Lawmakers are preparing to take up legislation intended to prevent significant premium increases in New Jersey’s individual health insurance market, and NJBIA’s Mary Beaumont wants to know what you think about the bills.
The bill sponsors have agreed to meet with stakeholders and consider amendments, and NJBIA is grateful for the opportunity to have input on them. The association also wants feedback from member companies on how the legislation will impact them.
The bills are in response to the federal tax reform law that repealed the IRS penalties for those not covered by health insurance starting in 2019, which had been required under the Affordable Care Act (ACA).
A-3380 would establish a state “individual mandate” requiring all resident taxpayers to obtain health insurance coverage that qualifies as minimum essential coverage, which includes coverage under health plans provided by employers. The penalty would be the same as that under the ACA prior to the repeal (approximately $695 per adult, up to a family maximum of $2,085, or 2.5 percent of household income, whichever is greater).
A-3379 permits the state to apply for a federal waiver under the ACA to create a reinsurance program to reimburse health insurance carriers in the individual market for claims incurred that exceed a certain threshold amount. Approval of the waiver by the federal government would allow New Jersey to apply for and draw down federal funds for the reinsurance program. In addition, health insurance carriers and third-party administrators that contract to oversee, manage, deliver or provide healthcare services in the large and small group health insurance market would be assessed. These monies together with the federal funds would then be used to reimburse the carriers in the individual market for high-cost claims. The bill would take effect immediately.
NJBIA has relayed its concerns to the Senate and Assembly bill sponsors because it is not yet known (1) how much will be collected under the state individual mandate and (2) it is very likely that any assessments of health insurance carriers to fully fund the reinsurance program will result in premium increases for both small and large employer health benefits plans in its effort to stabilize the individual market.