As Reported by the House Insurance Committee

126th General Assembly Regular Session 2005-2006

Sub. S. B. No. 5

Senators Hottinger, Harris 

Representatives Daniels, Barrett, Blessing, Evans, D., Faber, Gibbs, Martin, Patton, T., Raussen, White, J. 

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A BILL

To amend sections 1731.01, 1731.03, 1731.04, 1731.09,

1

1751.04, 1751.12, 1751.34, 3924.04, and 3924.06

2

and to enact sections 3905.56, 3923.81, and

3

3961.01 to 3961.09 of the Revised Code to regulate

4

discount medical plan organizations concerning

5

provider agreements and marketing, disclosure,

6

cancellation, and refund requirements; to make

7

changes to the Small Employer Health Care

8

Alliances Law and the Small Employer Health

9

Benefit Plans Law; to exempt health insuring

10

corporations covering only medicaid recipients

11

from examination by the director of health; to

12

allow health insuring corporations to offer

13

insurance products with a high annual deductible;

14

to require insurance consultants to disclose

15

compensation in certain circumstances; and to

16

limit the amount of copayments and deductibles

17

paid by persons insured by health benefit plans.

18

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

Section 1.  That sections 1731.01, 1731.03, 1731.04, 1731.09,	19
1751.04, 1751.12, 1751.34, 3924.04, and 3924.06 be amended and	20
sections 3905.56, 3923.81, 3961.01, 3961.02, 3961.03, 3961.04,	21
3961.05, 3961.06, 3961.07, 3961.08, and 3961.09 of the Revised	22
Code be enacted to read as follows:	23

Sec. 1731.01.  As used in this chapter:

24

(A) "Alliance" or "small employer health care alliance" means	25
an existing or newly created organization that has been granted a	26
certificate of authority by the superintendent of insurance under	27
section 1731.021 of the Revised Code and that is either of the	28
following:	29

(1) A chamber of commerce, trade association, professional	30
organization, or any other organization that has all of the	31
following characteristics:	32

(a) Is a nonprofit corporation or association;

33

(b) Has members that include or are exclusively small	34
employers;	35

(c) Sponsors or is part of a program to assist such small	36
employer members to obtain coverage for their employees under one	37
or more health benefit plans;	38

(d) Except as provided in division (A)(1)(e) of this section,	39
is not directly or indirectly controlled, through voting	40
membership, representation on its governing board, or otherwise,	41
by any insurance company, person, firm, or corporation that sells	42
insurance, any provider, or by persons who are officers, trustees,	43
or directors of such enterprises, or by any combination of such	44
enterprises or persons.	45

(e) Division (A)(1)(d) of this section does not apply to an	46
organization that is comprised of members who are either insurance	47
agents or providers, that is controlled by the organization's	48
members or by the organization itself, and that elects to offer	49
health insurance exclusively to any or all of the following:	50

(i) Employees and retirees of the organization;

51

(ii) Insurance agents and providers that are members of the	52
organization;	53

(iii) Employees and retirees of the agents or providers	54
specified in division (A)(1)(e)(ii) of this section;	55

(iv) Families and dependents of the employees, providers,	56
agents, and retirees specified in divisions (A)(1)(e)(i),	57
(A)(1)(e)(ii), and (A)(1)(e)(iii) of this section.	58

(2) A nonprofit corporation controlled by one or more	59
organizations described in division (A)(1) of this section.	60

(B) "Alliance program" or "alliance health care program"	61
means a program sponsored by a small employer health care alliance	62
that assists small employer members of such small employer health	63
care alliance or any other small employer health care alliance to	64
obtain coverage for their employees under one or more health	65
benefit plans, and that includes at least one agreement between a	66
small employer health care alliance and an insurer that contains	67
the insurer's agreement to offer and sell one or more health	68
benefit plans to such small employers and contains all of the	69
other features required under section 1731.04 of the Revised Code.	70

(C) "Eligible employees, retirees, their dependents, and	71
members of their families," as used together or separately, means	72
the active employees of a small employer, or retired former	73
employees of a small employer or predecessor firm or organization,	74
their dependents or members of their families, who are eligible	75
for coverage under the terms of the applicable alliance program.	76

(D) "Enrolled small employer" or "enrolled employer" means a	77
small employer that has obtained coverage for its eligible	78
employees from an insurer under an alliance program.	79

(E) "Health benefit plan" means any hospital or medical	80
expense policy of insurance or a health care plan provided by an	81
insurer, including a health insuring corporation plan, provided by	82
or through an insurer, or any combination thereof. "Health benefit	83
plan" does not include any of the following:	84

(1) A policy covering only accident, credit, dental,	85
disability income, long-term care, hospital indemnity, medicare	86
supplement, specified disease, or vision care, except where any of	87
the foregoing is offered as an addition, indorsement, or rider to	88
a health benefit plan;	89

(2) Coverage issued as a supplement to liability insurance,	90
insurance arising out of a workers' compensation or similar law,	91
automobile medical-payment insurance, or insurance under which	92
benefits are payable with or without regard to fault and which is	93
statutorily required to be contained in any liability insurance	94
policy or equivalent self-insurance;	95

(3) Coverage issued by a health insuring corporation	96
authorized to offer supplemental health care services only.	97

(F) "Insurer" means an insurance company authorized to do the	98
business of sickness and accident insurance in this state or, for	99
the purposes of this chapter, a health insuring corporation	100
authorized to issue health care plans in this state.	101

(G) "Participants" or "beneficiaries" means those eligible	102
employees, retirees, their dependents, and members of their	103
families who are covered by health benefit plans provided by an	104
insurer to enrolled small employers under an alliance program.	105

(H) "Provider" means a hospital, urgent care facility,	106
nursing home, physician, podiatrist, dentist, pharmacist,	107
chiropractor, certified registered nurse anesthetist, dietitian,	108
or other health care provider licensed by this state, or group of	109
such health care providers.	110

(I) "Qualified alliance program" means an alliance program	111
under which health care benefits are provided to twoone thousand	112
five hundred or more participants.	113

(J) "Small employer," regardless of its definition in any	114
other chapter of the Revised Code, in this chapter means an	115
employer that employs no more than onefive hundred fifty	116
full-time employees, at least a majority of whom are employed at	117
locations within this state.	118

(1) For this purpose:

119

(a) Each entity that is controlled by, controls, or is under	120
common control with, one or more other entities shall, together	121
with such other entities, be considered to be a single employer.	122

(b) "Full-time employee" means a person who normally works at	123
least twenty-five hours per week and at least forty weeks per year	124
for the employer.	125

(c) An employer will be treated as having onefive hundred	126
fifty or fewer full-time employees on any day if, during the prior	127
calendar year or any twelve consecutive months during the	128
twenty-four full months immediately preceding that day, the mean	129
number of full-time employees employed by the employer does not	130
exceed onefive hundred fifty.	131

(2) An employer that qualifies as a small employer for	132
purposes of becoming an enrolled small employer continues to be	133
treated as a small employer for purposes of this chapter until	134
such time as it fails to meet the conditions described in division	135
(J)(1) of this section for any period of thirty-six consecutive	136
months after first becoming an enrolled small employer, unless	137
earlier disqualified under the terms of the alliance program.	138

Sec. 1731.03.  (A) A small employer health care alliance may	139
do any of the following:	140

(1) Negotiate and enter into agreements with one or more	141
insurers for the insurers to offer and provide one or more health	142
benefit plans to small employers for their employees and retirees,	143
and the dependents and members of the families of such employees	144
and retirees, which coverage may be made available to enrolled	145
small employers without regard to industrial, rating, or other	146
classifications among the enrolled small employers under an	147
alliance program, except as otherwise provided under the alliance	148
program, and for the alliance to perform, or contract with others	149
for the performance of, functions under or with respect to the	150
alliance program;	151

(2) Contract with another alliance for the inclusion of the	152
small employer members of one in the alliance program of the	153
other;	154

(3) Provide or cause to be provided to small employers	155
information concerning the availability, coverage, benefits,	156
premiums, and other information regarding an alliance program and	157
promote the alliance program;	158

(4) Provide, or contract with others to provide, enrollment,	159
record keeping, information, premium billing, collection and	160
transmittal, and other services under an alliance program;	161

(5) Receive reports and information from the insurer and	162
negotiate and enter into agreements with respect to inspection and	163
audit of the books and records of the insurer;	164

(6) Provide services to and on behalf of an alliance program	165
sponsored by another alliance, including entering into an	166
agreement described in division (B) of section 1731.01 of the	167
Revised Code on behalf of the other alliance;	168

(7) If it is a nonprofit corporation created under Chapter	169
1702. of the Revised Code, exercise all powers and authority of	170
such corporations under the laws of the state, or, if otherwise	171
constituted, exercise such powers and authority as apply to it	172
under the applicable laws, and its articles, regulations,	173
constitution, bylaws, or other relevant governing instruments.	174

(B) A small employer health care alliance is not and shall	175
not be regarded for any purpose of law as an insurer, an offeror	176
or seller of any insurance, a partner of or joint venturer with	177
any insurer, an agent of, or solicitor for an agent of, or	178
representative of, an insurer or an offeror or seller of any	179
insurance, an adjuster of claims, or a third-party administrator,	180
and will not be liable under or by reason of any insurance	181
coverage or other health benefit plan provided or not provided by	182
any insurer or by reason of any conditions or restrictions on	183
eligibility or benefits under an alliance program or any insurance	184
or other health benefit plan provided under an alliance program or	185
by reason of the application of those conditions or restrictions.	186

(C) The promotion of an alliance program by an alliance or by	187
an insurer is not and shall not be regarded for any purpose of law	188
as the offer, solicitation, or sale of insurance.	189

(D)(1) No alliance shall adopt, impose, or enforce medical	190
underwriting rules or underwriting rules requiring a small	191
employer to have more than a minimum number of employees for the	192
purpose of determining whether an alliance member is eligible to	193
purchase a policy, contract, or plan of health insurance or health	194
benefits from any insurer in connection with the alliance health	195
care program.	196

(2) No alliance shall reject any applicant for membership in	197
the alliance based on the health status of the applicant's	198
employees or their dependents or because the small employer does	199
not have more than a minimum number of employees.	200

(3) A violation of division (D)(1) or (2) of this section is	201
deemed to be an unfair and deceptive act or practice in the	202
business of insurance under sections 3901.19 to 3901.26 of the	203
Revised Code.	204

(4) Nothing in division (D)(1) or (2) of this section shall	205
be construed as inhibiting or preventing an alliance from	206
adopting, imposing, and enforcing rules, conditions, limitations,	207
or restrictions that are based on factors other than the health	208
status of employees or their dependents or the size of the small	209
employer for the purpose of determining whether a small employer	210
is eligible to become a member of the alliance. Division (D)(1) of	211
this section does not apply to an insurer that sells health	212
coverage to an alliance member under an alliance health care	213
program.	214

(E) HealthExcept as otherwise specified in section 1731.09	215
of the Revised Code, health benefit plans offered and sold to	216
alliance members that are small employers as defined in section	217
3924.01 of the Revised Code are subject to sections 3924.01 to	218
3924.14 of the Revised Code.	219

(F) Any person who represents an alliance in bargaining or	220
negotiating a health benefit plan with an insurer shall disclose	221
to the governing board of the alliance any direct or indirect	222
financial relationship the person has or had during the past two	223
years with the insurer.	224

Sec. 1731.04.  (A) An agreement between an alliance and an	225
insurer referred to in division (B) of section 1731.01 of the	226
Revised Code shall contain at least the following:	227

(1) A provision requiring the insurer to offer and sell to	228
small employers served or to be served by an alliance one or more	229
health benefit plan options for coverage of their eligible	230
employees and the eligible dependents and members of the families	231
of the eligible employees and, if applicable, such members'	232
eligible retirees and the eligible dependents and members of the	233
families of the retirees, subject to such conditions and	234
restrictions as may be set forth or incorporated into the	235
agreement;	236

(2) A brief description of each type of health benefit plan	237
option that is to be so offered and the conditions for the	238
modification, continuation, and termination of the coverage and	239
benefits thereunder;	240

(3) A statement of the eligibility requirements that an	241
employee or retiree must meet in order for the employee or retiree	242
to be eligible to obtain and retain coverage under any health	243
benefit plan option so offered and, if one of such requirements is	244
that an employee must regularly work for a minimum number of hours	245
per week, a statement of such minimum number of hours, which	246
minimum shall not exceed seventeen and one-halftwenty-five hours	247
per week;	248

(4) A description of any pre-existing condition and waiting	249
period rules;	250

(5) A statement of the premium rates or other charges that	251
apply to each health benefit plan option or a formula or method of	252
determining the rates or charges;	253

(6) A provision prescribing the minimum employer contribution	254
toward premiums or other charges required in order to permit a	255
small employer to obtain coverage under a health benefit plan	256
option offered under an alliance program;	257

(7) A provision requiring that each health benefit plan under	258
the alliance program must provide for the continuation of coverage	259
of participants of an enrolled small employer so long as the small	260
employer determines that such person is a qualified beneficiary	261
entitled to such coverage pursuant to Part 6 of Title I of the	262
"Federal Employee Retirement Income Security Act of 1974," 88	263
Stat. 832, 29 U.S.C.A. 1001, and the laws of this state, and	264
regulations or rulings interpreting such provisions. Such coverage	265
provided by the insurer under the plan to participants shall	266
comply with the "Federal Employee Retirement Income Security Act	267
of 1974" and the relevant statutes, regulations, and rulings	268
interpreting that act, including provisions regarding types of	269
coverage to be provided, apportionments of limitations on	270
coverage, apportionments of deductibles, and the rights of	271
qualified beneficiaries to elect coverage options relating to	272
types of coverage and otherwise.	273

(B) An agreement between an alliance and an insurer referred	274
to in division (B) of section 1731.01 of the Revised Code may	275
contain provisions relating to, but not limited to, any of the	276
following:	277

(1) The application and enrollment process for a small	278
employer and related provisions pertaining to historical	279
experience, health statements, and underwriting standards;	280

(2) The minimum number of those employees eligible to be	281
participants that are required to participate in order to permit a	282
small employer to obtain coverage under a health benefit plan	283
option offered under the alliance program, which may vary with the	284
number of employees or those eligible to be participants in	285
respect of the small employer;	286

(3) A procedure for allowing an enrolled small employer to	287
change from one plan option to another under the alliance program,	288
subject to qualifying by size or otherwise under the alliance	289
program;	290

(4) The application of any risk-related pooling or grouping	291
programs and related premiums, conditions, reviews, and	292
alternatives offered by the insurer;	293

(5) The availability of a medicare supplement coverage option	294
for eligible participants who are covered by Parts A and B of	295
medicare, Title XVIII of the "Social Security Act," 49 Stat. 620	296
(1935), 42 U.S.C.A. 301;	297

(6) Relevant experience periods, enrollment periods, and	298
contract periods;	299

(7) Effective dates for coverage of eligible participants;

300

(8) Conditions under which denial or withdrawal of coverage	301
of participants or small employers and their employees may occur	302
by reason of falsification or misrepresentation of material facts	303
or criminal conduct toward the insurer, small employer, or	304
alliance under the program;	305

(9) Premium rate structures, which may be uniform or make	306
provision for age-specific rates, differentials based on number of	307
participants of an enrolled small employer, products and plan	308
options selected, and other factors, rate adjustments based on	309
consumer price indices, utilization, or other relevant factors,	310
notification of rate adjustments, and arbitration;	311

(10) Any responsibilities of the alliance for billing,	312
collection, and transmittal of premiums;	313

(11) Inclusion under the alliance program of small employers	314
that are members of other organizations described in division	315
(A)(1) of section 1731.01 of the Revised Code that contract with	316
the alliance for this purpose, and conditions pertaining to those	317
small employer members and to their employees and retirees, and	318
dependents and family members of those employees or retirees, as	319
applicable under the alliance program;	320

(12) The agreement of the insurer to offer and sell one or	321
more health benefit plans to small employer members of another	322
small employer health care alliance that contracts with the	323
alliance for this purpose;	324

(13) Use of the health benefit plan options of the insurer in	325
the alliance program and use of the names of the alliance and the	326
insurer;	327

(14) Indemnification from claims and liability by reason of	328
acts or omissions of others;	329

(15) OnwershipOwnership, use, availability, and maintenance	330
of confidentiality of data and records relating to the alliance	331
program;	332

(16) Utilization reports to be provided to the alliance by	333
the insurer;	334

(17) Such other provisions as may be agreed upon by the	335
alliance and the insurer to better provide for the articulation,	336
promotion, financing, and operation of the alliance program or a	337
health benefit plan under the program in furtherance of the public	338
purposes stated in section 1731.02 of the Revised Code.	339

(C) Neither an alliance program nor an agreement between an	340
alliance and an insurer is itself a policy or contract of	341
insurance, or a certificate, indorsement, rider, or application	342
forming any part of a policy, contract, or certificate of	343
insurance. Chapters 3905., 3933., and 3959. of the Revised Code do	344
not apply to an alliance program or to an agreement between an	345
alliance and an insurer thereunder, as such, or to the functions	346
of the alliance under an alliance program.	347

Sec. 1731.09. (A) Nothing contained in this chapter is	348
intended to or shall inhibit or prevent the application of the	349
provisions of Chapter 3924. of the Revised Code to any health	350
benefit plan or insurer to which they would otherwise apply in the	351
absence of this chapter, except as otherwise specified in	352
divisions (B) and (C) of this section or unless such application	353
conflicts with the provisions of section 1731.05 of the Revised	354
Code.	355

(B) An insurer may establish one or more separate classes of	356
business solely comprised of one or more alliances. All of the	357
following shall apply to health plans covering small employers in	358
each class of business established pursuant to this division:	359

(1) The premium rate limitations set forth in section 3924.04	360
of the Revised Code apply to each class of business separate and	361
apart from the insurer's other business;	362

(2) For purposes of applying sections 3924.01 to 3924.14 of	363
the Revised Code to a class of business, the base premium rate and	364
midpoint rate shall be determined with respect to each class of	365
business separate and apart from the insurer's other business.	366

(3) The midpoint rate for a class of business shall not	367
exceed the midpoint rate for any other class of business or the	368
insurer's non-alliance business by more than fifteen per cent.	369

(4) The insurer annually shall file with the superintendent	370
of insurance an actuarial certification consistent with section	371
3924.06 of the Revised Code for each class of business	372
demonstrating that the underwriting and rating methods of the	373
insurer do all of the following:	374

(a) Comply with accepted actuarial practices;

375

(b) Are uniformly applied to health benefit plans covering	376
small employers within the class of business;	377

(c) Comply with the applicable provisions of this section and	378
sections 3924.01 to 3924.14 of the Revised Code.	379

(5) An insurer shall apply sections 3924.01 to 3924.14 of the	380
Revised Code to the insurer's non-alliance business and coverage	381
sold through alliances not established as a separate class of	382
business.	383

(6) An insurer shall file with the superintendent a	384
notification identifying any alliance or alliances to be treated	385
as a separate class of business at least sixty days prior to the	386
date the rates for that class of business take effect.	387

(7) Any application for a certificate of authority filed	388
pursuant to section 1731.021 of the Revised Code shall include a	389
disclosure as to whether the alliance will be underwritten or	390
rated as part of a separate class of business.	391

(C) As used in this section:

392

(1) "Class of business" means a group of small employers, as	393
defined in section 3924.01 of the Revised Code, that are enrolled	394
employers in one or more alliances.	395

(2) "Actuarial certification," "base premium rate," and	396
"midpoint rate" have the same meanings as in section 3924.01 of	397
the Revised Code.	398

Sec. 1751.04.  (A) Except as provided by division (F) of this	399
section, upon the receipt by the superintendent of insurance of a	400
complete application for a certificate of authority to establish	401
or operate a health insuring corporation, which application sets	402
forth or is accompanied by the information and documents required	403
by division (A) of section 1751.03 of the Revised Code, the	404
superintendent shall transmit copies of the application and	405
accompanying documents to the director of health.	406

(B) The director shall review the application and	407
accompanying documents and make findings as to whether the	408
applicant for a certificate of authority has done all of the	409
following with respect to any basic health care services and	410
supplemental health care services to be furnished:	411

(1) Demonstrated the willingness and potential ability to	412
ensure that all basic health care services and supplemental health	413
care services described in the evidence of coverage will be	414
provided to all its enrollees as promptly as is appropriate and in	415
a manner that assures continuity;	416

(2) Made effective arrangements to ensure that its enrollees	417
have reliable access to qualified providers in those specialties	418
that are generally available in the geographic area or areas to be	419
served by the applicant and that are necessary to provide all	420
basic health care services and supplemental health care services	421
described in the evidence of coverage;	422

(3) Made appropriate arrangements for the availability of	423
short-term health care services in emergencies within the	424
geographic area or areas to be served by the applicant,	425
twenty-four hours per day, seven days per week, and for the	426
provision of adequate coverage whenever an out-of-area emergency	427
arises;	428

(4) Made appropriate arrangements for an ongoing evaluation	429
and assurance of the quality of health care services provided to	430
enrollees, including, if applicable, the development of a quality	431
assurance program complying with the requirements of sections	432
1751.73 to 1751.75 of the Revised Code, and the adequacy of the	433
personnel, facilities, and equipment by or through which the	434
services are rendered;	435

(5) Developed a procedure to gather and report statistics	436
relating to the cost and effectiveness of its operations, the	437
pattern of utilization of its services, and the quality,	438
availability, and accessibility of its services.	439

(C) Within ninety days of the director's receipt of the	440
application for issuance of a certificate of authority, the	441
director shall certify to the superintendent whether or not the	442
applicant meets the requirements of division (B) of this section	443
and sections 3702.51 to 3702.62 of the Revised Code. If the	444
director certifies that the applicant does not meet these	445
requirements, the director shall specify in what respects it is	446
deficient. However, the director shall not certify that the	447
requirements of this section are not met unless the applicant has	448
been given an opportunity for a hearing.	449

(D) If the applicant requests a hearing, the director shall	450
hold a hearing before certifying that the applicant does not meet	451
the requirements of this section. The hearing shall be held in	452
accordance with Chapter 119. of the Revised Code.	453

(E) The ninety-day review period provided for under division	454
(C) of this section shall cease to run as of the date on which the	455
notice of the applicant's right to request a hearing is mailed and	456
shall remain suspended until the director issues a final	457
certification order.	458

(F) Nothing in this section requires the director to review	459
or make findings with regard to an application and accompanying	460
documents to establish or operate a health insuring corporation to	461
cover solely recipients of assistance under the medicaid program	462
operated pursuant to Chapter 5111. of the Revised Code, a health	463
insuring corporation to cover solely recipients of assistance	464
under the federal medicare program under Title XVIII of the	465
"Social Security Act," 49 Stat. 62 (1935), 42 U.S.C. 301, as	466
amended, or a health insuring corporation to cover solely	467
recipients of assistance under both the medicaid and medicare	468
programs.	469

Sec. 1751.12.  (A)(1) No contractual periodic prepayment and	470
no premium rate for nongroup and conversion policies for health	471
care services, or any amendment to them, may be used by any health	472
insuring corporation at any time until the contractual periodic	473
prepayment and premium rate, or amendment, have been filed with	474
the superintendent of insurance, and shall not be effective until	475
the expiration of sixty days after their filing unless the	476
superintendent sooner gives approval. The filing shall be	477
accompanied by an actuarial certification in the form prescribed	478
by the superintendent. The superintendent shall disapprove the	479
filing, if the superintendent determines within the sixty-day	480
period that the contractual periodic prepayment or premium rate,	481
or amendment, is not in accordance with sound actuarial principles	482
or is not reasonably related to the applicable coverage and	483
characteristics of the applicable class of enrollees. The	484
superintendent shall notify the health insuring corporation of the	485
disapproval, and it shall thereafter be unlawful for the health	486
insuring corporation to use the contractual periodic prepayment or	487
premium rate, or amendment.	488

(2) No contractual periodic prepayment for group policies for	489
health care services shall be used until the contractual periodic	490
prepayment has been filed with the superintendent. The filing	491
shall be accompanied by an actuarial certification in the form	492
prescribed by the superintendent. The superintendent may reject a	493
filing made under division (A)(2) of this section at any time,	494
with at least thirty days' written notice to a health insuring	495
corporation, if the contractual periodic prepayment is not in	496
accordance with sound actuarial principles or is not reasonably	497
related to the applicable coverage and characteristics of the	498
applicable class of enrollees.	499

(3) At any time, the superintendent, upon at least thirty	500
days' written notice to a health insuring corporation, may	501
withdraw the approval given under division (A)(1) of this section,	502
deemed or actual, of any contractual periodic prepayment or	503
premium rate, or amendment, based on information that either of	504
the following applies:	505

(a) The contractual periodic prepayment or premium rate, or	506
amendment, is not in accordance with sound actuarial principles.	507

(b) The contractual periodic prepayment or premium rate, or	508
amendment, is not reasonably related to the applicable coverage	509
and characteristics of the applicable class of enrollees.	510

(4) Any disapproval under division (A)(1) of this section,	511
any rejection of a filing made under division (A)(2) of this	512
section, or any withdrawal of approval under division (A)(3) of	513
this section, shall be effected by a written notice, which shall	514
state the specific basis for the disapproval, rejection, or	515
withdrawal and shall be issued in accordance with Chapter 119. of	516
the Revised Code.	517

(B) Notwithstanding division (A) of this section, a health	518
insuring corporation may use a contractual periodic prepayment or	519
premium rate for policies used for the coverage of beneficiaries	520
enrolled in Title XVIII of the "Social Security Act," 49 Stat. 620	521
(1935), 42 U.S.C.A. 301, as amended, pursuant to a medicare risk	522
contract or medicare cost contract, or for policies used for the	523
coverage of beneficiaries enrolled in the federal employees health	524
benefits program pursuant to 5 U.S.C.A. 8905, or for policies used	525
for the coverage of beneficiaries enrolled in Title XIX of the	526
"Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.A. 301, as	527
amended, known as the medical assistance program or medicaid,	528
provided by the department of job and family services under	529
Chapter 5111. of the Revised Code, or for policies used for the	530
coverage of beneficiaries under any other federal health care	531
program regulated by a federal regulatory body, or for policies	532
used for the coverage of beneficiaries under any contract covering	533
officers or employees of the state that has been entered into by	534
the department of administrative services, if both of the	535
following apply:	536

(1) The contractual periodic prepayment or premium rate has	537
been approved by the United States department of health and human	538
services, the United States office of personnel management, the	539
department of job and family services, or the department of	540
administrative services.	541

(2) The contractual periodic prepayment or premium rate is	542
filed with the superintendent prior to use and is accompanied by	543
documentation of approval from the United States department of	544
health and human services, the United States office of personnel	545
management, the department of job and family services, or the	546
department of administrative services.	547

(C) The administrative expense portion of all contractual	548
periodic prepayment or premium rate filings submitted to the	549
superintendent for review must reflect the actual cost of	550
administering the product. The superintendent may require that the	551
administrative expense portion of the filings be itemized and	552
supported.	553

(D)(1) Copayments must be reasonable and must not be a	554
barrier to the necessary utilization of services by enrollees.	555

(2) A health insuring corporation, in order to ensure that	556
copayments are reasonable and not a barrier to the necessary	557
utilization of basic health care services by enrollees, may do one	558
of the following:	559

(a) Impose copayment charges on any single covered basic	560
health care service that does not exceed forty per cent of the	561
average cost to the health insuring corporation of providing the	562
service;	563

(b) Impose copayment charges that annually do not exceed	564
twenty per cent of the total annual cost to the health insuring	565
corporation of providing all covered basic health care services,	566
including physician office visits, urgent care services, and	567
emergency health services, when aggregated as to all persons	568
covered under the filed product in question. In addition, annual	569
copayment charges as to each enrollee shall not exceed twenty per	570
cent of the total annual cost to the health insuring corporation	571
of providing all covered basic health care services, including	572
physician office visits, urgent care services, and emergency	573
health services, as to such enrollee. The total annual cost of	574
providing a health care service is the cost to the health insuring	575
corporation of providing the health care service to its enrollees	576
as reduced by any applicable provider discount.	577

(3) To ensure that copayments are reasonable and not a	578
barrier to the utilization of basic health care services, a health	579
insuring corporation may not impose, in any contract year, on any	580
subscriber or enrollee, copayments that exceed two hundred per	581
cent of the average annual premium rate to subscribers or	582
enrollees.	583

(4) For purposes of division (D) of this section, both of the	584
following apply:	585

(a) Copayments imposed by health insuring corporations in	586
connection with a high deductible health plan that is linked to a	587
health savings account are reasonable and are not a barrier to the	588
necessary utilization of services by enrollees.	589

(b) Divisions (D)(2) and (3) of this section do not apply to	590
a high deductible health plan that is linked to a health savings	591
account.	592

(E) A health insuring corporation shall not impose lifetime	593
maximums on basic health care services. However, a health insuring	594
corporation may establish a benefit limit for inpatient hospital	595
services that are provided pursuant to a policy, contract,	596
certificate, or agreement for supplemental health care services.	597

(F) A health insuring corporation may require that an	598
enrollee pay an annual deductible that does not exceed one	599
thousand dollars per enrollee or two thousand dollars per family,	600
except that:	601

(1) A health insuring corporation may impose higher	602
deductibles for high deductible health plans that are linked to	603
health savings accounts;	604

(2) The superintendent may adopt rules allowing different	605
annual deductible amounts for plans with a medical savings	606
account, health reimbursement arrangement, flexible spending	607
account, or similar account;	608

(3) A health insuring corporation may impose higher	609
deductibles under health plans if requested by the group contract,	610
policy, certificate, or agreement holder, or an individual seeking	611
coverage under an individual health plan. This shall not be	612
construed as requiring the health insuring corporation to create	613
customized health plans for group contract holders or individuals.	614

(G) As used in this section, "health savings account" and	615
"high deductible health plan" have the same meanings as in the	616
"Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C. 223, as	617
amended.	618

Sec. 1751.34.  (A) Each health insuring corporation and each	619
applicant for a certificate of authority under this chapter shall	620
be subject to examination by the superintendent of insurance in	621
accordance with section 3901.07 of the Revised Code. Section	622
3901.07 of the Revised Code shall govern every aspect of the	623
examination, including the circumstances under and frequency with	624
which it is conducted, the authority of the superintendent and any	625
examiner or other person appointed by the superintendent, the	626
liability for the assessment of expenses incurred in conducting	627
the examination, and the remittance of the assessment to the	628
superintendent's examination fund.	629

(B) The director of health shall make an examination	630
concerning the matters subject to the director's consideration in	631
section 1751.04 of the Revised Code as often as the director	632
considers it necessary for the protection of the interests of the	633
people of this state, but not less frequently than once every	634
three years. The expenses of such examinations shall be assessed	635
against the health insuring corporation being examined in the	636
manner in which expenses of examinations are assessed against an	637
insurance company under section 3901.07 of the Revised Code.	638
Nothing in this division requires the director to make an	639
examination of a health insuring corporation that covers solely	640
recipients of assistance under the medicaid program operated	641
pursuant to Chapter 5111. of the Revised Code, a health insuring	642
corporation that covers solely recipients of assistance under the	643
federal medicare program under Title XVIII of the "Social Security	644
Act," 49 Stat. 62 (1935), 42 U.S.C. 301, as amended, or a health	645
insuring corporation that covers solely recipients of assistance	646
under both the medicaid and medicare programs.	647

(C) An examination, pursuant to section 3901.07 of the	648
Revised Code, of an insurance company holding a certificate of	649
authority under this chapter to organize and operate a health	650
insuring corporation shall include an examination of the health	651
insuring corporation pursuant to this section and the examination	652
shall satisfy the requirements of divisions (A) and (B) of this	653
section.	654

(D) The superintendent may conduct market conduct	655
examinations pursuant to section 3901.011 of the Revised Code of	656
any health insuring corporation as often as the superintendent	657
considers it necessary for the protection of the interests of	658
subscribers and enrollees. The expenses of such market conduct	659
examinations shall be assessed against the health insuring	660
corporation being examined. All costs, assessments, or fines	661
collected under this division shall be paid into the state	662
treasury to the credit of the department of insurance operating	663
fund.	664

Sec. 3905.56. (A)(1) Where an insurance agent or an affiliate	665
of an insurance agent receives any compensation from a public	666
entity related to the placement of insurance, or is entitled to	667
receive such compensation from a public entity even if the agent	668
or affiliate waives receipt or collection of that compensation,	669
neither that agent nor the affiliate shall accept or receive any	670
compensation from an insurer or other third party related to that	671
placement of insurance with the public entity unless the agent or	672
affiliate has, prior to the placement of insurance, obtained the	673
public entity's documented acknowledgement that such third-party	674
compensation will be received by the agent or affiliate.	675

(2) This division shall not apply to any of the following:

676

(a) A person licensed as an insurance agent who acts only as	677
an intermediary between an insurer and the public entity's agent,	678
such as a managing general agent, a sales manager, or wholesale	679
broker;	680

(b) A reinsurance intermediary;

681

(c) An insurance agent or affiliate of an insurance agent	682
whose sole compensation related to the placement of insurance with	683
the public entity is compensation from an insurer or other third	684
party.	685

(3) Execution and receipt of a public entity's documented	686
acknowledgment in accordance with this section shall not supersede	687
an otherwise valid and enforceable contract between the public	688
entity and the agent or affiliate nor shall it supersede the	689
superintendent's authority to enforce the laws relating to	690
insurance in the state of Ohio.	691

(B) When an insurance agent or affiliate is acting as a	692
public servant, the agent's or affiliate's acceptance of	693
compensation from an insurer or the other third party exclusively	694
related to the placement of insurance with the public entity shall	695
not constitute a violation of division (A) of section 2921.43 of	696
the Revised Code if the insurance agent or affiliate complies with	697
this section.	698

(C) For purposes of this section:

699

(1) "Affiliate" means a person who controls, is controlled	700
by, or is under common control with the agent.	701

(2) "Compensation from an insurer or other third party" means	702
payments, commissions, fees, awards, overrides, bonuses,	703
contingent commissions, loans, stock options, gifts, prizes, or	704
any other form of valuable consideration, whether or not payable	705
pursuant to a written agreement.	706

(3) "Compensation from a public entity" shall not include	707
either of the following:	708

(a) Any fee charged to, and paid by, a public entity pursuant	709
to section 3905.55 of the Revised Code if such fee does not exceed	710
fifty dollars; or	711

(b) Any portion of an insurance premium paid by a public	712
entity to an insurance agent or any affiliate of such agent that	713
an insurer or other third party has authorized the agent or	714
affiliate to retain as commission after the balance of the public	715
entity's premium payment has been remitted to the insurer or other	716
third party.	717

(4) "Documented acknowledgment" means the public entity's	718
written acknowledgment obtained prior to the placement of	719
insurance. In the case of a purchase over the telephone or by	720
electronic means for which written acknowledgment cannot	721
reasonably be obtained, acknowledgment documented by the agent	722
shall be acceptable.	723

(5) "Insurance product" includes a fully insured product or	724
partially or fully self-insured product.	725

(6) "Placement of insurance" means the initial purchase of an	726
insurance product or the renewal of an existing product unless the	727
insurer independently generates and processes the renewal without	728
the agent's participation or involvement. "Placement of insurance"	729
does not mean the servicing or modification of an existing	730
contract that does not involve the public entity evaluating	731
options for the purchase or renewal of an insurance product.	732

(7) "Public entity" means the state and any political	733
subdivision as defined in section 2744.01 of the Revised Code; any	734
state institution of higher education as defined in section	735
3345.12 of the Revised Code; and any instrumentality or retirement	736
system of the state, any political subdivision, or any state	737
institution of higher education.	738

(8) "Public servant" shall have the same definition as in	739
section 2921.01 of the Revised Code.	740

Sec. 3923.81.  (A) If a person is covered by a health benefit	741
plan issued by a sickness and accident insurer, health insuring	742
corporation, or multiple employer welfare arrangement and the	743
person is required to pay for health care costs out-of-pocket or	744
with funds from a savings account, the amount the person is	745
required to pay to a health care provider or pharmacy shall not	746
exceed the amount the sickness and accident insurer, health	747
insuring corporation, or multiple employer welfare arrangement	748
would pay under applicable reimbursement rates negotiated with the	749
provider or pharmacy. This division does not preclude a person	750
from reaching an agreement with a health care provider or pharmacy	751
on terms that are more favorable to the person than negotiated	752
reimbursement rates that otherwise would apply as long as the	753
claim submitted reflects the alternative amount negotiated, except	754
that a health care provider or pharmacy shall not waive all or	755
part of a copay or deductible if prohibited by any other provision	756
of the Revised Code. The requirements of this division do not	757
apply to amounts owed to a provider or pharmacy with whom the	758
sickness and accident insurer, health insuring corporation, or	759
multiple employer welfare arrangement has no applicable negotiated	760
reimbursement rate.	761

(B) Each sickness and accident insurer, health insuring	762
corporation, or multiple employer welfare arrangement shall	763
establish and maintain a system whereby a person covered by a	764
health benefit plan may obtain information regarding potential out	765
of pocket costs for services provided by in-network providers.	766

(C) As used in this section:

767

(1) "Health benefit plan" means any policy of sickness and	768
accident insurance or any policy, contract, or agreement covering	769
one or more "basic health care services," "supplemental health	770
care services," or "specialty health care services," as defined in	771
section 1751.01 of the Revised Code, offered or provided by a	772
health insuring corporation or by a sickness and accident insurer	773
or multiple employer welfare arrangement.	774

(2) "Reimbursement rates" means any rates that apply to a	775
payment made by a sickness and accident insurer, health insuring	776
corporation, or multiple employer welfare arrangement for charges	777
covered by a health benefit plan.	778

(3) "Savings account" includes health savings accounts,	779
health reimbursement arrangements, flexible savings accounts,	780
medical savings accounts, and similar accounts and arrangements.	781

Sec. 3924.04.  (A)(1) With respect to any health benefit plan	782
of a carrier and except as otherwise provided in division	783
divisions (A)(2) and (3) of this section, the premium rates	784
charged or offered for a rating period for the same or similar	785
coverage under a health benefit plan covering any small employer	786
with similar case characteristics shall not vary from the	787
applicable midpoint rate by more than thirty-fiveforty per cent	788
of the midpoint rate, as to all health benefit plans issued on or	789
after the effective date of this section.	790

(2) A carrier may apply a low claims discount not to exceed	791
five per cent of the midpoint rate to small employers with	792
favorable claims experience. A premium rate for a rating period	793
may fall outside the range set forth in division (A) of this	794
section as the result of a low claims discount.	795

(3) If the premium rates charged or offered for the same or	796
similar coverage under a health benefit plan covering any small	797
employer with similar case characteristics, as determined by the	798
carrier, exceeds the applicable midpointpremium rate by more than	799
thirty-five pointslimitations described in divisions (A)(1) and	800
(2) of this section, any increase in premium rates for a new	801
rating period shall not exceed the sum of both of the following:	802

(a) Any percentage change in the base premium rate measured	803
from the first day of the prior rating period to the first day of	804
the new rating period;	805

(b) Any adjustment due to change in case characteristics or	806
plan design of the small employer, as determined by the carrier.	807

(3) With respect to any health benefit plan of a carrier that	808
is delivered or issued for delivery prior to the effective date of	809
this section, a premium rate for a rating period may exceed the	810
ranges set forth in divisions (A)(1) and (2) of this section for	811
the eighteen-month period immediately following the effective date	812
of this section. The percentage increase in the premium rate	813
charged to a small employer for a new rating period, however,	814
shall not exceed the sum of the following:	815

(a) Any percentage change in the base premium rate measured	816
from the first day of the prior rating period to the first day of	817
the new rating period;	818

(b) Any adjustment due to a change in case characteristics or	819
plan design of the small employer, as determined by the carrier.	820

(4) For purposes of this section, a small employer carrier	821
shall treat all health benefit plans issued or renewed in the same	822
calendar month as having the same rating period.	823

(B) If a carrier utilizes industry as a case characteristic	824
in establishing premium rates, the rate factor associated with any	825
industry classification shall not vary by more than fifteen per	826
cent from the arithmetic average of the rate factors associated	827
with all industry classifications.	828

(C) Subject to divisions (A) and (B) of this section, any	829
increase in premium rates for a new rating period shall not exceed	830
any percentage change in the base premium rate measured from the	831
first day of the prior rating period to the first day of the new	832
rating period plus fifteen per cent, adjusted on a pro rata basis	833
for rating periods greater or less than one year, of the base	834
premium rate for the new rating period and any adjustments due to	835
a change in case characteristics or plan design of the small	836
employer, as determined by the carrier.	837

(D) The superintendent of insurance may adopt rules in	838
accordance with Chapter 119. of the Revised Code that set forth	839
alternative methods of calculating the premium rates required	840
under this section, which methods result in premium rates that are	841
consistent with, and meet the applicable requirements of, this	842
section. A carrier that utilizes any such method of calculation is	843
deemed to be in compliance with this section.	844

(E) If a carrier has established a separate class of business	845
for one or more small employer health care alliances in accordance	846
with section 1731.09 of the Revised Code, this section shall apply	847
in accordance with section 1731.09 of the Revised Code.	848

Sec. 3924.06. (A) Compliance with the underwriting and	849
rating requirements contained in sections 3924.01 to 3924.14 of	850
the Revised Code shall be demonstrated through actuarial	851
certification. Carriers offering health benefit plans to small	852
employers shall file annually with the superintendent of insurance	853
an actuarial certification stating that the underwriting and	854
rating methods of the carrier do all of the following:	855

(A)(1) Comply with accepted actuarial practices;

856

(B)(2) Are uniformly applied to health benefit plans covering	857
small employers;	858

(C)(3) Comply with the applicable provisions of sections	859
3924.01 to 3924.14 of the Revised Code.	860

(B) If a carrier has established a separate class of business	861
for one or more small employer health care alliances in accordance	862
with section 1731.09 of the Revised Code, this section shall apply	863
in accordance with section 1731.09 of the Revised Code.	864

Sec. 3961.01.  As used in sections 3961.01 to 3961.09 of the	865
Revised Code:	866

(A)(1) "Discount medical plan" means a business arrangement	867
or contract in which a person, in exchange for fees, dues,	868
charges, or other consideration, offers access to members to	869
providers of medical services and the right to receive discounted	870
medical services from those providers.	871

(2) "Discount medical plan" does not include any of the	872
following:	873

(a) A plan that does not require a membership or charge a fee	874
to use the plan's medical card;	875

(b) A plan that offers discounts for only pharmaceutical	876
supplies or prescription drugs, or both, and no other medical	877
services;	878

(c) A plan offered by a sickness and accident insurer that is	879
regulated under Title XXXIX of the Revised Code, a health insuring	880
corporation that is regulated under Title XVII of the Revised	881
Code, or an affiliate of such insurer or corporation if the	882
insurer, corporation, or affiliate discloses in writing in not	883
less than twelve-point type on any applications, advertisements,	884
marketing materials, and brochures describing the plan that the	885
plan is not insurance.	886

(B)(1) "Discount medical plan organization" or "organization"	887
means a person who does business in this state; offers to members	888
access to providers of medical services and the right to receive	889
discounted medical services from those providers; contracts with	890
providers, provider networks, or other discount medical plan	891
organizations to offer discounted medical services to members; and	892
determines the fee members pay to participate in the plan.	893

(2) "Discount medical plan organization" does not include a	894
sickness and accident insurer that is regulated under Title XXXIX	895
of the Revised Code or a health insuring corporation that is	896
regulated under Title XVII of the Revised Code.	897

(C) "Facility" means an institution where medical services	898
are performed, including, but not limited to, a hospital or other	899
licensed inpatient center; ambulatory surgical or treatment	900
center; skilled nursing center; residential treatment center;	901
rehabilitation center; diagnostic, laboratory, and imaging center;	902
and any other health care setting.	903

(D) "Health care professional" means a physician or other	904
health care provider who is licensed, accredited, certified, or	905
otherwise authorized to perform specified medical services within	906
the scope of the person's license, accreditation, certification,	907
or other authorization and performs medical services consistent	908
with the laws of this state.	909

(E)(1) "Marketer" means a person or entity who markets,	910
promotes, sells, or distributes a discount medical plan,	911
including, but not limited to, a private label entity that places	912
its name on and markets or distributes a discount medical plan	913
pursuant to a written agreement with a discount medical plan	914
organization described under section 3961.03 of the Revised Code.	915

(2) "Marketer" does not mean a sickness and accident insurer	916
that is regulated under Title XXXIX of the Revised Code, a health	917
insuring corporation that is regulated under Title XVII of the	918
Revised Code, or an affiliate of such insurer or corporation if	919
the insurer, corporation, or affiliate discloses in writing in not	920
less than twelve-point type on any applications, advertisements,	921
marketing materials, and brochures describing the plan that the	922
plan is not insurance.	923

(F) "Medical services" means any maintenance care of the	924
human body; preventative care for the human body; or care,	925
service, or treatment of an illness or dysfunction of, or injury	926
to, the human body. "Medical services" includes, but is not	927
limited to, physician care, inpatient care, hospital surgical	928
services, emergency services, ambulance services, dental care	929
services, vision care services, pharmaceutical supplies,	930
prescription drugs, mental health services, substance abuse	931
services, chiropractic services, podiatric services, laboratory	932
services, and medical equipment and supplies.	933

(G) "Member" means any individual who pays fees, dues,	934
charges, or other consideration to a discount medical plan	935
organization for access to providers of medical services and the	936
right to receive the benefits of a discount medical plan.	937

(H) "Person" means an individual, corporation, partnership,	938
association, joint venture, joint stock company, trust,	939
unincorporated organization, any similar entity, or any	940
combination of these entities.	941

(I) "Provider" means any health care professional or facility	942
that has contracted, directly or indirectly, with a discount	943
medical plan organization to offer discounted medical services to	944
members.	945

(J) "Provider agreement" means any agreement entered into	946
between a discount medical plan organization and a provider or	947
provider network to offer discounted medical services to members	948
as described in section 3961.02 of the Revised Code.	949

(K) "Provider network" means a person that negotiates,	950
directly or indirectly, with a discount medical plan organization	951
on behalf of more than one provider to offer discounted medical	952
services to members.	953

Sec. 3961.02.  (A) A discount medical plan organization shall	954
not offer to members, or advertise to prospective members,	955
discounted medical services unless the services are offered	956
pursuant to a provider agreement. A discount medical plan	957
organization may enter into a provider agreement directly with a	958
provider, indirectly through a provider network to which a	959
provider belongs, or through another discount medical plan	960
organization that contracts with providers directly or through a	961
provider network.	962

(B) A provider agreement between a discount medical plan	963
organization and a provider shall contain all of the following:	964

(1) A list of medical services and products offered at a	965
discount;	966

(2) The discounted rates for medical services or a fee	967
schedule that reflects the provider's discounted rates;	968

(3) A statement that the provider will not charge members	969
more than the discounted rates described in division (B)(2) of	970
this section.	971

(C) A provider agreement between a discount medical plan	972
organization and a provider network shall require the provider	973
network to do all of the following:	974

(1) Maintain an up-to-date list of the provider network's	975
contracted providers and supply that list to the discount medical	976
plan organization on a monthly basis;	977

(2) Have a written agreement with each provider who offers	978
discounted medical services that contains both of the following:	979

(a) The items listed in division (B) of this section;

980

(b) A grant of authority that allows the provider network to	981
contract with discount medical plan organizations on behalf of the	982
provider.	983

(D) A provider agreement between a discount medical plan	984
organization and another discount medical plan organization shall	985
require that the other discount medical plan organization have	986
provider agreements in place that comply with division (A) of this	987
section and division (B) or (C) of this section, as applicable.	988

(E) A discount medical plan organization shall keep for the	989
duration of the agreement a copy of each provider agreement into	990
which the organization has entered.	991

Sec. 3961.03. (A) Prior to a discount medical plan	992
organization allowing a marketer to market, promote, sell, or	993
distribute a discount medical plan, the organization shall enter	994
into a written agreement with the marketer. This agreement shall	995
prohibit the marketer from using or issuing any advertising,	996
marketing materials, brochures, or discount medical cards without	997
the organization's written approval.	998

(B) A discount medical plan organization is bound by and	999
responsible for a marketer's activities that are within the scope	1000
of the marketer's agency relationship with the organization.	1001

(C) A discount medical plan organization shall approve in	1002
writing all advertisements, marketing materials, brochures, and	1003
discount cards prior to a marketer using these materials to	1004
market, promote, sell, or distribute the discount medical plan.	1005

Sec. 3961.04.  (A) A discount medical plan organization or	1006
marketer shall disclose all of the following information in	1007
writing in not less than twelve-point type on the first content	1008
page of any advertisements, marketing materials, or brochures made	1009
available to the public relating to a discount medical plan and	1010
with any enrollment forms:	1011

(1) A statement that the discount medical plan is not	1012
insurance;	1013

(2) A statement that the range of discounts for medical	1014
services offered under the discount medical plan will vary	1015
depending on the type of provider and medical services;	1016

(3) A statement that the discount medical plan is prohibited	1017
from making members' payments to providers for medical services	1018
received under the discount medical plan;	1019

(4) A statement that the member is obligated to pay for all	1020
discounted medical services received under the discount medical	1021
plan;	1022

(5) The discount medical plan organization's toll-free	1023
telephone number and internet web site address that a member or	1024
prospective member may use to obtain additional information about	1025
and assistance with the discount medical plan and up-to-date lists	1026
of providers participating in the discount medical plan.	1027

(B) If a discount medical plan organization's or marketer's	1028
initial contact with a prospective member is by telephone, the	1029
organization or marketer shall disclose all of the information	1030
listed in division (A) of this section orally in addition to	1031
including such disclosures in the initial written materials	1032
provided to the prospective or new member.	1033

(C) In addition to the disclosures required under division	1034
(A) of this section, a discount medical plan organization shall	1035
provide to each prospective member, at the time of enrollment, a	1036
copy of the terms and conditions of the discount medical plan,	1037
including any limitations or restrictions on the refund of any	1038
processing fees or periodic charges associated with the discount	1039
medical plan. A discount medical plan organization also shall	1040
provide each new member a written document containing the terms	1041
and conditions of the discount medical plan and including all of	1042
the following:	1043

(1) Name of the member;

1044

(2) Benefits provided under the discount medical plan;

1045

(3) Any processing fees and periodic charges associated with	1046
the discount medical plan, including, but not limited to, if	1047
applicable, the procedures for changing the mode of payment and	1048
any accompanying additional charges;	1049

(4) Any limitations, exclusions, or exceptions regarding the	1050
receipt of discount medical plan benefits;	1051

(5) Any waiting periods for certain medical services under	1052
the discount medical plan;	1053

(6) Procedures for obtaining discounts under the discount	1054
medical plan, such as requiring members to contact the discount	1055
medical plan organization to request that the organization make an	1056
appointment with a provider on the member's behalf;	1057

(7) Cancellation and refund rights described in section	1058
3961.06 of the Revised Code;	1059

(8) Membership renewal, termination, and cancellation terms	1060
and conditions;	1061

(9) Procedures for adding new family members to the discount	1062
medical plan;	1063

(10) Procedures for filing complaints under the discount	1064
medical plan organization's complaint system and a statement	1065
explaining that, if the member remains dissatisfied after	1066
completing the organization's complaint system, the member may	1067
contact the department of insurance;	1068

(11) Name, mailing address, and toll-free telephone number of	1069
the discount medical plan organization that a member may use to	1070
make inquiries about the discount medical plan, send cancellation	1071
notices, and file complaints.	1072

(D) A discount medical plan organization shall maintain on an	1073
internet web site page an up-to-date list of the names and	1074
addresses of the providers with which the organization has	1075
contracted directly or indirectly through a provider network. The	1076
organization's internet web site address shall be prominently	1077
displayed on all of the organization's advertisements, marketing	1078
materials, brochures, and discount medical plan cards.	1079

(E) When a discount medical plan organization or marketer	1080
sells a discount medical plan together with any other product, the	1081
organization or marketer shall do either of the following:	1082

(1) Provide the charges for each discount medical plan in	1083
writing to the member;	1084

(2) Reimburse the member for all periodic charges for the	1085
discount medical plan and all periodic charges for any other	1086
product if the member cancels his or her membership in accordance	1087
with division (B) of section 3901.06 of the Revised Code.	1088

Sec. 3961.05.  A discount medical plan organization shall not	1089
do any of the following:	1090

(A) Except when otherwise permitted in sections 3961.01 to	1091
3961.09 of the Revised Code, as a disclaimer of any relationship	1092
between discount medical plan benefits and insurance, or in a	1093
description of an insurance product connected with a discount	1094
medical plan, use the term "insurance" in the organization's	1095
advertisements, marketing material, brochures, or discount medical	1096
plan cards.	1097

(B) Use in the organization's advertisements, marketing	1098
material, brochures, or discount medical plan cards the terms	1099
"health plan," "coverage," "benefits," "copay," "copayments,"	1100
"deductible," "pre-existing conditions," "guaranteed issue,"	1101
"premium," "PPO," "preferred provider organization," or any other	1102
terms in a manner that could mislead a person into believing that	1103
the discount medical plan is health insurance.	1104

(C) Make misleading, deceptive, or fraudulent statements or	1105
representations regarding the terms or benefits of the discount	1106
medical plan, including, but not limited to, statements or	1107
representations regarding discounts, range of discounts, or access	1108
to those discounts offered under the discount medical plan.	1109

(D) Except for hospital services, have restrictions on access	1110
to discount medical plan providers, including, but not limited to,	1111
waiting and notification periods.	1112

(E) Pay providers fees for medical services or collect or	1113
accept money from a member to pay a provider for medical services	1114
received under the discount medical plan.	1115

Sec. 3961.06.  (A) A discount medical plan organization shall	1116
permit members to cancel membership in a discount medical plan at	1117
any time.	1118

(B) If a member gives notice of cancellation within thirty	1119
days after the date the member receives the written document	1120
described in division (C) of section 3961.04 of the Revised Code	1121
for the discount medical plan, the discount medical plan	1122
organization, within thirty days of the member giving notice of	1123
cancellation, shall fully refund any fees except for a nominal fee	1124
associated with enrollment costs that shall not exceed thirty	1125
dollars.	1126

(C) A discount medical plan organization shall not charge or	1127
collect a periodic fee after the member has returned to the	1128
organization the member's discount medical plan card or given the	1129
organization notice of cancellation.	1130

(D) Cancellation of membership in a discount medical plan	1131
occurs when the member gives notice of cancellation to the	1132
discount medical plan organization or marketer by delivering the	1133
notice by hand, depositing the notice in a mailbox if the notice	1134
is properly addressed to the discount medical plan organization or	1135
marketer and postage is prepaid, or sending an electronic message	1136
to the discount medical plan organization's or marketer's	1137
electronic message address.	1138

(E) A discount medical plan organization shall make a pro	1139
rata reimbursement of all periodic fees charged to a member, less	1140
nominal fees associated with enrollment, if a discount medical	1141
plan organization cancels a member's membership for any reason	1142
other than the member's failure to pay fees.	1143

Sec. 3961.07.  (A) The superintendent of insurance may	1144
examine or investigate the business and affairs of a discount	1145
medical plan organization as the superintendent deems appropriate	1146
to protect the interests of the residents of this state.	1147

(B) When examining or investigating a discount medical plan	1148
organization pursuant to division (A) of this section, the	1149
superintendent may do both of the following:	1150

(1) Order a discount medical plan organization to produce any	1151
records, files, advertising and solicitation materials, lists of	1152
providers with which the organization contracted, lists of	1153
members, provider agreements described in section 3961.02 of the	1154
Revised Code, agreements between a marketer and discount medical	1155
plan organization described in section 3961.03 of the Revised	1156
Code, or other information;	1157

(2) Take statements under oath to determine whether a	1158
discount medical plan organization has violated or is violating	1159
sections 3961.01 to 3961.08 of the Revised Code or is acting	1160
contrary to the public interest.	1161

(C)(1) All records and other information concerning a	1162
discount medical plan organization obtained by the superintendent	1163
or the superintendent's deputies, examiners, assistants, agents,	1164
or other employees pursuant to division (B) of this section are	1165
confidential and not public records as defined in section 149.43	1166
of the Revised Code unless the organization is given notice and	1167
opportunity for hearing pursuant to Chapter 119. of the Revised	1168
Code concerning the records and other information obtained under	1169
division (B) of this section. If no administrative action is	1170
initiated with respect to a particular matter about which the	1171
superintendent obtained records or other information under	1172
division (B) of this section, the records and other information	1173
shall remain confidential for three years after the file on the	1174
matter is closed. Release of the records and other information	1175
after the three-year period shall be governed by section 149.43 of	1176
the Revised Code.	1177

(2) The records and other information described in division	1178
(C)(1) of this section shall remain confidential for all purposes	1179
except where the superintendent or the superintendent's deputies,	1180
examiners, assistants, agents, or other employees appropriately	1181
take official action regarding the affairs of the discount medical	1182
plan organization or marketer or in connection with actual or	1183
potential criminal proceeding.	1184

(D) Notwithstanding division (C) of this section, the	1185
superintendent may do any of the following:	1186

(1) Share records and other information obtained pursuant to	1187
division (B) of this section with other persons employed by or	1188
acting on behalf of the superintendent; local, state, federal, and	1189
international regulatory and law enforcement agencies; local,	1190
state, and federal prosecutors; and the national association of	1191
insurance commissioners and its affiliates and subsidiaries if the	1192
recipient agrees and has authority to agree to maintain the	1193
confidential status of the records or other information;	1194

(2) Disclose records and other information obtained pursuant	1195
to division (B) of this section in furtherance of any regulatory	1196
or legal action brought by or on behalf of the superintendent or	1197
this state resulting from the exercise of the superintendent's	1198
official duties.	1199

(E) Notwithstanding divisions (C) and (D) of this section,	1200
the superintendent may authorize the national association of	1201
insurance commissioners and its affiliates and subsidiaries by	1202
agreement to share confidential records and other information	1203
obtained pursuant to division (B) of this section with local,	1204
state, federal, and international regulatory and law enforcement	1205
agencies and local, state, and federal prosecutors if the	1206
recipient agrees and has authority to agree to maintain the	1207
confidential status of the records and other information.	1208

(F) Any applicable privilege or claim of confidentiality is	1209
not waived as a result of sharing or disclosing information	1210
pursuant to division (D)(1) or (E) of this section.	1211

(G) Employees or agents of the department of insurance shall	1212
not be required by any court in this state to testify in a civil	1213
action if the testimony concerns any matter related to records or	1214
other information considered confidential under this section.	1215

(H) Nothing in this section shall be construed to limit the	1216
superintendent's powers under section 3901.04 of the Revised Code.	1217

Sec. 3961.08.  (A) No person shall fail to comply with	1218
sections 3961.01 to 3961.09 of the Revised Code. If the	1219
superintendent of insurance determines that any person has	1220
violated sections 3961.01 to 3961.07 of the Revised Code, the	1221
superintendent may take one or more of the following actions:	1222

(1) Assess a civil penalty in an amount not to exceed	1223
twenty-five thousand dollars per violation if the person knew or	1224
should have known of the violation;	1225

(2) Assess administrative costs to cover the expenses	1226
incurred in the administrative action, including, but not limited	1227
to, expenses incurred in the investigation and hearing process.	1228
Costs collected under this division shall be paid into the state	1229
treasury to the credit of the department of insurance operating	1230
fund created in section 3901.021 of the Revised Code.	1231

(3) Order corrective actions in lieu of or in addition to the	1232
other penalties described in this section, including, but not	1233
limited to, suspending civil penalties if a discount medical plan	1234
organization complies with the terms of the corrective action	1235
order;	1236

(4) Order restitution to members.

1237

(B) Before imposing a penalty under division (A) of this	1238
section, the superintendent shall give a discount medical plan	1239
organization notice and opportunity for hearing as described in	1240
Chapter 119. of the Revised Code to the extent that Chapter 119.	1241
of the Revised Code does not conflict with any of the following	1242
service requirements:	1243

(1)(a) A notice of opportunity for hearing, a hearing	1244
officer's findings and recommendations, or any order issued by the	1245
superintendent under division (A) of this section shall be served	1246
by certified mail, return receipt requested, to the last known	1247
address of a discount medical plan organization. For purposes of	1248
division (B) of this section, an organization's last known address	1249
is the address listed on the organization's disclosures required	1250
under section 3961.04 of the Revised Code.	1251

(b) If the certified mail envelope described in division	1252
(B)(1)(a) of this section is returned to the superintendent with	1253
an endorsement showing that service was refused or that the	1254
envelope was unclaimed, the notices, findings and recommendations,	1255
and orders described in division (B)(1)(a) of this section and all	1256
subsequent notices required under Chapter 119. of the Revised Code	1257
may be served by ordinary mail to the discount medical plan	1258
organization's last known address. The time period to request an	1259
administrative hearing described in Chapter 119. of the Revised	1260
Code shall begin to run from the date the ordinary mailing was	1261
sent. A certificate of mailing shall evidence any mailings sent by	1262
ordinary mail pursuant to this division and shall complete service	1263
to the organization unless the ordinary mail envelope is returned	1264
to the superintendent with an endorsement showing failure of	1265
delivery.	1266

(c) If service by ordinary mail as described in division	1267
(B)(1)(b) of this section fails, the superintendent may publish a	1268
summary of the substantive provisions of the notice, findings and	1269
recommendations, or orders described in division (B)(1)(a) of this	1270
section once a week for three consecutive weeks in a newspaper of	1271
general circulation in the county of the discount medical plan	1272
organization's last known address. The notice shall be considered	1273
served on the date of the third publication.	1274

(d) Any notice required to be served under Chapter 119. of	1275
the Revised Code also shall be served upon the party's attorney by	1276
ordinary mail if the party's attorney has entered an appearance in	1277
the matter.	1278

(e) In lieu of certified or ordinary mail or publication	1279
notice as described in divisions (B)(1)(a), (b), and (c) of this	1280
section, the superintendent may perfect service on a party by	1281
personal delivery of the notice by the superintendent's designee.	1282

(f) Notices regarding the scheduling of hearings and all	1283
other notices not described in division (B)(1)(a) of this section	1284
shall be sent by ordinary mail to the party and the party's	1285
attorney.	1286

(2) A subpoena or subpoena duces tecum from the	1287
superintendent or the superintendent's designee or attorney to a	1288
witness for appearance at a hearing, for the production of	1289
documents or other evidence, or for taking testimony for use at a	1290
hearing shall be served by certified mail, return receipt	1291
requested. The subpoenas described in this division shall be	1292
enforced in the manner described in section 119.09 of the Revised	1293
Code. Nothing in this division shall be construed to limit the	1294
superintendent's other statutory powers to issue subpoenas.	1295

(C)(1) If a violation of sections 3961.01 to 3961.07 of the	1296
Revised Code has caused, is causing, or is about to cause	1297
substantial and material harm, the superintendent may issue a	1298
cease-and-desist order requiring a person to cease and desist from	1299
engaging in a violation.	1300

(2) The superintendent shall, immediately after issuing an	1301
order pursuant to division (C)(1) of this section, serve notice of	1302
the order by certified mail, return receipt requested, or by any	1303
other manner described in division (B) of this section to the	1304
person subject to the order and all other persons involved in the	1305
violation. The notice shall specify the particular act, omission,	1306
practice, or transaction that is the subject of the order and set	1307
a date, not more than fifteen days after the date the order was	1308
issued, for a hearing on the continuation or revocation of the	1309
order. The person subject to the order shall comply with the order	1310
immediately upon receiving the order. After an order is issued	1311
pursuant to division (C)(1) of this section, the superintendent	1312
may publicize and notify all interested parties that a	1313
cease-and-desist order was issued.	1314

(3) Upon application by the person subject to the order and	1315
for good cause, the superintendent may continue the hearing date	1316
described in division (C)(2) of this section. Chapter 119. of the	1317
Revised Code applies to the hearing on the order to the extent	1318
that the chapter does not conflict with the procedures described	1319
in this section. The superintendent shall, within fifteen days	1320
after objections are submitted concerning the hearing officer's	1321
report and recommendations, issue a final order either confirming	1322
or revoking the cease-and-desist order described in division	1323
(C)(1) of this section. The final order may be appealed as	1324
described in section 119.12 of the Revised Code.	1325

(4) The remedy described in division (C) of this section is	1326
cumulative and concurrent with other remedies available under this	1327
section.	1328

(D) If the superintendent has reasonable cause to believe	1329
that an order issued pursuant to this section has been violated in	1330
whole or in part, the superintendent may request the attorney	1331
general to commence any appropriate action against the violator.	1332
In an action described in this division, a court may impose any of	1333
the following penalties:	1334

(1) A civil penalty of not more than twenty-five thousand	1335
dollars per violation;	1336

(2) Injunctive relief;

1337

(3) Restitution;

1338

(4) Any other appropriate relief.

1339

(E) The superintendent shall deposit any penalties assessed	1340
under division (A)(1) or (D) of this section into the state	1341
treasury to the credit of the department of insurance operating	1342
fund created in section 3901.021 of the Revised Code.	1343

Sec. 3961.09.  The superintendent of insurance may adopt	1344
rules in accordance with Chapter 119. of the Revised Code for	1345
purposes of implementing sections 3961.01 to 3961.08 of the	1346
Revised Code.	1347

Section 2. That existing sections 1731.01, 1731.03, 1731.04,	1348
1731.09, 1751.04, 1751.12, 1751.34, 3924.04, and 3924.06 of the	1349
Revised Code are hereby repealed.	1350

Section 3. Section 3923.81 of the Revised Code, as enacted by	1351
this act, takes effect on the effective date of this act; however,	1352
the amendment of division (B) of that section does not apply to	1353
any facts occurring before six months after the effective date of	1354
this act.	1355