S3856

An Act concerning reorganization of a health service corporation and supplementing P.L.2020, c.145 (C.17:48E-46.1 et seq.).

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

1. a. Following regulatory approval pursuant to section 5 of P.L.2020, c.145 (C.17:48E-46.5) and the establishment of a mutual holding company, the Commissioner of Banking and Insurance shall establish a commission in, but not of, the Department of Banking and Insurance, to award grants from the funds of the initial assessment established under subsection a. of section 13 of P.L.2020, c.145 (C.17:48E-46.13).

b. The commission shall consist of 12 members, and shall include:

(1) four members to be appointed by the Governor, with no more than two members from any one political party;

(2) one member appointed by the President of the Senate;

(3) one member appointed by the Minority Leader of the Senate;

(4) one member appointed by the Speaker of the Assembly;

(5) one member appointed by the Minority Leader of the Assembly;

(6) three members appointed by the board of the mutual holding company established pursuant to section 15 of P.L.2020, c.145 (C.17:48E-46.15); and

(7) the Commissioner of Banking and Insurance, or the commissioner’s designee, who shall serve as an ex officio, non-voting member.

c. The initial assessment paid pursuant to subsection a. of section 13 of P.L.2020, c.145 (C.17:48E-46.13) shall be deposited in a special account in the General Fund to be administered by the commissioner, upon the recommendations of the commission. The revenue in the fund established pursuant to this act shall be used in accordance with this act and the recommendations of the commission. No more than 25 percent of the initial assessment shall be expended within a fiscal year. The commission shall establish a plan for use of the funds to develop a program that is to be overseen by the commission to award grants to nonprofit or State-run health care entities, including dental groups. The plan shall also provide for no less than $100 million to be distributed to the county boards of health for the purposes of expansion and reorganization.

2. This act shall take effect immediately, and shall expire following the exhaustion of the funds in the special account established pursuant to this act.

STATEMENT

This bill requires the initial assessment following the reorganization of a health service corporation that is required pursuant to current law to be used to award grants to nonprofit or State-run health care entities, including dental groups, and the county boards of health.

Current law permits a health service corporation, which is a type of health insurer, to reorganize as a mutual holding company. The mutual holding company would continue to offer health insurance after the reorganization. Pursuant to the law, the mutual holding company, or any affiliate benefiting from the establishment of a mutual holding company, is to pay to the State an initial assessment of $600 million.

Current law does not specify how the revenue generated by the initial assessment may be used. This bill would require that the initial assessment from the reorganized company be used to develop a program to award grants to nonprofit or State-run health care entities and dental groups. The bill would also provide for no less than $100 million to be distributed to the county boards of health for the purposes of expansion and reorganization. Horizon Blue Cross Blue Shield of New Jersey is the only health service corporation in the State.