STATE BUDGET FINALLY APPROVED

 

General Overview

After three one-week interim budgets were passed to keep state government running, the House and Senate passed the state’s biennial budget which funds state government from July 1, 2009 – June 30, 2011.  The bill is now on Governor Strickland’s desk for his signature. 

 

The major stumbling block was how to close a projected $3.2 billion hole that was still in the budget after it had passed the House and Senate.  Governor Strickland then proposed $2.3 billion in cuts to state government and the implementation of video lottery terminals (slots) at Ohio’s seven race tracks which is projected to produce $933 million over the biennium. The slots provision was the most controversial, with the Senate Republicans saying that there should be a vote on this November’s ballot before slots should be approved. Ultimately, the agreement was that Governor Strickland would authorize the slots through an Executive Order and then the Legislature would include implementing language in the budget.

 

Governor Strickland is expected to sign the budget this week, so he could still veto some budget provisions.  Below is a summary of the budget (H.B. 1) that was approved by the House and Senate this past Monday:

 

Health Insurance related provisions

 

·          Individual Market Open Enrollment for Uninsurable Persons

•  Rates for HICs and insurers capped at 2 times the base rate for calendar years 2010 and 2011.

•  For calendar year 2012 and every year thereafter, rates capped at 1½ times the base rate.

•  However, if ODI determines that the 2010 cap has resulted in a market-wide average medical loss ratio for coverage sold to individual insureds and non-employer group insureds, including open enrollment insureds, of more than 5.25%, the 2010 and 2011 cap shall remain in place.

•  During 2010 and 2011, each carrier shall accept into open enrollment up to 4% of the carrier’s total number of individual or non-employer group insureds in this state; for 2012 the number is 8%.

 

·         State Continuation of Coverage

•  Makes permanent the changes made in H.B. 2 (the Transportation Budget) that were set to expire January 1, 2010.

 

·         External Review of Health Care Denials

•  Requires a HIC to cover a health care service if the Supt. of Insurance determines it is a covered service.

•  Requires health insurer to initiate an external review automatically (without a request from insured) upon receiving such notification from Supt. of Insurance.

•  Allows health insurer to deny an insured’s request for an external review if request is not made within required time frames.

 

·         Payment of Claims by Third Party Payers

•  Requires third party payers to pay claims electronically when claim was received electronically and prohibits providers from refusing to accept electronic payments.

 

·         Administrative Expenses of Health Plans

•  Requires filing of premium rates for any individual policy of sickness and accident insurance or     individual policies sold through a group policy.

•  Changes definition of “Administrative Expense” to include amount of losses recovered from reinsurance   coverage and certain incurred costs.

•  Statements must itemize and separately detail eight different costs incurred for the insurer’s individual, small group and large group business.

•  Requires filing of small employer premium rates (HICs and insurers).

 

·         Coverage of Dependent Children

•  Requires insurers to offer dependent coverage up to age 28, but does not require the employer to pay for any part of the dependent’s premium.

 

·         Cafeteria Plans

•  Requires employers with 10 or more employees to adopt and maintain cafeteria plans.

            

·         Autism mandate

•  Removed provisions mandating coverage of Autism.

 

·         Children Buy-In Program - Eligibility

•  Family income must exceed 300% of federal poverty level, meaning the child cannot qualify for CHIP.

•  Child has not had creditable coverage for 3 months, however, requirement is not applicable if both of the following apply: (1) the child’s parents are involuntarily unemployed; at least one parent is unable to work due to a disabling condition; at least one parent involuntarily lost creditable coverage for the child; or the child has creditable coverage under COBRA continuation coverage; and (2) the cost of the least expensive creditable coverage available to the child is greater than 10% of the child’s countable family income; the premium for the creditable coverage with the lowest premium available to the child is greater than 150% of the premium applicable to the child under the children’s buy-in program; the child is unable to obtain creditable coverage due to a pre-existing condition; the child lost the only creditable coverage available because the child has exhausted a lifetime benefit limitation; or the child participates in the program for medically handicapped children.

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