REPRESENTATIVES Schmidt, Allen, Setzer, Seitz, Aslanides, C. Evans, Olman, Schneider, Schaffer, Raga, Webster, Buehrer, Skindell, Beatty, Brown, Chandler, Cirelli, Collier, Daniels, DeBose, Domenick, Hartnett, Harwood, Hughes, Jolivette, Key, Miller, Otterman, S. Patton, Perry, Price, Redfern, Reidelbach, Seaver, S. Smith, D. Stewart, J. Stewart, Strahorn, Yates

To amend sections 9.833, 124.84, 124.841, and 505.60

1

of the Revised Code to permit the state and

2

political subdivisions to pay some or all of the

3

premium for their employees' long-term care

4

insurance and to permit public officials and

5

employees of political subdivisions to serve on

6

the governing body of a joint self-insurance

7

program of which the subdivision is a member.

8

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 9.833, 124.84, 124.841, and 505.60	9
of the Revised Code be amended to read as follows:	10

Sec. 9.833.  (A) As used in this section, "political	11
subdivision" means a municipal corporation, township, county,	12
school district, or other body corporate and politic responsible	13
for governmental activities in a geographic area smaller than that	14
of the state.	15

(B) Political subdivisions that provide health care benefits	16
for their officers or employees may do any of the following:	17

(1) Establish and maintain an individual self-insurance	18
program with public moneys to provide authorized health care	19
benefits, including but not limited to, health care, prescription	20
drugs, dental care, and vision care, in accordance with division	21
(C) of this section;	22

(2) After establishing an individual self-insurance program,	23
agree with other political subdivisions that have established	24
individual self-insurance programs for health care benefits, that	25
their programs will be jointly administered in a manner specified	26
in the agreement;	27

(3) Pursuant to a written agreement and in accordance with	28
division (C) of this section, join in any combination with other	29
political subdivisions to establish and maintain a joint	30
self-insurance program to provide health care benefits;	31

(4) Pursuant to a written agreement, join in any combination	32
with other political subdivisions to procure or contract for	33
policies, contracts, or plans of insurance to provide health care	34
benefits for their officers and employees subject to the	35
agreement;	36

(5) Use in any combination any of the policies, contracts,	37
plans, or programs authorized under this division.	38

(C) Except as otherwise provided in division (E) of this	39
section, the following apply to individual or joint self-insurance	40
programs established pursuant to this section:	41

(1) Such funds shall be reserved as are necessary, in the	42
exercise of sound and prudent actuarial judgment, to cover	43
potential cost of health care benefits for the officers and	44
employees of the political subdivision. A report of amounts so	45
reserved and disbursements made from such funds, together with a	46
written report of a member of the American academy of actuaries	47
certifying whether the amounts reserved conform to the	48
requirements of this division, are computed in accordance with	49
accepted loss reserving standards, and are fairly stated in	50
accordance with sound loss reserving principles, shall be prepared	51
and maintained, within ninety days after the last day of the	52
fiscal year of the entity for which the report is provided for	53
that fiscal year, in the office of the program administrator	54
described in division (C)(3) of this section.	55

The report required by division (C)(1) of this section shall	56
include, but not be limited to, disbursements made for the	57
administration of the poolprogram, including claims paid, costs	58
of the legal representation of political subdivisions and	59
employees, and fees paid to consultants.	60

The program administrator described in division (C)(3) of	61
this section shall make the report required by this division	62
available for inspection by any person at all reasonable times	63
during regular business hours, and, upon the request of such	64
person, shall make copies of the report available at cost within a	65
reasonable period of time.	66

(2) Each political subdivision shall reserve funds necessary	67
for an individual or joint self-insurance program in a special	68
fund that may be established pursuant to an ordinance or	69
resolution of the political subdivision and not subject to section	70
5705.12 of the Revised Code. The political subdivision may	71
allocate the costs of insurance or any self-insurance program, or	72
both, among the funds or accounts in the subdivision's treasury on	73
the basis of relative exposure and loss experience.	74

(3) A contract may be awarded, without the necessity of	75
competitive bidding, to any person, political subdivision,	76
nonprofit corporation organized under Chapter 1702. of the Revised	77
Code, or regional council of governments created under Chapter	78
167. of the Revised Code for purposes of administration of an	79
individual or joint self-insurance program. No such contract shall	80
be entered into without full, prior, public disclosure of all	81
terms and conditions. The disclosure shall include, at a minimum,	82
a statement listing all representations made in connection with	83
any possible savings and losses resulting from the contract, and	84
potential liability of any political subdivision or employee. The	85
proposed contract and statement shall be disclosed and presented	86
at a meeting of the political subdivision not less than one week	87
prior to the meeting at which the political subdivision authorizes	88
the contract.	89

A contract awarded to a nonprofit corporation or a regional	90
council of governments under this division may provide that all	91
employees of the nonprofit corporation or regional council of	92
governments and the employees of all entities related to the	93
nonprofit corporation or regional council of governments may be	94
covered by the individual or joint self-insurance program under	95
the terms and conditions set forth in the contract.	96

(4) The individual or joint self-insurance program shall	97
include a contract with a member of the American academy of	98
actuaries for the preparation of the written evaluation of the	99
reserve funds required under division (C)(1) of this section.	100

(5) A joint self-insurance program may allocate the costs of	101
funding the program among the funds or accounts in the treasuries	102
of the participating political subdivisions on the basis of their	103
relative exposure and loss experience.	104

(6) An individual self-insurance program may allocate the	105
costs of funding the program among the funds or accounts in the	106
treasury of the political subdivision that established the	107
program.	108

(7) Two or more political subdivisions may also authorize the	109
establishment and maintenance of a joint health care cost	110
containment program, including, but not limited to, the employment	111
of risk managers, health care cost containment specialists, and	112
consultants, for the purpose of preventing and reducing health	113
care costs covered by insurance, individual self-insurance, or	114
joint self-insurance programs.	115

(8) A political subdivision is not liable under a joint	116
self-insurance program for any amount in excess of amounts payable	117
pursuant to the written agreement for the participation of the	118
political subdivision in the joint self-insurance program. Under a	119
joint self-insurance program agreement, a political subdivision	120
may, to the extent permitted under the written agreement, assume	121
the risks of any other political subdivision. A joint	122
self-insurance program established under this section is deemed a	123
separate legal entity for the public purpose of enabling the	124
members of the joint self-insurance program to obtain insurance or	125
to provide for a formalized, jointly administered self-insurance	126
fund for its members. An entity created pursuant to this section	127
is exempt from all state and local taxes.	128

(9) Any political subdivision may issue general obligation	129
bonds, or special obligation bonds that are not payable from real	130
or personal property taxes, and may also issue notes in	131
anticipation of such bonds, pursuant to an ordinance or resolution	132
of its legislative authority or other governing body for the	133
purpose of providing funds to pay expenses associated with the	134
settlement of claims, whether by way of a reserve or otherwise,	135
and to pay the political subdivision's portion of the cost of	136
establishing and maintaining an individual or joint self-insurance	137
program or to provide for the reserve in the special fund	138
authorized by division (C)(2) of this section.	139

In its ordinance or resolution authorizing bonds or notes	140
under this section, a political subdivision may elect to issue	141
such bonds or notes under the procedures set forth in Chapter 133.	142
of the Revised Code. In the event of such an election,	143
notwithstanding Chapter 133. of the Revised Code, the maturity of	144
the bonds may be for any period authorized in the ordinance or	145
resolution not exceeding twenty years, which period shall be the	146
maximum maturity of the bonds for purposes of section 133.22 of	147
the Revised Code.	148

Bonds and notes issued under this section shall not be	149
considered in calculating the net indebtedness of the political	150
subdivision under sections 133.04, 133.05, 133.06, and 133.07 of	151
the Revised Code. Sections 9.98 to 9.983 of the Revised Code are	152
hereby made applicable to bonds or notes authorized under this	153
section.	154

(10) A joint self-insurance program is not an insurance	155
company. Its operation does not constitute doing an insurance	156
business and is not subject to the insurance laws of this state.	157

(D) A political subdivision may procure group life insurance	158
for its employees in conjunction with an individual or joint	159
self-insurance program authorized by this section, provided that	160
the policy of group life insurance is not self-insured.	161

(E) Divisions (C)(1), (2), and (4) of this section do not	162
apply to individual self-insurance programs in municipal	163
corporations, townships, or counties.	164

(F) A public official or employee of a political subdivision	165
who is or becomes a member of the governing body of the program	166
administrator of a joint self-insurance program in which the	167
political subdivision participates is not in violation of division	168
(D) or (E) of section 102.03, division (C) of section 102.04, or	169
section 2921.42 of the Revised Code as a result of either of the	170
following:	171

(1) The political subdivision's entering under this section	172
into the written agreement to participate in the joint	173
self-insurance program;	174

(2) The political subdivision's entering under this section	175
into any other contract with the joint self-insurance program.	176

Sec. 124.84.  (A) The department of administrative services,	177
in consultation with the superintendent of insurance and subject	178
to division (D) of this section, shall negotiate and contract with	179
one or more insurance companies or health insuring corporations	180
authorized to operate or do business in this state for the	181
purchase of a policy of long-term care insurance covering all	182
state employees who are paid directly by warrant of the auditor of	183
state, including elected state officials. Any policy purchased	184
under this division shall be negotiated and entered into in	185
accordance with the competitive selection procedures specified in	186
Chapter 125. of the Revised Code. As used in this section,	187
"long-term care insurance" has the same meaning as in section	188
3923.41 of the Revised Code.	189

(B) Any elected state official or state employee paid	190
directly by warrant of the auditor of state may elect to	191
participate in any long-term care insurance policy purchased under	192
division (A) of this section and any official or employee who does	193
so shall be responsible for paying the entire premium charged,	194
which shall be deducted from the official's or employee's salary	195
or wage and be remitted by the auditor of state directly to the	196
insurance company or health insuring corporation. All or any	197
portion of the premium charged may be paid by the state.	198
Participation in the policy may include the dependents and family	199
members of the elected state official or state employee.	200

If a participant in a long-term care insurance policy leaves	201
employment, the participant and the participant's dependents and	202
family members may, at their election, continue to participate in	203
a policy established under this section in the same manner as if	204
the participant had not left employment. The manner of payment and	205
the portion of premium charged the participant, dependent, and	206
family member shall be established pursuant to division (E) of	207
this section.	208

(C) Any long-term care insurance policy purchased under this	209
section or section 124.841 or 145.581 of the Revised Code shall	210
provide for all of the following with respect to the premiums	211
charged for the policy:	212

(1) They shall be set at the entry age of the official or	213
employee when first covered by the policy and shall not increase	214
except as a class during coverage under the policy.	215

(2) They shall be based on the class of all officials or	216
employees covered by the policy.	217

(3) They shall continue, pursuant to section 145.581 of the	218
Revised Code, after the retirement of the official or employee who	219
is covered under the policy, at the rate in effect on the date of	220
the official's or employee's retirement.	221

(D) Prior to entering into a contract with an insurance	222
company or health insuring corporation for the purchase of a	223
long-term care insurance policy under this section, the department	224
shall request the superintendent of insurance to certify the	225
financial condition of the company or corporation. The department	226
shall not enter into the contract if, according to that	227
certification, the company or corporation is insolvent, is	228
determined by the superintendent to be potentially unable to	229
fulfill its contractual obligations, or is placed under an order	230
of rehabilitation or conservation by a court of competent	231
jurisdiction or under an order of supervision by the	232
superintendent.	233

(E) The department shall adopt rules in accordance with	234
section 111.15 of the Revised Code governing long-term care	235
insurance purchased under this section. The rules shall establish	236
methods of payment for participation under this section, which may	237
include establishment of a payroll deduction planAll or any	238
portion of the premium charged the participants, dependents, and	239
family members shall be paid in such manner or combination of	240
manners as the department determines.	241

Sec. 124.841.  (A) As used in this section:

242

(1) "Long-term care insurance" has the same meaning as in	243
section 3923.41 of the Revised Code.	244

(2) "Political subdivision" has the same meaning as in	245
section 9.833 of the Revised Code.	246

(B) Any political subdivision may negotiate with and may	247
contract with one or more insurance companies or health insuring	248
corporations authorized to operate or do business in this state	249
for the purchase of a policy of long-term care insurance covering	250
all elected officials and employees of the political subdivision.	251
The contract may be entered into without competitive bidding. Any	252
elected official or employee of a political subdivision may elect	253
to participate in any long-term care insurance policy that the	254
political subdivision purchases under this division and any	255
official or employee who does so shall be responsible for paying	256
the entire premium charged, which shall be deducted from the	257
official's or employee's salary or wage and be remitted directly	258
to the insurance company or health insuring corporation.	259

(C) Any long-term care insurance policy entered into under	260
this section is subject to division (C) of section 124.84 of the	261
Revised Code.	262

(D) All or any portion of the premium charged may be paid by	263
the political subdivision. The political subdivision shall	264
establish a manner or manners of payment for participants and the	265
political subdivision.	266

Sec. 505.60.  (A) As provided in this section and section	267
505.601 of the Revised Code, the board of township trustees of any	268
township may procure and pay all or any part of the cost of	269
insurance policies that may provide benefits for hospitalization,	270
surgical care, major medical care, disability, dental care, eye	271
care, medical care, hearing aids, prescription drugs, or sickness	272
and accident insurance, or a combination of any of the foregoing	273
types of insurance for township officers and employees. The board	274
of township trustees of any township may negotiate and contract	275
for the purchase of a policy of long-term care insurance for	276
township officers and employees pursuant to section 124.841 of the	277
Revised Code.	278

(B) If the board procures any insurance policies under this	279
section, the board shall provide uniform coverage under these	280
policies for township officers and full-time township employees	281
and their immediate dependents, and may provide coverage under	282
these policies for part-time township employees and their	283
immediate dependents, from the funds or budgets from which the	284
officers or employees are compensated for services, such policies	285
to be issued by an insurance company duly authorized to do	286
business in this state. Any township officer or employee may	287
refuse to accept the insurance coverage without affecting the	288
availability of such insurance coverage to other township officers	289
and employees.	290

The board may also contract for group health care services	291
with health insuring corporations holding certificates of	292
authority under Chapter 1751. of the Revised Code for township	293
officers and employees. If the board so contracts, it shall	294
provide uniform coverage under any such contracts for township	295
officers and full-time township employees and their immediate	296
dependents and may provide coverage under such contracts for	297
part-time township employees and their immediate dependents,	298
provided that each officer and employee so covered is permitted	299
to:	300

(1) Choose between a plan offered by an insurance company and	301
a plan offered by a health insuring corporation, and provided	302
further that the officer or employee pays any amount by which the	303
cost of the plan chosen exceeds the cost of the plan offered by	304
the board under this section;	305

(2) Change the choice made under division (B) of this section	306
at a time each year as determined in advance by the board.	307

An addition of a class or change of definition of coverage to	308
the plan offered by the board may be made at any time that it is	309
determined by the board to be in the best interest of the	310
township. If the total cost to the township of the revised plan	311
for any trustee's coverage does not exceed that cost under the	312
plan in effect during the prior policy year, the revision of the	313
plan does not cause an increase in that trustee's compensation.	314

(C) If any township officer or employee is denied coverage	315
under a health care plan procured under division (B) of this	316
section or if any township officer or employee elects not to	317
participate in the township's health care plan, the township may	318
reimburse the officer or employee for each out-of-pocket premium	319
that the officer or employee incurs for insurance policies	320
described in division (A) of this section that the officer or	321
employee otherwise obtains, but not to exceed an amount equal to	322
the average premium paid by the township for its officers and	323
employees under policies it procures under division (B) of this	324
section.	325

(D) The board may provide the benefits authorized under this	326
section, without competitive bidding, by contributing to a health	327
and welfare trust fund administered through or in conjunction with	328
a collective bargaining representative of the township employees.	329

The board may also provide the benefits described in this	330
section through an individual self-insurance program or a joint	331
self-insurance program as provided in section 9.833 of the Revised	332
Code.	333

(E) If a board of township trustees fails to pay one or more	334
premiums for a policy, contract, or plan of insurance or health	335
care services authorized by division (A) or (B) of this section	336
and the failure causes a lapse, cancellation, or other termination	337
of coverage under the policy, contract, or plan, it may reimburse	338
a township officer or employee for, or pay on behalf of the	339
officer or employee, any expenses incurred that would have been	340
covered under the policy, contract, or plan.	341

(F) As used in this section and section 505.601 of the	342
Revised Code:	343

(1) "Part-time township employee" means a township employee	344
who is hired with the expectation that the employee will work not	345
more than one thousand five hundred hours in any year.	346

(2) "Premium" does not include any deductible or health care	347
costs paid directly by a township officer or employee.	348

Section 2. That existing sections 9.833, 124.84, 124.841, and	349
505.60 of the Revised Code are hereby repealed.	350