[Passed Both Houses]
ASSEMBLY, No. 2884
STATE OF NEW JERSEY
INTRODUCED MAY 1, 1997
By Assemblywomen VANDERVALK, HECK, Senators Rice,
Sinagra and Codey
An Act concerning individual health care coverage and supplementing P.L.1992, c.161 (C.17B:27A-2 et seq.).
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. Notwithstanding the provisions of section 6 of P.L.1992, c.161 (C.17B:27A-7) to the contrary, a carrier shall waive any preexisting condition limitation in the case of an eligible person who applies to purchase a health benefits plan on or before May 1, 1997, and who, as of February 1, 1997, was an employee of a nonprofit corporation that filed for bankruptcy during the month of February 1997 and that failed to pay required premiums on the employee's health benefits plan so that the employee's health benefits coverage lapsed more than 30 days before the employee was able to purchase an individual health benefits plan pursuant to P.L.1992, c.161 (C.17B:27A-2 et seq.).
b. The waiver of a preexisting condition limitation pursuant to this section shall apply retroactively to an individual health benefits plan purchased between February 1, 1997 and May 1, 1997.
2. This act shall take effect immediately.
This bill waives the one-year preexisting condition limitation for individual health benefits plans in the case of an otherwise eligible person who applies to purchase a health benefits plan on or before May 1, 1997, and who, as of February 1, 1997, was an employee of a nonprofit corporation that filed for bankruptcy in February and that failed to pay required premiums on the employee's health benefits plan.
The provisions of this bill will assist former employees of United Healthcare System which filed for bankruptcy in February 1997 and ceased operation shortly thereafter. United Healthcare System, which operated United Hospitals Medical Center, recently faced dire financial circumstances and incurred a substantial debt. Without the knowledge of its employees, the healthcare system failed to make required payments to the health insurance carrier that provided health benefits coverage to the employees, so that the employees' health care coverage lapsed for more than 30 days. Many former employees of the healthcare system now find themselves without health care coverage through no fault of their own. These former employees are eligible to purchase individual health benefits coverage under P.L.1992, c.161 (C.17B:27A-2 et seq.), but because of the lapse in coverage they are not eligible for the exemption from the preexisting condition limitation under the individual health insurance program. Accordingly, this bill extends the exemption from the preexisting condition limitation to these former employees.
Waives the preexisting condition limitation in individual health benefits plans for certain former employees whose previous coverage lapsed.