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(126th General Assembly)
(Amended Substitute House Bill Number 46)
To amend section 9.833 and to enact section 305.172 of the Revised Code to permit political subdivisions to offer and make contributions to health savings accounts for employees.
Be it enacted by the General Assembly of the State of Ohio:
SECTION 1. That section 9.833 be amended and section 305.172 of the Revised Code be enacted to read as follows:
Sec. 9.833. (A) As used in this section, "political
subdivision" means a municipal corporation, township, county,
school district, or other body corporate and politic responsible
for governmental activities in a geographic area smaller than
that of the state.
(B) Political subdivisions that provide health care
benefits for their officers or employees may do any of the
(1) Establish and maintain an individual self-insurance
program with public moneys to provide authorized health care
benefits, including but not limited to, health care, prescription drugs, dental care, and vision care, in accordance with division (C) of this section;
(2) Establish and maintain a health savings account program whereby employees or officers may establish and maintain health savings accounts in accordance with section 223 of the Internal Revenue Code. Public moneys may be used to pay for or fund federally qualified high deductible health plans that are linked to health savings accounts or to make contributions to health savings accounts. A health savings account program may be a part of a self-insurance program.
(3) After establishing an individual self-insurance
program, agree with other political subdivisions that have
established individual self-insurance programs for health care
benefits, that their programs will be jointly administered in a
manner specified in the agreement;
(3)(4) Pursuant to a written agreement and in accordance with
division (C) of this section, join in any combination with other
political subdivisions to establish and maintain a joint
self-insurance program to provide health care benefits; (4)(5) Pursuant to a written agreement, join in any
combination with other political subdivisions to procure or
contract for policies, contracts, or plans of insurance to
provide health care benefits, which may include a health savings account program, for their officers and employees
subject to the agreement; (5)(6) Use in any combination any of the policies, contracts,
plans, or programs authorized under this division.
(C) Except as otherwise provided in division (E) of this
section, the following apply to individual or joint
self-insurance programs established pursuant to this section:
(1) Such funds shall be reserved as are necessary, in the
exercise of sound and prudent actuarial judgment, to cover
potential cost of health care benefits for the officers and
employees of the political subdivision. A report of amounts so
reserved and disbursements made from such funds, together with a
written report of a member of the American academy of actuaries
certifying whether the amounts reserved conform to the
requirements of this division, are computed in accordance with
accepted loss reserving standards, and are fairly stated in
accordance with sound loss reserving principles, shall be
prepared and maintained, within ninety days after the last day of
the fiscal year of the entity for which the report is provided
for that fiscal year, in the office of the program administrator
described in division (C)(3) of this section.
The report required by division (C)(1) of this section
shall include, but not be limited to, disbursements made for the
administration of the program, including claims paid, costs of the
legal representation of political subdivisions and employees, and
fees paid to consultants.
The program administrator described in division (C)(3) of
this section shall make the report required by this division
available for inspection by any person at all reasonable times
during regular business hours, and, upon the request of such
person, shall make copies of the report available at cost within
a reasonable period of time.
(2) Each political subdivision shall reserve funds
necessary for an individual or joint self-insurance program in a
special fund that may be established pursuant to an ordinance or
resolution of the political subdivision and not subject to
section 5705.12 of the Revised Code. The political subdivision
may allocate the costs of insurance or any self-insurance
program, or both, among the funds or accounts in the
subdivision's treasury on the basis of relative exposure and loss
(3) A contract may be awarded, without the necessity of
competitive bidding, to any person, political subdivision,
nonprofit corporation organized under Chapter 1702. of the
Revised Code, or regional council of governments created under
Chapter 167. of the Revised Code for purposes of administration
of an individual or joint self-insurance program. No such
contract shall be entered into without full, prior, public
disclosure of all terms and conditions. The disclosure shall
include, at a minimum, a statement listing all representations
made in connection with any possible savings and losses resulting
from the contract, and potential liability of any political
subdivision or employee. The proposed contract and statement
shall be disclosed and presented at a meeting of the political
subdivision not less than one week prior to the meeting at which
the political subdivision authorizes the contract.
A contract awarded to a nonprofit corporation or a regional council of governments under this division may provide that all employees of the nonprofit corporation or regional council of governments and the employees of all entities related to the nonprofit corporation or regional council of governments may be covered by the individual or joint self-insurance program under the terms and conditions set forth in the contract.
(4) The individual or joint self-insurance program shall
include a contract with a member of the American academy of
actuaries for the preparation of the written evaluation of the
reserve funds required under division (C)(1) of this section.
(5) A joint self-insurance program may allocate the costs
of funding the program among the funds or accounts in the
treasuries of the participating political subdivisions on the
basis of their relative exposure and loss experience.
(6) An individual self-insurance program may allocate the costs of funding
program among the funds or accounts in the treasury of the political
subdivision that established the program.
(7) Two or more political subdivisions may also authorize
the establishment and maintenance of a joint health care cost
containment program, including, but not limited to, the employment
of risk managers, health care cost containment specialists, and
consultants, for the purpose of preventing and reducing health
care costs covered by insurance, individual self-insurance, or joint
(8) A political subdivision is not liable under a joint
self-insurance program for any amount in excess of amounts
payable pursuant to the written agreement for the participation
of the political subdivision in the joint self-insurance program.
Under a joint self-insurance program agreement, a political
subdivision may, to the extent permitted under the written
agreement, assume the risks of any other political subdivision.
A joint self-insurance program established under this section is
deemed a separate legal entity for the public purpose of enabling
the members of the joint self-insurance program to obtain
insurance or to provide for a formalized, jointly administered
self-insurance fund for its members. An entity created pursuant
to this section is exempt from all state and local taxes.
(9) Any political subdivision may issue general obligation
bonds, or special obligation bonds that are not payable from
real or personal property taxes, and may also issue notes in
anticipation of such bonds, pursuant to an ordinance or
resolution of its legislative authority or other governing body
for the purpose of providing funds to pay expenses associated
with the settlement of claims, whether by way of a reserve or
otherwise, and to pay the political subdivision's portion of the
cost of establishing and maintaining an individual or joint
self-insurance program or to provide for the reserve in the
special fund authorized by division (C)(2) of this section.
In its ordinance or resolution authorizing bonds or notes
under this section, a political subdivision may elect to issue
such bonds or notes under the procedures set forth in Chapter
133. of the Revised Code. In the event of such an election,
notwithstanding Chapter 133. of the Revised Code, the maturity of
the bonds may be for any period authorized in the ordinance or
resolution not exceeding twenty years, which period shall be the
maximum maturity of the bonds for purposes of section 133.22 of
the Revised Code.
Bonds and notes issued under this section shall not be
considered in calculating the net indebtedness of the political
subdivision under sections 133.04, 133.05, 133.06, and 133.07 of
the Revised Code. Sections 9.98 to 9.983 of the Revised Code are
hereby made applicable to bonds or notes authorized under this
(10) A joint self-insurance program is not an insurance
company. Its operation does not constitute doing an insurance
business and is not subject to the insurance laws of this state.
(D) A political subdivision may procure group life insurance for its employees in conjunction with an individual or joint self-insurance program authorized by this section, provided that the policy of group life insurance is not self-insured.
(E) Divisions (C)(1), (2), and (4) of this section do not
apply to individual self-insurance programs in municipal
corporations, townships, or counties.
(F) A public official or employee of a political subdivision who is or becomes a member of the governing body of the program administrator of a joint self-insurance program in which the political subdivision participates is not in violation of division (D) or (E) of section 102.03, division (C) of section 102.04, or section 2921.42 of the Revised Code as a result of either of the following:
(1) The political subdivision's entering under this section into the written agreement to participate in the joint self-insurance program;
(2) The political subdivision's entering under this section into any other contract with the joint self-insurance program.
Sec. 305.172. As used in this section, "county officer or employee" includes, but is not limited to, a member or employee of the county board of elections.
The board of county commissioners of any county may establish and maintain a health savings account program whereby county officers or employees may establish and maintain health savings accounts in accordance with section 223 of the Internal Revenue Code. Public moneys may be used to pay for or fund federally qualified high deductible health plans that are linked to health savings accounts or to make contributions to health savings accounts.
SECTION 2. That existing section 9.833 of the Revised Code is hereby repealed.