Bill Text: NJ S4516 | 2026-2027 | Regular Session | Introduced
Bill Title: Makes various changes to SHBP governance and administration.
Sponsorship: Moderate Partisan Bill (Democrat 12-2)
Status: (Introduced) 2026-06-22 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S4516 Detail]
Download: New_Jersey-2026-S4516-Introduced.html
Sponsored by:
Senator JOSEPH A. LAGANA
District 38 (Bergen)
SYNOPSIS
Makes various changes to SHBP governance and administration.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning the plan administration of the State Health Benefits Program and amending P.L.1961, c.49 and P.L.2011, c.78.
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] 13 members as follows:
(1) the State Treasurer; the Commissioner of Banking and Insurance; the Chairperson of the Civil Service Commission; and the Commissioner of Health, or their designees, who shall serve ex officio; [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.]
(2) one member appointed by the Governor who shall represent local government employers;
(3) one member appointed by the Governor who shall represent higher education employers;
(4) three members appointed by the Public Employee Committee of the New Jersey AFL-CIO who are members of each of the three public employee organizations affiliated with the New Jersey AFL-CIO with the largest number of employees participating in the State Health Benefits Program;
(5) one member appointed by the public employee organization that is not affiliated with the New Jersey AFL-CIO, that represents the largest number of police officers in this State;
(6) one member appointed by the public employee organization that is not affiliated with the New Jersey AFL-CIO, that represents the largest number of firefighters in this State;
(7) one member from the State Troopers Fraternal Association; and
(8) one member, who shall be a non-voting member, appointed by a majority vote of the commission members appointed pursuant to paragraphs (1) through (7) of this subsection, who shall have expertise in the administration and design of health care plans, shall not represent an employee or employer organization, and shall not be employed in a managerial or consultant capacity with a provider or administrator of health care services, supplies, insurance or pharmaceuticals. If the members of the commission appointed pursuant to paragraphs (1) through (7) of this subsection are unable to agree on the selection of the 13th member, the dispute shall be referred to the Public Employee Relations Commission. The members of the commission appointed pursuant to paragraphs (1) through (3) of this subsection shall submit to the Public Employee Relations Commission the names of two individuals who satisfy the stated criteria, along with their resumes, and the members of the commission appointed pursuant to paragraphs (4) through (7) of this subsection shall submit to the Public Employee Relations Commission the names of two individuals who satisfy the stated criteria, along with their resumes. The Public Employee Relations Commission shall select one individual, from among the four names submitted, to serve as the 13th member of the commission.
The members of the commission appointed pursuant to paragraphs (1) through (3) of this subsection shall designate a co-chair. The members of the commission appointed pursuant to paragraphs (4) through (7) of this subsection shall designate a co-chair.
Each of the members appointed pursuant to paragraphs (2) through (8) of this subsection shall be a New Jersey resident and shall be qualified by experience, education, or training in the review, administration, and design of health insurance plans for self-insured employers.
The initial terms of the members of the commission shall be as follows: the members appointed pursuant to paragraphs (2), (3), and (8) of this subsection shall serve for a term of three years; and the members appointed pursuant to paragraphs (4), (5), (6), and (7) of this subsection shall serve for a term of two years. All subsequent terms of the members appointed pursuant to paragraphs (2) through (8) of this subsection shall be for three years. However, the members designated as co-chairs pursuant to this subsection shall serve for an initial term of two years and thereafter shall serve for a term of 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.
Except as otherwise specified in P.L. , c. (C. ) (pending before the Legislature as this bill), actions of the commission shall require the affirmative vote of a majority of the authorized membership. Seven members of the commission shall constitute a quorum for the transaction of business.
[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]. In those instances in which the Attorney General has a conflict of interest with the commission, a commission decision, or a commission action, the commission shall have the right to retain independent counsel. The fees of such independent counsel shall be paid for by the Department of the Treasury.
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.
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.] (Deleted by amendment, P.L. , c. ) (pending before the Legislature as this bill)
c. (1) The commission, by a majority vote of its authorized membership, shall establish and modify rules and regulations as may be deemed reasonable and necessary for the administration of P.L.1961, c.49 (C.52:14-17.25 et seq.).
(2) Members of the commission shall be fiduciaries of the plan participants and beneficiaries, meaning that members shall be legally obligated to act in the best interests of participants and beneficiaries, shall manage the plan and its assets with prudence, skill, and diligence, and shall be transparent and honest in all their dealings involving the plan.
(3) The commission shall have responsibility for, and authority over, the various plans and components of those plans, including medical benefits, prescription drug benefits, dental, vision, and any other health benefits, offered and administered by the program. The commission shall have the authority to create, modify, or terminate any plan or component of any plan at its sole discretion and shall have the authority to set limits on the rates of reimbursements to hospitals or other health care providers. Any reference in law to the State Health Benefits Plan Design Committee in the context of the creation, modification, or termination of a plan or plan component shall be deemed to apply to the commission.
(4) The commission shall ensure that audits are performed as required by section 17 of P.L.2008, c.89 (C.52:14-17.27a), that claims reviews are performed as specified in section 6 of P.L.1961, c.49 (C.52:14-17.30), and establish requirements for review of in-State and out-of-State medical claims. Actions of the commission resulting from such audits and claims reviews shall require a majority vote of the authorized membership of the commission to be approved.
(5) Members of the commission shall have access to information, consistent with the "Health Insurance Portability and Accountability Act of 1996," Pub.L.104-191, necessary to carry out the duties vested in the commission by statute, including, but not limited to, the setting of premiums, designing of health care plans, and entering into contracts for the provision of benefits for health services pursuant to section 4 of P.L.1961, c.49 (C.52:14-17.28). Commission members shall have access to data necessary to carry out the duties vested in the commission by statute, including, but not limited to, any available claims and utilization data; reimbursement rates between third-party administrators, medical service providers, and hospitals; and any documents relating to the solicitation and award of contracts, including, but not limited to, requests for proposals, quotations, and requests for quotations, at least 30 days prior to the release of such contract documents.
The co-chairs shall transmit a request for information to the appropriate individual or entity. Information requested by the commission shall be provided as soon as is practicable and in a usable format. In any vote before the commission, the co-chairs may take into account whether legitimate requests for information have been provided as soon as is practicable and in a usable format. The co-chairs may also take into account whether requests for information have been excessive or unreasonable. Upon the commencement of binding arbitration proceedings pursuant to the provisions of subsection b. of section 55 of P.L.2011, c.78 (C.52:14-17.27b), the arbitrator may take into account whether legitimate requests for information have been provided as soon as is practicable and in a usable format, or whether requests for information were excessive or unreasonable, for the purpose of rendering a final decision on a matter before the arbitrator.
(6) Whenever the commission remains at an impasse on a matter before the commission for more than 30 days, the provisions of subsection b. of section 55 of P.L.2011, c.78 (C.52:14-17.27b) shall be followed, unless by majority vote the commission extends the time within which to render a decision on a matter before it.
(7) In consultation with the program actuary, the State Health Benefits Commission shall develop plan designs for the State Health Benefits Program. Such plan designs shall apply to and remain in effect for those employees and retirees who are covered under such plans until the commission, in consultation with the program actuary, shall determine that adjustments to one or more of the plans are necessary.
(8) If the anticipated premiums of one or more of the State Health Benefits Program health plans as recommended by the program actuary will exceed the rate of medical or prescription drug inflation for a given plan year, as determined by the program actuary based upon relevant indices or information, the commission shall undertake such actions and plan modifications as may be necessary to appropriately manage such costs and ensure the continued viability of the program, subject to established processes including, but not limited to, collective negotiations agreements. Matters under this paragraph shall not be subject to the provisions of section 55 of P.L.2011, c.78, (C.52:14-17.27b).
(cf: P.L.2011, c.78, s.45)
2. Section 55 of P.L.2011, c.78 (C.52:14-17.27b) is amended to read as follows:
55. a. Whenever the [State Health Benefits Plan Design Committee of the State Health Benefits Program or the] School Employees' Health Benefits Plan Design Committee of the School Employees' Health Benefits Program fails to render a decision on a matter before the committee because it has not received a vote of the majority of the committee members after 60 days have passed following the initial consideration of the matter, the committee shall utilize a super conciliator, randomly selected from a list developed by the New Jersey Public Employment Relations Commission. The super conciliator shall assist the committee based upon procedures and subject to qualifications established by the commission pursuant to regulation.
The super conciliator shall promptly schedule investigatory proceedings. The purpose of the proceedings shall be to:
Investigate and acquire all relevant information regarding the committee's failure to render a decision;
Discuss with the members of the committee their differences, and utilize means and mechanisms, including but not limited to requiring 24-hour per day negotiations, until a voluntary settlement is reached, and provide recommendations to resolve the members' differences; and
Institute any other non-binding procedures deemed appropriate by the super conciliator.
If the actions taken by the super conciliator fail to resolve the dispute, the super conciliator shall issue a final report, which shall be provided to the committee promptly and made available to the public within 10 days thereafter.
The super conciliator, while functioning in a mediatory capacity, shall not be required to disclose any files, records, reports, documents, or other papers classified as confidential which are received or prepared by him or to testify with regard to mediation conducted by him under this section. Nothing contained herein shall exempt an individual from disclosing information relating to the commission of a crime.
b. (1) Whenever the State Health Benefits Commission remains at an impasse on a matter before the commission pursuant to the timeframes set forth in paragraph (6) of subsection c. of section 3 of P.L.1961, c.49 (C.52:14-17.27), other than on a matter concerning such actions and plan modifications as may be necessary to appropriately manage costs as provided under paragraph (8) of subsection c. of section 3 of P.L.1961, c.49 (C.52:14-17.27), the commission shall select a neutral third-party arbitrator with subject matter expertise who shall assist the commission based upon procedures and subject to qualifications established by the commission pursuant to regulation. If the commission is unable to agree on the selection of an arbitrator, the co-chairs of the commission shall submit a request to the Public Employment Relations Commission to appoint an arbitrator with subject matter expertise in the dispute. If an arbitrator ceases or is unable to act during the arbitration proceeding, a replacement arbitrator shall be selected to continue the proceedings and resolve the matter.
The arbitrator shall promptly schedule investigatory proceedings. The purpose of the proceedings shall be to:
investigate and acquire all relevant information regarding the commission's failure to render a decision;
discuss with the members of the commission their differences, and utilize means and mechanisms, including but not limited to requiring 24-hour per day negotiations, until a voluntary settlement is reached, and provide recommendations to resolve the members' differences; and
institute any other non-binding procedures deemed appropriate by the arbitrator.
(2) If the commission fails to reach a resolution of the matter after 30 days of arbitration, the arbitrator shall issue a final decision on the matter, which shall be binding. The arbitrator shall issue a decision within 60 days from the commencement of the arbitration. The decision shall be provided to the commission promptly and made available to the public within 10 days thereafter. By majority vote, the commission may extend the 30-day period within which to reach a resolution following the commencement of arbitration and may extend the 60-day period within which an arbitrator is required to issue a decision.
The arbitrator shall not be required to disclose any files, records, reports, documents, or other papers classified as confidential which are received or prepared by the arbitrator or to testify with regard to arbitration conducted under this section. Nothing contained herein shall exempt an individual from disclosing information relating to the commission of a crime.
(cf: P.L.2011, c.78, s.55)
3. Section 5 of P.L.1961, c.49 (C.52:14-17.29) is amended to read as follows:
5. (A) The contract or contracts purchased by the commission pursuant to subsection b. of section 4 of P.L.1961, c.49 (C.52:14-17.28) shall provide separate coverages or policies as follows:
(1) Basic benefits which shall include:
(a) Hospital benefits, including outpatient;
(b) Surgical benefits;
(c) Inpatient medical benefits;
(d) Obstetrical benefits; and
(e) Services rendered by an extended care facility or by a home health agency and for specified medical care visits by a physician during an eligible period of such services, without regard to whether the patient has been hospitalized, to the extent and subject to the conditions and limitations agreed to by the commission and the carrier or carriers.
Basic benefits shall be substantially equivalent to those available on a group remittance basis to employees of the State and their dependents under the subscription contracts of the New Jersey "Blue Cross" and "Blue Shield" Plans. Such basic benefits shall include benefits for:
(i) Additional days of inpatient medical service;
(ii) Surgery elsewhere than in a hospital;
(iii) X-ray, radioactive isotope therapy and pathology services;
(iv) Physical therapy services;
(v) Radium or radon therapy services;
and the extended basic benefits shall be subject to the same conditions and limitations, applicable to such benefits, as are set forth in "Extended Outpatient Hospital Benefits Rider," Form 1500, 71(9-66), and in "Extended Benefit Rider" (as amended), Form MS 7050J(9-66) issued by the New Jersey "Blue Cross" and "Blue Shield" Plans, respectively, and as the same may be amended or superseded, subject to filing by the Commissioner of Banking and Insurance; and
(2) Major medical expense benefits which shall provide benefit payments for reasonable and necessary eligible medical expenses for hospitalization, surgery, medical treatment and other related services and supplies to the extent they are not covered by basic benefits. The commission may, by regulation, determine what types of services and supplies shall be included as "eligible medical services" under the major medical expense benefits coverage as well as those which shall be excluded from or limited under such coverage. Benefit payments for major medical expense benefits shall be equal to a percentage of the reasonable charges for eligible medical services incurred by a covered employee or an employee's covered dependent, during a calendar year as exceed a deductible for such calendar year of $100.00 subject to the maximums hereinafter provided and to the other terms and conditions authorized by this act. The percentage shall be 80 percent of the first $2,000.00 of charges for eligible medical services incurred subsequent to satisfaction of the deductible and 100 percent thereafter. There shall be a separate deductible for each calendar year for (a) each enrolled employee and (b) all enrolled dependents of such employee. Not more than $1,000,000.00 shall be paid for major medical expense benefits with respect to any one person for the entire period of such person's coverage under the plan, whether continuous or interrupted except that this maximum may be reapplied to a covered person in amounts not to exceed $2,000.00 a year. Maximums of $10,000.00 per calendar year and $20,000.00 for the entire period of the person's coverage under the plan shall apply to eligible expenses incurred because of mental illness or functional nervous disorders, and such may be reapplied to a covered person, except as provided in P.L.1999, c.441 (C.52:14-17.29d et al.). The same provisions shall apply for retired employees and their dependents. Under the conditions agreed upon by the commission and the carriers as set forth in the contract, the deductible for a calendar year may be satisfied in whole or in part by eligible charges incurred during the last three months of the prior calendar year.
Any service determined by regulation of the commission to be an "eligible medical service" under the major medical expense benefits coverage which is performed by a duly licensed practicing psychologist within the lawful scope of psychologist practice shall be recognized for reimbursement under the same conditions as would apply were such service performed by a physician.
(B) The contract or contracts purchased by the commission pursuant to subsection c. of section 4 of P.L.1961, c.49 (C.52:14-17.28) shall include coverage for services and benefits that are at a level that is equal to or exceeds the level of services and benefits set forth in this subsection, provided that such services and benefits shall include only those that are eligible medical services and not those deemed experimental, investigative or otherwise not eligible medical services. The determination of whether services or benefits are eligible medical services shall be made by the commission consistent with the best interests of the State and participating employers, employees, and dependents. The following list of services is not intended to be exclusive or to require that any limits or exclusions be exceeded.
Covered services shall include:
(1) Physician services, including:
(a) Inpatient services, including:
(i) medical care including consultations;
(ii) surgical services and services related thereto; and
(iii) obstetrical services including normal delivery, cesarean section, and abortion.
(b) Outpatient/out-of-hospital services, including:
(i) office visits for covered services and care;
(ii) allergy testing and related diagnostic/therapy services;
(iii) dialysis center care;
(iv) maternity care;
(v) well child care;
(vi) child immunizations/lead screening;
(vii) routine adult physicals including pap, mammography, and prostate examinations; and
(viii) annual routine obstetrical/gynecological exam.
(2) Hospital services, both inpatient and outpatient, including:
(a) room and board;
(b) intensive care and other required levels of care;
(c) semi-private room;
(d) therapy and diagnostic services;
(e) surgical services or facilities and treatment related thereto;
(f) nursing care;
(g) necessary supplies, medicines, and equipment for care; and
(h) maternity care and related services.
(3) Other facility and services, including:
(a) approved treatment centers for medical emergency/accidental injury;
(b) approved surgical center;
(c) hospice;
(d) chemotherapy;
(e) diagnostic x-ray and lab tests;
(f) ambulance;
(g) durable medical equipment;
(h) prosthetic devices;
(i) foot orthotics;
(j) diabetic supplies and education; and
(k) oxygen and oxygen administration.
(4) All services for which coverage is required pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.), as amended and supplemented. Benefits under the contract or contracts purchased as authorized by the State Health Benefits Program shall include those for mental health services subject to limits and exclusions consistent with the provisions of the New Jersey State Health Benefits Program Act.
(C) The contract or contracts purchased by the commission pursuant to subsection c. of section 4 of P.L.1961, c.49 (C.52:14-17.28) shall include the following provisions regarding reimbursements and payments:
(1) In the successor plan, the co-payment for doctor's office visits shall be $10 per visit with a maximum out-of-pocket of $400 per individual and $1,000 per family for in-network services for each calendar year. The out-of-network deductible shall be $100 per individual and $250 per family for each calendar year, and the participant shall receive reimbursement for out-of-network charges at the rate of 80 percent of reasonable and customary charges, provided that the out-of-pocket maximum shall not exceed $2,000 per individual and $5,000 per family for each calendar year.
(2) In the State managed care plan that is required to be included in a contract entered into pursuant to subsection c. of section 4 of P.L.1961, c.49 (C.52:14-17.28), the co-payment for doctor's office visits shall be $15 per visit. The participant shall receive reimbursement for out-of-network charges at the rate of 70% of reasonable and customary charges. The in-network and out-of-network limits, exclusions, maximums, and deductibles shall be substantially equivalent to those in the NJ PLUS plan in effect on June 30, 2007, with adjustments to that plan pursuant to a binding collective negotiations agreement or pursuant to action by the commission, in its sole discretion, to apply such adjustments to State employees for whom there is no majority representative for collective negotiations purposes.
(3) "Reasonable and customary charges" means charges based upon the 90th percentile of the usual, customary, and reasonable (UCR) fee schedule determined by the Health Insurance Association of America or a similar nationally recognized database of prevailing health care charges.
(D) Benefits under the contract or contracts purchased as authorized by this act may be subject to such limitations, exclusions, or waiting periods as the commission finds to be necessary or desirable to avoid inequity, unnecessary utilization, duplication of services or benefits otherwise available, including coverage afforded under the laws of the United States, such as the federal Medicare program, or for other reasons.
Benefits under the contract or contracts purchased as authorized by this act shall include those for the treatment of alcohol use disorder where such treatment is prescribed by a physician and shall also include treatment while confined in or as an outpatient of a licensed hospital or residential treatment program which meets minimum standards of care equivalent to those prescribed by the Joint Commission on Hospital Accreditation. No benefits shall be provided beyond those stipulated in the contracts held by the State Health Benefits Commission.
(E) The rates charged for any contract purchased under the authority of this act shall reasonably and equitably reflect the cost of the benefits provided based on principles which in the judgment of the commission are actuarially sound. The rates charged shall be determined by the carrier on accepted group rating principles with due regard to the experience, both past and contemplated, under the contract. The commission shall have the right to particularize subgroups for experience purposes and rates. No increase in rates shall be retroactive.
(F) The initial term of any contract purchased by the commission under the authority of this act shall be for such period to which the commission and the carrier may agree, but permission may be made for automatic renewal in the absence of notice of termination by the commission. Subsequent terms for which any contract may be renewed as herein provided shall each be limited to a period not to exceed one year.
(G) A contract purchased by the commission pursuant to subsection b. of section 4 of P.L.1961, c.49 (C.52:14-17.28) shall contain a provision that if basic benefits or major medical expense benefits of an employee or of an eligible dependent under the contract, after having been in effect for at least one month in the case of basic benefits or at least three months in the case of major medical expense benefits, is terminated, other than by voluntary cancellation of enrollment, there shall be a 31-day period following the effective date of termination during which such employee or dependent may exercise the option to convert, without evidence of good health, to converted coverage issued by the carriers on a direct payment basis. Such converted coverage shall include benefits of the type classified as "basic benefits" or "major medical expense benefits" in subsection (A) hereof and shall be equivalent to the benefits which had been provided when the person was covered as an employee. The provision shall further stipulate that the employee or dependent exercising the option to convert shall pay the full periodic charges for the converted coverage which shall be subject to such terms and conditions as are normally prescribed by the carrier for this type of coverage.
(H) The commission may purchase a contract or contracts to provide drug prescription and other health care benefits or authorize the purchase of a contract or contracts to provide drug prescription and other health care benefits as may be required to implement a duly executed collective negotiations agreement or as may be required to implement a determination by a public employer to provide such benefit or benefits to employees not included in collective negotiations units.
(I) The commission shall take action as necessary, in cooperation with the School Employees' Health Benefits Commission established pursuant to section 33 of P.L.2007, c.103 (C.52:14-17.46.3), to effectuate the purposes of the School Employees' Health Benefits Program Act as provided in sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11) and to enable the School Employees' Health Benefits Commission to begin providing coverage to participants pursuant to the School Employees' Health Benefits Program Act as of July 1, 2008.
(J) Beginning January 1, 2012, the State Health Benefits Plan Design Committee shall provide to employees the option to select one of at least three levels of coverage each for family, individual, individual and spouse, and individual and dependent, or equivalent categories, for each plan offered by the program differentiated by out of pocket costs to employees including co-payments and deductibles. Notwithstanding any other provision of law to the contrary, the committee shall have the sole discretion to set the amounts for maximums, co-pays, deductibles, and other such participant costs for all plans in the program. The committee shall also provide for a high deductible health plan that conforms with Internal Revenue Code Section 223.
There shall be appropriated annually for each State fiscal year, through the annual appropriations act, such amounts as shall be necessary as funding by the State as an employer, or as otherwise required, with regard to employees or retirees who have enrolled in a high deductible health plan that conforms with Internal Revenue Code Section 223.
(K) Any contract or contracts purchased, or the extension of any contract entered into, by the commission pursuant to subsection b. of section 4 of P.L.1961, c.49 (C.52:14-17.28) on and after the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) shall require the third-party administrator under contract to file with the commission reports, data, schedules, statistics, or other information determined by the commission, showing the reimbursement rates negotiated between third-party administrators and providers for health care services and the amount paid for health care procedures and services received by members. The information provided shall be in a format suitable for the commission to establish and maintain an interactive, Internet-based price transparency dashboard that allows the commission, participating employers, and members to view the health care prices paid by the third-party administrator for health care services. The dashboard shall allow the commission and participating employers to sort the information by geographic location, by health care provider, and by the specific health care procedure or health care service.
(cf: P.L.2023, c.177, s.139)
4. This act shall take effect immediately.
STATEMENT
This bill makes various changes to State Health Benefits Plan (SHBP) governance and administration.
State Health Benefits Commission
The bill revises the structure of the State Health Benefits Commission (SHBC) to include 13 members as follows:
(1) the State Treasurer; the Commissioner of Banking and Insurance; the Chairperson of the Civil Service Commission, and the Commissioner of Health, or their designees, who will serve ex officio;
(2) one member appointed by the Governor who will represent local government employers;
(3) one member appointed by the Governor who will represent higher education employers;
(4) three members appointed by the Public Employee Committee of the New Jersey AFL-CIO who are members of each of the three public employee organizations affiliated with the New Jersey AFL-CIO with the largest number of employees participating in the State Health Benefits Program;
(5) one member appointed by the public employee organization that is not affiliated with the New Jersey AFL-CIO, that represents the largest number of police officers in the State;
(6) one member appointed by the public employee organization that is not affiliated with the New Jersey AFL-CIO, that represents the largest number of firefighters in the State;
(7) one member from the State Troopers Fraternal Association; and
(8) one member who will be a non-voting member and who will be mutually agreed upon by the majority vote of the membership of the commission.
The bill specifies that the SHBC will establish the health benefits program and, with respect to plan design, the SHBC will have responsibility for, and authority over, the various health care benefits plans and components of those plans, including medical benefits, prescription drug benefits, dental, vision, and any other health benefits, offered and administered by the SHBP and will have the authority to create, modify, or terminate any plan or component of any health care benefits plan, at its sole discretion and will have the authority to set limits on the rates of reimbursements to hospitals or other health care providers. The bill empowers the SHBC to obtain certain information necessary to make informed decisions and to enter into contracts with third-party administrators and consultants.
The SHBC will also be required to follow the advice and guidance of the program actuary when developing plan designs for the health plans provided by the program. Whenever the program actuary advises that the anticipated costs of one or more of the plans under the program is likely to exceed the rate of medical or prescription drug inflation for a given plan year, as determined by the program actuary based upon relevant indices and information, the commission will be required to take such actions as may be necessary to appropriately mange such costs and ensure the continued viability of the program, subject to established processes including, but not limited to, collective negotiations agreements.
The bill establishes fiduciary responsibility of the commission to the plan participants and beneficiaries consistent with the standards established in the Employee Retirement Income Security Act of 1974 (ERISA).
Plan Design Committee and Arbitration Process
This bill eliminates the SHBP Plan Design Committee and transfers the powers and functions of the Plan Design Committee to the newly organized SHBC. With the elimination of the SHBP Plan Design Committee, the bill ends the use of a super conciliator by the SHBP to resolve deadlocked matters before the SHBP Plan Design Committee. Instead, the bill requires all decisions before the commission, other than on matters concerning such actions and plan modifications as may be necessary to appropriately manage costs, to be resolved within 30 days from the date such decisions are placed before the commission. After the 30-day period, if a decision on a matter before the commission is not reached, or if the commission remains at an impasse, the commission will select a neutral third-party arbitrator with subject matter expertise who will attempt to assist the commission in reaching a voluntary resolution on the matter.
The bill requires the arbitrator to promptly schedule investigatory proceedings to investigate and acquire all relevant information regarding the committee's failure to render a decision; discuss with the members of the committee their differences, and utilize means and mechanisms, including but not limited to requiring 24-hour per day negotiations, until a voluntary settlement is reached, and provide recommendations to resolve the members' differences; and institute any other non-binding procedures deemed appropriate by the arbitrator. If the actions taken by the arbitrator fail to resolve the dispute after 60 days, the arbitrator will issue a final binding decision, which will be provided to the commission promptly and made available to the public within 10 days thereafter.
Third-party Medical Claims Reviewer Requirements
The bill directs the SHBC to require the third-party medical claims reviewer to include claims reimbursed to providers located in another state, along with other data, in an Internet-based price transparency dashboard.
