Senate Commerce Committee Statement to Assembly, No. 4538 (1R) — State of New Jersey (February 11, 2021)

Summary

A Senate Commerce Committee statement to the First Reprint of Assembly, No. 4538, State of New Jersey, dated February 11, 2021, reporting the bill favorably with committee amendments. The bill requires certain insurers and dental service and dental plan organizations to provide credits for reduced usage during the coronavirus disease 2019 pandemic. Every carrier writing dental insurance plans in the State is to credit each policyholder in good standing with a plan in effect on March 27, 2020, for reduced claims experience from March 27, 2020 to May 26, 2020, as a direct refund or a credit toward future premiums. Entities that issued a credit or refund of 50% or more of one month's premium for March through June 2020, among other exemptions, are excluded.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

[First Reprint]

ASSEMBLY,
No. 4538

with
committee amendments

STATE
OF NEW JERSEY

DATED: FEBRUARY
11, 2021

The
Senate Commerce Committee reports favorably and with committee amendments
Assembly Bill No. 4538.

This
bill requires certain insurance companies, health, hospital, medical, and
dental service organizations, and dental plan organizations to provide credits
for reduced usage during the coronavirus disease 2019 pandemic. The provisions
of the bill do not apply to any entity that:

(1) issued
a credit or refund to policyholders in an amount equivalent to 50% or more of
one month’s premium for each policyholder for the period of March through June
2020;

(2) waived
frequency limits for the 2020 plan year;

(3) waived
deductibles or maximum annual rollover limitations; or

(4) has
taken any actions to assist policyholders that the Commissioner of Banking and
Insurance deems sufficient to excuse the entity from the provisions of the
bill.

Under
the bill, every carrier writing dental insurance plans in this State is to
issue to each policyholder in good standing with a plan that was in effect on
March 27, 2020, regardless of whether the plan has since been terminated, a
credit in an amount equivalent to the value of any reduced claims experience
due to the limitations of dental services for the period beginning on March 27,
2020 and ending on May 26, 2020. The credit may be returned to the policyholder
in the form of a direct refund, or credit toward future premiums, and shall
apply to both fully paid and monthly billed policies. Policyholders shall not
be required to take any action to receive the refund or credit. The
bill prohibits a carrier from conditioning the issuance of the credit on the
renewal of the plan by the policyholder.

Under
the bill, every insurer is to provide to the Department of Banking and
Insurance a report containing all actions taken, and contemplated future
actions, to reduce premiums in compliance with the bill. The information
provided in each report shall reflect activity through the preceding month’s
end.

As amended and reported, this bill is identical to
Senate Bill No. 3131, as also amended and reported by the committee.

COMMITTEE AMENDMENTS:

The committee amended the bills to:

(1) require a carrier subject to the provisions of
the bill to issue a credit to each policyholder pursuant to the bill without
regard to whether the policyholder’s plan has since been terminated;

(2) prohibit a carrier from conditioning the issuance
of the credit on the renewal of the plan by the policyholder;

(3) change the date by which a carrier is to provide
certain information to the Department of Banking and Insurance to May 31, 2021
from December 31, 2020;

(4) make certain changes to the requirements for
exemption from the provisions of the bill;

(5) define the term “dental benefits plan”; and

(6) clarify that the bill does not apply to certain
provider network contracts for dental services.

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