ASSEMBLY, No. 476
STATE OF NEW JERSEY
Introduced Pending Technical Review by Legislative Counsel
PRE-FILED FOR INTRODUCTION IN THE 1996 SESSION
By Assemblywoman VANDERVALK
An Act concerning health insurance and amending P.L.1992, c.161 and P.L.1992, c.162.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1992, c.161 (C.17B:27A-4) is amended to read as follows:
3. a. No later than 180 days after the effective date of this act, a carrier shall, as a condition of issuing health benefits plans in this State, offer individual health benefits plans. The plans shall be offered on an open enrollment, community rated basis, pursuant to the provisions of this act; except that a carrier shall be deemed to have satisfied its obligation to provide the individual health benefits plans by paying an assessment or receiving an exemption pursuant to section 11 of this act.
b. A carrier shall offer to an eligible person a choice of five standard individual health benefits plans, any of which may contain provisions for managed care. One plan shall be a basic health benefits plan, one plan shall be a managed care plan and three plans shall include enhanced benefits of proportionally increasing actuarial value. A carrier may elect to convert any individual health benefits plans in force on the effective date of this act to any of the five standard benefit plans, except that the replacement plan shall be of no less actuarial value than the policy or contract being replaced.
Notwithstanding the provisions of this subsection to the contrary, at any time after three years after the effective date of this act, the board, by regulation, may reduce the number of standard plans required to be offered by a carrier.
Notwithstanding the provisions of this subsection to the contrary, a health maintenance organization which is a qualified health maintenance organization pursuant to the "Health Maintenance Organization Act of 1973," Pub.L.93-222 (42 U.S.C.§300e et seq.) shall be permitted to offer a basic health benefits plan in accordance with the provisions of that law in lieu of the five standard plans required pursuant to this subsection.
Notwithstanding the provisions of this subsection to the contrary, a carrier may offer other individual health benefits plans, in addition to the five standard individual plans, provided that the actuarial value of any additional individual health benefits plan is at least equal to the actuarial value of the basic health care contract pursuant to sections 55, 57, and 59 of P.L.1991, c.187 (C.17:48E-22.2, 17B:26B-2 and 26:2J-4.3) and that the policy forms and contract forms for any such plan are filed with the board.
c. (1) A basic health benefits plan shall provide the benefits set forth in section 55 of P.L.1991, c.187 (C:17:48E-22.2), section 57 of P.L.1991, c.187 (C.17B:26B-2) or section 59 of P.L.1991, c.187 (C.26:2J-4.3), as the case may be.
(2) Notwithstanding the provisions of this subsection or any other law to the contrary, a carrier may, with the approval of the board, modify the coverage provided for in sections 55, 57, and 59 of P.L.1991, c.187 (C.17:48E-22.2, 17B:26B-2 and 26:2J-4.3, respectively) or provide alternative benefits or services from those required by this subsection if they are within the intent of this act or if the board changes the benefits included in the basic health benefits plan.
(3) A contract or policy for a basic health benefits plan provided for in this section may contain or provide for coinsurance or deductibles, or both, except that no deductible shall be payable in excess of a total of $250 by an individual or $500 by a family unit during any benefit year; and no coinsurance shall be payable in excess of a total of $500 by an individual or by a family unit during any benefit year.
(4) Notwithstanding the provisions of paragraph (3) of this subsection or any other law to the contrary, a carrier may provide for increased deductibles or coinsurance for a basic health benefits plan if approved by the board or if the board increases deductibles or coinsurance included in the basic health benefits plan.
(5) The provisions of section 13 of P.L.1985, c.236 (C:17:48E-13), N.J.S.17B:26-1, and section 8 of P.L.1973, c.337 (C.26:2J-8) with respect to the filing of policy forms shall not apply to standard health plans issued on or after the effective date of this act.
(6) The provisions of section 27 of P.L.1985, c.236 (C.17:48E-27) and section 7 of P.L.1988, c.71 (C.17:48E-27.1) with respect to rate filings shall not apply to individual health plans issued on or after the effective date of this act.
d. Every group conversion contract or policy issued after the effective date of this act shall be issued pursuant to this section; except that this requirement shall not apply to any group conversion contract or policy in which a portion of the premium is chargeable to, or subsidized by, the group policy from which the conversion is made.
e. If all five of the standard individual health benefits plans are not established by the board by the effective date of P.L.1993, c.164 (C.17B:27A-16.1 et al.), a carrier may phase-in the offering of the five standard health benefits plans by offering each health benefits plan as it is established by the board; however, once the board establishes all five standard plans, the carrier shall be required to offer the five standard plans in accordance with the provisions of P.L.1992, c.161 (C.17B:27A-2 et al.).
(cf: P.L.1993, c.164, s.3)
2. Section 3 of P.L.1992, c.162 (C.17B:27A-19) is amended to read as follows:
3. a. Except as provided in subsection f. of this section, every small employer carrier shall, as a condition of transacting business in this State, offer to every small employer the five standard health [benefit] benefits plans as provided in this section. The board shall establish a standard policy form for each of the five standard plans [, which shall be the only plans offered to small groups on or after January 1, 1994]. One policy form shall contain the benefits provided for in sections 55, 57, and 59 of P.L.1991, c.187 (C.17:48E-22.2, 17B:26B-2 and 26:2J-4.3). In the case of indemnity carriers, one policy form shall be established which contains benefits and cost sharing levels which are equivalent to the health benefits plans of health maintenance organizations pursuant to subchapter XI of Pub.L.93-222 (42 U.S.C. §300 et seq.). The remaining policy forms shall contain basic hospital and medical-surgical benefits, including, but not limited to:
(1) Basic inpatient and outpatient hospital care;
(2) Basic and extended medical-surgical benefits;
(3) Diagnostic tests, including X-rays;
(4) Maternity benefits, including prenatal and postnatal care; and
(5) Preventive medicine, including periodic physical examinations and inoculations.
At least three of the forms shall provide for major medical benefits in varying lifetime aggregates, one of which shall provide at least $1,000,000 in lifetime aggregate benefits. The policy forms provided pursuant to this section shall contain benefits representing progressively greater actuarial values.
Notwithstanding the provisions of this subsection to the contrary, a carrier may offer other health benefits plans, in addition to the five standard health benefits plans, provided that the actuarial value of any additional health benefits plan is at least equal to the actuarial value of the basic health care contract pursuant to sections 55, 57, and 59 of P.L.1991, c.187 (C.17:48E-22.2, 17B:26B-2 and 26:2J-4.3) and that the policy forms and contract forms for any such plan are filed with the board.
b. Initially, a carrier shall offer a plan within 90 days of the approval of such plan by the commissioner. Thereafter, the plans shall be available to all small employers on a continuing basis. Every small employer which elects to be covered under any health benefits plan who pays the premium therefor and who satisfies the participation requirements of the plan shall be issued a policy or contract by the carrier.
c. The carrier may establish a premium payment plan which provides installment payments and which may contain reasonable provisions to ensure payment security, provided that provisions to ensure payment security are uniformly applied.
d. In addition to the five standard policies described in subsection a. of this section, the board may develop up to five rider packages. Any such package which a carrier chooses to offer shall be issued to a small employer who pays the premium therefor, and shall be subject to the rating methodology set forth in section 9 of P.L.1992, c.162 (C.17B:27A-25).
e. Notwithstanding the provisions of subsection a. of this section to the contrary, the board may approve a health benefits plan containing only medical-surgical benefits or major medical expense benefits, or a combination thereof, which is issued as a separate policy in conjunction with a contract of insurance for hospital expense benefits issued by a hospital service corporation, if the health benefits plan and hospital service corporation contract combined otherwise comply with the provisions of P.L.1992, c.162 (C.17B:27A-17 et seq.).
f. Notwithstanding the provisions of this section to the contrary, a health maintenance organization which is a qualified health maintenance organization pursuant to the "Health Maintenance Organization Act of 1973," Pub.L.93-222 (42 U.S.C. §300e et seq.) shall be permitted to offer health benefits plans formulated by the board and approved by the commissioner which are in accordance with the provisions of that law in lieu of the five plans required pursuant to this section.
Notwithstanding the provisions of this section to the contrary, a health maintenance organization which is approved pursuant to P.L.1973, c.337 (C.26:2J-1 et seq.) shall be permitted to offer health benefits plans formulated by the board and approved by the commissioner which are in accordance with the provisions of that law in lieu of the five standard plans required pursuant to this section, except that the plans shall provide the same level of benefits as required for a federally qualified health maintenance organization, including any requirements concerning copayments by enrollees.
g. A carrier shall not be required to own or control a health maintenance organization or otherwise affiliate with a health maintenance organization in order to comply with the provisions of this section, but the carrier shall be required to offer the five health benefits plans which are formulated by the board and approved by the commissioner, including one plan which contains benefits and cost sharing levels that are equivalent to those required for health maintenance organizations.
h. Notwithstanding the provisions of subsection a. of this section to the contrary, the board may modify the benefits provided for in sections 55, 57 and 59 of P.L.1991, c.187 (C.17:48E-22.2, 17B:26B-2 and 26:2J-4.3).
(cf: P.L.1993, c.162, s.2)
3. Section 13 of P.L.1993, c.162 (C.17B:27A-48) is amended to read as follows:
13. A multiple employer arrangement covering a group of 49 or fewer employees or participating persons of an individual employer who are residents of this State shall register with the board of directors established pursuant to section 13 of P.L.1992, c.162 (C.17B:27A-29).
The multiple employer arrangement shall be required to offer the standard health benefits plans established by the board. The premium rates charged for the multiple employer arrangement health benefits plan shall conform to the requirements of section 9 of P.L.1992, c.162 (C.17B:27A-25) and the coverage shall comply with the provisions of subsection b. of section 3 and sections 6 and 7 of P.L.1992, c.162 (C.17B:27A-19, 22 and 23), regardless of the situs of delivery of the multiple employer arrangement.
Notwithstanding the provisions of this section to the contrary, a multiple employer arrangement may offer other health benefits plans, in addition to the standard health benefits plans, provided that the actuarial value of any additional health benefits plan shall be at least equal to the actuarial value of the basic health care contract pursuant to sections 55, 57, and 59 of P.L.1991, c.187 (C.17:48E-22.2, 17B:26B-2 and 26:2J-4.3) and that the policy forms and contract forms for any such plan are filed with the board. (cf: P.L.1993, c.162, s.13)
4. Section 6 of P.L.1992, c.162 (C.17B:27A-7) is amended to read as follows:
6. The board shall establish the policy and contract forms and benefit levels to be made available by all carriers for the standard policies required to be issued pursuant to section 3 of this act. The board shall provide the commissioner with an informational filing of the policy and contract forms and benefit levels it establishes or receives from carriers or multiple employer arrangements.
a. The individual health benefits plans established by the board may include cost containment measures such as, but not limited to: utilization review of health care services, including review of medical necessity of hospital and physician services; case management benefit alternatives; selective contracting with hospitals, physicians, and other health care providers; and reasonable benefit differentials applicable to participating and nonparticipating providers; and other managed care provisions.
b. An individual health benefits plan offered pursuant to section 3 of this act shall contain a limitation of no more than 12 months on coverage for preexisting conditions, except that the limitation shall not apply to an individual who has, under a prior group or individual health benefits plan, with no intervening lapse in coverage, been treated or diagnosed by a physician for a condition under that plan or satisfied a 12 month preexisting condition limitation.
c. In addition to the five standard individual health benefits plans provided for in section 3 of this act, the board may develop up to five rider packages. Premium rates for the rider packages shall be determined in accordance with section 8 of this act.
d. After the board's establishment of the individual health benefits plans required pursuant to section 3 of this act, and notwithstanding any law to the contrary, a carrier shall file the policy or contract forms with the board and certify to the board that the health benefits plans to be used by the carrier are in substantial compliance with the provisions in the corresponding board approved plans. The certification shall be signed by the chief executive officer of the carrier. Upon receipt by the board of the certification, the certified plans may be used until the board, after notice and hearing, disapproves their continued use.
(cf: P.L.1993, c.164, s.4)
5. This act shall take effect immediately.
STATEMENT
The bill permits insurers offering individual or small employer insurance health benefits plans to offer health benefits plans, in addition to the five standard plans established under the New Jersey Health Coverage Program or the New Jersey Small Employer Health Benefits Program, provided that the actuarial value of any additional health benefits plan is at least equal to the actuarial value of a basic health care plan. This bill would also permit multiple employer arrangements to provide such additional health care plans.
Currently, under the individual and small employer health benefits programs, consumers are severely limited in their choices of health care coverage. Additionally, beginning January 1, 1994, small employers and trade and professional associations will be forced to convert their current health benefits plans, which are generally provided by multiple employer arrangements, to one of the standard plans. In many cases, such forced conversions will result in those groups paying higher premiums for less coverage or for coverage that may not meet their needs.
Expands health benefits coverage that may be offered by individual and small employer carriers.