Senate Commerce Committee Statement to Senate, No. 2676 — State of New Jersey (July 23, 2020)

Summary

A Senate Commerce Committee statement to the Senate on Senate Bill No. 2676, State of New Jersey, dated July 23, 2020, reporting the bill favorably with committee amendments. As amended, the bill requires entities authorized to issue health benefits plans to pay an annual assessment of 2.75% of net written premiums, filed with the Commissioner of Banking and Insurance by April 1 and paid to the State Treasurer by May 1. Assessments go to a nonlapsing "Health Insurance Affordability Fund" in the Department of the Treasury, to be used to increase affordability in the individual and small group markets, with a primary focus on households below 400 percent of the federal poverty level. The amendments exclude Medicare supplements plans and add a report on impacts by income level, race, and immigration status.

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SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE, No.
2676

with
committee amendments

STATE
OF NEW JERSEY

DATED: JULY
23, 2020

The
Senate Commerce Committee reports favorably and with committee amendments
Senate Bill No. 2676.

As amended by the committee, the bill requires certain
entities authorized to issue health benefits plans to pay annual assessments
based on the entity’s net written premiums.

The bill requires entities to pay an annual assessment
of 2.75% of the entity’s net written premiums. Entities include various
organizations that are authorized to issue health and dental benefits plans in
this State.

The bill requires entities to annually file with the
Commissioner of Banking and Insurance their net written premiums for the
preceding year, no later than April 1 of each year.

The bill requires the commissioner to calculate and
issue to the entity a certified assessment, which will be 2.75% of the entity’s
net written premiums.

The bill requires entities to pay the assessment
issued by the commissioner to the State Treasurer no later than May 1 of each
year, as prescribed by the commissioner.

The bill provides that if the commissioner determines
that the amount of the assessment will reduce the State’s total revenue, the
commissioner may reduce the assessment.

The bill establishes in the Department of the Treasury
a nonlapsing revolving fund to be known as the “Health Insurance Affordability
Fund.” This fund is to be the repository for all monies collected pursuant to
the bill. As directed by the commissioner, the monies in the fund are to be
used only for the purposes of increasing affordability in the individual and
small group markets and providing greater access to health insurance to the
uninsured, including minors, with a primary focus on households with an income
below 400 percent of the federal poverty level, expanding eligibility, or
modifying the definition of affordability in those markets, through subsidies,
reinsurance, tax policies, outreach and enrollment efforts, buy-in programs,
such as the NJ FamilyCare Advantage Program, or any other efforts that can
increase affordability for small employers and individual policyholders in
those markets or that can reduce racial disparities in coverage for the
uninsured.

The bill provides that a report currently required to
be issued by the Commissioner of Banking and Insurance by June 1, 2022 shall
also set forth the impacts of the measures taken pursuant to the bill on
affordability, reductions in racial disparities in health insurance coverage,
including impacts by income level, race, and immigration status. The report
shall make recommendations to increase affordability and reduce the uninsured
rate in New Jersey, as appropriate, based on the data available to the
department.

The bill also requires that the assessments collected
pursuant to the bill be used only for the purposes contained in the bill, with
certain provisions to ensure the assessments are used for those purposes in
future fiscal years.

COMMITTEE AMENDMENTS:

The committee amended the bill to:

1) Make clarifications to the definition of “entity
subject to this act,” as used in the bill, and provide that the bill does not
apply to Medicare supplements plans.

2) Remove references to certain sections of the
federal Affordable Care Act that will no longer be in effect in 2021.

3) Provide that the Commissioner of Banking and
Insurance must consult with the Commissioners
of the Department of Human Services and the Department of Health in using the
funds collected pursuant to the bill.

4) Provide that
the funds collected pursuant to the bill are to be used to increase
affordability and provide greater access to health insurance with a primary focus on households with an income
below 400 percent of the federal poverty level , and to expand
eligibility, and to modify the definition of affordability in the small
employer and individual markets .

5) Provide that the funds collected pursuant to the bill may
be used for efforts that can reduce racial disparities in coverage for the
uninsured.

6) Provide that a
report currently required to be issued by the Commissioner of Banking and
Insurance by June 1, 2022 shall also set forth the impacts of the measures
taken pursuant to the bill on affordability, reductions in racial disparities
in health insurance coverage, including impacts by income level, race, and
immigration status. The report shall make recommendations to increase
affordability and reduce the uninsured rate in New Jersey, as appropriate,
based on the data available to the department.

7) Require that
the assessments collected pursuant to the bill be used only for the purposes
contained in the bill, with certain provisions to ensure the assessments are
used for those purposes in future fiscal years.

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