As Introduced

130th General Assembly Regular Session 2013-2014

H. B. No. 511

Representative Sears 

Cosponsors: Representatives Boose, Grossman, Henne, Romanchuk, Smith, Wachtmann, Young 

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A BILL

To amend sections 1739.05, 1751.14, 3923.123,

1

3923.24, 3923.241, and 3924.01 and to suspend

2

sections 1751.53 and 3923.38 of the Revised Code

3

to suspend the operation of continuation of

4

coverage requirements and make other

5

insurance-related changes.

6

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

Section 1. That sections 1739.05, 1751.14, 3923.123, 3923.24,	7
3923.241, and 3924.01 of the Revised Code are amended to read as	8
follows:	9

Sec. 1739.05.  (A) A multiple employer welfare arrangement	10
that is created pursuant to sections 1739.01 to 1739.22 of the	11
Revised Code and that operates a group self-insurance program may	12
be established only if any of the following applies:	13

(1) The arrangement has and maintains a minimum enrollment of	14
three hundred employees of two or more employers.	15

(2) The arrangement has and maintains a minimum enrollment of	16
three hundred self-employed individuals.	17

(3) The arrangement has and maintains a minimum enrollment of	18
three hundred employees or self-employed individuals in any	19
combination of divisions (A)(1) and (2) of this section.	20

(B) A multiple employer welfare arrangement that is created	21
pursuant to sections 1739.01 to 1739.22 of the Revised Code and	22
that operates a group self-insurance program shall comply with all	23
laws applicable to self-funded programs in this state, including	24
sections 3901.04, 3901.041, 3901.19 to 3901.26, 3901.38, 3901.381	25
to 3901.3814, 3901.40, 3901.45, 3901.46, 3902.01 to 3902.14,	26
3923.24, 3923.282, 3923.30, 3923.301, 3923.38, 3923.581, 3923.63,	27
3923.80, 3924.031, 3924.032, and 3924.27 of the Revised Code.	28

(C) A multiple employer welfare arrangement created pursuant	29
to sections 1739.01 to 1739.22 of the Revised Code shall solicit	30
enrollments only through agents or solicitors licensed pursuant to	31
Chapter 3905. of the Revised Code to sell or solicit sickness and	32
accident insurance.	33

(D) A multiple employer welfare arrangement created pursuant	34
to sections 1739.01 to 1739.22 of the Revised Code shall provide	35
benefits only to individuals who are members, employees of	36
members, or the dependents of members or employees, or are	37
eligible for continuation of coverage under section 1751.53 or	38
3923.38 of the Revised Code or under Title X of the "Consolidated	39
Omnibus Budget Reconciliation Act of 1985," 100 Stat. 227, 29	40
U.S.C.A. 1161, as amended.	41

Sec. 1751.14.  (A) Notwithstanding section 3901.71 of the	42
Revised Code, any policy, contract, or agreement for health care	43
services authorized by this chapter that is issued, delivered, or	44
renewed in this state and that provides that coverage of an	45
unmarried dependent child will terminate upon attainment of the	46
limiting age for dependent children specified in the policy,	47
contract, or agreement, shall also provide in substance both of	48
the following:	49

(1) Once an unmarried child has attained the limiting age for	50
dependent children, as provided in the policy, contract, or	51
agreement, upon the request of the subscriber, the health insuring	52
corporation shall offer to cover the unmarried child until the	53
child attains twenty-eighttwenty-six years of age if all of the	54
following are true:	55

(a) The child is the natural child, stepchild, or adopted	56
child of the subscriber.	57

(b) The child is a resident of this state or a full-time	58
student at an accredited public or private institution of higher	59
education.	60

(c) The child is not employed by an employer that offers any	61
health benefit plan under which the child is eligible for	62
coverage.	63

(d) The child is not eligible for coverage under the medicaid	64
program or the medicare program.	65

(2) That attainment of the limiting age for dependent	66
children shall not operate to terminate the coverage of a	67
dependent child if the child is and continues to be both of the	68
following:	69

(a) Incapable of self-sustaining employment by reason of	70
mental retardation or physical handicap;	71

(b) Primarily dependent upon the subscriber for support and	72
maintenance.	73

(B) Proof of incapacity and dependence for purposes of	74
division (A)(2) of this section shall be furnished to the health	75
insuring corporation within thirty-one days of the child's	76
attainment of the limiting age. Upon request, but not more	77
frequently than annually, the health insuring corporation may	78
require proof satisfactory to it of the continuance of such	79
incapacity and dependency.	80

(C) Nothing in this section shall do any of the following:

81

(1) Require that any policy, contract, or agreement offer	82
coverage for dependent children or provide coverage for an	83
unmarried dependent child's children as dependents on the policy,	84
contract, or agreement;	85

(2) Require an employer to pay for any part of the premium	86
for an unmarried dependent child that has attained the limiting	87
age for dependents, as provided in the policy, contract, or	88
agreement;	89

(3) Require an employer to offer health insurance coverage to	90
the dependents of any employee.	91

(D) This section does not apply to any health insuring	92
corporation policy, contract, or agreement offering only	93
supplemental health care services or specialty health care	94
services.	95

(E) As used in this section, "health benefit plan" has the	96
same meaning as in section 3924.01 of the Revised Code and also	97
includes both of the following:	98

(1) A public employee benefit plan;

99

(2) A health benefit plan as regulated under the "Employee	100
Retirement Income Security Act of 1974," 29 U.S.C. 1001, et seq.	101

Sec. 3923.123.  (A) As used in this section:

102

(1) "Association" means a voluntary unincorporated	103
association of insurers formed for the sole purpose of enabling	104
cooperative action to provide health coverage in accordance with	105
this section.	106

(2) "Insurer" includes any insurance company authorized to do	107
the business of sickness and accident insurance in this state and	108
any health insuring corporation holding a certificate of authority	109
under Chapter 1751. of the Revised Code.	110

(3) "Insured" means a person covered under a group policy or	111
contract issued pursuant to this section.	112

(4) "Qualified unemployed person" means one who became	113
unemployed while a resident of this state from employment or	114
self-employment and has since been continuously unemployed or is	115
employed only so that the person does not have, or have a right to	116
purchase, group health coverage. An individual who is, or who	117
becomes, covered by medicare is not a qualified unemployed person.	118
A person eligible for coverage under this section, who is also	119
eligible for continuation of coverage under section 1751.53 or	120
3923.38 of the Revised Code, may elect either coverage, but not	121
both. A person who elects continuation of coverage under either of	122
such sections may, upon the termination of the continuation of	123
coverage, elect any coverage available under this section.	124

(B) Any insurer may join with one or more other insurers, in	125
an association, to offer, sell, and issue to a policyholder or	126
subscriber selected by the association a policy or contract of	127
group health coverage, covering residents of this state who are	128
qualified unemployed persons and the spouses or dependents of such	129
residents. The coverage shall be offered, issued, and administered	130
in the name of the association. Membership in the association	131
shall be open to any insurer and each insurer which participates	132
shall be liable for a specified percentage of the risks. The	133
policy or contract may be executed on behalf of the association by	134
a duly authorized person.	135

(C) The persons eligible for coverage under the policy or	136
contract shall be all residents of this state who are qualified	137
unemployed persons and their spouses and dependents, subject to	138
reasonable underwriting restrictions to be set forth in the plan	139
of the association. The policy or contract may provide basic	140
hospital and surgical coverage, basic medical coverage, major	141
medical coverage, and any combination of these; provided that it	142
shall not be required as a condition for obtaining major medical	143
coverage that any basic coverage be taken.	144

(D) The association shall file with the superintendent of	145
insurance any policy, contract, certificate, or other evidence of	146
coverage, application, or other forms pertaining to such insurance	147
together with the premium rates to be charged therefor. The	148
superintendent may approve, disapprove, and withdraw approval of	149
the forms in accordance with section 3923.02 of the Revised Code,	150
or the premium rates if by reasonable assumptions such rates are	151
excessive in relation to the benefits provided. In determining	152
whether such rates by reasonable assumptions are excessive in	153
relation to the benefits provided, the superintendent shall give	154
due consideration to past and prospective claim experience, within	155
and outside this state, and to fluctuations in such claim	156
experience, to a reasonable risk charge, to contribution to	157
surplus and contingency funds, to past and prospective expenses,	158
both within and outside this state, and to all other relevant	159
factors within and outside this state, including any differing	160
operating methods of the insurers joining in the issuance of the	161
policy or contract. In reviewing the forms the superintendent	162
shall not be bound by the requirements of sections 3923.04 to	163
3923.07 of the Revised Code with respect to standard provisions to	164
be included in sickness and accident policies or forms.	165

(E) The association may enroll eligible persons for coverage	166
under the policy or contract through any person licensed by, or	167
authorized under the law of, this state to sell the policies or	168
contracts, or to enroll persons in the health plans, of any of the	169
insurers participating in the association.	170

(F) The association shall file annually with the	171
superintendent on such date and in such form as the superintendent	172
may prescribe, a financial summary of its operations.	173

(G) The association may sue and be sued in its associate name	174
and for such purposes only shall be treated as a domestic	175
corporation. Service of process against such association made upon	176
a managing agent, any member thereof, or any agent authorized by	177
appointment to receive service of process, shall have the same	178
force and effect as if such service had been made upon all members	179
of the association.	180

(H) Under any policy issued as provided in this section, the	181
policyholder, or such person as the policyholder shall designate,	182
shall alone be a member of each domestic mutual insurance company	183
joining in the issue of the policy and shall be entitled to one	184
vote by virtue of such policy at the meetings of each such mutual	185
insurance company. Notice of the annual meetings of each such	186
mutual insurance company may be given by written notice to the	187
policyholder or as otherwise prescribed in said policy.	188

Sec. 3923.24.  (A) Notwithstanding section 3901.71 of the	189
Revised Code, every certificate furnished by an insurer in	190
connection with, or pursuant to any provision of, any group	191
sickness and accident insurance policy delivered, issued for	192
delivery, renewed, or used in this state on or after January 1,	193
1972, every policy of sickness and accident insurance delivered,	194
issued for delivery, renewed, or used in this state on or after	195
January 1, 1972, and every multiple employer welfare arrangement	196
offering an insurance program, which provides that coverage of an	197
unmarried dependent child of a parent or legal guardian will	198
terminate upon attainment of the limiting age for dependent	199
children specified in the contract shall also provide in substance	200
both of the following:	201

(1) Once an unmarried child has attained the limiting age for	202
dependent children, as provided in the policy, upon the request of	203
the insured, the insurer shall offer to cover the unmarried child	204
until the child attains twenty-eighttwenty-six years of age if	205
all of the following are true:	206

(a) The child is the natural child, stepchild, or adopted	207
child of the insured.	208

(b) The child is a resident of this state or a full-time	209
student at an accredited public or private institution of higher	210
education.	211

(c) The child is not employed by an employer that offers any	212
health benefit plan under which the child is eligible for	213
coverage.	214

(d) The child is not eligible for the medicaid program or the	215
medicare program.	216

(2) That attainment of the limiting age for dependent	217
children shall not operate to terminate the coverage of a	218
dependent child if the child is and continues to be both of the	219
following:	220

(a) Incapable of self-sustaining employment by reason of	221
mental retardation or physical handicap;	222

(b) Primarily dependent upon the policyholder or certificate	223
holder for support and maintenance.	224

(B) Proof of such incapacity and dependence for purposes of	225
division (A)(2) of this section shall be furnished by the	226
policyholder or by the certificate holder to the insurer within	227
thirty-one days of the child's attainment of the limiting age.	228
Upon request, but not more frequently than annually after the	229
two-year period following the child's attainment of the limiting	230
age, the insurer may require proof satisfactory to it of the	231
continuance of such incapacity and dependency.	232

(C) Nothing in this section shall require an insurer to cover	233
a dependent child who is mentally retarded or physically	234
handicapped if the contract is underwritten on evidence of	235
insurability based on health factors set forth in the application,	236
or if such dependent child does not satisfy the conditions of the	237
contract as to any requirement for evidence of insurability or	238
other provision of the contract, satisfaction of which is required	239
for coverage thereunder to take effect. In any such case, the	240
terms of the contract shall apply with regard to the coverage or	241
exclusion of the dependent from such coverage. Nothing in this	242
section shall apply to accidental death or dismemberment benefits	243
provided by any such policy of sickness and accident insurance.	244

(D) Nothing in this section shall do any of the following:

245

(1) Require that any policy offer coverage for dependent	246
children or provide coverage for an unmarried dependent child's	247
children as dependents on the policy;	248

(2) Require an employer to pay for any part of the premium	249
for an unmarried dependent child that has attained the limiting	250
age for dependents, as provided in the policy;	251

(3) Require an employer to offer health insurance coverage to	252
the dependents of any employee.	253

(E) This section does not apply to any policies or	254
certificates covering only accident, credit, dental, disability	255
income, long-term care, hospital indemnity, medicare supplement,	256
specified disease, or vision care; coverage under a	257
one-time-limited-duration policy of not longer than six months;	258
coverage issued as a supplement to liability insurance; insurance	259
arising out of a workers' compensation or similar law; automobile	260
medical-payment insurance; or insurance under which benefits are	261
payable with or without regard to fault and that is statutorily	262
required to be contained in any liability insurance policy or	263
equivalent self-insurance.	264

(F) As used in this section, "health benefit plan" has the	265
same meaning as in section 3924.01 of the Revised Code and also	266
includes both of the following:	267

(1) A public employee benefit plan;

268

(2) A health benefit plan as regulated under the "Employee	269
Retirement Income Security Act of 1974," 29 U.S.C. 1001, et seq.	270

Sec. 3923.241. (A) Notwithstanding section 3901.71 of the	271
Revised Code, any public employee benefit plan that provides that	272
coverage of an unmarried dependent child will terminate upon	273
attainment of the limiting age for dependent children specified in	274
the plan shall also provide in substance both of the following:	275

(1) Once an unmarried child has attained the limiting age for	276
dependent children, as provided in the plan, upon the request of	277
the employee, the public employee benefit plan shall offer to	278
cover the unmarried child until the child attains twenty-eight	279
twenty-six years of age if all of the following are true:	280

(a) The child is the natural child, stepchild, or adopted	281
child of the employee.	282

(b) The child is a resident of this state or a full-time	283
student at an accredited public or private institution of higher	284
education.	285

(c) The child is not employed by an employer that offers any	286
health benefit plan under which the child is eligible for	287
coverage.	288

(d) The child is not eligible for the medicaid program or the	289
medicare program.	290

(2) That attainment of the limiting age for dependent	291
children shall not operate to terminate the coverage of a	292
dependent child if the child is and continues to be both of the	293
following:	294

(a) Incapable of self-sustaining employment by reason of	295
mental retardation or physical handicap;	296

(b) Primarily dependent upon the plan member for support and	297
maintenance.	298

(B) Proof of incapacity and dependence for purposes of	299
division (A)(2) of this section shall be furnished to the public	300
employee benefit plan within thirty-one days of the child's	301
attainment of the limiting age. Upon request, but not more	302
frequently than annually, the public employee benefit plan may	303
require proof satisfactory to it of the continuance of such	304
incapacity and dependency.	305

(C) Nothing in this section shall do any of the following:

306

(1) Require that any public employee benefit plan offer	307
coverage for dependent children or provide coverage for an	308
unmarried dependent child's children as dependents on the public	309
employee benefit plan;	310

(2) Require an employer to pay for any part of the premium	311
for an unmarried dependent child that has attained the limiting	312
age for dependents, as provided in the plan;	313

(3) Require an employer to offer health insurance coverage to	314
the dependents of any employee.	315

(D) This section does not apply to any public employee	316
benefit plan covering only accident, credit, dental, disability	317
income, long-term care, hospital indemnity, medicare supplement,	318
specified disease, or vision care; coverage under a	319
one-time-limited-duration policy of not longer than six months;	320
coverage issued as a supplement to liability insurance; insurance	321
arising out of a workers' compensation or similar law; automobile	322
medical-payment insurance; or insurance under which benefits are	323
payable with or without regard to fault and which is statutorily	324
required to be contained in any liability insurance policy or	325
equivalent self-insurance.	326

(E) As used in this section, "health benefit plan" has the	327
same meaning as in section 3924.01 of the Revised Code and also	328
includes both of the following:	329

(1) A public employee benefit plan;

330

(2) A health benefit plan as regulated under the "Employee	331
Retirement Income Security Act of 1974," 29 U.S.C. 1001, et seq.	332

Sec. 3924.01.  As used in sections 3924.01 to 3924.14 of the	333
Revised Code:	334

(A) "Actuarial certification" means a written statement	335
prepared by a member of the American academy of actuaries, or by	336
any other person acceptable to the superintendent of insurance,	337
that states that, based upon the person's examination, a carrier	338
offering health benefit plans to small employers is in compliance	339
with sections 3924.01 to 3924.14 of the Revised Code. "Actuarial	340
certification" shall include a review of the appropriate records	341
of, and the actuarial assumptions and methods used by, the carrier	342
relative to establishing premium rates for the health benefit	343
plans.	344

(B) "Adjusted average market premium price" means the average	345
market premium price as determined by the board of directors of	346
the Ohio health reinsurance program either on the basis of the	347
arithmetic mean of all carriers' premium rates for an OHC plan	348
sold to groups with similar case characteristics by all carriers	349
selling OHC plans in the state, or on any other equitable basis	350
determined by the board.	351

(C) "Base premium rate" means, as to any health benefit plan	352
that is issued by a carrier and that covers at least two but no	353
more than fifty employees of a small employer, the lowest premium	354
rate for a new or existing business prescribed by the carrier for	355
the same or similar coverage under a plan or arrangement covering	356
any small employer with similar case characteristics.	357

(D) "Carrier" means any sickness and accident insurance	358
company or health insuring corporation authorized to issue health	359
benefit plans in this state or a MEWA. A sickness and accident	360
insurance company that owns or operates a health insuring	361
corporation, either as a separate corporation or as a line of	362
business, shall be considered as a separate carrier from that	363
health insuring corporation for purposes of sections 3924.01 to	364
3924.14 of the Revised Code.	365

(E) "Case characteristics" means, with respect to a small	366
employer, the geographic area in which the employees work; the age	367
and sex of the individual employees and their dependents; the	368
appropriate industry classification as determined by the carrier;	369
the number of employees and dependents; and such other objective	370
criteria as may be established by the carrier. "Case	371
characteristics" does not include claims experience, health	372
status, or duration of coverage from the date of issue.	373

(F) "Dependent" means the spouse or child of an eligible	374
employee, subject to applicable terms of the health benefits plan	375
covering the employee.	376

(G) "Eligible employee" means an employee who works a normal	377
work week of twenty-fivethirty or more hours. "Eligible employee"	378
does not include a temporary or substitute employee, or a seasonal	379
employee who works only part of the calendar year on the basis of	380
natural or suitable times or circumstances.	381

(H) "Health benefit plan" means any hospital or medical	382
expense policy or certificate or any health plan provided by a	383
carrier, that is delivered, issued for delivery, renewed, or used	384
in this state on or after the date occurring six months after	385
November 24, 1995. "Health benefit plan" does not include policies	386
covering only accident, credit, dental, disability income,	387
long-term care, hospital indemnity, medicare supplement, specified	388
disease, or vision care; coverage under a	389
one-time-limited-duration policy of no longer than six months;	390
coverage issued as a supplement to liability insurance; insurance	391
arising out of a workers' compensation or similar law; automobile	392
medical-payment insurance; or insurance under which benefits are	393
payable with or without regard to fault and which is statutorily	394
required to be contained in any liability insurance policy or	395
equivalent self-insurance.	396

(I) "Late enrollee" means an eligible employee or dependent	397
who enrolls in a small employer's health benefit plan other than	398
during the first period in which the employee or dependent is	399
eligible to enroll under the plan or during a special enrollment	400
period described in section 2701(f) of the "Health Insurance	401
Portability and Accountability Act of 1996," Pub. L. No. 104-191,	402
110 Stat. 1955, 42 U.S.C.A. 300gg, as amended.	403

(J) "MEWA" means any "multiple employer welfare arrangement"	404
as defined in section 3 of the "Federal Employee Retirement Income	405
Security Act of 1974," 88 Stat. 832, 29 U.S.C.A. 1001, as amended,	406
except for any arrangement which is fully insured as defined in	407
division (b)(6)(D) of section 514 of that act.	408

(K) "Midpoint rate" means, for small employers with similar	409
case characteristics and plan designs and as determined by the	410
applicable carrier for a rating period, the arithmetic average of	411
the applicable base premium rate and the corresponding highest	412
premium rate.	413

(L) "Pre-existing conditions provision" means a policy	414
provision that excludes or limits coverage for charges or expenses	415
incurred during a specified period following the insured's	416
enrollment date as to a condition for which medical advice,	417
diagnosis, care, or treatment was recommended or received during a	418
specified period immediately preceding the enrollment date.	419
Genetic information shall not be treated as such a condition in	420
the absence of a diagnosis of the condition related to such	421
information.	422

For purposes of this division, "enrollment date" means, with	423
respect to an individual covered under a group health benefit	424
plan, the date of enrollment of the individual in the plan or, if	425
earlier, the first day of the waiting period for such enrollment.	426

(M) "Service waiting period" means the period of time after	427
employment begins before an employee is eligible to be covered for	428
benefits under the terms of any applicable health benefit plan	429
offered by the small employer.	430

(N)(1) "Small employer" means, in connection with a group	431
health benefit plan and with respect to a calendar year and a plan	432
year, an employer who employed an average of at least two but no	433
more than fifty eligible employees on business days during the	434
preceding calendar year and who employs at least two employees on	435
the first day of the plan year.	436

(2) For purposes of division (N)(1) of this section, all	437
persons treated as a single employer under subsection (b), (c),	438
(m), or (o) of section 414 of the "Internal Revenue Code of 1986,"	439
100 Stat. 2085, 26 U.S.C.A. 1, as amended, shall be considered one	440
employer. In the case of an employer that was not in existence	441
throughout the preceding calendar year, the determination of	442
whether the employer is a small or large employer shall be based	443
on the average number of eligible employees that it is reasonably	444
expected the employer will employ on business days in the current	445
calendar year. Any reference in division (N) of this section to an	446
"employer" includes any predecessor of the employer. Except as	447
otherwise specifically provided, provisions of sections 3924.01 to	448
3924.14 of the Revised Code that apply to a small employer that	449
has a health benefit plan shall continue to apply until the plan	450
anniversary following the date the employer no longer meets the	451
requirements of this division.	452

(O) "OHC plan" means an Ohio health care plan, which is the	453
basic, standard, or carrier reimbursement plan for small employers	454
and individuals established in accordance with section 3924.10 of	455
the Revised Code.	456

Section 2. That existing sections 1739.05, 1751.14, 3923.123,	457
3923.24, 3923.241, and 3924.01 of the Revised Code are hereby	458
repealed.	459

Section 3. Sections 1739.05, 1751.14, and 3924.01 as amended	460
by this act, apply only to policies, contracts, and agreements	461
that are delivered, issued for delivery, or renewed in this state	462
on or after January 1, 2015. Sections 3923.123, 3923.24, and	463
3923.241 as amended by this act, apply only to policies of	464
sickness and accident insurance delivered, issued for delivery, or	465
renewed in this state and public or private employee benefit plans	466
that are established or modified in this state on or after January	467
1, 2015.	468

Section 4. (A) During the period beginning on January 1,	469
2015, and ending January 1, 2018, the operation of sections	470
1751.53 and 3923.38 of the Revised Code are suspended.	471
Accordingly, group insurance contracts issued on or after January	472
1, 2015, and before January 1, 2018, shall not be required to	473
provide that any eligible employee, or the employee's dependents,	474
may continue coverage under the contract.	475

(B) If any portion of 42 U.S.C. 300gg-1 to 300gg-6 is amended	476
or repealed in such a way as to nullify insurance requirements	477
related to guaranteed availability of coverage or guaranteed	478
renewal of health insurance, prior to January 1, 2018, then	479
sections 1751.53 and 3923.38 of the Revised Code, in either their	480
present form or as they are later amended, shall again become	481
operational.	482

(C) As used in this section, "eligible employee" has the same	483
meaning as in section 1751.53 or 3923.38 of the Revised Code, as	484
applicable.	485