SENATE, No. 627
STATE OF NEW JERSEY
INTRODUCED FEBRUARY 5, 1996
By Senator LITTELL
An Act concerning health care benefits and certain other benefits for public employees, amending P.L.1961, c.49, and supplementing Title 52 of the Revised Statutes.
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] the rules and regulations governing the enrollment and effective dates of coverage of dependents of employees [as] it deems [are] necessary or desirable. [Such] The rules and regulations shall not defer [the insurance] coverage 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] the date, insured with respect to [such] the dependent under a group major medical insurance plan of [such] the employer which was in effect immediately prior to [said] the 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] the employee 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] the employee is not actively at work [on] full time at [his] the customary place of employment or other location to which [his] the employment requires [him] the employee to travel, [he] the employee shall not be covered until [he] the employee is so actively at work, except [such] the employee shall be covered, if on the date the employee's employer becomes a participating employer, [said] the employee was, immediately prior to [said] that date, insured under a group major medical insurance plan of [such] the employer which was in effect immediately prior to [said] that 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] the prior insurance plan or (ii) which may be used in satisfaction of any deductible requirement under [such] the prior insurance plan to establish entitlement to [such] the continuation of benefits.
Each employee shall furnish the Division of Pensions and Benefits, in [such] the prescribed form [as is prescribed], [such] the information [as is] necessary on account of [his] the employee's own coverage and [as] necessary to enroll [his] dependents. Any employee not desiring coverage at the time [he] the employee first becomes eligible, shall give the division written notice of that fact in [such] the form [as] prescribed by the division [may prescribe]. [Such] The employee may not enroll thereafter except at [such] the times and under [such] the conditions [as] prescribed by the commission [may prescribe].
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.
If a husband and wife are both eligible for coverage under the program as employees:
a. each may elect coverage for himself or herself as an employee and for their qualified dependents, including the spouse, under the traditional plan or the State managed care plan, but only one may elect coverage for himself or herself and for their qualified dependents, including the spouse, in a participating health maintenance organization; and
b. each may elect single coverage in any participating health maintenance organization, provided that he or she is not covered under the participating health maintenance organization as a dependent of his or her spouse.
Any person employed as a substitute teacher by a school district and who provides evidence of coverage under another health benefits program may waive coverage for the current school year on or after the date on which the person becomes an employee eligible for coverage.
(cf: P.L.1994, c.40, s.1)
2. (New section) Notwithstanding the provisions of any other law to the contrary, the obligations of the State or any local employer to pay the premium or periodic charges for health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.) may be determined by means of a binding collective negotiations agreement, including any agreements in force at the time of the adoption of P.L. , c. (now pending before the Legislature as this bill). With respect to State employees for whom there is no majority representative for collective negotiations purposes, the commission may, in its sole discretion, modify the respective payment obligations set forth in P.L.1961, c.49 for the State and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the State. With respect to employees of employers other than the State for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective payment obligations set forth in P.L.1961, c.49 for such employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on such employer.
3. (New section) Notwithstanding the provisions of any other law to the contrary, the State Treasurer on behalf of the State, and the governing body of a local unit of government, a school district, or an independent State or local public authority, board, commission, corporation, agency or organization may establish as an employer a cafeteria plan for its employees pursuant to section 125 of the federal Internal Revenue Code, 26 U.S.C.§125. The plan may provide for a reduction in an employee's salary, through payroll deductions or otherwise, in exchange for payment by the employer of medical or dental expenses not covered by a health benefits plan, and dependent care expenses as provided in section 129 of the code, 26 U.S.C.§129, and such other benefits as are consistent with section 125 which are included under the plan. The amount of any reduction in an employee's salary for the purpose of contributing to the plan shall continue to be treated as regular compensation for all other purposes, including the calculation of pension contributions and the amount of any retirement allowance, but, to the extent permitted by the federal Internal Revenue Code, shall not be included in the computation of federal taxes withheld from the employee's salary.
4. This act shall take effect immediately.
STATEMENT
This bill changes certain features of the State Health Benefits Program (SHBP). SHBP benefits with regard to covered services, however, remain unchanged.
Current law provides that the State as an employer bears the complete cost of SHBP benefits for active State employees and their dependents. Local participating public employers are required to pay the cost of SHBP coverage for an employee and may require an employee contribution toward some or all of the cost of dependent coverage. Many local employers, however, have assumed the cost of SHBP dependent coverage.
The bill provides that the obligations of the State or any local employer to pay the premium or periodic charges for SHBP coverage with respect to active employees and retirees may be determined by means of a binding collective negotiations agreement, including any agreements in force at the time of the adoption of this bill. With respect to State employees for whom there is no majority representative for collective negotiations purposes, the State Health Benefits Commission may, in its sole discretion, modify the respective statutory payment obligations of the State and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the State. With respect to employees of employers other than the State for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective statutory payment obligations of such employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on such employer.
The bill also provides that if a husband and wife are both eligible for SHBP coverage as employees:
(a) each may elect coverage for himself or herself as an employee and for their qualified dependents, including the spouse, under the traditional plan or NJ Plus, but only one may elect coverage for himself or herself and for their qualified dependents, including the spouse, in a participating HMO; and
(b) each may elect single coverage in any participating HMO, provided that he or she is not covered under that HMO as a dependent of his or her spouse.
The bill allows the State and local employers to establish a cafeteria plan for its employees pursuant to section 125 of the Internal Revenue Code to provide for a reduction in an employee's salary in exchange for payment by the employer of any required employee contribution for SHBP coverage, medical or dental expenses not covered by SHBP, or dependent care expenses. The amount of any reduction in an employee's salary for the purpose of contributing to the plan shall continue to be treated as regular compensation for all other purposes, including the calculation of pension contributions and the amount of any retirement allowance, but, to the extent permitted by the Internal Revenue Code, shall not be included in the computation of federal taxes withheld from the employee's salary.
Changes certain provisions of State Health Benefits Program.