Senate Commerce Committee Statement to Senate, No. 1971 (State of New Jersey, March 24, 2025)

Summary

A Senate Commerce Committee statement to the Senate, No. 1971 with committee amendments, dated March 24, 2025, reporting favorably and with committee amendments Senate Bill No. 1971. The statement says the bill, as amended, imposes rate filing requirements on individual health benefits plans available on New Jersey's State-based exchange, "Get Covered NJ," and requires carriers offering these plans to follow the ACA's single-risk-pool rule. It says the bill requires the Commissioner of Banking and Insurance to promulgate regulations on additional requirements for health benefits plans. The committee amended the bill to update to 2026 the year for which a carrier is to base the price of a plan in the silver level, and to make technical updates.

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     SENATE COMMERCE COMMITTEE

                    STATEMENT TO

                  SENATE, No. 1971
                   with committee amendments



 STATE OF NEW JERSEY
                     DATED: MARCH 24, 2025

    The Senate Commerce Committee reports favorably and with
committee amendments Senate Bill No. 1971.
   As amended, this bill imposes certain rate filing requirements on
individual health benefits plans available on New Jersey’s State-
based exchange, “Get Covered NJ.” The legislation requires all
health insurance carriers offering these plans to follow the ACA’s
single-risk-pool rule. The rule requires every carrier to price each
plan based on projected utilization by the identical population, the
entire market risk pool. Accordingly, the cost of silver and gold
level plans will be priced more in line with the actuarial value of
those plans.
   The bill requires the Commissioner of Banking and Insurance
(commissioner) to promulgate regulations imposing additional
requirements for health benefits plans, including qualified health
plans, to address the following factors:
   (1) whether the carrier issuing the health benefits plan has
complied with all requirements for pooling risk, as provided by
federal regulation, and participating in risk adjustment under State
or federal law;
   (2) the covered benefits or health benefits plan design or, for a
rate change, any changes to the benefits or design; and
   (3) certain other factors enumerated by federal regulation.
   The bill requires the commissioner to consider certain additional
factors in making a determination concerning a proposed rate for a
qualified health plan, including:
   (1) the purchasing power of consumers who are eligible for a
premium subsidy;
   (2) if the plan is in the silver level, whether the rate is
appropriate for the plan in relation to the rates charged for qualified
health plans offering coverage at other metal levels, taking into
account any funding or lack of funding for cost sharing reductions,
the covered benefits for each level of coverage, and expected
service utilization by the carrier’s entire individual market risk
pool, if enrolled in each metal level of coverage; and
   (3) whether the carrier issuing the health benefits plan utilized
the induced demand factors developed by the federal Centers for
Medicare and Medicaid Services for the risk adjustment program
                                    2

established under federal law for the level of coverage offered by
the plan, unless the Department of Banking and Insurance
determines that the use of those factors would be objectively
inappropriate in estimating the impact of cost sharing on expected
utilization by the carrier’s entire individual market risk pool.
   The bill requires carriers that make an individual or small
employer health benefits plan and provider network available in a
geographic area at either the gold or silver level to offer the plan
and provider network in that area at both the gold and silver levels.
   The bill provides that, in any rate filing issued by a carrier
offering a health benefits plan through the State-based exchange,
the carrier shall base the price of any plan in the silver level on a
distribution of silver-tier enrollment among cost sharing reduction
variants that:
   (1) for rates charged in 2026, assumes that the plan’s enrollees
will be distributed among cost sharing reduction variants in
proportion to the total statewide distribution of silver-tier enrollees
among those variants in 2022, as estimated by the commissioner;
and
   (2) for rates charged after 2026, assumes that the plan’s
enrollees will enroll in plans with an actuarial value of 90 percent.
   The bill provides that nothing in current law or in the bill is to be
construed to prevent a carrier from transferring a member from a
plan in the silver level to a plan in the gold level, provided that:
   (1) before the most recent open enrollment period, the member
was enrolled in a silver level plan;
   (2) during that open enrollment period, the member did not
make an affirmative choice of plan;
   (3) the gold plan and the silver plan have the same product and
provider network;
   (4) the gold plan has a higher actuarial value and a lower
premium than the silver plan;
   (5) the member received prior and subsequent notice from the
carrier describing the transfer and explaining how the member can
opt out of the transfer, as prescribed by the department; and
    (6) the transfer is pursuant to a transfer policy of the carrier that
is filed with the department and that transfers all members who
meet the criteria described in this paragraph.
    This bill was prefiled for introduction in the 2024-2025 session
pending technical review. As reported, the bill includes the changes
required by technical review, which has been performed.

COMMITTEE AMENDMENTS
    The committee amended the bill to:
    1) update to 2026 as the year for which a carrier is to base the
price of a plan in the silver level and in which the bill is effective; and
    2) make technical updates.


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