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I was playing a 1000 point game with a friend at a FLGS and came to a situation where I fired markerlights and reduced cover on a unit of Rangers. Then launched my sub-munition round from t=my hammerhead. The rangers were on a tiered hill with one base hill and a small topper. He split the rangers on the hill in half during deployment between the base and the top. I was unaware, but he came to the idea that I would have to choose what level I hit to determine the wounds. We agreed to a 5 cover at the beginning of the match, but nothing was ever mentioned to treat it like a ruin. being a friendly game I played out the top portion of the hill. My question is do tiered hills count as ruins when using a blast template or perhaps I have overlooked a area in the rule book. I am curious as to what players opinions are to this situation.

No. Only ruins have levels.

You can make up house rules to give levels to other things, but you'd have to agree to do so.

If it was not agreed as a ruin, then the rules for ruins do not apply, and the basic "everything under the marker" rules for determining hits is used.

Thanks for feedback

It depends on what the hill was designated as at the start of the game.

If it was called a 5+ piece of cover, then everyone under the blast gets hit, and no cover saves unless 50% of the models are LOS obscured

If it was called 5+ area terrain, then everyone under the blast gets hit, and get cover saves

If it was called a 5+ ruin, then your friend could argue the multi-level rule. If it was called a "Ruin", but didn't discuss levels, then decide with a 4+