Bill Text: NJ S4438 | 2026-2027 | Regular Session | Introduced
Bill Title: "Public School Employees' Health Benefits Trust Act."
Sponsorship: Partisan Bill (Democrat 1)
Status: (Introduced) 2026-06-08 - Introduced in the Senate, Referred to Senate State Government, Wagering, Tourism & Historic Preservation Committee [S4438 Detail]
Download: New_Jersey-2026-S4438-Introduced.html
Sponsored by:
Senator VIN GOPAL
District 11 (Monmouth)
SYNOPSIS
"Public School Employees' Health Benefits Trust Act."
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the health benefits provided to all eligible public school employees and their dependents, amending and supplementing various parts of the statutory law, and making an appropriation.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. This act shall be known and may be cited as the "Public School Employees' Health Benefits Trust Act."
2. (New Section) As used in this act:
"Beneficiary" means any employee or dependent who is eligible for health insurance coverage through the trust pursuant to P.L. , c. (C. ) (pending before the Legislature as this bill) and receives health insurance coverage through the trust.
"Board of trustees" or "board" means the board of trustees of the Public School Employees' Health Benefits Trust, established pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
"Dependents" means an employee's spouse, domestic partner, or partner in a civil union couple, and unmarried children who live in a regular parent-child relationship with the employee until the end of the calendar year in which the children attain the age of 31. The term "children" shall include stepchildren, legally adopted children and children placed by the Division of Child Protection and Permanency in the Department of Children and Families, provided they are reported for coverage and are wholly dependent upon the employee for support and maintenance.
A spouse, domestic partner, partner in a civil union couple, or child enlisting or inducted into military service shall not be considered a dependent during the military service.
A determination by the board that a person is a dependent, or not a dependent, for the purposes of the act shall be final and binding on all parties.
"Employee" means a person currently employed by an employer in a full-time capacity who appears on a regular payroll and receives a salary or wages for an average of the number of hours per week as prescribed by the governing body of the participating employer which shall be considered full-time, determined by resolution, and not less than 25 hours. The term "employee" shall not include persons employed on a short-term, seasonal, intermittent, or emergency basis, persons compensated on a fee basis, persons having less than two months of continuous service or persons whose compensation is limited to reimbursement of necessary expenses actually incurred in the discharge of their official duties. An employee paid on a 10-month basis, pursuant to an annual contract, shall be deemed to have satisfied the two-month waiting period if the employee begins employment at the beginning of the contract year. A determination by the board that a person is an employee, or not an employee, for the purposes of the act shall be final and binding on all parties.
"Employer" means local school district, regional school district, county vocational school district, county special services school district, jointure commission, educational services commission, State-operated school district, charter school, county college, any officer, board, or commission under the authority of the Commissioner of Education or of the State Board of Education, and any other public entity which is established pursuant to authority provided by Title 18A of the New Jersey Statutes, but excluding the State public institutions of higher education and excluding those public entities where the employer is the State of New Jersey.
"State" means the State of New Jersey.
"Trust" means the Public School Employees' Health Benefits Trust, established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
Unless otherwise defined in this section, terms used in this act, P.L. , c. (C. ) (pending before the Legislature as this bill) shall have the same meaning as those set forth in the School Employees' Health Benefits Program Act, P.L.2007, c.103 (C.52:14-17.46.1 et seq.) as of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
3. (New Section) a. There is established in, but not of, the Department of the Treasury a trust fund which shall be known as the Public School Employees' Health Benefits Trust, which shall consist of appropriations made pursuant to section 20 of P.L. , c. (C. ) (pending before the Legislature as this bill), and the contributions made pursuant to section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. The trust shall be governed by a board of trustees as set forth in section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill).
c. The purpose of the trust shall be to pool the health risks of beneficiaries and to provide affordable medical, pharmacy, dental, and vision benefits to those beneficiaries and, accordingly, the assets of the trust shall be managed in the sole interest of the beneficiaries.
4. (New section) a. There is established a board of trustees of the Public School Employees' Health Benefits Trust, consisting of 10 members, in which employees and employers shall be equally represented as follows:
(1) three members appointed by the New Jersey Education Association;
(2) one member appointed by the American Federation of Teachers New Jersey;
(3) one member appointed by the majority representative union of the Community Colleges in this State;
(4) one member appointed by the New Jersey School Boards Association;
(5) one member appointed by the New Jersey Association of School Business Officials;
(6) one member appointed by the New Jersey Association of School Administrators;
(7) one member appointed by the New Jersey Principals and Supervisors Association; and
(8) one member appointed by the Governor.
b. Each member of the board shall possess experience, education, or training in the review, administration, design, or collective negotiation of employer-sponsored group health insurance plans or group health insurance plan coverage, but no member of the board shall be employed by, or have a financial interest in, any entity with which the board contracts.
c. The terms of the members of the board shall be as follows:
(1) two of the initial members appointed pursuant to paragraph (1) and the initial members appointed pursuant to paragraphs (2), (7), and (8) of subsection a. of this section shall serve three-year terms;
(2) one of the initial members appointed pursuant to paragraph (1) and the initial members appointed pursuant to paragraphs (3), (4), (5), and (6) of subsection a. of this section shall serve a two-year term; and
(3) all subsequent terms shall be for three years, except that a newly elected Governor may appoint a member of the Governor's choosing to serve the remainder of the term then being served by the prior Governor's appointee.
d. A member may be reappointed for an additional term in the same manner as the original appointment. In the event of a vacancy, a new member shall be appointed in the same manner as the original appointment within 10 days of the vacancy's occurrence and shall serve the remainder of the term.
e. A member may be removed by majority vote of the other members for failure to attend at least 50 percent of board meetings in a calendar year or other good cause as defined by a board policy adopted pursuant to section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
f. Members shall serve without compensation, but shall be reimbursed for all expenses they may incur in the performance of their service on the board, and any employee, as defined in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill), who serves on the board shall be granted paid time off by their employers for such service.
g. A majority of the authorized membership of the board shall constitute a quorum and each member of the board shall have one vote.
h. The members shall annually select a chair, vice chair, and treasurer from among the membership of the board.
i. No member of the administrative or professional staff shall serve as a voting member of the board, provided, however, that the executive director shall also serve as an ex officio non-voting member of the board.
j. There shall be four standing committees of the board: an audit committee, a plan design committee, an investment committee, and a beneficiary appeals committee.
(1) The audit committee shall be comprised of no fewer than three members and shall be responsible for assisting in the oversight of the financial reporting and audit processes of the board. At least two members of the committee shall be members of the board. At least one of member of the committee shall have accounting, governmental auditing, or related financial expertise.
The committee shall assist the board in retaining an independent auditor to conduct annual audits of trust financial statements by making a recommendation to the board after engaging in an auditor selection process. The auditor selection process shall be based upon public, competitive bidding principles, as set forth in section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall take place no less than once every five years.
(2) The plan design committee shall be comprised of no fewer than three members, and shall be responsible for assisting in the design, establishment, modification, and termination of health insurance plans offered through the trust. At least two members of the committee shall be members of the board. At least one member of the committee shall have demonstrated experience in group health insurance plan design, administration, or collective negotiation.
The committee shall also assist the board in contracting a third-party administrator should the board, in its discretion, decide to do so, in which case the third-party administrator selection process shall be based upon public, competitive bidding principles, as set forth in section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall take place no less than once every five years.
(3) The investment committee shall be comprised of no fewer than three members, and shall be responsible for assisting in the investment, sale, or purchase of trust assets. At least two members of the committee shall be members of the board. At least one member of the committee shall have demonstrated experience in institutional investing.
(4) The beneficiary appeals committee shall be comprised of no fewer than three members, and shall be responsible for hearing beneficiary appeals prior to the hearing thereof by the full board. At least two members of the committee shall be members of the board. At least one member of the committee shall be a physician, other than a member of the medical board described in section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill).
k. All final decisions of the board shall be made by a majority vote of the members present and constituting a quorum.
l. Appointments to the board shall be made within 90 days of the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill). The board shall organize at its initial meeting and promptly initiate the rulemaking and procurement necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill). The trust shall commence operations and offer health insurance coverage beginning on January 1, 2028, as shall be established by board resolution in consultation with participating employers.
5. a. The board of trustees of the Public School Employees' Health Benefits Trust shall have the power and authority to:
(1) adopt bylaws, including internal board policy and rules regarding the provision of medical, pharmacy, dental, and vision benefits, including beneficiary appeal procedures;
(2) enter into contracts necessary to effectuate the purposes of the trust;
(3) set and revise contribution rates and premium amounts and collect contributions and premiums, including, as the board may deem prudent, the establishment of banded rates to promote equity, and plan stability provided that:
(a) the employee contribution structure set forth in section 2 of P.L.2020, c.44 (C.52:14-17.46.14) and contribution calculation set forth in section 4 of P.L.2020, c.44 (C.52:14-17.46.16), for the former New Jersey Educators Health Plan shall apply as the default contribution rates for the plans offered to employees through the trust; and
(b) employee contribution rates shall remain as provided for by law in effect on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) unless modified by the board as permitted by law on or after January 1, 2028, except that the employee contribution rates shall remain to be calculated as a percent of salary.
(4) manage and invest the assets of the trust;
(5) incur indebtedness, borrow money, and authorize and issue negotiable obligations or bonds;
(6) design, establish, modify, or terminate health insurance plans offered through the trust;
(7) review, adjudicate, and issue final decisions regarding beneficiary appeals;
(8) calculate and determine fair allocations for out-of-network charges;
(9) at the board's discretion, retain legal counsel with demonstrated expertise in the law governing employer-sponsored group health insurance plans in the public or private sector, to advise and represent the board on matters within said counsel's expertise, including the initiation of litigation to pursue recovery of any money paid in error or as a result of fraud or abuse;
(10) at the board's discretion, develop, contract for, and operate a primary care delivery system; and
(11) hire administrative and professional staff and appoint an executive director thereof, or contract with a third-party administrator, as the board may deem necessary, to administer the trust and health insurance plans offered through the trust.
b. The board shall have the duties to:
(1) meet at least once per calendar month;
(2) record minutes for all of its meetings, and maintain records consistent with state record retention requirements;
(3) publish an annual report showing the fiscal transactions of the trust for the preceding year, the amount of the accumulated cash and securities held by the trust and detailing the performance of each health insurance plan offered through the trust, including enrollment figures, claims experience, and administrative costs associated therewith which shall be reported to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1);
(4) retain an independent auditor, who shall conduct an annual audit of the trust's financial records and statements, and, where deemed necessary by the board, the financial records and statements of all vendors, contractors, subcontractors and similar third-party entities providing services to the trust or the board;
(5) retain an actuary, who shall have demonstrated experience providing actuarial services to employer-sponsored group health insurance plans in the public and private sector, and who shall be the technical advisor of the board with respect to questions concerning the operation of the health insurance plans offered through the trust and perform such other necessary duties required in connection therewith, including the preparation of an annual report demonstrating the financial condition of the trust by means of an actuarial valuation of the assets and liabilities thereof;
(6) establish, in consultation with the actuary, actuarial funding policies for the trust, subject to the minimum requirement that the trust carry reserves necessary for two months of projected expenditures;
(7) designate a medical board comprised of a minimum of three physicians who are not employees or dependents as those terms are defined under section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) who shall recommend to the board final action to be taken on beneficiary and provider appeals;
(8) ensure compliance with applicable federal and state laws, including but not limited to the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. � 1320d et seq., and No Surprises Act of 2022, 26 U.S.C. � 9816;
(9) exercise the preceding powers and duties solely in the interest of the beneficiaries and for the exclusive purpose of providing benefits to beneficiaries and defraying reasonable expenses of administering the plan;
(10) act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(11) act in accordance with the rules adopted by the board to the extent consistent with the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill).
6. Notwithstanding any other provision of law to the contrary, the board may contract for and procure goods and services necessary to effectuate the purposes of the Public School Employees' Health Benefits Trust. The board shall adopt rules which ensure that any such contracts provide for integrity, competitiveness, and the best possible value to the greatest extent practicable.
7. The board shall provide for an annual independent audit of the trust's financial statements and records, and an annual actuarial analysis of the trust's assets and liabilities.
Contracts with vendors and any third-party entities providing services to the trust or the board shall require the provision of de-identified claims and utilization data to the board sufficient to enable effective administration, auditing, and transparency.
The School Employees' Health Benefits Program and the Division of Pension and Benefits in the Department of the Treasury shall share relevant information and data with the board as may be necessary to facilitate transition and continuity of administration consistent with State and federal law.
The board shall promote expanded use of patient centered medical homes and population health arrangements designed to manage costs and prevent inappropriate utilization, and may provide comprehensive wellness services, including biometric screening, chronic condition coaching, and tobacco cessation.
The board may engage brokers or other health insurance plan representatives to assist with member education, open enrollment, and outreach, subject to the board's procurement procedures as set forth in P.L. , c. (C. ) (pending before the Legislature as this bill).
8. (New section) a. In addition to employee contributions, the State shall provide such start‑up financing as may be necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) through appropriation or other lawful means, which amounts may be structured as repayable advances from the trust's revenues under mutually acceptable terms approved by the State Treasurer.
b. Premiums and other revenues held in the trust shall be held in the sole interest of beneficiaries and for the payment of reasonable administrative expenses. Any excess funds collected shall remain held in the trust and be used solely in the interest of beneficiaries.
c. The liabilities of the School Employees' Health Benefits Program shall remain the property and responsibility of the State.
9. (New section) The employee contribution structure established in section 2 of P.L.2020, c.44 (C.52:14‑17.46.14) and the contribution calculation established in section 4 of P.L.2020, c.44 (C.52:14‑17.46.16) shall apply to plans offered through the trust for employees and their dependents, if any, subject to modification by the board consistent with sound actuarial principles and in the sole interest of beneficiaries on or after January 1, 2028.
10. (New section) To ensure continuity and uniformity of administration, beneficiary eligibility, plan design references, appeal standards, and other program terms under P.L. , c. (C. ) (pending before the Legislature as this bill) shall be implemented in a manner consistent with the provisions of the School Employees' Health Benefits Program Act, P.L.2007, c.103 (C.52:14‑17.46.1 et seq.) and, where applicable, with the New Jersey State Health Benefits Program Act, P.L.1961, c.49 (C.52:14‑17.25 et seq.), and the board may adopt by reference School Employees' Health Benefits Program or State Health Benefits Program definitions, rules, or guidance to the extent not inconsistent with P.L. , c. (C. ) (pending before the Legislature as this bill).
Notwithstanding any law, rule, or regulation to the contrary, the State shall continue to be responsible for the full payment of health insurance coverage for eligible retired public school employees and their dependents, as provided by law on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill). Nothing in P.L. , c. (C. ) (pending before the Legislature as this bill) shall be construed to alter, diminish, or transfer the State's statutory obligation to fund such retired employee health insurance coverage.
11. (New section) a. Beneficiaries shall have the right to appeal denials of their claims for coverage by the health insurance plan in which they are enrolled through the trust, and non-beneficiaries shall have the right to appeal the denial of their status as eligible beneficiaries, pursuant to an internal appeals procedure that the board shall establish, which shall include consideration of the appeal by the beneficiary appeals committee as the penultimate step and consideration by the board as the ultimate step.
b. If all or part of a beneficiary's claim for benefits, or any non-beneficiary's assertion of eligible beneficiary status, is denied after exhaustion of the internal appeal procedure established by the board pursuant to subsection a. of this section, such person may, within 180 days of the denial, institute a civil action against the trust in the Superior Court of New Jersey to recover benefits due under the terms of the health insurance plan in which the beneficiary is enrolled or to enforce rights provided for under P.L. , c. (C. ) (pending before the Legislature as this bill) provided, however, that no health insurance plan offered through the trust shall allow for assignment of coverage or the right to institute a civil action against the trust by a beneficiary to a third party.
12. (New section) If the trust is dissolved, after the payment of all liabilities, any remaining trust assets shall be returned proportionally to participating employers and beneficiaries as determined by the board. The health insurance plan or plans in effect at the time of dissolution shall serve as the status quo terms and conditions, with respect to health insurance coverage, for subsequent collective negotiations between employers and employee organizations concerning health insurance coverage.
13. (New section) The provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) shall apply to county colleges and to all other employers as defined by section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill) regardless of whether such employers previously participated in the School Employees' Health Benefits Program prior to the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill).
14. (New section) a. Notwithstanding any other law, rule, or regulation to the contrary, on and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), employers shall provide statutorily required health insurance coverage to their employees through the trust and shall not be permitted to provide any other type of health insurance to their employees. Enrollment in the School Employees' Health Benefits Program and Garden State Health Plan shall not be offered to employees, and any employees already enrolled therein shall be transitioned to health insurance coverage provided through the trust in a manner to be prescribed by the board.
b. The School Employees' Health Benefits Program shall continue to operate for employers and employees outside the scope of P.L. , c. (C. ) (pending before the Legislature as this bill) and the Division of Pensions and Benefits shall cooperate with the board to ensure an orderly transition of covered employees from coverage by the School Employees' Health Benefits Program to coverage by health insurance plans through the trust, and to share data as authorized by law.
c. All employees enrolled in health insurance coverage provided pursuant to P.L.1983, c.108 (C.18A:18B-1 et seq.), P.L.1979, c.230 (C.40A:10-16 et seq.), and P.L.1983, c.372 (C.40A:10-36 et seq.) shall be transitioned to health insurance coverage provided through the trust, and the former coverage shall be terminated upon the expiration of any contract for such insurance coverage or the applicable collective negotiations agreements between their employers and employee organizations.
d. On and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), employers participating in the School Employees' Health Benefits Program shall be prohibited from withdrawing from the program.
e. Notwithstanding any law, rule or regulation to the contrary, children with disabilities who attain the age of 31 shall be eligible for continued health insurance coverage through the trust only if the employee submits a form to the board requesting said continuation no later than January 31 of the year following the calendar year in which the children attained the age of 31 and the board's medical advisors determine that the children are incapable of self-sustaining employment by reason of mental or physical disabilities. Children with disabilities who are age 31 or older at the time of the employee's enrollment in health insurance coverage through the trust shall be eligible for coverage only if they were covered under a different public employer's group health insurance plan immediately preceding the employee's enrollment and the board's medical advisors determine that the children are incapable of self-sustaining employment by reason of mental or physical disabilities.
15. Section 1 of P.L.2020, c.44 (C.52:14-17.46.13) is amended to read as follows:
1. This section shall apply to the School Employees' Health Benefits Program (SEHBP) and to those employers defined pursuant to section 32 of P.L.2007, c.103 (C.52:14-17.46.2) that participate in the program.
a. (1) Notwithstanding the provisions of any other law, rule, or regulation to the contrary, beginning with the plan year that commences January 1, 2021 and for each plan year thereafter, the School Employees' Health Benefits Program shall offer only three plans that provide medical and prescription drug benefits for employees, and retirees who are not Medicare-eligible, and their dependents if any. [All other plans offered prior to January 1, 2021 for employees, and retirees who are not Medicare-eligible, and their dependents if any, shall be terminated.] For employers subject to the Public School Employees' Health Benefits Trust Act, P.L. , c. (C. ) (pending before the Legislature as this bill), health insurance plans required by this section shall be offered through the Public School Employees' Health Benefits Trust established pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) and administered by the board of trustees pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) and not through the School Employees' Health Benefits Program. The Division of Pensions and Benefits shall coordinate with the board of the trust to effectuate this transition.
The three plans shall be the New Jersey Educators Health Plan as developed by the School Employees' Health Benefits Plan Design Committee in accordance with subsection f. of this section which sets forth the plan design of the New Jersey Educators Health Plan; the SEHBP NJ Direct 10 plan as adopted and implemented by the School Employees' Health Benefits Commission for the plan year that began January 1, 2020; and the SEHBP NJ Direct 15 plan as adopted and implemented by the School Employees' Health Benefits Commission for the plan year that began January 1, 2020.
Employers that participate in the School Employees' Health Benefits Program shall retain the ability to enter the program for medical only plans and may separately purchase pharmacy and dental benefits outside of the program without limitation or restriction.
(2) Only the plans set forth in this section shall be offered by the program regardless of any collective negotiations agreement between a participating employer and its employees in effect on the effective date of this act, P.L.2020, c.44, that provides for enrollment in other plans that were offered by the program prior to January 1, 2021.
b. Prior to January 1, 2021, the program, through the Division of Pensions and Benefits in the Department of the Treasury, shall provide for an enrollment period during which all employees who commenced employment prior to the effective date of this act shall be required to select affirmatively one of the three plans specified in subsection a. of this section. If an employee fails to select affirmatively a plan during this enrollment period, the program shall enroll the employee, and the employee's dependents if any, in the New Jersey Educators Health Plan for the plan year beginning January 1, 2021 and ending December 31, 2021.
During the enrollment period, any person who is enrolled in a plan offered by the program and who is paying the full cost of health care benefits coverage shall also be required to select affirmatively one of the three plans specified in subsection a. of this section. If a person fails to select affirmatively a plan during this enrollment period, the program shall enroll the person, and the person's dependents if any, in the New Jersey Educators Health Plan for the plan year beginning January 1, 2021 and ending December 31, 2021. Any such person shall continue to pay the full cost of coverage and shall not be subject to the contribution schedule or any mandatory enrollment period as set forth in this section.
c. (1) Beginning on January 1, 2021, an employee commencing employment on or after the effective date of this act but before January 1, 2028 who does not waive coverage shall be enrolled by the program, with the employee's dependents if any, in the New Jersey Educators Health Plan, or the Garden State Health Plan if selected by the employee. The employee shall remain enrolled in either the New Jersey Educators Health Plan or the Garden State Health Plan selected by the employee at the annual open enrollment for each plan year through the plan year that ends December 31, 2027, provided that the employee during this period may waive coverage as an employee and select and change the type of coverage received under the plan following a qualifying life event, in accordance with the program regulations.
The enrollment required by this paragraph shall not include an employee who commenced employment prior to the effective date of P.L.2020, c.44 and who did not enroll, who waived enrollment, or who was not eligible to enroll prior to that effective date for health care coverage provided by the employer, including, but not limited to, an employee who commenced employment as a part-time employee prior to the effective date of P.L.2020, c.44. If such an employee was required to enroll prior to the effective date of P.L.2021, c.163 in accordance with this paragraph, the employee shall be notified promptly in writing that enrollment is not mandatory and shall be provided promptly with an opportunity to select enrollment in another health care benefits plan.For the plan year beginning January 1, 2028, the employee may select, during any open enrollment period or at such other times or under such conditions as the program may provide, any plan offered by the program.
(2) For the plan year beginning January 1, 2021, the program shall enroll a retiree who is not Medicare-eligible, and the retiree's dependents if any, in the New Jersey Educators Health Plan for health care benefits coverage as a retiree, if the retiree does not waive coverage. The retiree shall remain enrolled in that plan for each plan year through the plan year that ends December 31, 2027 or until the retiree becomes eligible for Medicare, whichever comes first. The retiree who becomes eligible for Medicare shall no longer be eligible for enrollment in the New Jersey Educators Health Plan, except that any dependent of the retiree who is not eligible for Medicare may remain eligible for coverage under the New Jersey Educators Health Plan. For the plan year beginning January 1, 2028, that retiree who is not Medicare-eligible may select, during any open enrollment period or at such other times or under such conditions as the program may provide, any plan offered by the program.
(3) Except as otherwise provided in this subsection or subsection b. of this section, selection of a plan shall be at the sole discretion of the employee or retiree who is not Medicare-eligible.
d. Beginning January 1, 2022 and for each plan year thereafter, the program shall offer a fourth plan to be called the Garden State Health Plan. The plan shall be developed by the School Employees' Health Benefits Plan Design Committee. If the committee does not adopt a design for the Garden State Health Plan by December 31, 2020, the Division of Pensions and Benefits in the Department of the Treasury may develop the Garden State Health Plan. The program shall provide an enrollment period prior to January 1, 2022.
The Garden State Health Plan shall provide medical and prescription drug benefits that are equivalent to the level of medical and prescription drug benefits provided by the New Jersey Educators Health Plan, except that the benefits under the Garden State Health Plan shall be available only from providers located in the State of New Jersey.
Access to a service provider that is located outside of the State shall be available only under such terms, conditions, restrictions, and limitations as the plan design committee or the division, as appropriate, shall provide in the plan governing documents.
Employers that participate in the School Employees' Health Benefits Program shall retain the ability to enter the program for medical only plans and may separately purchase pharmacy and dental benefits outside of the program without limitation or restriction.
e. The plan design of the New Jersey Educators Health Plan, the Garden State Health Plan, the NJ Direct 10 plan, and the NJ Direct 15 plan as those plan designs are specified in subsections a., d., and f. of this section shall remain unchanged until December 31, 2027. No change in the plan design of those plans shall be made before that date unless such a change in plan design is required by federal or State law to governmental health care benefits plans or to both governmental and non-governmental health care benefits plans.
For the plan year that commences January 1, 2028 and for each plan year thereafter, the plan design of the New Jersey Educators Health Plan, the Garden State Health Plan, the NJ Direct 10 plan, and the NJ Direct 15 plan as those plan designs are specified in subsections a., d., and f. of this section may be modified by the School Employees' Health Benefits Plan Design Committee.
Modifications to plan design of the plans set forth in this section made by the School Employees' Health Benefits Plan Design Committee or the State Treasurer pursuant to section 7 of this act shall be implemented by the program for the purposes of this section commencing January 1, 2024.
f. The plan design of the New Jersey Educators Health Plan shall be the following:
In Network Benefits
Coverage
Member Coinsurance:10%, Applies Only to Emergency Transportation Care and Durable Medical Equipment
Deductible:N/A
Out-of-Pocket Maximum:$500 Single/ $1,000 Family (covers all in network copayments, coinsurance, and deductible)
Emergency Room Copayment:$125 (To be Waived if Admitted)
PCP Office Visit Copayment:$10
Specialist Office Visit Copayment$15Out-of-Network Benefits
Coverage
Member Coinsurance:30% of the Out-of-Network Fee Schedule
Deductible:$350 / $700
Out-of-Pocket Maximum:$2,000 Single / $5,000 Family Routine Lab:Paid at Out-of-Network Benefit Level
Out-of-Network Fee Schedule:200% of CMS - MedicarePharmacy
Out-of-Pocket Maximum:$1,600 Single / $3,200 Family (Indexed Annually Pursuant to Federal Law)Generic Copayment:$5 Retail 30 Day Supply / $10 Mail 90 Day SupplyBrand Copayment:$10 Retail 30 Day Supply/ $20 Mail 90 Day SupplyMandatory Generic:Member Pays Difference in Cost Between Generic and Brand, Plus Brand CopaymentFormulary: Closed Formulary as contracted with the Pharmacy Benefit Manager and the School Employees' Health Benefits CommissionOther
Chiropractic, Physical Therapy, and Acupuncture:
Subject to the same Out-of-Network Limits as for the State Health Benefits Program as were in effect on June 1, 2020 to take effect as of July 1, 2020, or as soon thereafter as reasonably practicable.
Under a patient centered medical home model, there shall be no office visit copay for primary care for participants who select and commit to a patient centered medical home for primary care in accordance with plan rules and regulations.
g. Any plan offered by the School Employees' Health Benefits Program shall require that chiropractic, physical therapy, and acupuncture benefits shall be subject to the same out-of-network limits as for the State Health Benefits Program that were in effect on June 1, 2020 to take effect as of July 1, 2020 or as soon thereafter as reasonably practicable.
h. Notwithstanding any provision of law, rule, or regulation to the contrary, for any period of time during which the employer does not have to pay a premium or periodic charge for any health care benefits plan or program provided to its employees through the School Employees' Health Benefits Program, an employee enrolled in such plan or program shall not be required to make the employee's contribution toward that premium or periodic charge during that period of time. In the event that a collective negotiations agreement specifically addresses a premium holiday the collective negotiations agreement shall be controlling.
(cf: P.L.2021, c.163, s.2)
16. Section 5 of P.L.2020, c.44 (C.18A:16‑13.2) is amended to read as follows:
5. This section shall apply to local boards of education and employers, as specified in subsection k. of this section, who do not participate in the School Employees' Health Benefits Program.
Any health insurance company may provide to local boards of education and to those employers defined pursuant to section 32 of P.L.2007, c.103 (C.52:14-17.46.2) who do not participate in the School Employees' Health Benefits Program the equivalent of the New Jersey Educators Health Plan in the School Employees' Health Benefits Program as that plan design is described in subsection f. of section 1 of P.L.2020, c.44 (C.52:14-17.46.13) and the Garden State Health Plan as that plan design is described in subsection d. of section 1 of P.L.2020, c.44 (C.52:14-17.46.13), notwithstanding the provisions of any other law, rule, or regulation, including any regulation of the New Jersey Department of Banking and Insurance, to the contrary. As used in this subsection, "health insurance company" means and includes a health, hospital, and medical service corporation; commercial individual, small employer, and larger group health insurer; and a health maintenance organization.
a. (1) Notwithstanding the provisions of any other law, rule, or regulation to the contrary, beginning January 1, 2021 and for each plan year thereafter, a board of education as an employer providing health care benefits coverage for its employees, and their dependents if any, in accordance with P.L.1979, c.391 (C.18A:16-12 et seq.) shall offer to its employees, and their dependents if any, the equivalent of the New Jersey Educators Health Plan in the School Employees' Health Benefits Program as that plan design is described in subsection f. of section 1 of P.L.2020, c.44 (C.52:14-17.46.13). On and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill), a board of education or county college shall satisfy the requirement by offering health insurance coverage through the Public School Employees' Health Benefits Trust.
Beginning January 1, 2022 and for each plan year thereafter, a board of education as an employer providing health care benefits coverage for its employees, and their dependents if any, in accordance with P.L.1979, c.391 (C.18A:16-12 et seq.) shall also offer a plan for its employees, and their dependents if any, that is the equivalent of the Garden State Health Plan in the School Employees' Health Benefits Program. The board shall provide an enrollment period prior to January 1, 2022.
(2) The plans under this section shall be offered by the employer regardless of any collective negotiations agreement between the employer and its employees in effect on the effective date of this act, P.L.2020, c.44, that provides for enrollment in other plans offered by the employer.
No new health care benefits plans, other than those specified in paragraph (1) of this subsection, shall be added by the employer from January 1, 2021 through December 31, 2027 unless the provisions of any collective negotiations agreement entered into before or after the effective date of this act, P.L.2020, c.44, results in additional premium cost reductions. Nothing in this section shall prohibit an employer from offering health care benefits plans that existed prior to the effective date of this act.
(3) Commencing January 1, 2028, the employer may offer such other plans as may be required in accordance with any collective negotiations agreement between the employer and its employees.
b. Prior to January 1, 2021, each employer shall provide an enrollment period during which all employees who commenced employment prior to the effective date of this act shall be required to select affirmatively a plan provided by the employer. If an employee fails to select affirmatively a plan during this enrollment period, the employer shall enroll the employee, and the employee's dependents if any, in the equivalent New Jersey Educators Health Plan offered pursuant to subsection a. of this section for the year January 1, 2021 until December 31, 2021.
During the enrollment period, each person who is enrolled in a plan offered by the employer and who is paying the full cost of coverage shall also be required to select affirmatively a plan provided by the employer. If a person fails to select affirmatively a plan during this enrollment period, the employer shall enroll the person, and the person's dependents if any, in the equivalent New Jersey Educators Health Plan offered pursuant to subsection a. of this section for the year January 1, 2021 until December 31, 2021. Any such person shall continue to pay the full cost of coverage and shall not be subject to the contribution schedule or any mandatory enrollment period as set forth in this section.
c. (1) Beginning on January 1, 2021, an employee commencing employment on or after the effective date of this act but before January 1, 2028 who does not waive coverage, shall be enrolled by the employer in the equivalent New Jersey Educators Health Plan, or the equivalent Garden State Health Plan if selected by the employee, as those plans are offered pursuant to subsection a. of this section. The employee shall remain enrolled in either the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan selected by the employee at the annual open enrollment for each plan year until December 31, 2027, provided that the employee during this period may waive coverage as an employee and select and change the type of coverage received under the plan following a qualifying life event, in accordance with the plan regulations. Beginning January 1, 2028, the employee may select, during any open enrollment period or at such other times or under such conditions as the employer may provide, any plan offered by the employer.
(2) Except as otherwise provided in this subsection or subsection b. of this section, selection of a plan shall be at the sole discretion of the employee.
(3) The enrollment required by paragraph (1) of this subsection shall not include an employee who commenced employment prior to the effective date of P.L.2020, c.44 and who did not enroll, who waived enrollment, or who was not eligible to enroll prior to that effective date for health care coverage provided by the employer, including, but not limited to, an employee who commenced employment as a part-time employee prior to the effective date of P.L.2020, c.44. If such an employee was required to enroll prior to the effective date of P.L.2021, c.163 in accordance with paragraph (1), the employee shall be notified promptly in writing that enrollment is not mandatory and shall be provided promptly with an opportunity to select enrollment in another health care benefits plan.
d. An employee shall contribute annually toward the cost of health care benefits coverage for the employee, and employee's dependents if any, the amount specified, in the manner specified, in subsection a. or b. of section 2 of this act, P.L.2020, c.44 (C.52:14-17.46.14) if the employee, and the employee's dependents if any, are enrolled in the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section. An employee's contribution toward the cost of coverage under the equivalent Garden State Health Plan offered pursuant to subsection a. of this section shall be the amount required in subsection b. of section 2 of this act, except that the contribution specified in that subsection shall not be less than the minimum annual contribution for health care benefits coverage of 1.5% of salary as required by law.
e. (1) An employee enrolled in the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section shall be required to pay only the contribution specified in subsections a. and b. of section 2 of this act, notwithstanding any other provision of law, rule, or regulation to the contrary requiring contributions by employees toward the cost of health care benefits coverage provided by an employer, except as provided in subsection d. of this section. No other contribution may be required by collective negotiations agreement, except as set forth in subsection i. of this section.
(2) Employees who are not enrolled in the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section shall continue, after the effective date of this act, P.L.2020, c.44, to contribute to health care benefits coverage and those contributions shall be determined in accordance with what is permitted or required by provisions of law.
An employee who is enrolled in a plan other than the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section shall be required to contribute toward the cost of health care benefits coverage offered by the employer (a) in accordance with a collective negotiations agreement applicable to that employee as negotiated prior to or after the effective date of this act pursuant to the requirements that were set forth in law on the day next preceding that effective date; (b) as may be required at the discretion of the employer; or (c) as required by a provision of law, whichever is applicable to that employee.
With regard to contributions by an employee who is enrolled in a plan other than the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section, no provision in this section shall be deemed to modify, alter, impair, or terminate the requirement in sections 77 and 78 of P.L.2011, c.78 (C.18A:16-17.2 and C.52:14-17.28e), as applicable, that a public employer and employees who are in negotiations for the collective negotiations agreement to be executed after the employees in that unit had reached full implementation of the premium share set forth in section 39 of P.L.2011, c.78 (C.52:14-17.28c) shall conduct negotiations concerning contributions for health care benefits as if the full premium share was included in the prior contract. Nothing in this act shall be deemed to modify, alter, impair, or terminate the continued compliance after the effective date of this act with that requirement for negotiations for any collective negotiations agreement for employee contributions for plans other than the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section.
(3) For an employee, the annual base salary paid by the employer for the position held by the employee shall be used to identify the percentage to be used to calculate the annual contribution required under subsections a. and b. of section 2 of this act.
f. The annual contribution by an employee as calculated in accordance with subsection a. or b. of section 2 of this act shall not exceed the amount as calculated in accordance with section 4 of this act.
g. The contributions required by this section shall apply to employees for whom the employer has assumed a health care benefits payment obligation, to require that such employees pay the amount of contribution specified in this section for health care benefits coverage.
h. The level of benefits in the equivalent New Jersey Educators Health Plan and the equivalent Garden State Health Plan offered by the employer shall remain unchanged until December 31, 2027. No change in the level of benefits in those plans shall be made before that date unless such a change is required by federal or State law to governmental health care benefits plans or to both governmental and non-governmental health care benefits plans.
Commencing January 1, 2028 and for each plan year thereafter, the level of benefits in the equivalent New Jersey Educators Health Plan and the equivalent Garden State Health Plan offered by the employer may be modified by the employer in accordance with collective negotiations agreements entered into between the employers who do not participate in the School Employees' Health Benefits Program and their employees, or as otherwise permitted by law.
i. Commencing January 1, 2028 and for each plan year thereafter, the contributions required pursuant to subsections a. and b. of section 2 of this act for employees enrolled in the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered pursuant to subsection a. of this section may be modified in accordance with collective negotiations agreements entered into between the employers who do not participate in the School Employees' Health Benefits Program and their employees. The contributions required pursuant to subsections a. and b. of section 2 of this act shall become part of the parties' collective negotiations and shall then be subject to collective negotiations in a manner similar to other negotiable items between the parties. Negotiations concerning contributions for health care benefits shall be conducted as if the contributions required pursuant to subsections a. and b. of section 2 of this act were included in the prior contract. The contribution scheme of the percentage of base salary set forth in those subsections may be modified or a new contribution scheme or method other than a percentage of salary may be provided for in accordance with a collective negotiations agreement.
j. Modifications to plan design of the plans set forth in section 1 of this act, P.L.2020, c.44 (C.52:14-17.46.13), or adjustments to the employee contribution rates set forth in subsections a. and b. of section 2 of this act, made by the School Employees' Health Benefits Plan Design Committee or the State Treasurer pursuant to section 7 of this act shall be implemented for the purposes of this section by the employer commencing January 1, 2024.
k. This section shall also apply when health care benefits coverage is provided though an insurance fund or joint insurance fund or any other manner. This section shall apply to any employer, as that term is defined in section 32 of P.L.2007, c.103 (C.52:14-17.46.2), that is not a participating employer in the School Employees' Health Benefits Program. This section shall not apply to charter school or renaissance school employers unless they have a collective negotiations agreement with any of their employees in effect on or after the effective date of P.L.2020, c.44.
l. Notwithstanding any provision of law, rule, or regulation to the contrary, for any period of time during which the employer does not have to pay a premium or periodic charge for any health care benefits plan or program provided to its employees pursuant to this section, pursuant to another law, or pursuant to a collective bargaining agreement, an employee enrolled in such plan or program shall not be required to make the employee's contribution toward that premium or periodic charge during that period of time. In the event that a collective negotiations agreement specifically addresses a premium holiday the collective negotiations agreement shall be controlling.
(cf: P.L.2021, c.163, s.1)
17. Section 2 of P.L.2020, c.44 (C.52:14‑17.46.14) is amended to read as follows:
2. a. Each employee, and retiree who is not Medicare-eligible and who is required by another provision of law to contribute in retirement toward the cost of health care benefits coverage under the program, shall contribute annually toward the cost of health care benefits coverage for the employee and retiree, and dependents if any, under the New Jersey Educators Health Plan offered by the School Employees' Health Benefits Program or through the Public School Employees Health Benefits Trust, an amount equal to a percentage of the employee's annual base salary or retiree's annual retirement allowance, including any cost of living adjustments to that allowance. The contribution shall be withheld by the employer from the salary of the employee or by the retirement system from the retirement allowance, including any cost of living adjustments to that allowance, of the retiree who is not Medicare-eligible. The percent to be contributed shall be as follows with the retirement allowance including any cost of living adjustments to that allowance:
For Base Salary or Retirement Allowance of $40,000 or Less: 1.7% for Single Coverage; 2.2% for Parent and Child(ren) Coverage; 2.8% for Employee and Spouse Coverage; and 3.3% for Family Coverage
For Base Salary or Retirement Allowance of more than $40,000 to $50,000: 1.9% for Single Coverage; 2.5% for Parent and Child(ren) Coverage; 3.3% for Employee and Spouse Coverage; and 3.9% for Family Coverage
For Base Salary or Retirement Allowance of more than $50,000 to $60,000: 2.2% for Single Coverage; 2.8% for Parent and Child(ren) Coverage; 3.9% for Employee and Spouse Coverage; and 4.4% for Family Coverage
For Base Salary or Retirement Allowance of more than $60,000 to $70,000: 2.5% for Single Coverage; 3% for Parent and Child(ren) Coverage; 4.4% for Employee and Spouse Coverage; and 5% for Family Coverage
For Base Salary or Retirement Allowance of more than $70,000 to $80,000: 2.8% for Single Coverage; 3.3% for Parent and Child(ren) Coverage; 5% for Employee and Spouse Coverage; and 5.5% for Family Coverage
For Base Salary or Retirement Allowance of more than $80,000 to $90,000: 3% for Single Coverage; 3.6% for Parent and Child(ren) Coverage; 5.5% for Employee and Spouse Coverage; and 6% for Family Coverage
For Base Salary or Retirement Allowance of more than $90,000 to $100,000: 3.3% for Single Coverage; 3.9% for Parent and Child(ren) Coverage; 6% for Employee and Spouse Coverage; and 6.6% for Family Coverage
For Base Salary or Retirement Allowance of more than $100,000 to $125,000: 3.6% for Single Coverage; 4.4% for Parent and Child(ren) Coverage; 6.6% for Employee and Spouse Coverage; and 7.2% for Family Coverage
When the base salary or retirement allowance is more than $125,000, the amount to be contributed shall be the same as for a base salary or retirement allowance of $125,000.
b. Each employee, and retiree who is not Medicare-eligible and who is required by another provision of law to contribute in retirement toward the cost of health care benefits coverage under the program, shall contribute annually toward the cost of health care benefits coverage for the employee and retiree, and dependents if any, under the Garden State Health Plan offered by the School Employees' Health Benefits Program or through the Public School Employees Health Benefits Trust, an amount equal to a percentage of the employee's annual salary or retiree's annual retirement allowance, including any cost of living adjustments to that allowance. The contribution shall be withheld by the employer from the salary of the employee or by the retirement system from the retirement allowance, including any cost of living adjustments to that allowance, of the retiree who is not Medicare-eligible. The percent to be contributed shall be one-half of the percentage set forth in subsection a. of this section for the salary or retirement allowance range and type of coverage, except that the contribution specified in this subsection shall not be less than the minimum annual contribution for health care benefits coverage of 1.5% of salary or retirement allowance, including any cost of living adjustments to that allowance, as required by law.
c. (1) An employee enrolled in the New Jersey Educators Health Plan or the Garden State Health Plan shall be required to pay only the contribution specified in subsection a. or b. of this section, notwithstanding any other provision of law, rule, or regulation to the contrary requiring contributions by employees toward the cost of health care benefits coverage under the program, except as provided in subsection b. of this section. No other contribution may be required by collective negotiations agreement, except as set forth in subsection h. of this section.
(2) Only those retirees who are not Medicare-eligible and who are required by another provision of law to contribute in retirement toward the cost of health care coverage under the program shall be required to pay the contribution specified in subsection a. or b. of this section for coverage under the New Jersey Educators Health Plan or the Garden State Health Plan.
A retiree who is not Medicare-eligible, who is enrolled in the New Jersey Educators Health Plan or the Garden State Health Plan, and who is required by another provision of law to contribute in retirement toward the cost of health care coverage under the program shall be required to pay only the contribution specified in subsection a. or b. of this section, notwithstanding the provisions of section 77 of P.L.2011, c.78 (C.52:14-17.28e), section 3 of P.L.1987, c.384 (C.52:14-17.32f), section 2 of P.L.1992, c.126 (C.52:14-17.32f1), or section 1 of P.L.1995, c.357 (C.52:14-17.32f2) to the contrary requiring contributions by retirees toward the cost of health care benefits coverage under the program, except as provided in subsection b. of this section.
d. Employees who are not enrolled in the New Jersey Educators Health Plan or the Garden State Health Plan shall continue, after the effective date of this act, P.L.2020, c.44, to contribute to health care benefits coverage and those contributions shall be determined in accordance with what is permitted or required by provisions of law.
An employee who is enrolled in a plan other than the New Jersey Educators Health Plan or the Garden State Health Plan shall be required to contribute toward the cost of health care benefits coverage under the program (a) in accordance with a collective negotiations agreement applicable to that employee as negotiated prior to or after the effective date of this act, P.L.2020, c.44, pursuant to the requirements that were set forth in law on the day next preceding that effective date; (b) as may be required at the discretion of the employer; or (c) as required by a provision of law, whichever is applicable to that employee.
With regard to contributions by an employee who is enrolled in a plan other than the New Jersey Educators Health Plan or the Garden State Health Plan, no provision in this section shall be deemed to modify, alter, impair, or terminate the requirement in sections 77 and 78 of P.L.2011, c.78 (C.18A:16-17.2 and C.52:14-17.28e), as applicable, that a public employer and employees who were in negotiations for the collective negotiations agreement to be executed after the employees in that unit had reached full implementation of the premium share set forth in section 39 of P.L.2011, c.78 (C.52:14-17.28c) shall conduct negotiations concerning contributions for health care benefits as if the full premium share was included in the prior contract. Nothing in this act shall be deemed to modify, alter, impair, or terminate the continued compliance after the effective date of this act with that requirement for negotiations for any collective negotiations agreement for employee contributions for plans other than the New Jersey Educators Health Plan or the Garden State Health Plan.
e. For an employee, the annual base salary paid by the employer for the position held by the employee shall be used to identify the percentage to be used to calculate the annual contribution required under subsections a. and b. of section 2 of this act. For a retiree who is not Medicare-eligible, the annual retirement allowance, including any cost of living adjustments to that allowance, received by the retiree shall be used to identify the percentage to be used to calculate the annual contribution required under subsections a. and b. of section 2 of this act.
f. The annual contribution by an employee or a retiree who is not Medicare-eligible as calculated in accordance with subsection a. or b. of this section shall not exceed the amount as calculated in accordance with section 4 of this act, P.L.2020, c.44 (C.52:14-17.46.16).
g. The contributions required by this section shall apply to employees for whom the employer has assumed a health care benefits payment obligation, to require that such employees pay the amount of contribution specified in this section for health care benefits coverage. The contributions required by this section shall apply to retirees for whom the State has assumed a health care benefits payment obligation but who are required by law to contribute toward the cost of health care benefits coverage under the program, to require that such retirees pay the amount of contribution specified in this section for health care benefits coverage.
h. [For] Except as otherwise provided by P.L. , c. (C. ) (pending before the Legislature as this bill), for the plan year that commences on January 1, 2028 and for each plan year thereafter, the contributions required pursuant to subsections a. and b. of this section for employees enrolled in the New Jersey Educators Health Plan or the Garden State Health Plan may be modified through collective negotiations agreements entered into between the employers who participate in the School Employees' Health Benefits Program and their employees. The contributions required pursuant to subsections a. and b. of this section shall become part of the parties' collective negotiations and shall then be subject to collective negotiations in a manner similar to other negotiable items between the parties. Negotiations concerning contributions for health care benefits shall be conducted as if the contributions required pursuant to subsections a. and b. of this section were included in the prior contract. The contribution scheme of percentage of base salary set forth in those subsections may be modified or a new contribution scheme or method other than a percentage of salary may be provided for in accordance with a collective negotiations agreement.
i. Modifications to the contribution rates set forth in this section made by the School Employees' Health Benefits Plan Design Committee or the State Treasurer pursuant to section 7 of this act shall be implemented by the program for the purposes of this section commencing January 1, 2024.
(cf: P.L.2020, c.137, s.1)
18. Section 4 of P.L.2020, c.44 (C.52:14-17.46.16) is amended to read as follows:
4. For employees and retirees who are not Medicare-eligible who are required to make a contribution pursuant to subsection a. or b. of section 2, or subsection d. of section 5, of this act, P.L.2020, c.44 (C.18A:16-13.2), due to enrollment in the New Jersey Educators Health Plan or the Garden State Health Plan, or the equivalent plan, as appropriate, a calculation shall be made in accordance with this section. For employers offering health insurance coverage through the Public School Employees Health Benefits Trust, references in this section to the School Employees' Health Benefits Program shall be deemed to also refer to the trust. The employee or retiree shall be required to contribute the lesser of: the amount calculated for that employee or retiree in accordance with subsection a. or b. of section 2, or in accordance with subsection d. of section 5, of this act, as appropriate; or the amount calculated for that employee or retiree in accordance with this section.
for family coverage or its equivalent -
an employee or retiree who earns less than $25,000 shall pay 3 percent of the cost of coverage;
an employee or retiree who earns $25,000 or more but less than $30,000 shall pay 4 percent of the cost of coverage;
an employee or retiree who earns $30,000 or more but less than $35,000 shall pay 5 percent of the cost of coverage;
an employee or retiree who earns $35,000 or more but less than $40,000 shall pay 6 percent of the cost of coverage;
an employee or retiree who earns $40,000 or more but less than $45,000 shall pay 7 percent of the cost of coverage;
an employee or retiree who earns $45,000 or more but less than $50,000 shall pay 9 percent of the cost of coverage;
an employee or retiree who earns $50,000 or more but less than $55,000 shall pay 12 percent of the cost of coverage;
an employee or retiree who earns $55,000 or more but less than $60,000 shall pay 14 percent of the cost of coverage;
an employee or retiree who earns $60,000 or more but less than $65,000 shall pay 17 percent of the cost of coverage;
an employee or retiree who earns $65,000 or more but less than $70,000 shall pay 19 percent of the cost of coverage;
an employee or retiree who earns $70,000 or more but less than $75,000 shall pay 22 percent of the cost of coverage;
an employee or retiree who earns $75,000 or more but less than $80,000 shall pay 23 percent of the cost of coverage;
an employee or retiree who earns $80,000 or more but less than $85,000 shall pay 24 percent of the cost of coverage;
an employee or retiree who earns $85,000 or more but less than $90,000 shall pay 26 percent of the cost of coverage;
an employee or retiree who earns $90,000 or more but less than $95,000 shall pay 28 percent of the cost of coverage;
an employee or retiree who earns $95,000 or more but less than $100,000 shall pay 29 percent of the cost of coverage;
an employee or retiree who earns $100,000 or more but less than $110,000 shall pay 32 percent of the cost of coverage;
an employee or retiree who earns $110,000 or more shall pay 35 percent of the cost of coverage
for individual coverage or its equivalent -
an employee or retiree who earns less than $20,000 shall pay 4.5 percent of the cost of coverage;
an employee or retiree who earns $20,000 or more but less than $25,000 shall pay 5.5 percent of the cost of coverage;
an employee or retiree who earns $25,000 or more but less than $30,000 shall pay 7.5 percent of the cost of coverage;
an employee or retiree who earns $30,000 or more but less than $35,000 shall pay 10 percent of the cost of coverage;
an employee or retiree who earns $35,000 or more but less than $40,000 shall pay 11 percent of the cost of coverage;
an employee or retiree who earns $40,000 or more but less than $45,000 shall pay 12 percent of the cost of coverage;
an employee or retiree who earns $45,000 or more but less than $50,000 shall pay 14 percent of the cost of coverage;
an employee or retiree who earns $50,000 or more but less than $55,000 shall pay 20 percent of the cost of coverage;
an employee or retiree who earns $55,000 or more but less than $60,000 shall pay 23 percent of the cost of coverage;
an employee or retiree who earns $60,000 or more but less than $65,000 shall pay 27 percent of the cost of coverage;
an employee or retiree who earns $65,000 or more but less than $70,000 shall pay 29 percent of the cost of coverage;
an employee or retiree who earns $70,000 or more but less than $75,000 shall pay 32 percent of the cost of coverage;
an employee or retiree who earns $75,000 or more but less than $80,000 shall pay 33 percent of the cost of coverage;
an employee or retiree who earns $80,000 or more but less than $95,000 shall pay 34 percent of the cost of coverage;
an employee or retiree who earns $95,000 or more shall pay 35 percent of the cost of coverage;
for member with child or spouse coverage or its equivalent -
an employee or retiree who earns less than $25,000 shall pay 3.5 percent of the cost of coverage;
an employee or retiree who earns $25,000 or more but less than $30,000 shall pay 4.5 percent of the cost of coverage;
an employee or retiree who earns $30,000 or more but less than $35,000 shall pay 6 percent of the cost of coverage;
an employee or retiree who earns $35,000 or more but less than $40,000 shall pay 7 percent of the cost of coverage;
an employee or retiree who earns $40,000 or more but less than $45,000 shall pay 8 percent of the cost of coverage;
an employee or retiree who earns $45,000 or more but less than $50,000 shall pay 10 percent of the cost of coverage;
an employee or retiree who earns $50,000 or more but less than $55,000 shall pay 15 percent of the cost of coverage;
an employee or retiree who earns $55,000 or more but less than $60,000 shall pay 17 percent of the cost of coverage;
an employee or retiree who earns $60,000 or more but less than $65,000 shall pay 21 percent of the cost of coverage;
an employee or retiree who earns $65,000 or more but less than $70,000 shall pay 23 percent of the cost of coverage;
an employee or retiree who earns $70,000 or more but less than $75,000 shall pay 26 percent of the cost of coverage;
an employee or retiree who earns $75,000 or more but less than $80,000 shall pay 27 percent of the cost of coverage;
an employee or retiree who earns $80,000 or more but less than $85,000 shall pay 28 percent of the cost of coverage;
an employee or retiree who earns $85,000 or more but less than $100,000 shall pay 30 percent of the cost of coverage.
an employee or retiree who earns $100,000 or more shall pay 35 percent of the cost of coverage.
The annual base salary of an employee shall be used to determine what the employee earns for the purpose of determining the percent of the cost of coverage. The annual retirement allowance, including any cost of living adjustments to that allowance, of a retiree who is not Medicare-eligible shall be used to determine what the retiree earns for the purpose of determining the percent of the cost of coverage.
As used in this section, "cost of coverage" means the premium or periodic charges for medical and prescription drug plan coverage, but not for dental, vision, or other health care, provided: (1) under the New Jersey Educators Health Plan or the Garden State Health Plan offered by the School Employees' Health Benefits Program pursuant to section 1 of P.L.2020, c.44 (C.52:14-17.46.13); or (2) under the equivalent New Jersey Educators Health Plan or the equivalent Garden State Health Plan offered by an employer pursuant to section 5 of P.L.2020, c.44 (C.18A:16-13.2) when that employer is not a participant in the School Employees' Health Benefits Program.
(cf: P.L.2020, c.44, s.4)
19. If any provision of P.L. , c. (C. ) (pending before the Legislature as this bill) or its application to any person or circumstance is held invalid, the invalidity shall not affect other provisions or applications of this act which can be given effect without the invalid provision or application, and to this end the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill) are severable.
20. There is appropriated from the General Fund to the Department of the Treasury such amounts as may be necessary to provide start‑up financing to the Public School Employees' Health Benefits Trust, to remain available until expended, subject to the approval of the Director of the Division of Budget and Accounting. The board may repay such start‑up financing from trust revenues, pursuant to mutually acceptable terms approved by the State Treasurer.
21. This act shall take effect on the 180th day following the date of enactment.
STATEMENT
This bill, designated as the "Public School Employees' Health Benefits Trust Act," establishes, in but not of, the Department of the Treasury the Public School Employees' Health Benefits Trust. The trust will consist of appropriations made by the State, and contributions made by employers and employees. The purpose of the trust shall be to pool the health risks of beneficiaries and to provide affordable medical, pharmacy, dental, and vision benefits to those beneficiaries and, accordingly, the assets of the trust shall be managed in the sole interest of the beneficiaries.
Governance of the Trust
The trust will be managed by a board of trustees consisting of ten members as follows:
(1) three members appointed by the New Jersey Education Association;
(2) one member appointed by the American Federation of Teachers New Jersey;
(3) one member appointed by the majority representative union of the Community Colleges in this State;
(4) one member appointed by the New Jersey School Boards Association;
(5) one member appointed by the New Jersey Association of School Business Officials;
(6) one member appointed by the New Jersey Association of School Administrators;
(7) one member appointed by the New Jersey Principals and Supervisors Association; and
(8) one member appointed by the Governor.
Each member of the board must possess experience, education, or training in the review, administration, design, or collective negotiation of employer-sponsored group health insurance plans or group health insurance plan coverage, but no member of the board will be employed by, or have a financial interest in, any entity with which the board contracts.
The board will have four standing committees: an audit committee, a plan design committee, an investment committee, and a beneficiary appeals committee.
The audit committee will be comprised of no fewer than three members. and will be responsible for assisting in the oversight of the financial reporting and audit processes of the board. At least two members of the committee will be members of the board. At least one of member of the committee will have accounting, governmental auditing, or related financial expertise. The committee will assist the board in retaining an independent auditor to conduct annual audits of trust financial statements by making a recommendation to the board after engaging in an auditor selection process. The auditor selection process will be based upon public, competitive bidding principles and will take place no less than once every five years.
The plan design committee will be comprised of no fewer than three members, and will be responsible for assisting in the design, establishment, modification, and termination of health insurance plans offered through the trust. At least two members of the committee will be members of the board. At least one member of the committee will have demonstrated experience in group health insurance plan design, administration, or collective negotiation. The committee will also assist the board in contracting a third-party administrator should the board, in its discretion, decide to do so, in which case the third-party administrator selection process will be based upon public, competitive bidding principles, and will take place no less than once every five years.
The investment committee will be comprised of no fewer than three members, and will be responsible for assisting in the investment, sale, or purchase of trust assets. At least two members of the committee will be members of the board. At least one member of the committee will have demonstrated experience in institutional investing.
The beneficiary appeals committee will be comprised of no fewer than three members, and will be responsible for hearing beneficiary appeals prior to the hearing thereof by the full board. At least two members of the committee will be members of the board. At least one member of the committee will be a physician, other than a member of the medical board.
Powers and Authorities of the Trust
The board will have the power and authority to:
(1) adopt bylaws, including internal board policy and rules regarding the provision of medical, pharmacy, dental and vision benefits, including beneficiary appeal procedures;
(2) enter into contracts necessary to effectuate the purposes of the trust;
(3) set and revise contribution rates and premium amounts and collect contributions and premiums, including, as the board may deem prudent, the establishment of banded rates to promote equity, and plan stability;
(4) manage and invest the assets of the trust;
(5) incur indebtedness, borrow money, and authorize and issue negotiable obligations or bonds;
(6) design, establish, modify, or terminate health insurance plans offered through the trust;
(7) review, adjudicate, and issue final decisions regarding beneficiary appeals;
(8) calculate and determine fair allocations for out-of-network charges;
(9) at the board's discretion, retain legal counsel with demonstrated expertise in the law governing employer-sponsored group health insurance plans in the public and private sector, to advise and represent the board on matters within said counsel's expertise, including the initiation of litigation to pursue recovery of any money paid in error or as a result of fraud or abuse;
(10) at the board's discretion, develop, contract for, and operate a primary care delivery system; and
(11) hire administrative and professional staff and appoint an executive director thereof, or contract with a third-party administrator, as the board may deems necessary, to administer the trust and health insurance plans offered through the trust.
Duties of the Board
The board will have the duties to:
(1) meet at least once per calendar month;
(2) record minutes for all of its meetings, and maintain records consisted with state record retention requirements;
(3) publish an annual report showing the fiscal transactions of the trust for the preceding year, the amount of the accumulated cash and securities held by the trust and detailing the performance of each health insurance plan offered through the trust, including enrollment figures, claims experience, and administrative costs associated therewith which will be reported to the Governor, and to the Legislature;
(4) retain an independent auditor, who will conduct an annual audit of the trust's financial records and statements, and, where deemed necessary by the board, the financial records and statements of all vendors, contractors, subcontractors and similar third-party entities providing services to the trust or the board;
(5) retain an actuary, who will have demonstrated experience providing actuarial services to employer-sponsored group health insurance plans in the public and private sector, and who will be the technical advisor of the board with respect to questions concerning the operation of the health insurance plans offered through the trust and perform such other necessary duties required in connection therewith, including the preparation of an annual report demonstrating the financial condition of the trust by means of an actuarial valuation of the assets and liabilities thereof;
(6) establish, in consultation with the actuary, actuarial funding policies for the trust, subject to the minimum requirement that the trust carry reserves necessary for two months of projected expenditures;
(7) designate a medical board comprised of a minimum of three physicians who are not employees or dependents, as those terms are defined under the bill, who will recommend to the board final action to be taken on beneficiary and provider appeals;
(8) ensure compliance with applicable federal and state laws, including but not limited to the Health Insurance Portability and Accountability Act of 1996, 42 U.S.C. � 1320d et seq., and No Surprises Act of 2022, 26 U.S.C. � 9816;
(9) exercise the preceding powers and duties solely in the interest of the beneficiaries and for the exclusive purpose of providing benefits to beneficiaries and defraying reasonable expenses of administering the plan;
(10) act with the care, skill, prudence, and diligence under the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, by diversifying the investments of the plan so as to minimize the risk of large losses, unless under the circumstances it is clearly prudent not to do so; and
(11) act in accordance with the rules adopted by the board.
Under the bill, appointments to the board will be made within 90 days of the bill's effective date The board will organize at its initial meeting and promptly initiate rulemaking and procurement necessary to implement the bill's provisions. The trust will commence operations and offer health insurance coverage beginning on January 1, 2028, as will be established by board resolution in consultation with participating employers.
Under the bill, premiums and other revenues held in the trust will be held in the sole interest of beneficiaries and for the payment of reasonable administrative expenses. Any excess funds collected will remain held in the trust and be used solely in the interest of beneficiaries.
Beneficiary Rights to Appeal
Under the bill, beneficiaries will have the right to appeal denials of their claims for coverage by the health insurance plan in which they are enrolled through the trust, and non-beneficiaries will have the right to appeal the denial of their status as eligible beneficiaries, pursuant to an internal appeals procedure that the board will establish, which will include consideration of the appeal by the beneficiary appeals committee as the penultimate step and consideration by the board as the ultimate step. If all or part of a beneficiary's claim for benefits, or any non-beneficiary's assertion of eligible beneficiary status, is denied after exhaustion of the internal appeal procedure established by the board, such person may, within 180 days of the denial, institute a civil action against the trust in the Superior Court of New Jersey to recover benefits due under the terms of the health insurance plan in which the beneficiary is enrolled or to enforce rights provided for.
Health Coverage Provided by the Trust
Under the bill, employers will provide health coverage to their employees through the trust and will not be permitted to provide any other type of insurance to their employees. Enrollment in the SEHBP and Garden State Health Plan will not be offered to employees, and any employees already enrolled in those programs will be transitioned to health insurance coverage provided through the trust in a manner to be prescribed by the board.
Under the bill, each employee will contribute annually toward the cost of health care benefits for the employee and dependents if any, under the New Jersey Educators Health Plan offered by the SEHBP or through the Public School Employees' Health Benefits Trust, an amount equal to a percentage of the employee's annual base salary, including any cost of living adjustments to that allowance.
The SEHBP will continue to operate for employers and employees outside the scope of this bill and the Division of Pensions and Benefits will cooperate with the board to ensure an orderly transition of covered employees from coverage by the SEHBP to coverage by health insurance plans through the trust, and to share data as authorized by law.
All employees enrolled in health insurance coverage provided pursuant to certain existing laws will be transitioned to health insurance coverage provided through the trust, and the former coverage will be terminated upon the expiration of any contract for such insurance coverage or the applicable collective negotiations agreements between their employers and employee organizations.
On and after the effective date of the bill, employers participating in the SEHBP will be prohibited from withdrawing from the program.
