;

(c) Is permanently and totally disabled prior to the limiting ages set forth in paragraph (A)(2)(a)(i) or (A)(2)(a)(ii) of this rule. For purposes of this paragraph “permanently and totally disabled” means the individual is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death, or which has lasted or can be expected to last for a continuous period of not less than twelve months.

(2) Provides not more than one-half of his or her own support for the calendar year.

(3) Resides at the same principal place of abode as the primary benefit recipient for more than one-half of the calendar year, unless all of the following apply:

(a) The parents of a child are divorced, legally separated, separated under a written separation agreement, or are living apart at all times during the last six months of the calendar year, and the primary benefit recipient is a parent of the child;

(b) The child is in the custody of one or both of the parents for more than one-half of the calendar year;

(c) The child receives over one-half of his or her support during the calendar year from the parents, subject to the provisions of section 152 of the Internal Revenue Code regarding multiple support agreements.

(4) Is a citizen, resident, or national of the United States or a resident of Canada or Mexico. For adopted children, the child has the same principal place of abode as, and is a member of the household of, the primary benefit recipient, who is a U.S. citizen or national.

(C) The grandchild of a primary benefit recipient for whom the benefit recipient has been ordered pursuant to section 3109.19 of the Revised Code to provide for the health care coverage, provided that the grandchild would, but for the grandchild relationship, meet the requirements of this paragraph.

(D) A child who is an eligible dependent under paragraph (A) or (B) of this rule and for whom the primary benefit recipient is ordered to provide health care coverage pursuant to a court order, divorce decree, or national medical support notice.

Replaces: 145-4-09

Effective: 01/01/2009

R.C. 119.032 review dates: 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.38, 145.46, 145.58

Prior Effective Dates: 10/27/06; 1/1/05

(A) A benefit recipient may enroll an eligible dependent in health care coverage at any time outside of the annual health care open enrollment period if any of the following apply:

(1) The primary benefit recipient may enroll a new spouse upon marriage;

(2) The benefit recipient may enroll a child upon the birth or adoption of that child;

(3) The benefit recipient may enroll a child between the age of eighteen and twenty-two who becomes eligible for enrollment by attending an educational institution described in rule 145-4-09 of the Administrative Code;

(4) The benefit recipient may enroll an eligible dependent who has involuntarily lost health care coverage from another source;

(5) The benefit recipient is ordered to enroll a child pursuant to a national medical support order;

(6) The dependent first achieves any other eligibility threshold described in rule 145-4-09 of the Administrative Code.

(B) Enrollment of an eligible dependent under this rule shall be made on an application provided by the public employees retirement system and must be received not later than sixty days after of the occurrence of the event described in paragraph (A) of this rule.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58.

Rule Amplifies: 145.58.

Prior Effective Dates: 1/1/07

(A) For purposes of section 145.58 of the Revised Code and this rule, “basic premium” means the monthly medicare part B premium amount charged to an individual for the current year without regard to the individual’s modified adjusted gross income, as determined by the centers for medicare and medicaid services. The basic premium does not include any increases to the monthly medicare part B premium paid by an individual based on his or her modified adjusted gross income.

(B) The amount of the current basic premium for medicare part B shall be reimbursed to an eligible benefit recipient in each monthly benefit payment when such benefit recipient submits both of the following:

(1) Proof of enrollment in and evidence of the premium amount paid for medicare part B coverage;

(2) Certification that the benefit recipient is not receiving reimbursement for the premium and that it is not being paid by any other source.

(C) Except as provided in paragraph (D) of this rule, the effective date for the reimbursement of the premium amount pursuant to division (C) of section 145.58 of the Revised Code shall be the later of:

(1) The effective date of medicare part B coverage;

(2) The first day of the month following receipt by the system of the information described in paragraph (B) of this rule.

(D) If the benefit recipient’s initial benefit payment was issued not later than thirty days prior to receipt of the information described in paragraph (B) of this rule, the effective date for the reimbursement shall be the first day of the month following the later of:

(1) The effective date of health care coverage under rule 145-4-04 of the Administrative Code;

(2) The effective date of medicare part B coverage.

(E) The retirement system shall not pay more than one monthly medicare part B premium to an eligible benefit recipient who is receiving more than one monthly retirement allowance from this system.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.58

Prior Effective Dates: 1/1/07; 1/1/03; 3/22/02; 9/6/88; 8/20/76

(A) This rule applies to a benefit recipient who irrevocably waived health care coverage under the version of rule 145-4-04 of the Administrative Code in effect prior to January 1, 2007, and an individual who irrevocably waived health care coverage in another Ohio retirement system prior to January 1, 2007.

(B)

(1) In the event that an eligible benefit recipient of this system who also was an eligible benefit recipient of another Ohio retirement system irrevocably waived health care coverage under rule 145-4-04 of the Administrative Code in order to be covered by the other Ohio retirement system, this system shall transfer to the other system annually for covered benefit recipients and dependents for each month covered an amount equal to the sum of:

(a) The lesser of this system’s average monthly medical cost including health maintenance organization or health insuring corporation cost per benefit recipient less the cost paid by the benefit recipient, or the other system’s average monthly medical cost including health maintenance organization or health insuring corporation cost per benefit recipient.

(b) The lesser of this system’s average monthly cost of the prescription drug program per benefit recipient, or the other system’s average monthly cost of the prescription drug program per benefit recipient.

(c) The lesser of the monthly cost of the medicare part B premium that would be reimbursed by this system for the benefit recipient, or the monthly cost of the medicare part B premium that would be reimbursed by the other system for the benefit recipient.

(2) This system shall transfer the amounts due pursuant to paragraph (B)(1) of this rule no later than the last business day of February each year for the preceding calendar year after the following occur:

(a) This system receives from the other system a list containing the names of benefit recipients and the number of months during which the recipients were covered by the other system for the preceding calendar year; and

(b) This system prepares an itemized accounting of the amount transferred for each such benefit recipient.

(C) Where an eligible benefit recipient or dependent of an eligible benefit recipient of this system has waived health care coverage in another Ohio retirement system prior to January 1, 2007, this system shall be responsible to provide health care coverage only if the other Ohio retirement system pays annually to this system for covered benefit recipients and dependents for each month covered, an amount equal to the sum of:

(1) The lesser of this system’s average monthly medical including health maintenance organization or health insuring corporation cost per benefit recipient less the cost paid by the benefit recipient, or the other system’s average monthly medical including health maintenance organization or health insuring corporation cost per benefit recipient.

(2) The lesser of this system’s average monthly cost of the prescription drug program per benefit recipient, or the other system’s average monthly cost of the prescription drug program per benefit recipient.

(3) The lesser of the monthly cost of the medicare part B premium that would be reimbursed by this system for the benefit recipient, or the monthly cost of the medicare part B premium that would be reimbursed by the other system for the benefit recipient.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 7/1/07; 4/6/07 (Emer.); 1/1/07; 1/1/03; 2/3/00; 8/1/98

(A) This rule amplifies division (D) of section 145.58 of the Revised Code.

(B) As used in this rule, “available coverage” means health care coverage available from another Ohio retirement system.

(C) Health care coverage provided by this retirement system under sections 145.325 and 145.58 of the Revised Code shall pay covered medical expenses for benefit recipients of this retirement system prior to payment under any available coverage if the available coverage is provided to the individual as the spouse or dependent of another person.

(D) Health care coverage provided by this system shall pay only the covered medical expenses not paid or reimbursed by any available coverage if either of the following occurs:

(1) In the case of a benefit recipient, the available coverage is not provided as a dependent of another person, and has been in effect for a longer time than the health care coverage provided by this system;

(2) In the case of a dependent, the available coverage is not provided as the dependent of another person or is provided as the dependent of another person but has been in effect for a longer time than the health care coverage provided by this system.

(E) Except as otherwise provided in this rule, the public employees retirement system shall not be the system responsible for health care coverage for eligible benefit recipients or eligible dependents of eligible benefit recipients of this system who waive or are otherwise eligible for any available coverage after January 1, 2007.

(F) Each benefit recipient and eligible dependent enrolled in health care coverage provided by this system shall annually make a report to the system or, an entity designated by the system, stating whether the person has other available coverage. The report shall include any information requested by the system or entity.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.58

Prior Effective Dates: 1/1/07

(A) As used in this rule, “household income” means the aggregate of all income and wages of a benefit recipient enrolled in health care coverage, plus the income and wages of the benefit recipient’s spouse and any individual that could be claimed as the dependent of the benefit recipient for purposes of federal income taxes.

(B) The public employees retirement board may offer a discount on the monthly premium for health care coverage to eligible benefit recipients and eligible dependents whose household income is below an amount determined by the board. The board shall establish the requirements that must be met to qualify for the discount.

(C) If offered under paragraph (B) of this rule, an eligible benefit recipient must apply for the discount annually on a form provided by the public employees retirement system. The system may request documentation to validate the benefit recipient’s eligibility for the program. Failure to accurately complete the enrollment form or provide the requested documentation will prevent enrollment in the program for that year.

(D) If the retirement system determines that the benefit recipient has made false or incomplete representations to qualify for the discount described in this rule, the benefit recipient shall reimburse the retirement system for any discounts improperly received and shall be ineligible to receive the discount at any time in the future.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.58

Prior Effective Dates: 1/1/07

(A) A member participating in the combined plan shall be a member of the traditional pension plan for purposes of the coverage described in sections 145.325 and 145.58 of the Revised Code.

(B) As used in section 145.58 of the Revised Code, “ineligible individual” includes all of the following:

(1) A former member receiving benefits pursuant to section 9.03 of the combined plan document for whom eligibility is established after June 13, 1986, and who, at the time of establishing eligibility, has accrued less than ten years of service credit in the combined plan, exclusive of service credit obtained in the combined plan after January 1, 2003, pursuant to section 145.293 or 145.301 of the Revised Code, and service credit obtained in the combined plan after January 1, 2003, pursuant to section 145.28 of the Revised Code;

(2) The spouse of the former member;

(3) The beneficiary of the former member receiving benefits pursuant to section 9.03(e) of the combined plan document.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58, 145.82

Rule Amplifies: 145.325, 145.58, 145.82

Prior Effective Dates: 1/1/07; 4/15/04

For purposes of determining eligibility for health care coverage and the monthly health care allowance, the public employees retirement system shall aggregate service credit earned and purchased in both the traditional pension plan and the combined plan if both of the following apply:

(A) The member is eligible to retire independently from both the traditional pension plan and the combined plan;

(B) The member applies for retirement under both the traditional pension plan and the combined plan with the same effective date of benefits under both plans.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09

Rule Amplifies: 145.58, 145.82

Prior Effective Dates: 1/1/07

(A) For each member who is contributing to the member-directed plan under section 145.85 of the Revised Code, the public employees retirement system shall credit to a retiree medical account a portion of the employer contribution under section 145.86 of the Revised Code. The portion of employer contribution to be credited shall be determined by the board.

(B) The rights of a member participating in the member-directed plan to reimbursement under a retiree medical account shall be governed exclusively by the provisions of the “public employees retirement system of Ohio VEBA health plan.” The member shall vest in amounts accumulated in the retiree medical account as provided in the “public employees retirement system of Ohio VEBA health plan.”

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.83, 145.88

Rule Amplifies: 145.83

Prior Effective Dates: 10/27/06; 4/15/04

(A) If the monthly health care allowance for an enrolled benefit recipient and enrolled dependent exceeds the monthly cost of the health care coverage of the benefit recipient and dependent, the public employees retirement system shall credit an amount equal to the excess allowance to the 401(h) retiree medical account of the benefit recipient.

(B) A 401(h) retiree medical account under this rule shall be invested by the public employees retirement board with other funds held in the 401(h) account. Each 401(h) retiree medical account shall be credited with interest or other earnings at a rate and at such intervals as determined by the board. An administrative fee may be assessed against a 401(h) retiree medical account as determined by the board.

(C) A 401(h) retiree medical account established under this rule shall be available solely for the payment of the qualified medical expenses of a benefit recipient or eligible dependent.

(D) Payment or reimbursement of a qualified medical expense shall occur only after submission of a claim and approval pursuant to rule 145-4-28 of the Administrative Code. Payment of a qualified medical expense shall occur only by payment of a premium for health care coverage. Reimbursement of a qualified medical expense shall occur by direct payment to the benefit recipient. Payment or reimbursement is limited to expenses not paid by social security, medicare, or any other medical and health insurance coverage held by the benefit recipient or eligible dependent, or their employers. Payment or reimbursement may not be made for qualified medical expenses that are deductible by the benefit recipient under any other section of the Internal Revenue Code.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07

(A) An individual eligible for payment or reimbursement of a qualified medical expense shall submit a claim to the service manager. The service manager shall determine if the claim is a qualified medical expense, and if the claim is approved, the service manager shall make payment or reimburse the qualified medical expense not later than thirty days after the date of approval.

(B) If a claim is denied, in whole or in part, by the service manager, the service manager shall provide the claimant with written notice of its decision within thirty days after receipt of the claim, unless special circumstances require an extension of time for review of the claim.

(1) If special circumstances require an extension of time for the service manager to review a claim, the claimant shall be advised, in writing, of the extension, the special circumstances giving rise to the extension, and the date by which the service manager expects to render its decision. The extension period shall not be more than ninety days after receipt of the claim.

(2) Any denial of a claim shall clearly describe the reason for the denial, the authority upon which the service manager relied in making the decision, any additional information necessary for the claimant to complete the claim, and the steps the claimant may take to submit the claim for review pursuant to paragraph (C) of this rule.

(3) In the event written notice of a denial of a claim is not provided to the claimant in the manner set forth in paragraph (B)(2) of this rule, the claim shall be deemed denied as of the date on which the service manager’s time period for rendering its decision expires.

(C) Any claimant whose request for payment or reimbursement has been denied, in whole or in part, or the claimant’s authorized representative, may appeal the denial by submitting to the service manager a written request for a review of the denied claim. Except as provided in this paragraph, a request for review must be received by the service manager not later than sixty days from the date the claimant received written notification of the service manager’s initial denial of the claimant’s request or from the date the claim was deemed denied. The service manager, upon the written application of the claimant or authorized representative, may in its discretion agree in writing to an extension of the sixty-day period.

During the period for filing a request for review of a denied claim described in this paragraph, the service manager shall permit the claimant to review relevant documents and submit to the service manager written issues and comments concerning the claim.

(D) Upon receiving a request for a review of a denied claim, the service manager shall promptly conduct an internal review of the denied claim and shall provide written notice to the claimant of its decision not later than sixty days after the date on which the request for review was received by the service manager, unless special circumstances require an extension of time for reviewing the denied claim. In the event special circumstances require an extension of time, the service manager shall, prior to the expiration of the initial sixty-day period described in this paragraph, provide the claimant with written notice of the following:

(1) The special circumstances which require an extension of time for review;

(2) The date by which the service manager expects to render its decision.

In no event shall such extension exceed a period of one hundred twenty days from the date on which the service manager received the claimant’s request for review.

(E) The service manager’s decision shall meet all of the following:

(1) Be written to the claimant in a manner designed to be understood by the claimant;

(2) Include specific reasons for their decision;

(3) Include specific references to the pertinent Administrative Code or Internal Revenue Code provisions on which the decision is based.

(F) The service manager may, in its discretion, determine that a hearing is required in order to properly consider the claimant’s request for review of a denied claim. In the event the service manager determines that a hearing is required, that determination shall constitute a special circumstance permitting an extension of time in which to consider the claimant’s request for review.

(G) The claims procedures set forth in this rule shall be strictly adhered to by the claimant or the representative of the claimant. No judicial or arbitration proceedings with respect to any claim for payment or reimbursement, to the extent any such proceedings may be available under applicable law, shall be commenced by any claimant until the proceedings set forth in this rule have been exhausted in full.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/26/2008 and 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07

(A) Amounts standing to the credit of a benefit recipient in the 401(h) retiree medical account at the time of death may be used by an eligible dependent of the benefit recipient for payment or reimbursement of qualified medical expenses.

(B) Except as provided in paragraph (C) of this rule, the 401(h) retiree medical account shall be forfeited and used as provided in paragraph (D) of this rule if any of the following occur:

(1) The primary benefit recipient is not survived by any eligible dependents;

(2) All eligible dependents cease to meet the criteria set forth in rule 145-4-09 of the Administrative Code;

(3) All eligible dependents that have been identified by the service manager do not claim a payment or reimbursement for a period of one year from the date of death of the benefit recipient;

(4) The service manager is unable to locate any eligible dependent within one year of the death of the benefit recipient;

(5) No claim for payment or reimbursement has been received by the service manager for a five-year period.

(C) If a 401(h) retiree medical account is forfeited pursuant to paragraph (B)(3), (B)(4), or (B)(5) of this rule, an eligible dependent may request in writing reinstatement of the 401(h) retiree medical account.

(D) Forfeitures shall be used to fund the administrative expenses of the 401(h) account and may be used as a credit against future employer contributions to the 401(h) account.

R.C. 119.032 review dates: 09/26/2008 and 09/26/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58

Prior Effective Dates: 1/1/07

(A) As used in this rule:

(1) “Electronic protected health information” means protected health information that is transmitted by electronic media or maintained in electronic media.

(2) “Enrollment/disenrollment information” means information on whether the individual is participating in the group health plan, or is enrolled in or has disenrolled from a health insurance issuer, health maintenance organization, or health insuring corporation offered by the plan.

(3) “Plan” means any health plan maintained by the Ohio public employees retirement system under the authority granted in section 145.58 of the Revised Code.

(4) “Plan administration functions” means administration functions performed by the plan sponsor of a group health plan on behalf of the group health plan and excludes functions performed by the plan sponsor in connection with any other benefit or benefit plan of the plan sponsor.

(5) “Plan sponsor” means the Ohio public employees retirement system.

(6) “Protected health information” means individually identifiable health information that is transmitted by electronic media; maintained in electronic media; or transmitted or maintained in any other form or medium. Protected health information excludes individually identifiable health information contained in education records under the Family Educational Rights and Privacy Act, 20 USC Section 1232g; health care records of post-secondary degree students described at 20 USC 1232(g)(4)(B)(iv); and employment records held by a covered entity in its role as employer.

(7) “Summary health information” means information (1) that summarizes the claims history, claims expenses, or type of claims experienced by individuals for whom a plan sponsor has provided health coverage under the plan; and (2) from which the information described at 42 CFR Section 164.514(b)(2)(i) has been deleted, except that the geographic information described in 42 CFR Section 164.514(b)(2)(i)(B) need only be aggregated to the level of a five-digit ZIP code.

(B) The plan may disclose to the plan sponsor enrollment/disenrollment information at any time.

(C) The plan (or a health insurance issuer, health maintenance organization, or health insuring corporation with respect to the plan) may disclose summary health information to the plan sponsor, provided that the plan sponsor requests the summary health information for the purpose of (1) obtaining premium bids from health plans for providing health insurance coverage under the plan; or (2) modifying, amending, or terminating the plan.

(D)

(1) Unless otherwise permitted by law, and subject to the conditions of disclosure described in paragraph (E) of this rule and obtaining written certification pursuant to paragraph (G) of this rule, the plan (or a health insurance issuer, health maintenance organization, or health insuring corporation on behalf of the plan) may disclose protected health information and electronic protected health information to the plan sponsor, provided that the plan sponsor uses or discloses such protected health information and electronic protected health information only for plan administration purposes. “Plan administration purposes” means administration functions performed by the plan sponsor on behalf of the plan, such as quality assurance, claims processing, auditing, and monitoring. Plan administration functions do not include functions performed by the plan sponsor in connection with any other benefit or benefit plan of the plan sponsor or any employment-related actions or decisions.

(2) Enrollment and disenrollment functions performed by the plan sponsor are performed on behalf of plan participants and their dependents, and are not plan administration functions.

(3) Notwithstanding any provisions of this plan to the contrary, in no event shall the plan sponsor be permitted to use or disclose protected health information or electronic protected health information in a manner that is inconsistent with 45 CFR Section 164.504(f).

(E)

(1) Plan sponsor agrees that with respect to any protected health information (other than enrollment/disenrollment information and summary health information, and information disclosed pursuant to a signed authorization that complies with the requirements of 45 CFR Section 164.508, which are not subject to these restrictions) disclosed to it by the plan (or a health insurance issuer, health maintenance organization, or health insuring corporation on behalf of the plan), plan sponsor shall:

(a) Not use or further disclose the protected health information other than as permitted or required by the plan or as required by law;

(b) Ensure that any agent, including a subcontractor, to whom it provides protected health information received from the plan agrees to the same restrictions and conditions that apply to the plan sponsor with respect to protected health information;

(c) Not use or disclose the protected health information for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the plan sponsor;

(d) Report to the plan any use or disclosure of the protected health information of which it becomes aware that is inconsistent with the uses or disclosures provided for;

(e) Make available protected health information to comply with the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) right to access in accordance with 45 CFR Section 164.524;

(f) Make available protected health information for amendment, and incorporate any amendments to protected health information, in accordance with 45 CFR Section 164.526;

(g) Make available the information required to provide an accounting of disclosures in accordance with 45 CFR Section 164.528;

(h) Make its internal practices, books, and records relating to the use and disclosure of protected health information received from the plan available to the secretary of health and human services for purposes of determining compliance by the plan with HIPAA’s privacy requirements;

(i) If feasible, return or destroy all protected health information received from the plan that the plan sponsor still maintains in any form and retain no copies of such information when no longer needed for the purpose for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible; and

(j) Ensure that the adequate separation between plan and plan sponsor (i.e., the firewall), required by 45 CFR Section 504(f)(2)(iii), is established.

(2) Plan sponsor further agrees that if it creates, receives, maintains, or transmits any electronic protected health information (other than enrollment/disenrollment information and summary health information, and information disclosed pursuant to a signed authorization that complies with the requirements of 45 CFR Section 164.508, which are not subject to these restrictions) on behalf of the plan, it will:

(a) Implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of the electronic protected health information that it creates, receives, maintains, or transmits on behalf of the plan;

(b) Ensure that the adequate separation between the plan and plan sponsor (i.e., the firewall), required by 45 CFR Section 504(f)(2)(iii) is supported by reasonable and appropriate security measures;

(c) Ensure that any agent, including a subcontractor, to whom it provides electronic protected health information agrees to implement reasonable and appropriate security measures to protect the information; and

(d) Report to the plan any security incident of which it becomes aware, as follows: plan sponsor will report to the plan, with such frequency and at such times as agreed, the aggregate number of unsuccessful, unauthorized attempts to access, use, disclose, modify, or destroy electronic protected health information or to interfere with systems operations in an information system containing electronic protected health information; in addition, plan sponsor will report to the plan as soon as feasible any successful unauthorized access, use, disclosure, modification, or destruction of electronic protected health information or interference with systems operations in an information system containing electronic protected health information.

(F)

(1) The plan sponsor shall allow only those employees or other persons under the control of the plan sponsor who receive protected health information relating to payment under, health care operations of, or other matters pertaining to the plan in the ordinary course of business access to the protected health information. No other persons shall have access to protected health information. These specified employees (or classes of employees) shall only have access to and use of protected health information to the extent necessary to perform the plan administration functions that the plan sponsor performs for the plan. In the event that any of these specified employees does not comply with the provisions of this rule, that employee shall be subject to disciplinary action by the plan sponsor for non-compliance pursuant to the plan sponsor’s employee discipline and termination procedures.

(2) The plan sponsor shall ensure that the provisions of this rule are supported by reasonable and appropriate security measures to the extent that the persons designated above create, receive, maintain, or transmit electronic protected health information on behalf of the plan.

(G) The plan (or a health insurance issuer, health maintenance organization, or health insuring corporation with respect to the plan) shall disclose protected health information to the plan sponsor only upon the receipt of a certification by the plan sponsor that the plan has been amended to incorporate the provisions of 45 CFR Section 164.504(f)(2)(ii), and that the plan sponsor agrees to the conditions of disclosure set forth in paragraph (E) of this rule.

Effective: 01/01/2009

R.C. 119.032 review dates: 09/29/2013

Promulgated Under: 111.15

Statutory Authority: 145.09, 145.58

Rule Amplifies: 145.325, 145.58