ASSEMBLY, No. 495

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 medical savings account plans.

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

1. As used in this act:

    "Account administrator" means

    (1) a federally or State chartered bank, savings and loan association, savings bank or credit union;

    (2) a trust company authorized to act as a fiduciary;

    (3) an insurer;

    (4) a third-party administrator;

    (5) a certified public accountant;

    (6) an employer that administers an employee benefit plan subject to regulation under the federal "Employee Retirement Income Security Act of 1974," 29 U.S.C. §1001 et seq., or that maintains medical savings accounts for its employees; or

    (7) such other person that demonstrates to the satisfaction of the Commissioner of Insurance that the medical savings account will be properly managed.

    "Deductible" means the total deductible for an employee and all of the employee's qualified dependents for a calendar year.

    "Medical savings account" or "account" means a custodial account or trust created in this State pursuant to a medical savings account plan to pay for the eligible medical expenses of an account holder or the account holder's qualified dependents or both.

    "Qualified dependent" means the spouse of an account holder or the child of an account holder when the child is:

    (1) under 19 years of age or under 23 years of age and a full-time student at an accredited college or university;

    (2) not self-sufficient due to mental or physical incapacitation; or

    (3) legally entitled to the provisions of proper or necessary subsistence, education, medical care or other care necessary for the child' guidance, or well-being and is not otherwise emancipated, self-supporting, married or a member of the armed forces of the United States.

    "Qualified higher deductible health plan" means a health coverage policy, certificate, or contract that provides for the payment of covered benefits that exceed the deductible, and is purchased by an employer for the benefit of an employee for whom the employer makes deposits into a medical savings account plan.

    2. Notwithstanding the provisions of any law to the contrary, no medical savings account plan shall be established in this State by an employer unless it includes all of the following:

    a. the payment on behalf of an employee into a medical savings account by the employee's employer of all or part of the premium differential realized by the employer based on the purchase of a higher deductible health coverage plan for the benefit of the employee;

    b. the purchase of a qualified higher deductible health coverage plan by the employer for the benefit of an employee; and

    c. an account administrator to administer the medical savings account.

    3. This act shall take effect immediately and shall apply to medical savings account plans established on or after the effective date of this act.

STATEMENT

    This bill requires medical savings account plans provided by employers in New Jersey to include all of the following: the payment on behalf of an employee into a medical savings account by the employee's employer of all or part of the premium differential realized by the employer based on the purchase of a higher deductible health benefits plan for the benefit of the employee; the purchase of qualified higher deductible health coverage plan for the benefit of an employee; and an account administrator to administer the medical savings account.

Establishes certain requirements for medical savings account plans.