ASSEMBLY, No. 209

 

STATE OF NEW JERSEY

 

Introduced Pending Technical Review by Legislative Counsel

 

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

 

 

By Assemblywoman WEINBERG and Assemblyman KELLY

 

 

An Act concerning health maintenance organizations.

 

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

 

    1. A health maintenance organization shall use at least 70% of its gross certificate, agreement, or contract income in the first year of operation, 75% in the second year of operation, and 80% in any subsequent year, for the direct provision of health care services to its enrollees.

 

    2. The Commissioner of Insurance, in consultation with the Commissioner of Health, shall promulgate rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) as may be necessary to effectuate the purposes of this act.

 

    3. This act shall take effect on the 60th day following enactment.

 

 

STATEMENT

 

    This bill requires health maintenance organizations to use at least 70% of their gross certificate, agreement, or contract income in the first year of operation, 75% in the second year of operation, and 80 % in any subsequent year, for the direct provision of health care services to their enrollees.

    This bill ensures that most of the income derived from enrollee certificates, agreements or contracts will be applied toward the direct provision of health care services to enrollees and limits to 20% the amount of such income that an established HMO may apply toward administration and other expenses and profit.


 

Specifies percent of gross income that HMOs must use for direct provision of health care services to enrollees.