SENATE, No. 2265

STATE OF NEW JERSEY

INTRODUCED NOVEMBER 17, 1997

By Senator BENNETT

An Act concerning small employer carriers and amending P.L.1992, c.162.

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

    1. Section 7 of P.L.1992 c.162 (C.17B:27A-23) is amended to read as follows:

     7. Every policy or contract issued to small employers in this State pursuant to P.L.1992, c.162 (C.17B:27A-17 et seq.) shall be renewable with respect to all eligible employees or dependents at the option of the policy or contract holder, or small employer except under the following circumstances:

    a. Nonpayment of the required premiums by the policyholder, contract holder, or employer;

    b. Fraud or misrepresentation of the policyholder, contract holder, or employer or, with respect to coverage of eligible employees or dependents, the enrollees or their representatives;

    c. The number of employees covered under the health benefits plan is less than the number or percentage of employees required by participation requirements under the health benefits policy or contract;     d. Noncompliance with a carrier's employment contribution requirements;

    e. Any carrier doing business pursuant to the provisions of this act ceases doing business in the small employer market, if the following conditions are satisfied:

    (1) The carrier gives notice to cease doing business in the small employer market to the commissioner not later than eight months prior to the date of the planned withdrawal from the small group market, during which time the carrier shall continue to be governed by this act with respect to business written pursuant to this act. For the purposes of this subsection, "date of withdrawal" means the date upon which the first notice to small employers is sent by the carrier pursuant to paragraph (2) of this subsection;

    (2) No later than two months following the date of the notification to the commissioner that the carrier intends to cease doing business in the small employer market, the carrier shall mail a notice to every small business employer insured by the carrier that the policy or contract of insurance will be terminated. This notice shall be sent by certified mail to the small business employer not less than six months in advance of the effective date of the cancellation date of the policy or contract;

    (3) Any carrier that ceases to do business pursuant to this act shall be prohibited from writing new business in the small employer market for a period of five years from the date of [notice to the commissioner] termination of the last health insurance coverage not so renewed, except that the five-year period shall not apply to a carrier that gave notice to the commissioner during the period January 1, 1997 to June 30, 1997 to cease doing business in the small employer market;

     f. In the case of policies or contracts issued in connection with membership in an association or trust of employers, an employer ceases to maintain its membership in the association or trust; or

    g. (Deleted by amendment, P.L.1995, c.50).

(cf: P.L.1995, c.50, s.1)

    2. This act shall take effect immediately.

STATEMENT

    This bill amends Section 7 of P.L.1992, c.162 (C.17B:27A-23) to exempt a small employer carrier that has given notice during the period January 1, 1997 to June 30, 1997 to the Commissioner of Banking and Insurance of its intent to withdraw from the small employer health benefits market, from the prohibition to write new business in that market for five years after that withdrawal.

Exempts certain small employer carriers who withdraw from market from 5-year prohibition on re-entry into market.