To amend sections 1751.11, 1751.33, 1751.78, 1751.81, 1751.82, and 5747.01 and to enact sections 1751.88, 1751.89, 1753.02, and 1753.13 of the Revised Code to hold a health insuring corporation responsible for harm to an enrollee proximately caused by the health insuring corporation's failure to exercise ordinary care in making a health care coverage decision; to make changes to the Health Insuring Corporation Law to provide for speedy review of enrollee appeals of adverse determinations; to allow female enrollees to obtain health care services from a participating obstetrician or gynecologist without a referral; to require health insuring corporations to name a licensed physician to act as a corporation's medical director; to require that at least one telephone number provided to enrollees for health-care-plan information be a toll-free number and to make additional information available to enrollees; and to permit personal income tax deductions for certain medical expenses and long-term care insurance premiums.

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

Sec. 1751.11. (A) Every subscriber of a health insuring corporation is entitled to an evidence of coverage for the health care plan under which health care benefits are provided.

(B) Every subscriber of a health insuring corporation that offers basic health care services is entitled to an identification card or similar document that specifies the health insuring corporation's name as stated in its articles of incorporation, and any trade or fictitious names used by the health insuring corporation. The identification card or document shall list at least one TOLL-FREE telephone number that provides the subscriber with access to health care, TO INFORMATION ON THE COVERAGE AVAILABLE UNDER THE SUBSCRIBER'S HEALTH CARE PLAN, AND TO INFORMATION ON THE HEALTH CARE PLAN'S APPEALS PROCESS, on a twenty-four-hours-per-day, seven-days-per-week basis.

(C) No evidence of coverage, or amendment to the evidence of coverage, shall be delivered, issued for delivery, renewed, or used, until the form of the evidence of coverage or amendment has been filed by the health insuring corporation with the superintendent of insurance. If the superintendent does not disapprove the evidence of coverage or amendment within sixty days after it is filed it shall be deemed approved, unless the superintendent sooner gives approval for the evidence of coverage or amendment. With respect to an amendment to an approved evidence of coverage, the superintendent only may disapprove provisions amended or added to the evidence of coverage. If the superintendent determines within the sixty-day period that any evidence of coverage or amendment fails to meet the requirements of this section, the superintendent shall so notify the health insuring corporation and it shall be unlawful for the health insuring corporation to use such evidence of coverage or amendment. At any time, the superintendent, upon at least thirty days' written notice to a health insuring corporation, may withdraw an approval, deemed or actual, of any evidence of coverage or amendment on any of the grounds stated in this section. Such disapproval shall be effected by a written order, which shall state the grounds for disapproval and shall be issued in accordance with Chapter 119. of the Revised Code.

(D) No evidence of coverage or amendment shall be delivered, issued for delivery, renewed, or used:

(1) If it contains provisions or statements that are inequitable, untrue, misleading, or deceptive;

(2) Unless it contains a clear, concise, and complete statement of the following:

(a) The health care services and insurance or other benefits, if any, to which the enrollee is entitled under the health care plan;

(b) Any exclusions or limitations on the health care services, type of health care services, benefits, or type of benefits to be provided, including copayments;

(c) The enrollee's personal financial obligation for noncovered services;

(d) Where and in what manner general information and information as to how services may be obtained is available, including the A TOLL-FREE telephone number;

(e) The premium rate with respect to individual and conversion contracts, and relevant copayment provisions with respect to all contracts. The statement of the premium rate, however, may be contained in a separate insert.

(f) The method utilized by the health insuring corporation for resolving enrollee complaints;

(g) THE AVAILABILITY OF UTILIZATION REVIEW PURSUANT TO SECTIONS 1751.77 TO 1751.86 OF THE REVISED CODE FOR THE DETERMINATION OF THE ELIGIBILITY OF AN ENROLLEE FOR HEALTH CARE SERVICES;

(h) THE ENROLLEE'S RIGHT TO BRING AN ACTION AGAINST THE HEALTH INSURING CORPORATION FOR HARM PROXIMATELY CAUSED BY THE HEALTH INSURING CORPORATION'S FAILURE TO EXERCISE ORDINARY CARE IN MAKING HEALTH CARE COVERAGE DECISIONS.

(3) Unless it provides for the continuation of an enrollee's coverage, in the event that the enrollee's coverage under the group policy, contract, certificate, or agreement terminates while the enrollee is receiving inpatient care in a hospital. This continuation of coverage shall terminate at the earliest occurrence of any of the following:

(a) The enrollee's discharge from the hospital;

(b) The determination by the enrollee's attending physician that inpatient care is no longer medically indicated for the enrollee; however, nothing in division (D)(3)(b) of this section precludes a health insuring corporation from engaging in utilization review as described in the evidence of coverage.

(c) The enrollee's reaching the limit for contractual benefits;

(d) The effective date of any new coverage.

(4) Unless it contains a provision that states, in substance, that the health insuring corporation is not a member of any guaranty fund, and that in the event of the health insuring corporation's insolvency, the enrollee is protected only to the extent that the hold harmless provision required by section 1751.13 of the Revised Code applies to the health care services rendered;

(5) Unless it contains a provision that states, in substance, that in the event of the insolvency of the health insuring corporation, the enrollee may be financially responsible for health care services rendered by a provider or health care facility that is not under contract to the health insuring corporation, whether or not the health insuring corporation authorized the use of the provider or health care facility;

(6) IF IT CONTAINS PROVISIONS THAT LIMIT A SUBSCRIBER'S OR ENROLLEE'S RIGHT TO A RECONSIDERATION OR APPEAL OF AN ADVERSE DETERMINATION PURSUANT TO SECTIONS 1751.77 TO 1751.86 OF THE REVISED CODE.

(E) Notwithstanding divisions (C) and (D) of this section, a health insuring corporation may use an evidence of coverage that provides for the coverage of beneficiaries enrolled in Title XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.A. 301, as amended, pursuant to a medicare contract, or an evidence of coverage that provides for the coverage of beneficiaries enrolled in the federal employees health benefits program pursuant to 5 U.S.C.A. 8905, or an evidence of coverage that provides for the coverage of beneficiaries enrolled in Title XIX of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C.A. 301, as amended, known as the medical assistance program or medicaid, provided by the Ohio department of human services under Chapter 5111. of the Revised Code, or an evidence of coverage that provides for the coverage of beneficiaries under any other federal health care program regulated by a federal regulatory body, or an evidence of coverage that provides for the coverage of beneficiaries under any contract covering officers or employees of the state that has been entered into by the department of administrative services, if both of the following apply:

(1) The evidence of coverage has been approved by the United States department of health and human services, the United States office of personnel management, the Ohio department of human services, or the department of administrative services.

(2) The evidence of coverage is filed with the superintendent of insurance prior to use and is accompanied by documentation of approval from the United States department of health and human services, the United States office of personnel management, the Ohio department of human services, or the department of administrative services.

Sec. 1751.33. (A) Each health insuring corporation shall provide to its subscribers, by mail, a description of the health insuring corporation, its method of operation, its service area, its most recent provider list, and its complaint procedure established pursuant to section 1751.19 of the Revised Code, ITS UTILIZATION REVIEW PROCESS FOR THE DETERMINATION OF THE ELIGIBILITY OF AN ENROLLEE FOR HEALTH CARE SERVICES, AND ITS PROCEDURES GOVERNING THE STANDARD APPEAL OF AN ADVERSE DETERMINATION. A health insuring corporation providing basic health care services or supplemental health care services shall provide this information annually. A health insuring corporation providing only specialty health care services shall provide this information biennially.

(B) Each health insuring corporation, upon the request of a subscriber, shall make available its most recent statutory financial statement.

Sec. 1751.78. (A)(1) Sections 1751.77 to 1751.86 of the Revised Code apply to any health insuring corporation that provides or performs utilization review services in connection with its policies, contracts, and agreements providing basic health care services and to any designee of the health insuring corporation, or to any utilization review organization that performs utilization review functions on behalf of the health insuring corporation in connection with policies, contracts, or agreements of the health insuring corporation providing basic health care services. UPON AN ENROLLEE'S REQUEST, THE HEALTH INSURING CORPORATION SHALL PERFORM UTILIZATION REVIEW TO DETERMINE THE ELIGIBILITY OF THE ENROLLEE FOR HEALTH CARE SERVICES THAT ARE REQUESTED BY, OR HAVE BEEN PROVIDED TO, THE ENROLLEE.

(2) Nothing in sections 1751.77 to 1751.82 or section 1751.85 of the Revised Code shall be construed to require a health insuring corporation to provide or perform utilization review services in connection with health care services provided under a policy, plan, or agreement of supplemental health care services or specialty health care services.

(B)(1) Each health insuring corporation shall be responsible for monitoring all utilization review activities carried out by, or on behalf of, the health insuring corporation and for ensuring that all requirements of sections 1751.77 to 1751.86 of the Revised Code, and any rules adopted thereunder, are met. The health insuring corporation shall also ensure that appropriate personnel have operational responsibility for the conduct of the health insuring corporation's utilization review program.

(2) If a health insuring corporation contracts to have a utilization review organization or other entity perform the utilization review functions required by sections 1751.77 to 1751.86 of the Revised Code, and any rules adopted thereunder, the superintendent of insurance shall hold the health insuring corporation responsible for monitoring the activities of the utilization review organization or other entity and for ensuring that the requirements of those sections and rules are met.

Sec. 1751.81. (A) As used in this section:

(1) "Enrollee" includes the representative of an enrollee.

(2) "Necessary information" includes the results of any face-to-face clinical evaluation or second opinion that may be required.

(B) A health insuring corporation shall maintain written procedures for making utilization review determinations and for notifying enrollees, and participating providers and health care facilities acting on behalf of enrollees, of its determinations.

(C) For initial determinations, a health insuring corporation shall make the determination within two business days after obtaining all necessary information regarding a proposed admission, procedure, or health care service requiring a review determination.

(1) In the case of a determination to certify an admission, procedure, or health care service, the health insuring corporation shall notify the provider or health care facility rendering the health care service by telephone or facsimile within three business days after making the initial certification.

(2) In the case of an adverse determination, the health insuring corporation shall notify the provider or health care facility rendering the health care service by telephone within three business days after making the adverse determination, and shall provide written or electronic confirmation of the telephone notification to the enrollee and the provider or health care facility within one business day after making the telephone notification.

(D) For concurrent review determinations, a health insuring corporation shall make the determination within one business day after obtaining all necessary information.

(1) In the case of a determination to certify an extended stay or additional health care services, the health insuring corporation shall notify the provider or health care facility rendering the health care service by telephone or facsimile within one business day after making the certification.

(2) In the case of an adverse determination, the health insuring corporation shall notify the provider or health care facility rendering the health care service by telephone within one business day after making the adverse determination, and shall provide written or electronic confirmation to the enrollee and the provider or health care facility within one business day after the telephone notification. The health care service to the enrollee shall be continued, with standard copayments and deductibles, if applicable, until the enrollee has been notified of the determination.

(E) For retrospective review determinations, a health insuring corporation shall make the determination within thirty business days after receiving all necessary information.

(1) In the case of a certification, the health insuring corporation may notify the enrollee and the provider or health care facility rendering the health care service in writing.

(2) In the case of an adverse determination, the health insuring corporation shall notify the enrollee and the provider or health care facility rendering the health care service, in writing, within five business days after making the adverse determination.

(F)(1) The time frames set forth in divisions (C), (D), and (E) of this section for determinations and notifications shall prevail unless the seriousness of the medical condition of the enrollee otherwise requires a more timely response from the health insuring corporation. The health insuring corporation shall maintain written procedures for making expedited utilization review determinations and notifications of enrollees and providers or health care facilities when warranted by the medical condition of the enrollee.

(2) AN ENROLLEE MAY PROCEED WITH AN APPEAL PURSUANT TO SECTION 1751.82 OF THE REVISED CODE IF A HEALTH INSURING CORPORATION FAILS TO MAKE A DETERMINATION AND NOTIFICATION WITHIN THE TIME FRAMES SET FORTH IN DIVISIONS (C), (D), AND (E) OF THIS SECTION. THE HEALTH INSURING CORPORATION'S FAILURE TO MAKE A DETERMINATION AND NOTIFICATION WITHIN THESE TIME FRAMES SHALL BE DEEMED TO BE AN ADVERSE DETERMINATION BY THE HEALTH INSURING CORPORATION FOR THE PURPOSE OF AN ENROLLEE'S INITIATION OF AN APPEAL.

(G) A written notification of an adverse determination shall include the principal reason or reasons for the determination, instructions for initiating an appeal or reconsideration of the determination, and instructions for requesting a written statement of the clinical rationale used to make the determination. A health insuring corporation shall provide the clinical rationale for an adverse determination in writing to any party who received notice of the adverse determination and who follows the instructions for a request. THE INSTRUCTIONS FOR INITIATING AN APPEAL OF AN ADVERSE DETERMINATION SHALL STATE THAT AN INDEPENDENT PHYSICIAN SHALL CONDUCT THE REVIEW OF, AND ISSUE A DECISION IN, ANY APPEAL MADE PURSUANT TO SECTION 1751.82 of the Revised Code.

(H)(1) A health insuring corporation shall have written procedures to address the failure or inability of a health care facility, provider, or enrollee to provide all necessary information for review.

(2) A HEALTH INSURING CORPORATION SHALL NOT USE UNREASONABLE REQUESTS FOR INFORMATION IN ORDER TO DELAY MAKING A DETERMINATION.

(3) If the health care facility, provider, or enrollee will not release necessary information, the health insuring corporation may deny certification. AN ENROLLEE MAY NOT PROCEED WITH AN APPEAL PURSUANT TO SECTION 1751.82 OF THE REVISED CODE BASED UPON A HEALTH INSURING CORPORATION'S FAILURE TO MAKE A TIMELY DETERMINATION, IF THE HEALTH INSURING CORPORATION'S DELAY IN MAKING A DETERMINATION AND NOTIFICATION IS CAUSED BY THE FAILURE OF A HEALTH CARE FACILITY, PROVIDER, OR ENROLLEE TO RELEASE ALL NECESSARY INFORMATION.

Sec. 1751.82. (A) In a case involving an initial determination or a concurrent review determination, a health insuring corporation shall give the provider or health care facility rendering the health care service an opportunity to request in writing on behalf of the enrollee a reconsideration of an adverse determination by the reviewer making the adverse determination. The reconsideration shall occur within three business days after the health insuring corporation's receipt of the written request for reconsideration, and shall be conducted between the provider or health care facility rendering the health care service and the reviewer who made the adverse determination. If that reviewer cannot be available within three business days, the reviewer may designate another reviewer.

(B) If the reconsideration process described in division (A) of this section does not resolve the difference of opinion, the adverse determination may be appealed by the enrollee or the provider or health care facility on behalf of the enrollee.

(C) Reconsideration is not a prerequisite to a standard or expedited appeal of an adverse determination.

(D) The time period allowed by division (A) of this section for a reconsideration of an adverse determination shall not apply if the seriousness of the medical condition of the enrollee requires a more expedited reconsideration. The health insuring corporation shall maintain written procedures for making such an expedited reconsideration.

(E)(1) THE SUPERINTENDENT OF INSURANCE SHALL PRESCRIBE, BY RULES ADOPTED IN ACCORDANCE WITH CHAPTER 119. OF THE REVISED CODE, PROCEDURES GOVERNING THE STANDARD APPEAL OF AN ADVERSE DETERMINATION.

(2) THE PROCEDURES SHALL REQUIRE ALL OF THE FOLLOWING:

(a) THE REVIEW OF AN APPEAL SHALL BE CONDUCTED BY A PHYSICIAN THAT HAS BEEN RETAINED FOR THIS PURPOSE. THE PHYSICIAN SHALL HAVE EXPERTISE IN THE TREATMENT OF THE ENROLLEE'S MEDICAL CONDITION. THE PHYSICIAN SHALL NOT HAVE ANY PROFESSIONAL, FAMILIAL, OR FINANCIAL AFFILIATION WITH THE HEALTH INSURING CORPORATION AND SHALL HAVE NO PATIENT-PHYSICIAN RELATIONSHIP OR OTHER AFFILIATION WITH THE ENROLLEE WHO HAS BROUGHT THE APPEAL. THIS NONAFFILIATION PROVISION DOES NOT PRECLUDE THE HEALTH INSURING CORPORATION FROM PAYING THE PHYSICIAN FOR THE CONDUCT OF THE REVIEW.

(b) ENROLLEES SHALL NOT BE REQUIRED TO PAY FOR THE PHYSICIAN'S REVIEW OF THEIR APPEAL. THE COSTS OF THE REVIEW SHALL BE BORNE BY THE HEALTH INSURING CORPORATION.

(c) THE HEALTH INSURING CORPORATION SHALL PROVIDE TO THE PHYSICIAN CONDUCTING THE REVIEW OF AN APPEAL A COPY OF THOSE MEDICAL RECORDS IN THE HEALTH INSURING CORPORATION'S POSSESSION THAT ARE RELEVANT TO THE ENROLLEE'S MEDICAL CONDITION AND THE APPEAL. THOSE RECORDS SHALL BE USED SOLELY FOR THE PURPOSE OF THIS DIVISION.

(d) A WRITTEN DECISION SHALL BE ISSUED TO ALL PARTIES TO AN APPEAL INVOLVING A LIFE-THREATENING DISEASE OR CONDITION, WHICH IS A DISEASE OR CONDITION FOR WHICH THE LIKELIHOOD OF DEATH IS PROBABLE UNLESS THE COURSE OF THE DISEASE OR CONDITION IS INTERRUPTED, WITHIN THREE DAYS AFTER THE FILING OF AN APPEAL.

(e) A WRITTEN DECISION SHALL BE ISSUED TO ALL PARTIES TO AN APPEAL NOT INVOLVING A LIFE-THREATENING DISEASE OR CONDITION WITHIN FOURTEEN DAYS AFTER THE FILING OF AN APPEAL.

(3) A HEALTH INSURING CORPORATION SHALL PROVIDE ANY COVERAGE REQUIRED BY A PHYSICIAN'S DECISION IN AN APPEAL OF AN ADVERSE DETERMINATION.

(4) SECTION 1753.24 OF THE REVISED CODE, RATHER THAN THIS DIVISION, SHALL APPLY IF AN ENROLLEE WITH A TERMINAL CONDITION MEETS ALL OF THE CRITERIA LISTED IN DIVISION (A) OF SECTION 1753.24 OF THE REVISED CODE.

Sec. 1751.88. (A) AS USED IN THIS SECTION:

(1) "ORDINARY CARE" MEANS, IN THE CASE OF A HEALTH INSURING CORPORATION, THAT DEGREE OF CARE THAT A HEALTH INSURING CORPORATION OF ORDINARY PRUDENCE WOULD USE UNDER THE SAME OR SIMILAR CIRCUMSTANCES. IN THE CASE OF A DESIGNEE OF A HEALTH INSURING CORPORATION, "ORDINARY CARE" MEANS THAT DEGREE OF CARE THAT A PERSON OF ORDINARY PRUDENCE IN THE SAME PROFESSION, SPECIALTY, OR AREA OF PRACTICE AS SUCH DESIGNEE WOULD USE IN THE SAME OR SIMILAR CIRCUMSTANCES. IN THE CASE OF A UTILIZATION REVIEW ORGANIZATION PERFORMING UTILIZATION REVIEW FUNCTIONS ON BEHALF OF A HEALTH INSURING CORPORATION, "ORDINARY CARE" MEANS THAT DEGREE OF CARE THAT A UTILIZATION REVIEW ORGANIZATION OF ORDINARY PRUDENCE WOULD USE IN THE SAME OR SIMILAR CIRCUMSTANCES.

(2) "UTILIZATION REVIEW" AND "UTILIZATION REVIEW ORGANIZATION" HAVE THE SAME MEANINGS AS IN SECTION 1751.77 OF THE REVISED CODE.

(B) EACH HEALTH INSURING CORPORATION THAT IS SUBJECT TO SECTIONS 1751.77 TO 1751.86 OF THE REVISED CODE SHALL EXERCISE ORDINARY CARE WHEN MAKING UTILIZATION REVIEW DETERMINATIONS.

A HEALTH INSURING CORPORATION IS LIABLE FOR DAMAGES FOR HARM TO AN ENROLLEE THAT IS PROXIMATELY CAUSED BY THE HEALTH INSURING CORPORATION'S FAILURE TO EXERCISE SUCH ORDINARY CARE. WITH RESPECT TO UTILIZATION REVIEW DETERMINATIONS MADE BY ANY DESIGNEE OF A HEALTH INSURING CORPORATION OR BY ANY UTILIZATION REVIEW ORGANIZATION THAT PERFORMS UTILIZATION REVIEW FUNCTIONS ON BEHALF OF A HEALTH INSURING CORPORATION, THE HEALTH INSURING CORPORATION IS ALSO LIABLE FOR DAMAGES FOR HARM TO AN ENROLLEE THAT IS PROXIMATELY CAUSED BY THE DESIGNEE'S OR UTILIZATION REVIEW ORGANIZATION'S FAILURE TO EXERCISE SUCH ORDINARY CARE.

(C) THIS SECTION DOES NOT CREATE ANY LIABILITY ON THE PART OF AN EMPLOYER OR EMPLOYER GROUP PURCHASING ORGANIZATION THAT PURCHASES COVERAGE OR ASSUMES RISK ON BEHALF OF ITS EMPLOYEES.

Sec. 1751.89. NO HEALTH INSURING CORPORATION CONTRACT WITH A PROVIDER OR HEALTH CARE FACILITY SHALL CONTAIN AN INDEMNIFICATION OR HOLD HARMLESS CLAUSE OR ANY OTHER PROVISION THAT ATTEMPTS TO LIMIT OR ELIMINATE THE HEALTH INSURING CORPORATION'S LIABILITY FOR ANY OMISSION OF OR ANY ACTION TAKEN BY THE HEALTH INSURING CORPORATION THAT AFFECTS THE MEDICAL CARE OF AN ENROLLEE.

ANY SUCH INDEMNIFICATION, HOLD HARMLESS, OR SIMILAR PROVISION IN A HEALTH INSURING CORPORATION CONTRACT WITH A PROVIDER OR HEALTH CARE FACILITY, WHICH CONTRACT IS IN FORCE ON THE EFFECTIVE DATE OF THIS SECTION, IS VOID.

Sec. 1753.02. A HEALTH INSURING CORPORATION SHALL NAME A PERSON LICENSED TO PRACTICE MEDICINE AND SURGERY OR OSTEOPATHIC MEDICINE AND SURGERY UNDER CHAPTER 4731. OF THE REVISED CODE TO ACT AS THE HEALTH INSURING CORPORATION'S MEDICAL DIRECTOR.

Sec. 1753.13. A HEALTH INSURING CORPORATION THAT DOES NOT ALLOW DIRECT ACCESS TO ALL SPECIALISTS SHALL PERMIT A FEMALE ENROLLEE TO OBTAIN HEALTH CARE SERVICES FROM AN OBSTETRICIAN OR GYNECOLOGIST PARTICIPATING IN THE ENROLLEE'S HEALTH CARE PLAN WITHOUT OBTAINING A REFERRAL OR ANY OTHER FORM OF PRIOR AUTHORIZATION FOR THE SERVICES. SUCH OBSTETRICIANS AND GYNECOLOGISTS SHALL BE AUTHORIZED TO PROVIDE HEALTH CARE SERVICES TO A FEMALE ENROLLEE IN THE SAME MANNER AS THE ENROLLEE'S PRIMARY CARE PROVIDER.

Sec. 5747.01. Except as otherwise expressly provided or clearly appearing from the context, any term used in this chapter has the same meaning as when used in a comparable context in the Internal Revenue Code, and all other statutes of the United States relating to federal income taxes.

As used in this chapter:

(A) "Adjusted gross income" or "Ohio adjusted gross income" means adjusted gross income as defined and used in the Internal Revenue Code, adjusted as provided in divisions (A)(1) to (17)(19) of this section:

(1) Add interest or dividends on obligations or securities of any state or of any political subdivision or authority of any state, other than this state and its subdivisions and authorities.

(2) Add interest or dividends on obligations of any authority, commission, instrumentality, territory, or possession of the United States that are exempt from federal income taxes but not from state income taxes.

(3) Deduct interest or dividends on obligations of the United States and its territories and possessions or of any authority, commission, or instrumentality of the United States to the extent included in federal adjusted gross income but exempt from state income taxes under the laws of the United States.

(4) Deduct disability and survivor's benefits to the extent included in federal adjusted gross income.

(5) Deduct benefits under Title II of the Social Security Act and tier 1 railroad retirement benefits to the extent included in federal adjusted gross income under section 86 of the Internal Revenue Code.

(6) Add, in the case of a taxpayer who is a beneficiary of a trust that makes an accumulation distribution as defined in section 665 of the Internal Revenue Code, the portion, if any, of such distribution that does not exceed the undistributed net income of the trust for the three taxable years preceding the taxable year in which the distribution is made. "Undistributed net income of a trust" means the taxable income of the trust increased by (a)(i) the additions to adjusted gross income required under division (A) of this section and (ii) the personal exemptions allowed to the trust pursuant to section 642(b) of the Internal Revenue Code, and decreased by (b)(i) the deductions to adjusted gross income required under division (A) of this section, (ii) the amount of federal income taxes attributable to such income, and (iii) the amount of taxable income that has been included in the adjusted gross income of a beneficiary by reason of a prior accumulation distribution. Any undistributed net income included in the adjusted gross income of a beneficiary shall reduce the undistributed net income of the trust commencing with the earliest years of the accumulation period.

(7) Deduct the amount of wages and salaries, if any, not otherwise allowable as a deduction but that would have been allowable as a deduction in computing federal adjusted gross income for the taxable year, had the targeted jobs credit allowed and determined under sections 38, 51, and 52 of the Internal Revenue Code not been in effect.

(8) Deduct any interest or interest equivalent on public obligations and purchase obligations to the extent included in federal adjusted gross income.

(9) Add any loss or deduct any gain resulting from the sale, exchange, or other disposition of public obligations to the extent included in federal adjusted gross income.

(10) Regarding tuition credits purchased under Chapter 3334. of the Revised Code:

(a) Deduct the following:

(i) For credits that as of the end of the taxable year have not been refunded pursuant to the termination of a tuition payment contract under section 3334.10 of the Revised Code, the amount of income related to the credits, to the extent included in federal adjusted gross income;

(ii) For credits that during the taxable year have been refunded pursuant to the termination of a tuition payment contract under section 3334.10 of the Revised Code, the excess of the total purchase price of the tuition credits refunded over the amount of refund, to the extent the amount of the excess was not deducted in determining federal adjusted gross income;

(b) Add the following:

(i) For credits that as of the end of the taxable year have not been refunded pursuant to the termination of a tuition payment contract under section 3334.10 of the Revised Code, the amount of loss related to the credits, to the extent the amount of the loss was deducted in determining federal adjusted gross income;

(ii) For credits that during the taxable year have been refunded pursuant to the termination of a tuition payment contract under section 3334.10 of the Revised Code, the excess of the amount of refund over the purchase price of each tuition credit refunded, to the extent not included in federal adjusted gross income.

(11) Deduct, in the case of a self-employed individual as defined in section 401(c)(1) of the Internal Revenue Code and to the extent not otherwise allowable as a deduction in computing federal adjusted gross income for the taxable year, the amount paid during the taxable year for insurance that constitutes medical care for the taxpayer, the taxpayer's spouse, and dependents. No deduction under division (A)(11) of this section shall be allowed to any taxpayer who is eligible to participate in any subsidized health plan maintained by any employer of the taxpayer or of the spouse of the taxpayer. No IN THE CASE OF A SELF-EMPLOYED INDIVIDUAL AS DEFINED IN SECTION 401(c) OF THE INTERNAL REVENUE CODE, NO deduction under division (A)(11) of this section shall be allowed to the extent that the sum of such deduction and any related deduction allowable in computing federal adjusted gross income for the taxable year exceeds the taxpayer's earned income, within the meaning of section 401(c) of the Internal Revenue Code, derived by the taxpayer from the trade or business with respect to which the A plan providing the medical coverage is established.

(12) Deduct any amount included in federal adjusted gross income solely because the amount represents a reimbursement or refund of expenses that in a previous year the taxpayer had deducted as an itemized deduction pursuant to section 63 of the Internal Revenue Code and applicable United States department of the treasury regulations.

(13) Deduct any portion of the deduction described in section 1341(a)(2) of the Internal Revenue Code, for repaying previously reported income received under a claim of right, that meets both of the following requirements:

(a) It is allowable for repayment of an item that was included in the taxpayer's adjusted gross income for a prior taxable year and did not qualify for a credit under division (A) or (B) of section 5747.05 of the Revised Code for that year;

(b) It does not otherwise reduce the taxpayer's adjusted gross income for the current or any other taxable year.

(14) Deduct an amount equal to the deposits made to, and net investment earnings of, a medical savings account during the taxable year, in accordance with section 3924.66 of the Revised Code. The deduction allowed by division (A)(14) of this section does not apply to medical savings account deposits and earnings otherwise deducted or excluded for the current or any other taxable year from the taxpayer's federal adjusted gross income.

(15)(a) Add an amount equal to the funds withdrawn from a medical savings account during the taxable year, and the net investment earnings on those funds, when the funds withdrawn were used for any purpose other than to reimburse an account holder for, or to pay, eligible medical expenses, in accordance with section 3924.66 of the Revised Code;

(b) Add the amounts distributed from a medical savings account under division (A)(2) of section 3924.68 of the Revised Code during the taxable year.

(16) Add any amount claimed as a credit under section 5747.059 of the Revised Code to the extent that such amount satisfies either of the following:

(a) The amount was deducted or excluded from the computation of the taxpayer's federal adjusted gross income as required to be reported for the taxpayer's taxable year under the Internal Revenue Code;

(b) The amount resulted in a reduction of the taxpayer's federal adjusted gross income as required to be reported for any of the taxpayer's taxable years under the Internal Revenue Code.

(17) Deduct the amount contributed by the taxpayer to an individual development account program established by a county department of human services pursuant to sections 329.11 to 329.14 of the Revised Code for the purpose of matching funds deposited by program participants. On request of the tax commissioner, the taxpayer shall provide any information that, in the tax commissioner's opinion, is necessary to establish the amount deducted under division (A)(17) of this section.

(18) DEDUCT EXPENSES PAID DURING THE TAXABLE YEAR FOR MEDICAL CARE OF THE TAXPAYER, THE TAXPAYER'S SPOUSE, AND DEPENDENTS, TO THE EXTENT THAT THE EXPENSES EXCEED SEVEN AND ONE-HALF PER CENT OF THE TAXPAYER'S FEDERAL ADJUSTED GROSS INCOME, THE EXPENSES ARE NOT OTHERWISE ALLOWABLE AS A DEDUCTION IN COMPUTING ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR, THE EXPENSES ARE NOT COMPENSATED FOR BY INSURANCE OR OTHERWISE, AND THE EXPENSES ARE DEDUCTIBLE FOR FEDERAL INCOME TAX PURPOSES UNDER SECTION 213 OF THE INTERNAL REVENUE CODE.

(19) DEDUCT THE AMOUNT PAID DURING THE TAXABLE YEAR FOR LONG-TERM CARE INSURANCE, TO THE EXTENT NOT OTHERWISE DEDUCTED IN COMPUTING FEDERAL ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OR DEDUCTED UNDER DIVISION (A)(18) OF THIS SECTION.

(B) "Business income" means income arising from transactions, activities, and sources in the regular course of a trade or business and includes income from tangible and intangible property if the acquisition, rental, management, and disposition of the property constitute integral parts of the regular course of a trade or business operation.

(C) "Nonbusiness income" means all income other than business income and may include, but is not limited to, compensation, rents and royalties from real or tangible personal property, capital gains, interest, dividends and distributions, patent or copyright royalties, or lottery winnings, prizes, and awards.

(D) "Compensation" means any form of remuneration paid to an employee for personal services.

(E) "Fiduciary" means a guardian, trustee, executor, administrator, receiver, conservator, or any other person acting in any fiduciary capacity for any individual, trust, or estate.

(F) "Fiscal year" means an accounting period of twelve months ending on the last day of any month other than December.

(G) "Individual" means any natural person.

(H) "Internal Revenue Code" means the "Internal Revenue Code of 1986," 100 Stat. 2085, 26 U.S.C.A. 1, as amended.

(I) "Resident" means:

(1) An individual who is domiciled in this state, subject to section 5747.24 of the Revised Code;

(2) The estate of a decedent who at the time of death was domiciled in this state. The domicile tests of section 5747.24 of the Revised Code and any election under section 5747.25 of the Revised Code are not controlling for purposes of division (I)(2) of this section.

(J) "Nonresident" means an individual or estate that is not a resident. An individual who is a resident for only part of a taxable year is a nonresident for the remainder of that taxable year.

(K) "Pass-through entity" has the same meaning as in section 5733.04 of the Revised Code.

(L) "Return" means the notifications and reports required to be filed pursuant to this chapter for the purpose of reporting the tax due and includes declarations of estimated tax when so required.

(M) "Taxable year" means the calendar year or the taxpayer's fiscal year ending during the calendar year, or fractional part thereof, upon which the adjusted gross income is calculated pursuant to this chapter.

(N) "Taxpayer" means any person subject to the tax imposed by section 5747.02 of the Revised Code or any pass-through entity that makes the election under division (D) of section 5747.08 of the Revised Code.

(O) "Dependents" means dependents as defined in the Internal Revenue Code and as claimed in the taxpayer's federal income tax return for the taxable year or which the taxpayer would have been permitted to claim had the taxpayer filed a federal income tax return.

(P) "Principal county of employment" means, in the case of a nonresident, the county within the state in which a taxpayer performs services for an employer or, if those services are performed in more than one county, the county in which the major portion of the services are performed.

(Q) As used in sections 5747.50 to 5747.55 of the Revised Code:

(1) "Subdivision" means any county, municipal corporation, park district, or township.

(2) "Essential local government purposes" includes all functions that any subdivision is required by general law to exercise, including like functions that are exercised under a charter adopted pursuant to the Ohio Constitution.

(R) "Overpayment" means any amount already paid that exceeds the figure determined to be the correct amount of the tax.

(S) "Taxable income" applies to estates only and means taxable income as defined and used in the Internal Revenue Code adjusted as follows:

(1) Add interest or dividends on obligations or securities of any state or of any political subdivision or authority of any state, other than this state and its subdivisions and authorities;

(2) Add interest or dividends on obligations of any authority, commission, instrumentality, territory, or possession of the United States that are exempt from federal income taxes but not from state income taxes;

(3) Add the amount of personal exemption allowed to the estate pursuant to section 642(b) of the Internal Revenue Code;

(4) Deduct interest or dividends on obligations of the United States and its territories and possessions or of any authority, commission, or instrumentality of the United States that are exempt from state taxes under the laws of the United States;

(5) Deduct the amount of wages and salaries, if any, not otherwise allowable as a deduction but that would have been allowable as a deduction in computing federal taxable income for the taxable year, had the targeted jobs credit allowed under sections 38, 51, and 52 of the Internal Revenue Code not been in effect;

(6) Deduct any interest or interest equivalent on public obligations and purchase obligations to the extent included in federal taxable income;

(7) Add any loss or deduct any gain resulting from sale, exchange, or other disposition of public obligations to the extent included in federal taxable income;

(8) Except in the case of the final return of an estate, add any amount deducted by the taxpayer on both its Ohio estate tax return pursuant to section 5731.14 of the Revised Code, and on its federal income tax return in determining either federal adjusted gross income or federal taxable income;

(9) Deduct any amount included in federal taxable income solely because the amount represents a reimbursement or refund of expenses that in a previous year the decedent had deducted as an itemized deduction pursuant to section 63 of the Internal Revenue Code and applicable treasury regulations;

(10) Deduct any portion of the deduction described in section 1341(a)(2) of the Internal Revenue Code, for repaying previously reported income received under a claim of right, that meets both of the following requirements:

(a) It is allowable for repayment of an item that was included in the taxpayer's taxable income or the decedent's adjusted gross income for a prior taxable year and did not qualify for a credit under division (A) or (B) of section 5747.05 of the Revised Code for that year.

(b) It does not otherwise reduce the taxpayer's taxable income or the decedent's adjusted gross income for the current or any other taxable year.

(11) Add any amount claimed as a credit under section 5747.059 of the Revised Code to the extent that the amount satisfies either of the following:

(a) The amount was deducted or excluded from the computation of the taxpayer's federal taxable income as required to be reported for the taxpayer's taxable year under the Internal Revenue Code;

(b) The amount resulted in a reduction in the taxpayer's federal taxable income as required to be reported for any of the taxpayer's taxable years under the Internal Revenue Code.

(T) "School district income" and "school district income tax" have the same meanings as in section 5748.01 of the Revised Code.

(U) As used in divisions (A)(8), (A)(9), (S)(6), and (S)(7) of this section, "public obligations," "purchase obligations," and "interest or interest equivalent" have the same meanings as in section 5709.76 of the Revised Code.

(V) "Limited liability company" means any limited liability company formed under Chapter 1705. of the Revised Code or under the laws of any other state.

(W) "Pass-through entity investor" means any person who, during any portion of a taxable year of a pass-through entity, is a partner, member, shareholder, or investor in that pass-through entity.

(X) "Banking day" has the same meaning as in section 1304.01 of the Revised Code.

(Y) "Month" means a calendar month.

(Z) "Quarter" means the first three months, the second three months, the third three months, or the last three months of the taxpayer's taxable year.

(AA) Any term used in this chapter that is not otherwise defined in this section and that is not used in a comparable context in the Internal Revenue Code and other statutes of the United States relating to federal income taxes has the same meaning as in section 5733.40 of the Revised Code.