New Jersey – State Passes Legislatures to Stabilize Market, Prevent Surprise Bills

April 2018 ~

The New Jersey Legislature recently approved two bills targeting state healthcare stabilization, as well as measures to protect patients from surprise out-of-network costs. The two-bill package is intended to maintain the viability of the individual mandate and establish a reinsurance fund to help stabilize the insurance market.

The first bill, A-3380, or the ‘New Jersey Health Insurance Market Preservation Act,’ would reestablish the recently repealed “shared responsibility tax.” A-3380 would require every New Jersey resident to obtain health insurance coverage or pay a fee, similar to the federal “individual mandate” rules established under the Affordable Care Act (ACA), which requires individuals to buy a policy or face a fine at tax time. Since the federal tax package approved and signed into law this past November ended the individual mandate in 2019, as of January 1, 2019, there is no fee associated with the individual mandate under the ACA.

The fee imposed by A-3380 would be assessed and collected in the same manner as the income tax, with the Commissioner of Banking and Insurance establishing a program for determining whether to grant exemptions for “religious conscience” or hardship. The money collected from residents who forgo buying coverage would be deposited into the New Jersey Health Insurance Premium Security Fund.

The second bill, A-3379, known as the ‘New Jersey Health Insurance Premium Security Act,’ would allow for a reinsurance program to bring more stability to the state market. The legislation would direct the Commissioner of Banking and Insurance to apply for a federal waiver of provisions of the ACA to support a reinsurance program to control premiums in the New Jersey.

Additionally, the bill also establishes a board that would work with the state insurance commissioner to design the plan. The board would also be charged with developing a fee structure to assess insurance carriers to fund the program and the money would be held in a newly created fund under the Treasury Department.

Source(s): Modern Healthcare; Healthcare DIVE;