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

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 1971 with committee amendments, State of New Jersey, dated March 24, 2025, reporting the bill favorably. As amended, the bill imposes rate filing requirements on individual health benefits plans on the State-based exchange, "Get Covered NJ," and requires carriers to follow the ACA's single-risk-pool rule. The Commissioner of Banking and Insurance is to weigh added factors for qualified health plan rates, and carriers offering a plan at either the gold or silver level in an area must offer it at both. Silver plan pricing for rates charged after 2026 assumes enrollment in plans with an actuarial value of 90 percent, and carriers may transfer qualifying members from silver to gold plans under stated conditions.

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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 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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