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Three State Law Changes in Ohio

While everyone is focusing on health care reform on the Federal level there have been three major changes on the state level in Ohio that impact employers sponsoring fully insured health plans.

1. The definition of full-time employee in the small group market in Ohio is changing from 25 hours per week to 30 hours per week. A small group employer under Ohio law is an employer with between 2 and 50 eligible employees during the previous calendar year. This change takes place for plan years beginning on or after January 1, 2016. So if you are a small employer you will be able to exclude employees who work fewer than 30 hours per week from your group health plan. Note that this change does not constitute a “qualifying event” under COBRA, which means those employees (and their family members) that lose coverage because of the change will not be entitled to COBRA.

2. The definition of adult child in Ohio is up to age 28. The age is being lowered to age 26 for plan years beginning on or after January 1, 2016. The COBRA rules are less clear with respect to adult children who lose their health coverage because of this change.

3. The Ohio Department of Insurance has recently changed its position with respect to spousal carve outs. Previously the Ohio Department of Insurance took the position that employers could only implement a spousal surcharge. That is, the employer could charge more to cover spouses who had access to other group health plans but the employer could not exclude those spouses from the group health plan. The Ohio Department of Insurance will now allow employers to completely exclude the spouse if the spouse has access to another group health plan. It is important to note that the carrier has to approve the spousal carve out provision. In other words, you have to get your carrier to issue a policy that has the spousal carve out provision. The employer cannot implement a spousal carve out without the carrier’s prior approval.

The first two changes bring Ohio law into line with the Federal statute. That is, Federal law defines a full-time employee as one who works 30 hours per week and Federal law requires employers to offer coverage to a child up to age 26. So, again, the first two changes simply bring Ohio into line with the Federal rules. The third change allows employers that sponsor fully insured health plans the same opportunity to exclude spouses that employers with self funded health plans have been doing for some time.