On behalf of our members representing over 1 million jobs in New Jersey, the New Jersey Business & Industry Association (NJBIA) is seeking amendments to A-5499. NJBIA places a strong and consistent focus on the quality and affordability of healthcare in New Jersey. The cost of providing health coverage to employees is one of the most significant challenges facing employers today. It is consistently ranked a top concern facing our members in our annual NJBIA Business Outlook Survey.
According to the 2018 NJBIA Health Benefits Survey, members, on average are spending $8,292 annually for employee-only plans. That’s compared to $7,044 for the same expenditures in 2016 – nearly an 18 percent overall increase.
NJBIA supports the implementation of a state exchange, however, implementation success and cost are a paramount concern. Additionally, protection of the small employer market must also be at the forefront of discussion.
In reviewing the legislation, NJBIA has expressed the following concerns with the legislation.
In section 1. a., NJBIA is concerned the legislation is too broad in describing the function of the “Health Insurance Exchange Trust Fund.” This legislation provides that the user fees “shall be used only for the purpose of supporting the exchange through initial start-up costs associated with establishment of the exchange, exchange operations, outreach, enrollment, reinsurance, and other means of supporting the exchange.” This leaves the scope of the fund too broad and NJBIA would like to see it have more limited authority. We also believe there should be legislative oversight of this fund and how its revenues are spent to ensure the exchange is established on budget.
In section 1. c. 3. of this legislation, it allows the Commissioner of Banking and Insurance discretion to adjust the rate of the fee collected to ensure that the State-Based exchange is fully funded. It also allows for the Commissioner to apply a monthly assessment to each health benefits plan offered by a carrier. NJBIA feels that there should be a statutory ceiling on the amount monthly fees assessed to each health benefits plan offered by a carrier for concern additional fees will raise health insurance premiums. If the fees raised are in excess of the needs of the program, the Commissioner should reduce the fees moving forward.
Section 2. a. of the legislation grants the Commissioner authority to reorganize boards of both the New Jersey Individual Health Coverage Program and the New Jersey Small Employer Health Benefits Program, as the commissioner deems appropriate. NJBIA feels that these boards offer beneficial input to these programs. Re-organizing, combining or doing away with these boards would limit an important voice from the boards. For example, the business community is represented on the IHC and SEH Boards. As a purchaser of health insurance, input for the business community should be guaranteed. NJBIA would like to see stakeholder input into this process continue.
In Section 3, c., the legislation states, “the Commissioner of Banking and Insurance shall present a report to the Governor and to the Legislature, which contain the Commissioner’s findings and recommendations. NJBIA is concerned that a recommendation could be a phase out the New Jersey Individual Health Coverage Program and the New Jersey Small Employer Health Benefits Program and transition the health care coverage provided to coverage provided under qualified health benefits plans through the exchange.” This recommendation, if made, would impose an additional 3.5% user fee on plans that are not currently subject to these costs. This would increase costs for our members within that market making their healthcare more expensive. NJBIA feels that an important decision like elimination or consolidation of this marketplace should require legislative oversight or approval.
For these reasons, we respectfully seek the following amendments to the legislation.
Section 1.a. – There is established in the Department of the Treasury a nonlapsing revolving fund to be known as the “Health Insurance Exchange Trust Fund.” This fund shall be the repository for monies collected pursuant to subsection c. of this section, any federal financial participation received for the administration of the State Medicaid plan through the exchange, and other monies received as grants or otherwise appropriated for the purposes of supporting health insurance outreach, enrollment, and reinsurance efforts. The monies in the fund shall be used only for the purpose of supporting the exchange through initial start-up costs associated with establishment of the exchange, exchange operations, outreach, enrollment, reinsurance, and other means of supporting the exchange. (Add) The New Jersey Legislature will have oversight of the operations of this fund.
Section 1. c. – The commissioner may apply a monthly assessment to each health benefits plan offered by a carrier. The assessment may be applied at a rate of:
(1) an amount up to 0.5 percent of the total monthly premium charged by a carrier for each health benefits plan during any period that the State is on a federally-facilitate exchange;
(2) an amount up to 1 percent of the total monthly premium charged by a carrier for each health benefits plan during any period that the State is on a State-based exchange using the federal platform; or
(3) an amount up to 3.5 percent of the total monthly premium charged by a carrier for each health benefits plan during any period that the State is on a State-based exchange. The commissioner shall have the discretion to adjust this rate to ensure that fees collected do not exceed the amount needed to ensure the State-based exchange is fully funded and the rate shall not exceed 3.5% at any given time.
Section 2. a. – Notwithstanding any other law to the contrary, the Department of banking and Insurance shall have the authority to operate a State-based exchange and coordinate the operations of the exchange with the operations of the New Jersey Individual Health Coverage Program and the New Jersey Small Employer Health Benefits Program, including reorganization of the boards, as the commissioner deems appropriate.
Thank you for your consideration of our comments.