[First Reprint]

ASSEMBLY, No. 4798

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED MAY 18, 2017

 


 

Sponsored by:

Assemblywoman  BLONNIE R. WATSON

District 29 (Essex)

Assemblywoman  CLEOPATRA G. TUCKER

District 28 (Essex)

 

 

 

 

SYNOPSIS

     Requires health insurance consultants and carriers to provide certain information to certain local units and boards of education; requires local units and boards of education to review information.

 

CURRENT VERSION OF TEXT

     As reported by the Assembly Financial Institutions and Insurance Committee on June 1, 2017, with amendments.

  


An Act concerning local unit 1and board of education1 employee health insurance and supplementing chapter 10 of Title 40A 1and chapter 16 of Title 18A1 of the New Jersey Statutes.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    As used in 1sections 1 through 4 of1 P.L.    , c.    (C.        ) (pending before the Legislature as this bill):

     “Carrier” means an entity that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefits plan, including: an insurance company authorized to issue health benefits plans; a health maintenance organization; a health, hospital, or medical service corporation; a multiple employer welfare arrangement; an entity under contract with the State Health Benefits Program to administer a health benefits plan; or any other entity providing a health benefits plan.

     “Health care data” means complete claims experience data from a carrier, including medical, dental, pharmacy, and behavioral health claims.

     “Insurance consultant” means an individual or a business entity providing, for a commission, brokerage fee, or other consideration, services, including, but not limited to, brokerage, risk management, and related administrative services associated with the procurement, evaluation, and advice, counsel, or opinion with respect to the benefits, advantages, or disadvantages of any insurance product or contract that is or could be issued to a local unit.

     “Local unit” means a county or municipality with at least 100 participants in its health benefits plan.

     “Other forms of compensation” includes but is not limited to incentive payments, bonuses, rebates, or any other thing of value, whether provided directly or indirectly.

 

     2.  a.  A contract for the provision of health insurance consulting services shall require that the insurance consultant provide to the local unit, no later than five months prior to the introduction of the annual budget of the local unit, a certification of the amount of commissions or other forms of compensation accepted from a carrier during the prior calendar year for any insurance consultant services provided in connection with any contract awarded to the carrier by the local unit.

     b.    If an insurance consultant fails to provide a certification as required by subsection a. of this section, the local unit shall be entitled to terminate any contract with the insurance consultant and the insurance consultant shall be liable to a civil penalty of $2 per employee covered under the local unit’s health benefits plan for each day the violation continues, which penalty may be collected in a summary proceeding by the local unit pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).  The remedies for a violation provided under this subsection shall be in addition to any other remedies that may be provided by contract.

 

     3.    a.  A contract for the provision of, delivery of, arrangement for, payment for, or reimbursement of any of the costs of health care services under a health benefits plan to the local unit’s employees shall require that the carrier report to the local unit on a 1[quarterly] biannual1 basis health care data.

     b.    The carrier and local unit shall comply with the applicable provisions of the federal health privacy rules set forth in sections 160 and 164 of Title 45, Code of Federal Regulations, and with other proprietary requirements related to the collection and release of health care data.

     c.     If a carrier fails to report information as required by subsection a. of this section, the carrier shall be liable to a civil penalty of $2 per employee covered under the local unit’s health benefits plan for each day the violation continues, which penalty may be collected in a summary proceeding by the local unit pursuant to the "Penalty Enforcement Law of 1999," P.L.1999, c.274 (C.2A:58-10 et seq.).  If a carrier fails to report information as required by subsection a. of this section 1[three or more times in any one year]1, the local unit shall be entitled to terminate any contract with the carrier.  The remedies for a violation provided under this subsection shall be in addition to any other remedies that may be provided by contract.

 

     4.    The governing body of a local unit shall, no later than four months prior to the introduction of the annual budget of the local unit, review the information provided to the local unit pursuant to sections 2 and 3 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill).  The governing body shall certify that this review has been completed in the annual budget of the local unit.  The Director of the Division of Local Government Services in the Department of Community Affairs shall not certify approval of an annual budget of a local unit if the annual budget does not contain the certification required by this section.

 

     15.   As used in sections 5 through 8 of  P.L.    , c.    (C.        ) (pending before the Legislature as this bill):

     “Board” means a local board of education.

     “Carrier” means an entity that contracts or offers to contract to provide, deliver, arrange for, pay for, or reimburse any of the costs of health care services under a health benefits plan, including:  an insurance company authorized to issue health benefits plans; a health maintenance organization; a health, hospital, or medical service corporation; a multiple employer welfare arrangement; an entity under contract with the State Health Benefits Program or School Employees’ Health Benefits Program to administer a health benefits plan; or any other entity providing a health benefits plan.

     “District” means a school district.

     “Health care data” means complete claims experience data from a carrier, including medical, dental, pharmacy, and behavioral health claims.

     “Insurance consultant” means an individual or a business entity providing, for a commission, brokerage fee, or other consideration, services, including, but not limited to, brokerage, risk management, and related administrative services associated with the procurement, evaluation, and advice, counsel, or opinion with respect to the benefits, advantages, or disadvantages of any insurance product or contract that is or could be issued to a district.

     “Other forms of compensation” includes but is not limited to incentive payments, bonuses, rebates, or any other thing of value, whether provided directly or indirectly.1

 

     16.  a.  A contract for the provision of health insurance consulting services shall require that the insurance consultant provide to the board of education, no later than five months prior to the introduction of the annual budget of the district, a certification of the amount of commissions or other forms of compensation accepted from a carrier during the prior calendar year for any insurance consultant services provided in connection with any contract awarded to the carrier by the board.

     b.    If an insurance consultant fails to provide a certification as required by subsection a. of this section, the board shall be entitled to terminate any contract with the insurance consultant and the insurance consultant shall be liable to a civil penalty of $2 per employee covered under the board’s health benefits plan for each day the violation continues, which penalty may be collected in a summary proceeding by the board pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).  The remedies for a violation provided under this subsection shall be in addition to any other remedies that may be provided by contract.1

 

     17.   a.  A contract for the provision of, delivery of, arrangement for, payment for, or reimbursement of any of the costs of health care services under a health benefits plan to the board of education’s employees shall require that the carrier report to the board on a biannual basis health care data.

     b.    The carrier and board shall comply with the applicable provisions of the federal health privacy rules set forth in sections 160 and 164 of Title 45, Code of Federal Regulations, and with other proprietary requirements related to the collection and release of health care data.

     c.     If a carrier fails to report information as required by subsection a. of this section, the carrier shall be liable to a civil penalty of $2 per employee covered under the board’s health benefits plan for each day the violation continues, which penalty may be collected in a summary proceeding by the board pursuant to the “Penalty Enforcement Law of 1999,” P.L.1999, c.274 (C.2A:58-10 et seq.).  If a carrier fails to report information as required by subsection a. of this section, the board shall be entitled to terminate any contract with the carrier.  The remedies for a violation provided under this subsection shall be in addition to any other remedies that may be provided by contract.1

 

     18.   The board of education shall, no later than four months prior to the introduction of the annual budget of the district, review the information provided to the board pursuant to sections 6 and 7 of P.L.    , c.    (C.        ) (pending before the Legislature as this bill).  The board shall certify that this review has been completed in the annual budget of the district.  The executive county superintendent shall not certify approval of an annual budget of a district if the annual budget does not contain the certification required by this section.1

 

     1[5.]  9.1  This act shall take effect immediately.