130th Ohio General Assembly
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Sub. H. B. No. 506  As Reported by the House Ways and Means Committee
As Reported by the House Ways and Means Committee

126th General Assembly
Regular Session
2005-2006
Sub. H. B. No. 506


Representatives Blessing, Collier, Hagan, Gibbs, Gilb, Latta, Seitz, Kilbane 



A BILL
To amend section 124.82 and to enact section 9.902 of the Revised Code to require public employers to make health savings accounts available to public employees.

BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That section 124.82 be amended and section 9.902 of the Revised Code be enacted to read as follows:
Sec. 9.902.  (A) As used in this section:
(1) "Health savings account," "high deductible health plan," and "qualified medical expenses" have the same meanings as in section 223 of the Internal Revenue Code.
(2) "Internal Revenue Code" has the same meaning as in section 5747.01 of the Revised Code.
(3) "Medical plan" means any policy, contract, or other agreement providing for the payment or other coverage of health, medical, hospital, or surgical expenses of public employees.
(4) "Public employer" means the state, a public institution of higher education described in section 9.90 of the Revised Code, or a county, township, municipal corporation, school district, or other body corporate and politic with jurisdiction within a geographic area smaller than that of the state.
(5) "Public employee" means a full-time employee of a public employer. In the case of the state, "public employee" means any such employee paid directly by warrant of the director of budget and management, including an elected state official.
(B) Except as otherwise provided in division (C) of this section, each public employer providing a medical plan to its public employees shall contract with one or more insurance companies authorized to do business in this state for the issuance of one or more policies or contracts for a high deductible health plan covering its public employees in conjunction with health savings accounts opened by such employees. In the case of the state, the department of administrative services shall contract for the issuance of the high deductible health plan policy or contract, subject to division (E) of section 124.82 of the Revised Code, and shall do so in accordance with the competitive selection procedures of Chapter 125. of the Revised Code. A high deductible health plan contracted for under this section shall comply with the requirements for such plans under section 223 of the Internal Revenue Code. The public employer may contribute all or a part of the contributions to public employees' health savings accounts opened by employees pursuant to division (D) of this section.
(C)(1) A public employer that is a party to a collective bargaining agreement in effect on the effective date of H.B. 506 of the 126th general assembly that does not require the employer to provide for a high deductible health plan is not required to contract for a high deductible health plan under this section covering employees who are subject to the agreement. When any collective bargaining agreement is negotiated on or after that effective date by a public employer and a public employee bargaining unit, the public employer shall offer to provide under the agreement one or more high deductible health plans covering such employees, and may offer to contribute under the agreement all or a part of the contributions to the public employees' health savings accounts opened by the employees. A public employees bargaining unit may accept, reject, or negotiate any or all terms and conditions of a high deductible health plan or health savings account contributions offered by a public employer under this division.
(2) A public employer is not required to contract for a high deductible health plan under this section for an enrollment period if the number of its public employees enrolled in the high deductible health plan for the preceding enrollment period is less than one per cent of the number of its public employees eligible to enroll in the plan for the preceding enrollment period.
(D) A public employee enrolled in a high deductible health plan provided under this section may open a health savings account. The account shall be administered by a person satisfying the requirements of section 223(d)(1)(B) of the Internal Revenue Code. An employee's health savings account may be funded by contributions from the employee or the public employer or both. A public employee may not open a health savings account under this division if the employee currently maintains a medical savings account under sections 3924.61 to 3924.74 of the Revised Code.
Sec. 124.82.  (A) Except as provided in division (D) of this section, the department of administrative services, in consultation with the superintendent of insurance, shall, in accordance with competitive selection procedures of Chapter 125. of the Revised Code, contract with an insurance company or a health plan in combination with an insurance company, authorized to do business in this state, for the issuance of a policy or contract of health, medical, hospital, dental, or surgical benefits, or any combination of those benefits, covering state employees who are paid directly by warrant of the director of budget and management, including elected state officials. The department may fulfill its obligation under this division by exercising its authority under division (A)(2) of section 124.81 of the Revised Code.
In addition to any policy or contract required under this division, the department of administrative services shall contract for one or more policies or contracts for high deductible health plans for state employees as prescribed by section 9.902 of the Revised Code.
(B) The department may, in addition, in consultation with the superintendent of insurance, negotiate and contract with health insuring corporations holding a certificate of authority under Chapter 1751. of the Revised Code, in their approved service areas only, for issuance of a contract or contracts of health care services, covering state employees who are paid directly by warrant of the director of budget and management, including elected state officials. The department may enter into contracts with one or more insurance carriers or health plans to provide the same plan of benefits, provided that:
(1) The amount of the premium or cost for such coverage contributed by the state, for an individual or for an individual and the individual's family, does not exceed that same amount of the premium or cost contributed by the state under division (A) of this section;
(2) The employee be permitted to exercise the option as to which plan the employee will select under division (A) or (B) of this section, at a time that shall be determined by the department;
(3) The health insuring corporations do not refuse to accept the employee, or the employee and the employee's family, if the employee exercises the option to select care provided by the corporations;
(4) The employee may choose participation in only one of the plans sponsored by the department;
(5) The director of health examines and certifies to the department that the quality and adequacy of care rendered by the health insuring corporations meet at least the standards of care provided by hospitals and physicians in that employee's community, who would be providing such care as would be covered by a contract awarded under division (A) of this section.
(C) All or any portion of the cost, premium, or charge for the coverage in divisions (A) and (B) of this section may be paid in such manner or combination of manners as the department determines and may include the proration of health care costs, premiums, or charges for part-time employees.
(D) Notwithstanding division (A) of this section, the department may provide benefits equivalent to those that may be paid under a policy or contract issued by an insurance company or a health plan pursuant to division (A) of this section.
(E) This section does not prohibit the state office of collective bargaining from entering into an agreement with an employee representative for the purposes of providing fringe benefits, including, but not limited to, hospitalization, surgical care, major medical care, disability, dental care, vision care, medical care, hearing aids, prescription drugs, group life insurance, sickness and accident insurance, group legal services or other benefits, or any combination of those benefits, to employees paid directly by warrant of the director of budget and management through a jointly administered trust fund. The employer's contribution for the cost of the benefit care shall be mutually agreed to in the collectively bargained agreement. The amount, type, and structure of fringe benefits provided under this division is subject to the determination of the board of trustees of the jointly administered trust fund. Notwithstanding any other provision of the Revised Code, competitive bidding does not apply to the purchase of fringe benefits for employees under this division when those benefits are provided through a jointly administered trust fund.
(F) Members of state boards or commissions may be covered by any policy, contract, or plan of benefits or services described in division (A) or (B) of this section. Board or commission members who are appointed for a fixed term and who are compensated on a per meeting basis, or paid only for expenses, or receive a combination of per diem payments and expenses shall pay the entire amount of the premiums, costs, or charges for that coverage.
Section 2. That existing section 124.82 of the Revised Code is hereby repealed.
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