ASSEMBLY, No. 396

STATE OF NEW JERSEY

Introduced Pending Technical Review by Legislative Counsel

PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION

By Assemblywoman HECK

An Act permitting waiver of coverage as an employee under the State Health Benefits Program and reenrollment in certain cases and amending P.L.1961, c.49.

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

    1. Section 7 of P.L.1961, c.49 (C.52:14-17.31) is amended to read as follows:

    7. The coverage provided solely for employees shall, subject to the provisions below, automatically become effective for all eligible employees from the first day on or after the effective date of the program on which they satisfy the definition of "employee" contained in this act. The commission shall establish such rules and regulations governing the enrollment and effective dates of coverage of dependents of employees as it deems are necessary or desirable. Such rules and regulations shall not defer the insurance with respect to any qualified dependent an employee has on the date the employee's employer becomes a participating employer, provided the employee was, immediately prior to said date, insured with respect to such dependent under a group major medical insurance plan of such employer which was in effect immediately prior to said date. Under the rules and regulations established by the commission, each employee shall be given the opportunity to enroll for coverage for his dependents as of the earliest date he becomes eligible for such enrollment. An employee may elect to enroll his dependents for both basic coverage and major medical expense coverage but may not enroll for either coverage alone.

    If, on the date coverage for an employee would become effective, he is not actively at work on full time at his customary place of employment or other location to which his employment requires him to travel, he shall not be covered until he is so actively at work, except such employee shall be covered, if on the date the employee's employer becomes a participating employer, said employee was, immediately prior to said date, insured under a group major medical insurance plan of such employer which was in effect immediately prior to said date.

    In the event that the group major medical plan which covered an employee or his dependents immediately prior to the date the employee's employer becomes a participating employer provides, after termination of coverage thereunder, any continuation of benefits for medical expenses for hospitalization, surgery,medical treatment or any related service or supply, or would so provide in the absence of coverage pursuant to this act, no coverage shall be afforded pursuant to this act for any such expenses (i) which are covered, or which would be covered in the absence of coverage pursuant to this act, in whole or in part, by such prior insurance plan or (ii) which may be used in satisfaction of any deductible requirement under such prior insurance plan to establish entitlement to such continuation of benefits.

    Each employee shall furnish the Division of Pensions and Benefits, in such form as is prescribed, such information as is necessary on account of his own coverage and as necessary to enroll his dependents. Any employee not desiring coverage at the time he first becomes eligible, shall give the division written notice of that fact in such form as the division may prescribe. Such employee may not enroll thereafter except at such times and under such conditions as the commission may prescribe.

    If an employee of the State or other employer who is eligible for coverage has a spouse who is also an employee of the State or other employer who is also eligible for coverage, the spouse may elect to waive the coverage for which he or she is otherwise eligible. The spouse who elected to waive coverage shall be permitted, however, to resume coverage upon the retirement or death of the spouse who retained coverage, or in the event of a divorce, provided the spouse is still eligible for coverage as an employee. After such a waiver has been filed and for so long as that waiver remains in effect, no premium shall be required to be paid by the employer of the spouse for coverage of the spouse, and the Division of Pensions and Benefits shall, not later than the 180th day after the date on which that filing occurs, refund to that employer the amount of any premium previously paid by the employer with respect to any period of coverage of the spouse which follows that filing date. The employer of a spouse who has elected to waive coverage hereunder may, pursuant to an agreement with the spouse in consideration of the filing of such a waiver, pay the spouse an amount which shall not in any year exceed 25% of the amount of the premium which otherwise would have been required to provide single coverage for that spouse.

    If an employee of an employer other than the State eligible for coverage has a spouse who is also an employee of an employer other than the State eligible for coverage, the spouse may elect single coverage as an employee and to enroll as a dependent, in which event no coverage shall be provided for such spouse as an employee while covered as a dependent. The employee of an employer other than the State, who has enrolled such spouse, and who is required to pay the full cost of dependent coverage, may receive a refund from the State Division of Pensions equivalent in amount to the employer's cost for an employee's coverage. When both husband and wife are covered as employees, only one may enroll for their children as dependents.

     A similar refund shall be authorized pursuant to such rules and regulations as the commission deems necessary or desirable in the case of an employee of an employer other than the State who is paying the full cost of dependent coverage for a spouse who is an employee of the State and eligible for coverage.

(cf: P.L.1972, c.75, s.6)

     2. This act shall take effect immediately.

STATEMENT

    This bill addresses the situation in which both a person and that person's spouse are eligible for coverage under the State Health Benefits Program (SHBP) as active employees of the State or other participating employer. Under the bill, the spouse would be allowed to waive the duplicative coverage. In the event of a divorce or of the death or retirement of the spouse who retains coverage, the spouse who elected to waive coverage may resume coverage under SHBP.

Permits either of two spouses eligible for coverage under SHBP as public employees to waive such coverage and to resume coverage in the event of death, retirement or divorce.