New Jersey Will Transition to a State-Based Exchange

April 2019 ~

On March 22, the governor of New Jersey has announced that the state will transition from the federally operated exchange platform to a State-Based Exchange (SBE) by the 2021 plan year.

According to state officials, the change will give the state more control over its health insurance market and is intended to strengthen the protections for access to affordable health care in the Affordable Care Act (ACA) that are at risk under the current national environment. By redirecting the assessment on premiums, currently paid to the federal government to utilize a Federally-Facilitated Exchange (FFE), New Jersey can operate an exchange that is tailored and efficient for New Jersey residents.

As seen in the announcement, the SBE can be created through Executive Action, beginning with the state’s submission of a Declaration Letter to the federal Centers for Medicare and Medicaid Services (CMS). To fund the operation of the SBE, legislation will be required to transfer the current federal exchange user fee, which is presently set at 3.5% of premiums, to a 3.5% State-Based Exchange user fee for plan year 2021. State officials go on to note that by maintaining the existing user fee in the individual market at 3.5% of premium in New Jersey will allow the state to dedicate funding towards outreach and enrollment efforts, which have been reduced at the federal level, as it transitions to an SBE for 2021.

The Administration is proposing to secure the protections in the ACA by codifying major provisions of the federal law, including:

  • Prohibiting preexisting conditions exclusions
  • Requiring dependent coverage to age 26
  • Requiring coverage of Essential Health Benefits
  • Prohibiting lifetime and annual limits
  • Requiring coverage without cost-sharing for preventative services.

“New Jersey has not shied away from the work required to secure the protections afforded by the Affordable Care Act and to provide access to quality affordable health care that our residents deserve – in fact, in partnership with the Legislature our state has stepped up,” said Governor Phil Murphy. “Together with the Legislature, we have the ability to further protect New Jersey from actions taken by the Trump Administration to roll back the hard-fought protections afforded by the ACA and I would argue we have an obligation to do so.”

“Maintaining a viable insurance market is critical to the success of the ACA, currently being undermined and sabotaged by the Trump Administration. New Jersey has benefited immensely from the ACA and I am glad to see that we are doing what we can to maintain the benefits for New Jerseyans across the state that rely on crucial health care services,” said Senator Vitale, the chairman of the Senate Health, Human Services and Senior Citizens Committee.

Source(s):; Deloitte; Insider NJ; Biz Journals; Politico;