Bill Text: NJ A5265 | 2026-2027 | Regular Session | Introduced
Bill Title: Specifies that members of State Health Benefits Plan Design Committee and School Employees' Health Benefits Plan Design Committee have fiduciary duty.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-06-15 - Introduced, Referred to Assembly State and Local Government Committee [A5265 Detail]
Download: New_Jersey-2026-A5265-Introduced.html
Sponsored by:
Assemblyman ROY FREIMAN
District 16 (Hunterdon, Mercer, Middlesex and Somerset)
SYNOPSIS
Specifies that members of State Health Benefits Plan Design Committee and School Employees' Health Benefits Plan Design Committee have fiduciary duty.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the duties of members of the State Health Benefits Plan Design Committee and the School Employees' Health Benefits Plan Design Committee and amending P.L.1961, c.49 and P.L.2007, c.103.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. Section 3 of P.L.1961, c.49 (C.52:14-17.27) is amended to read as follows:
3. a. There is hereby created a State Health Benefits Commission, consisting of five members: the State Treasurer; the Commissioner of Banking and Insurance; the Chairperson of the Civil Service Commission; a State employees' representative chosen by the Public Employee Committee of the AFL-CIO; and the fifth member of the commission shall be a local employees' representative chosen by the Public Employee Committee of the AFL-CIO.
The treasurer shall be chairman of the commission and the health benefits program authorized by P.L.1961, c.49 shall be administered in the Treasury Department. The Director of the Division of Pensions and Benefits shall be the secretary of the commission. The commission and committee shall establish a health benefits program for the employees of the State, the cost of which shall be paid as specified in section 6 of P.L.1961, c.49 (C.52:14-17.30). The commission, in consultation with the committee, shall establish rules and regulations as may be deemed reasonable and necessary for the administration of P.L.1961, c.49.
The Attorney General shall be the legal advisor of the commission and committee.
The members of the commission and committee shall serve without compensation but shall be reimbursed for any necessary expenditures. The public employee members shall not suffer loss of salary or wages during service on the commission or committee.
The commission shall publish annually a report showing the fiscal transactions of the program for the preceding year and stating other facts pertaining to the plan. The commission shall submit the report to the Governor and furnish a copy to every employer for use of the participants and the public.
b. There is established a State Health Benefits Plan Design Committee, composed of 12 members as follows:
six members who shall be appointed by the Governor as representatives of public employers whose employees are enrolled in the program;
three members who shall be appointed by the Public Employee Committee of the AFL-CIO;
one member who shall be appointed by the head of the union, that is not affiliated with the AFL-CIO, that represents the greatest number of police officers in this State;
one member who shall be appointed by the head of the union, that is not affiliated with the AFL-CIO, that represents the greatest number of firefighters in this State; and
one member who shall be appointed by the head of the State Troopers Fraternal Association.
The members of the committee shall serve for a term of three years and until a successor is appointed and qualified. Of the initial appointments by the Governor, three members shall serve for two years and until a successor is appointed and qualified, and two shall serve for one year and until a successor is appointed and qualified. Of the initial appointment by the head of the union representing the greatest number of police officers in the State, the member shall serve for two years and until a successor is appointed and qualified. Of the initial appointment by the head of the union representing the greatest number of firefighters in the State, the member shall serve for one year and until a successor is appointed and qualified.
The members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term as chairperson until all the members of the committee have served a term in a manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.
The committee shall have the responsibility for and authority over the various plans and components of those plans, including for medical benefits, prescription benefits, dental, vision, and any other health care benefits, offered and administered by the program. The committee shall have the authority to create, modify, or terminate any plan or component, at its sole discretion. Any reference in law to the State Health Benefits Commission in the context of the creation, modification, or termination of a plan or plan component shall be deemed to apply to the committee.
The members of the committee shall have the same duty and responsibility to the program as do the members of the commission and shall act as a fiduciary in carrying out their duties and responsibilities.
If any matter before the committee receives at least seven votes in the affirmative, the commission shall approve and implement the committee's decision.
If any matter before the committee receives six votes in the affirmative and six votes in the negative or the committee otherwise reaches an impasse on a decision, the provisions of section 55 of P.L.2011, c.78 (C.52:14-17.27b) shall be followed.
(cf: P.L.2011, c.78, s.45)
2. Section 33 of P.L.2007, c.103 (C.52:14-17.46.3) is amended to read as follows:
33. a. There is hereby created a School Employees' Health Benefits Commission, consisting of nine members:
(1) the State Treasurer and the Commissioner of the Department of Banking and Insurance serving ex officio;
(2) a member appointed by the Governor who is a New Jersey resident and is qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers;
(3) a member appointed by the Governor from among three persons nominated by the New Jersey School Boards' Association, which member shall be qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers;
(4) three members appointed by the Governor from among five persons nominated by the New Jersey Education Association, of whom two shall be qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers;
(5) a member appointed by the Governor from among three persons nominated by the education section of the New Jersey State AFL-CIO, which member shall be qualified by experience, education, or training in the review, administration, or design of health insurance plans for self-insured employers; and
(6) a member appointed pursuant to subsection b. of this section who shall be the chairperson.
b. The Governor shall appoint the chairperson from among three persons nominated jointly by at least six of the eight members appointed pursuant to subsection a. of this section.
c. If the Governor declines to make an appointment from among the persons nominated for membership, the Governor shall request that a new list of nominees be provided in compliance with subsection a. of this section. If the Governor declines to make an appointment from the new list, the process set forth in this subsection shall be repeated until the Governor makes an appointment from a list of nominees. Except with respect to the appointment of the chairperson, if a new list of nominees is not submitted within 45 days of the Governor's request, the Governor shall make the appointment without the need to select from any list of nominees.
d. The initial terms of the members of the commission shall be as follows:
(1) the member appointed pursuant to paragraph (3) of subsection a. of this section and the two members appointed pursuant to paragraph (4) of subsection a. of this section who are required to be qualified by experience, education, or training shall serve for a term of three years;
(2) the member appointed pursuant to paragraph (2) of subsection a. of this section, the member appointed pursuant to paragraph (4) of subsection a. of this section who is not required to be qualified by experience, education, or training, and the member appointed pursuant to paragraph (5) of subsection a. of this section shall serve for a term of two years; and
(3) the chairperson shall serve for a term of six years.
All subsequent terms shall be for three years, except that the term of the chairperson shall be five years. A member of the commission may be reappointed to succeeding terms without limit in the same manner as the original appointment. A vacancy occurring on the commission shall be filled in the same manner as the original appointment and only for the unexpired term.
e. There is established a School Employees' Health Benefits Plan Design Committee, composed of six members as follows:
three members who shall be appointed by the Governor as representatives of public employers whose employees are enrolled in the program;
two members who shall be appointed by the New Jersey Education Association; and
one member who shall be appointed by the education section of the New Jersey State AFL-CIO.
The members of the committee shall serve for a term of three years and until a successor is appointed and qualified. Of the initial appointments by the Governor, two members shall serve for two years and until a successor is appointed and qualified, and one shall serve for one year and until a successor is appointed and qualified. Of the initial appointments by the New Jersey Education Association, one member shall serve for one year and until a successor is appointed and qualified.
The members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term as chairperson until all the members of the committee have served a term in a manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.
The committee shall have the responsibility for and authority over the various plans and components of those plans, including for medical benefits, prescription benefits, dental, vision, and any other health care benefits, offered and administered by the program. The committee shall have the authority to create, modify, or terminate any plan or component, at its sole discretion. Any reference in law to the School Employees' Health Benefits Commission in the context of the creation, modification, or termination of a plan or plan component shall be deemed to apply to the committee.
The members of the committee shall have the same duty and responsibility to the program as do the members of the commission and shall act as a fiduciary in carrying out their duties and responsibilities.
If any matter before the committee receives at least four votes in the affirmative, the commission shall approve and implement the committee's decision.
If any matter before the committee receives three votes in the affirmative and three votes in the negative or the committee otherwise reaches an impasse on a decision, the provisions of section 55 of P.L.2011, c.78 (C.52:14-17.27b) shall be followed.
(cf: P.L.2011, c.78, s.46)
3. This act shall take effect immediately.
STATEMENT
This bill specifies that members of the State Health Benefits Plan Design Committee and the School Employees' Health Benefits Plan Design Committee must act as fiduciaries in carrying out their duties and responsibilities. Under current law, the members of the respective plan design committees owe the same duties as the State Health Benefits Commission and School Employees' Health Benefits Commission, respectively. This bill explicitly requires that the members of the committees have a fiduciary obligation in carrying out their duties and responsibilities.
