Chapter 145-4 Health Care Coverage

145-4-01 Health care definitions.

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 , 145.332 , 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) "Contributing service credit" means service credit earned or obtained under section 145.31 , 145.302 , 145.47 , or 145.483 of the Revised Code, section 3.03 of the combined plan document, or article VI of the combined or member-directed plan document. Beginning January 1, 2014, "contributing service credit" means service credit described in this paragraph for which the monthly earnable salary on and after January 1, 2014, is one thousand dollars or greater.

(E) "Health care coverage" means the coverage authorized under sections 145.58 and 145.584 of the Revised Code, except for reimbursement of the medicare part B premium, and dental and vision coverage.

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

(G) "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.

(H) "Primary benefit recipient" means an age and service retirant or disability benefit recipient who meets the requirements specified in rule 145-4-06 of the Administrative Code and is enrolled in health care coverage.

(I) "Qualified medical expense" means medical care, as defined in section 213(d) of the Internal Revenue Code of 1986, 26 U.S.C.A. 213(d) , and applicable regulations thereunder and are excludable from income in accordance with sections 105 and 106 of the Internal Revenue Code.

(J) "Qualified service credit" means contributing service credit and service credit purchased or transferred under section 145.295 , 145.2911 , or 145.37 of the Revised Code that, if earned or obtained in the public employees retirement system, would be the equivalent of the contributing service credit.

(K) "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 of 1986, 26 U.S.C.A. 501 , and described in the document entitled the "public employees retirement system of Ohio VEBA health plan" that was effective on January 1, 2003, and is available at www.opers.org.

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

(M) "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.

(N) "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: 01/01/2014
R.C. 119.032 review dates: 09/26/2013 and 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-02 Health care fund.

(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 of 1986, 26 U.S.C.A. 401 for the purpose of funding the coverage authorized under sections 145.58 and 145.584 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 145.48 , 145.51 , 145.58 and 145.584 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 per cent 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 if provided by the system, 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 if provided by the system.

(E) At no time prior to the satisfaction of all liabilities under this rule and sections 145.58 and 145.584 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 of 1986, 26 U.S.C.A. 401 and 414 .

(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: 01/01/2014
R.C. 119.032 review dates: 10/08/2013 and 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-03 Health care coverage.

(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. A primary benefit recipient may enroll an eligible dependent as defined in rule 145-4-09 of the Administrative Code.

(B)

(1) Except as provided in this paragraph, 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. During this sixty-day period, a recipient may make one change to the filed application. If the application is received more than sixty days after the benefit recipient's initial benefit payment or the benefit recipient fails to file an application within that period, the benefit recipient shall be treated as described in paragraph (E) of this rule.

(2) The system may accept and process an application received more than sixty days after the benefit recipient's initial benefit payment if either of the following occur:

(a) The system determines that a physical or mental incapacity prevented the benefit recipient from making application within the initial sixty day benefit period. The effective date of coverage shall be determined in accordance with rule 145-4-04 of the Administrative Code.

(b) The benefit recipient did not apply for coverage and later submits an application due to involuntary termination of coverage under another group plan. The benefit recipient shall submit the application within thirty-one days of the involuntary termination together with proof of such termination. If the application is received on or before the tenth day of a month, the coverage is effective on the first day of the month following receipt of the application. Otherwise, the coverage is effective on the first day of the second month following receipt of the application.

(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) An ineligible individual, as defined in rule 145-4-06 of the Administrative 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. Except to the extent required under paragraph (H) of this rule, the retirement system shall not be responsible for any premiums, claims, or withholding of premiums for such health care plan.

(E)

(1) An eligible benefit recipient may defer enrollment in health care coverage. The deferral applies to both the benefit recipient and the benefit recipient's dependents.

(2) A benefit recipient who is described in paragraph (E)(1) of this rule or who waived coverage under a version of this rule in effect prior to January 1, 2014, may enroll 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 deferral or waiver remains effective until January first of the next year;

(b) Within sixty days of involuntary termination of coverage under another group plan, and with proof of such termination, except that the deferral or 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 deferral or waiver remains effective until the first day of the second month following receipt of the application.

(F) 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.

(G)

(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.

(3) For any period that a benefit recipient or dependent is eligible but fails to enroll in medicare part A or B as required by this paragraph, the health care claims paid by the retirement system shall be reduced by the coverage the individual should have received if enrolled in medicare part A or B.

(H) 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 .

(I) An enrolled benefit recipient's coverage shall be rescinded if the benefit recipient is convicted of falsification under section 2921.13 of the Revised Code regarding the health care coverage or performs an act, practice or omission that constitutes fraud or makes an intentional misrepresentation of material fact regarding the health care coverage. The effective date of the termination of coverage shall be the earlier of the date of the conviction or the act, practice or omission that constitutes fraud or an intentional misrepresentation of material fact, unless otherwise limited by Ohio law. The retirement system shall notify the benefit recipient of the rescission at least thirty days prior to processing the rescission. The rescission applies to all enrolled dependents and all coverage options.

Effective: 01/01/2014
R.C. 119.032 review dates: 09/26/2013 and 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 8/20/76, 12/9/88, 4/1/93, 6/29/96, 5/4/00, 10/9/00, 3/22/02, 8/8/02, 1/1/03, 4/15/04, 1/1/05, 1/1/07, 1/1/09, 1/1/11, 1/1/12, 9/7/12, 12/10/12, 1/7/13 (Emer.), 3/24/13

145-4-04 Effective date of health care coverage.

(A) Except as otherwise provided in this rule or rule 145-4-03 of the Administrative Code, the effective date of health care coverage shall be the later of the following:

(1) The effective benefit date of the benefit that is the basis of the health care coverage, or

(2) The first day of the month during which an application for the benefit is received by the public employees retirement system.

(B) For benefit receipients of survivor benefits under section 145.45 of the Revised Code and article XI of the combined plan document, the effective date of health care coverage shall be the effective date of the survivor benefit, but shall not exceed more than one year prior to the date on which the system receives an application for enrollment in health care coverage.

(C) 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.

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

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58
Prior Effective Dates: 8/20/76, 12/9/88, 4/1/93, 6/29/96, 5/4/00, 10/9/00, 3/22/02, 8/8/02, 1/1/03, 4/15/04, 1/1/05, 1/1/07, 1/1/12, 12/10/12

145-4-05 Monthly health care allowance.

(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 of qualified service credit, and for effective dates of retirement on and after January 1, 2015, attained age at the time of initial enrollment in the plan.

(B) The monthly health care allowance shall only be used to purchase health care coverage.

Effective: 01/01/2014
R.C. 119.032 review dates: 09/26/2013 and 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-06 Eligibility for health care in traditional pension and combined plans.

(A) For effective dates of benefits before January 1, 2014, as used in section 145.58 of the Revised Code, "ineligible individual" means all of the following:

(1) A former member receiving benefits pursuant to section 145.32 , 145.33 , 145.331 , 145.332 , or 145.46 or former section 145.34 of the Revised Code or 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, exclusive of credit obtained pursuant to section 145.297 or 145.298 of the Revised Code, credit obtained after January 29, 1981, pursuant to section 145.293 or 145.301 of the Revised Code, credit obtained after May 4, 1992, pursuant to section 145.28 of the Revised Code, and credit obtained in the combined plan after January 1, 2003, pursuant to section 145.28 , 145.293 , or 145.301 of the Revised Code;

(2) The spouse of the former member;

(3) The beneficiary of the former member receiving benefits pursuant to section 145.46 of the Revised Code or section 9.03(e) of the combined plan document, as amended on January 7, 2013.

(B) For effective dates of benefits on and after January 1, 2014, but before January 1, 2015, as used in section 145.58 of the Revised Code, "ineligible individual" means any individual who does not meet any of the following:

(1) A former member receiving benefits pursuant to section 145.32 , 145.33 , 145.331 , 145.332 , or 145.46 or former section 145.34 of the Revised Code or section 9.03 of the combined plan document with an effective date of benefits on and after January 1, 2014, but before January 1, 2015, and who has accrued at least ten years of qualified service credit.

(2) The spouse of the former member;

(3) The beneficiary of the former member receiving benefits pursuant to section 145.46 of the Revised Code or section 9.03(e) of the combined plan document, as amended on January 7, 2013.

(C) For effective dates of benefits on or after January 1, 2015, as used in section 145.58 of the Revised Code, "ineligible individual" means any individual who does not meet any of the following:

(1) A former member receiving benefits pursuant to section 145.32 , 145.33 , 145.331 , 145.332 , or 145.46 or former section 145.34 of the Revised Code or section 9.03 of the combined plan document with an effective date of benefits on and after January 1, 2015, and who has attained age sixty and has accrued at least twenty years of qualified service credit or is any age and has accrued at least thirty years of qualified service credit.

(2) The spouse of the former member;

(3) The beneficiary of the former member receiving benefits pursuant to section 145.46 of the Revised Code or section 9.03(e) of the combined plan document, as amended on January 7, 2013.

(D) Beginning January 1, 2014, as used in section 145.58 of the Revised Code, an "ineligible individual" includes a disability benefit recipient who has an effective date of benefits that is on or after January 1, 2014, and has been receiving a disability benefit for more than five years unless the recipient meets one of the following:

(1) The recipient has met the eligibility requirements described in paragraph (B) or (C) of this rule;

(2) The recipient qualifies for federal hospital insurance benefits under the Social Security Amendments of 1965, 79 Stat. 291, 42 U.S.C.A. 1395c , on the basis of a disability and has not attained age sixty-five.

(E) A member participating in the combined plan shall be a member of the traditional pension plan for purposes of the coverage described in sections 145.58 and 145.584 of the Revised Code.

Replaces: 145-4-06

Effective: 01/01/2014
R.C. 119.032 review dates: 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58 , 145.82
Rule Amplifies: 145.58 , 145.584 , 145.82
Prior Effective Dates: 4/15/04, 1/1/07, 1/7/13 (Emer.), 3/24/13

145-4-07 Reenrollment following voluntary termination of health care coverage.

(A) An eligible benefit recipient enrolled in health care coverage under rule 145-4-03 of the Administrative Code may voluntarily terminate coverage. The termination of coverage applies to both the benefit recipient and the benefit recipient's dependents. The effective date of the termination of coverage shall be determined as follows:

(1) If the termination of coverage is received by the retirement system not later than sixty days after issuance of the initial benefit payment and the public employees retirement system has not paid claims for health care coverage of the benefit recipient or dependent, the termination is effective on the effective date of benefits. The benefit recipient shall be treated as an individual who did not enroll in coverage under paragraph (E)(1) of rule 145-4-03 of the Administrative Code.

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

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

(B) A benefit recipient who voluntarily terminated coverage as described in paragraph (A) of this rule on or after January 1, 2014, may reenroll in coverage by one of the following actions:

(1) During the annual open enrollment period, the benefit recipient applies for health care coverage and provides proof of creditable coverage in another health care plan that is effective through December thirty-first of the plan year immediately preceding participation in this plan; or

(2) Within sixty days of involuntary termination of health care coverage under another plan, the benefit recipient submits and application for health care coverage and provides proof of creditable coverage in the prior plan. This enrollment will become effective on the first day of the month following receipt of the application if the application is received not later than the tenth day of the month; otherwise, the enrollment becomes effective on the first day of the second month following receipt of the application.

(C) This rule does not apply to any of the following:

(1) Rule 145-4-13 of the Administrative Code;

(2) A benefit recipient whose disenrollment occurred under rule 145-4-17 of the Administrative Code;

(3) A benefit recipient whose health care coverage has been suspended for failure to submit the documentation necessary to administer the individual's enrollment in the coverage.

Effective: 01/10/2014
R.C. 119.032 review dates: 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584

145-4-08 Eligibility for health care coverage for the dependents and survivors of this system's members and retirants.

(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) 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 dependent's twenty-sixth birthday. An eligible dependent described in paragraph (C) 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 eighteenth birthday of the primary benefit recipient's child who is the parent of the primary benefit recipient's enrolled grandchild.

(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 rule 145-4-09 of the Administrative Code .

(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.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58
Prior Effective Dates: 1/1/05, 10/27/06, 1/1/09, 1/1/11

145-4-09 Definition of "eligible dependent" for health care coverage.

For coverage commencing on or after January 1, 2011, "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 who is under the age of twenty-six or is permanently and totally disabled prior to age twenty-two. 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.

(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.

Replaces: 145-4-09.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.38 , 145.46 , 145.58
Prior Effective Dates: 1/1/05, 10/27/06, 1/1/09, 1/1/11

145-4-10 Enrollment of eligible dependents outside of open enrollment period.

(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 an eligible dependent who has involuntarily lost health care coverage from another source;

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

(5) The dependent first achieves an 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: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58
Prior Effective Dates: 1/1/07, 1/1/11

145-4-11 Reimbursement of medicare part "B" premium.

(A) The public employees retirement board shall determine the monthly amount paid to reimburse for medicare part "B" coverage, if any. The amount paid shall be the following, except that the board shall make no payment that exceeds the amount paid by the recipient for the coverage:

(1) For calendar year 2013, $ 96.40;

(2) For calendar year 2014, $ 96.40;

(3) For calendar year 2015, $ 63.62;

(4) For calendar year 2016, $ 31.81;

(5) For calendar year 2017 and each year thereafter, zero.

(B) The amount described in paragraph (A) of this rule 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 and this rule 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.

(F) If a benefit recipient fails to certify the amount paid for medicare part B coverage, the board may, following notice to the benefit recipient, suspend the premium reimbursement for any month that certification is not received. The board shall not reimburse the benefit recipient for any period of suspension.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58
Prior Effective Dates: 8/20/76, 9/6/88, 3/22/02, 1/1/03, 1/1/07, 1/1/09, 4/5/10, 1/7/13 (Emer.), 3/24/13

145-4-13 Waiver program grandfathered.

(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.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 8/1/98, 2/3/00, 1/1/03, 1/1/07, 4/6/07 (Emer.), 7/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-14 Coordination of coverage.

(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

145.58 and 145.584 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.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-15 Income-based discount program.

(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: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58
Prior Effective Dates: 1/1/07

145-4-17 Payment of health care charges and disenrollment for nonpayment.

(A)

(1) Enrolled benefit receipients shall pay all health care premiums and associated costs through deduction from the benefit.

(2) If the benefit does not satisfy the amounts due, the public employees retirement system or designated third party shall bill the benefit recipient for the amount due or the remainder of the amount due after partial deduction from the available benefit.

(B) A benefit receipient who fails to timely remit payment for amounts due pursuant to paragraph (A)(2) of this rule shall be disenrolled from all health care coverage as provided in this rule.

(1) A benefit recipient may prevent disenrollment only by remitting all amounts due prior to the due date.

(2) A benefit recipient who has failed to remit the amount due by the due date shall be notified of disenrollment from health care coverage not less than fifteen days prior to the date on which the retirement system will process the disenrollment.

(3) The effective date of disenrollment shall be the last day of the month following the month the benefit recipient failed to remit the amount due, in coordination with the centers for medicare and medicaid services, as necessary.

(4) Any unpaid amounts due through the effective date of disenrollment shall be deducted from the benefit following disenrollment.

(5) Disenrollment of a benefit recipient pursuant to this rule applies to all enrolled dependents and coverage options.

(C) A benefit receipient whose coverage was terminated pursuant to this rule may re-enroll in coverage once during the annual open enrollment period if full payment of all amounts due is received by the first day of December of the year preceding the coverage period.

(D) A second termiantion of coverage pursuant to this rule is permanent and ends all eligibility to participate in this plan.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 8/20/76, 12/9/88, 4/1/93, 6/29/96, 5/4/00, 10/9/00, 3/22/02, 8/8/02, 1/1/03, 4/15/04, 1/1/05, 1/1/07, 1/1/09, 1/1/11, 1/1/12, 9/10/12, 1/7/13 (Emer.), 3/24/13

145-4-20 [Rescinded]Health care coverage for combined plan.

Effective: 03/24/2013
R.C. 119.032 review dates: 01/04/2013
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58 , 145.82
Rule Amplifies: 145.58 , 145.82
Prior Effective Dates: 4/15/07, 1/1/07

145-4-22 Eligibility for health care coverage for service in traditional pension and combined plans.

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: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09
Rule Amplifies: 145.58 , 145.82
Prior Effective Dates: 1/1/07

145-4-24 Retiree medical account for member-directed plan.

(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: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.83 , 145.88
Rule Amplifies: 145.83
Prior Effective Dates: 4/15/04, 10/27/06

145-4-26 401(h) retiree medical account.

(A) 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.

(B) 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.

(C) 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: 01/01/2014
R.C. 119.032 review dates: 09/26/2013 and 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-28 Administration of 401(h) retiree medical account-claims and appeals.

(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.

R.C. 119.032 review dates: 09/26/2013 and 09/26/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/07, 1/1/09, 1/7/13 (Emer.), 3/24/13

145-4-30 Administration of 401(h) retiree medical account-forfeiture and unclaimed accounts.

(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;

(C) If a 401(h) retiree medical account is forfeited pursuant to paragraph (B)(3) or (B)(4) 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.

Effective: 09/16/2013
R.C. 119.032 review dates: 06/27/2013 and 09/16/2018
Promulgated Under: 111.15
Statutory Authority: 145.09, 145.58
Rule Amplifies: 145.58, 145.584
Prior Effective Dates: 1/1/07, 1/7/13 (Emer.), 3/24/13, 7/7/13 (Emer.)

145-4-50 Health care plan provisions regarding the Health Insurance Portability and Accountability Act of 1996 ("HIPAA").

(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 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 administrative functions performed by the plan sponsor of a health plan on behalf of the 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.

(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 C.F.R. Section 164.514(b)(2)(i), 67 F.R. 53270 (2002), has been deleted, except that the geographic information described in 42 C.F.R. 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 administrative 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 and other administrative services related to the plan. 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) 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 C.F.R. Section 164.504(f), 68 F.R. 8381 (2003).

(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 C.F.R. Section 164.508, 67 F.R. 53268 (2002), 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 C.F.R. Section 164.524, 67 F.R. 53271 (2002);

(f) Make available protected health information for amendment, and incorporate any amendments to protected health information, in accordance with 45 C.F.R. Section 164.526, 65 F.R. 82802 (2002);

(g) Make available the information required to provide an accounting of disclosures in accordance with 45 C.F.R. 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 C.F.R. Section 164.504(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 C.F.R. 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 C.F.R. Section 164.504(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 are involved in the administration of the health plan 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 C.F.R. 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: 01/01/2014
R.C. 119.032 review dates: 09/26/2013 and 09/29/2018
Promulgated Under: 111.15
Statutory Authority: 145.09 , 145.58
Rule Amplifies: 145.58 , 145.584
Prior Effective Dates: 1/1/09, 1/1/11, 1/7/13 (Emer.), 3/24/13