A1693

ASSEMBLY, No. 1693

STATE OF NEW JERSEY

INTRODUCED MARCH 4, 1996

By Assemblymen ROCCO and DORIA

An Act allowing independent institutions of higher education to participate in the State Health Benefits Program, amending the title and body of P.L.1961, c.49 and amending and supplementing P.L.1964, c.125.

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

1. (New section) The Legislature finds and declares that New Jersey's independent institutions of higher education:

a. comprise an important component of the State's higher education community;

b. provide educational opportunities to a substantial number of students who could not be served solely by public colleges and universities;

c. promote academic excellence;

d. help create a workforce prepared to meet the future; and

e. should be able to participate in the State Health Benefits Program since that program offers options and cost efficiencies not generally available to such institutions and thus will enhance their ability to provide quality education at a reasonable price.

2. The title of P.L.1961, c.49 is amended to read as follows:

An Act concerning hospital, medical, surgical and major medical expense benefits for public and school employees and employees of independent institutions of higher education and providing for the procuring of such benefits.

(cf: P.L.1964, c.125, s.1)

3. Section 3 of P.L.1964, c.125 (C.52:14-17.34) is amended to read as follows:

3. In order that the New Jersey State Health Benefits Program Act may be extended to include other public and school employees and employees of independent institutions of higher education, participation by counties, municipalities, school districts, independent institutions of higher education as defined in P.L.1985, c.263 (C.52:25-16.5) and public agencies or organizations as defined in section 71 of P.L.1954, c. 84, including the New Jersey Turnpike Authority, the New Jersey Highway Authority, the Interstate Sanitation Commission, the Delaware River Basin Commission, New Jersey Housing Finance Agency, New Jersey Educational Facilities Authority, Hackensack Meadowlands Development Commission and the Compensation Rating and Inspection Bureau, hereinafter defined as employers, is hereby authorized.

(cf: P.L.1972, c.75, s.8)

4. Section 4 of P.L.1964, c.125 (C.52:14-17.35) is amended to read as follows:

4. As used in this act and in the act to which this act is a supplement:

(a) The term "employer" means a county, municipality, school district, independent institution of higher education as defined in P.L.1985, c.263 (C.52:25-16.5), or public agency or organization as defined in section 71 of P.L.1954, c. 84, including the New Jersey Turnpike Authority, the New Jersey Highway Authority, the Interstate Sanitation Commission, the Delaware River Basin Commission, New Jersey Housing Finance Agency, New Jersey Educational Facilities Authority, Hackensack Meadowlands Development Commission and the Compensation Rating and Inspection Bureau.

(b) The term "State Treasury" means the State agency responsible for the administration of the New Jersey State Health Benefits Program Act which is to be located in the Division of Pensions and Benefits in the Department of the Treasury.

(cf: P.L.1972, c.75, s.9)

5. Section 5 of P.L.1964, c.125 (C.52:14-17.36) is amended to read as follows:

5. The commission established by section 3 of chapter 49 of the laws of 1961, is hereby authorized to prescribe rules and regulations satisfactory to the carrier or carriers under which employers may participate in the health benefits program provided by that act. All provisions of that act will, except as expressly stated herein, be construed as to participating employers and to their employees and to dependents of such employees the same as for the State, employees of the State and dependents of such employees, except that participating employers which are independent institutions of higher education shall not be required to offer all of the program options to their employees, but may elect instead to offer such health benefit program option or combination of options as they select.

(cf: P.L.1964, c.125, s.5)

6. Section 7 of P.L.1964, c.125 (C.52:14-17.38) is amended to read as follows:

7. The Division of Pensions and Benefits shall certify to the certifying agent of each employer electing participation under the program the premium rates and periodic charges applicable to the coverage provided for employees and dependents. The participating employer shall remit to the division all contributions to premiums and periodic charges in advance of their due dates, subject to the rules and regulations of the commission.

The employer shall reimburse the active employee for his premium charges under Part B of the federal Medicare Program covering the employee and the employee's spouse, except that employers which are independent institutions of higher education shall not be so required.

From funds allocated therefor, the employer other than the State may pay the premium or periodic charges for the benefits provided to a retired employee and his dependents covered under the program, if such employee retired from a State or locally-administered retirement system on a benefit based on 25 years or more of service credited in such retirement system, excepting the employee who elected deferred retirement, but including the employee who retired on a disability pension based on fewer years of service credited in such retirement system, and may also reimburse such retired employee for his premium charges under Part B of the federal Medicare Program covering the retired employee and the employee's spouse. "Retired employee and his dependents" may, upon adoption of an appropriate resolution therefor by the participating employer, also include otherwise eligible employees, and their dependents, who retired from a State or locally-administered retirement system prior to the date that the employer became a participating employer in the New Jersey State Health Benefits Program. The term may also, upon adoption of an appropriate resolution therefor by the participating employer, include otherwise eligible employees, and their dependents, who did not elect to continue coverage in the program during such time after the employer became a participating employer that the employer did not pay premium or periodic charges for benefits to retired employees and their dependents pursuant to this section. Eligibility and enrollment of such employees and dependents shall be in accordance with such rules and regulations as may be adopted by the State Health Benefits Commission.

The employer other than the State may, by resolution, pay the premium or periodic charges for the benefits provided to the surviving spouse of a retired employee and his dependents covered under the program as provided in this section.

An independent institution of higher education shall have the authority to establish its own contribution policy regarding retiree benefits. It shall have the option to pay whatever portion of premiums it deems appropriate for coverage of retirees and their dependents, including the option to make no contribution for coverage of retirees or their dependents. When retirees of an independent institution of higher education are responsible for paying all or a portion of their health program costs, the Division of Pensions and Benefits shall be responsible for collecting premiums from those retirees. When a retiree from an independent institution of higher education has elected not to continue coverage through the independent institution of higher education either before or after the institution's decision to participate in the State Health Benefits Program, nothing in P.L. , c. (C. ) (now pending before the Legislature as this bill) shall be construed as

giving that retiree the right to coverage under the State Health Benefits Program.

(cf: P.L.1987, c.384, s.2)

7. Section 9 of P.L.1964, c.125 (C.52:14-17.40) is amended to read as follows:

9. An employee enrolling for dependents coverage shall, at the time of enrollment, authorize the participating employer to withhold, on an advance basis, from his wages or salary the contribution required by such employer for such coverage, which shall not exceed the premium or periodic charge therefor. The remainder of the premiums and periodic charges for employee and dependents coverage shall be paid by the participating employer out of its own funds. An employee who enrolls the employee or the employee's dependents as a result of an employment contract with or through an independent institution of higher education shall, at the time of enrollment, authorize the participating employer to withhold, on an advance basis, from the employee's wages or salary the contribution required by the employer for employee coverage or dependent coverage or both. Employee contributions shall not exceed the premium charges for coverage under the State Health Benefits Program.

(cf: P.L.1964, c.125, s.9)

8. Section 8 of P.L.1961, c.49 (C.52:14-17.32) is amended to read as follows:

8. a. The basic coverage and the major medical coverage of any employee, and of his dependents, if any, shall cease upon the discontinuance of his term of office or employment or upon cessation of active full-time employment subject to such regulations as may be prescribed by the commission for limited continuance of basic coverage and major medical coverage during disability, part-time employment, leave of absence or lay off, and for continuance of basic coverage and major medical coverage after retirement, any such continuance after retirement to be provided at such rates and under such conditions as shall be prescribed by the commission, subject, however, to the requirements hereinafter set forth in this section. The commission may also establish regulations prescribing an extension of coverage when an employee or dependent is totally disabled at termination of coverage.

b. Rates payable by retired employees for themselves and their dependents, by active employees for dependents covered by medicare benefits, and by the State or other employer for an active employee alone covered by medicare benefits, shall be determined on the basis of utilization experience according to classifications determined by the commission, provided, however, that the total rate payable by such retired employee for himself and his dependents, or by such active employee for his dependents and the State or other employer for such active employee alone, for coverage hereunder and for Part B of medicare, shall not exceed by more than 25%, as determined by the commission, the total amount which would have been required to have been paid by him and by the State or other employer for the coverage maintained had he continued in office or active employment and he and his dependents were not eligible for medicare benefits. "Medicare" as used in this act means the coverage provided under Title XVIII of the Social Security Act as amended in 1965, or its successor plan or plans. Nothing in this subsection shall be construed as limiting the power of an independent institution of higher education to require employee and retiree contributions equal to a portion or all of the State Health Benefits Program premium for employees or dependents.

c. (1) From funds appropriated therefor, the State shall pay the premium or periodic charges for the benefits provided to a retired State employee and his dependents covered under the program, but not including survivors, if such employee retired from a State-administered retirement system on a benefit based on 25 years or more of service credited in such retirement system, excepting the employee who elected deferred retirement, but including the employee who retired on a disability pension based on fewer years of service credited in such retirement system and shall also reimburse such retired employee for his premium charges under Part B of the federal medicare program covering the retired employee and the employee's spouse. In the case of full-time employees of the Rutgers University Cooperative Extension Service, service credited in the federal Civil Service Retirement System (5 U.S.C. §8331 et seq.) which was earned as a result of full-time employment at Rutgers University, may be considered alone or in combination with service credited in a State-administered retirement system for the purposes of establishing the minimum 25-year service requirement to qualify for the benefits provided in this section. Any full-time employee of the Rutgers University Cooperative Extension Service who meets the eligibility requirements set forth in this amendatory act shall be eligible for the benefits provided in this section, provided that at the time of retirement such employee was covered by the State Health Benefits Program and elected to continue such coverage into retirement.

(2) Notwithstanding the provisions of this section to the contrary, from funds appropriated therefor, the State shall pay the premium or periodic charges for the benefits provided to a retired State employee and his dependents covered under the program, but not including survivors, if: (a) the employee retires on or after the effective date of this 1987 amendatory act; (b) the employee was employed by Rutgers University prior to January 2, 1955 and remained in continuous service with Rutgers University until retirement even though the employee (i) did not join a State-administered retirement system, or, (ii) became a member of a State-administered retirement system, but accumulated less than 25 years of credited service; and (c) the employee is covered by the program at the time of retirement.

(3) Notwithstanding the provisions of this section to the contrary, in the case of an employee of a State college, as described in chapter 64 of Title 18A of the New Jersey Statutes, or of a county college, as defined in N.J.S.18A:64A-1, service credited in a private defined contribution retirement plan which was earned as an employee of an auxiliary organization, as defined in section 2 of P.L.1982, c.16 (C.18A:64-27), at a State or county college shall be considered in combination with service credited in a State-administered retirement system for the purposes of establishing the minimum 25-year service requirement to qualify for the benefits provided in this section, provided that the employee is covered by the program at the time of retirement.

(cf: P.L.1993, c.28, s.1)

9. This act shall take effect immediately.

STATEMENT

This bill allows, but does not require, New Jersey's independent institutions of higher education to participate in the State Health Benefits Program.

The bill is intended to provide maximum flexibility to these colleges and universities in order to avoid imposing financial burdens on them if they choose to participate in the program. Thus the participating institutions:

(1) shall not be required to offer all of the program options but may elect to offer such options as they select; and

(2) shall not be required to reimburse the active employee for premium charges under Part B of the federal Medicare program.

Allows independent institutions of higher education to participate in the State Health Benefits Program.