On Thursday, both the Assembly State & Local Government Committee and Assembly Appropriations Committee will consider A-5903, which makes various changes to SHBP plan offerings and governance.
The legislation will abolish the State Health Benefits Plan Design Committee and transfer its duties to the State Health Benefits Commission. In addition, the composition of the State Health Benefits Commission would be expanded to an 11-member board (5 management, 5 labor, and 1 chairperson nominated by the Commission).
The State Health Benefits Commission will be required to establish the health benefit program; will have the authority to create, modify, or terminate plan or plan components; must take actions to manage costs and ensure continued viability of program when actuaries advise the anticipated costs will likely exceed the rate of medical or prescription drug inflation; issue an actuarial report; review and consider any prescription medication newly approved by FDA on quarterly basis; review third-party medical claims on an annual basis.
The State Health Benefits Commission members would have access to HIPPA information and data necessary to carry out the Commission’s duties including but not limited to setting of premiums; designing of health care plans; entering into contracts for the provision of benefits for health services; claims and utilization data; reimbursement rates between third-party administrators, medical service providers, and hospitals; and any documents relating to the solicitation and award of contracts, at least 30 days prior to release. At any time, three members of the Commission may request information through the Chair. Upon receipt of the request, the Chair must transmit the request to the appropriate individual or entity. Information must be provided as soon as is practicable.
In addition, the Commission must annually require a third-party medical claims reviewer to review at least 33% of in-network claims and 33% of out-of-network claims to ensure that State Health Benefits Plan is properly charged for in-network and out-of-network provider services. The claims review program must annually review 33% of claims reimbursed to providers located in NY and PA, with a focus on claims resulting in higher cost of services.
Within one year, the number of health benefits plans offered would be reduced from seven plans to five plans as follows:
- SHBP Unity 2019 – contribution rates outlined in bill.
- Either flat % or fixed dollar amount depending upon salary and coverage.
- SHBP Tiered Network – contribution rates equal to 75% of SHBP Unity 2019 Plan.
- SHBP PPO 2030 – contribution rates remain at c. 78 rates.
- SHBP PPO 2035 - contribution rates remain at c. 78 rates.
- NJ Gold Plan (actuarially equal to 80%) – with no contribution from the employee.
After the first plan year and for each plan year thereafter, the contributions required may be modified through a collective negotiations agreement between the employers and the employees. Negotiations will be conducted as if the required contributions above were included in the prior contract. New contribution rates become the baseline in contracts for future negotiations. No other contribution may be required by a collective negotiations agreement, unless the parties to a collective agreement agree to negotiate different contributions.
The bill permits local governments can be part of the State Health Benefits Program for medical plans only and may separately purchase pharmacy and dental outside SHBP without limitation or restrictions.
For local governments participating in the State Health Benefits program, employees and retirees not Medicare eligible will be required to affirmatively select one of the plans. If an employee or retiree is not Medicare eligible fails to affirmatively select a plan, they will be enrolled in SHBP Unity 2019 PPO plan.
Retirees must remain enrolled in the plan for each year until the retiree becomes eligible for Medicare; however, their dependents who are not Medicare eligible remain in the plan. Plan selection is at the sole discretion of the employee or retiree who is not Medicare eligible.
Parties to a collective negotiations agreement is permitted to enter into binding agreements to provide employees with access to health care reimbursement arrangements, health care savings accounts, and flexible spending accounts as permitted by federal law.
Finally, Local Governments must decide within one year if they wish to join the State Health Benefits Program. If they choose to participate, they must stay in plan for two consecutive plan years. If they chose not to join the State Health Benefits Program, they cannot join for two consecutive plan years.
There is no current Senate companion to this legislation. In an opinion piece earlier this week, Senate President Nick Scutari announced the creation of a State Senate work group to address the exorbitant SHBP increases. We will be reaching out to the members of the working group as soon as possible.
We anticipate that there will be amendments introduced tomorrow that could change the contribution rates outlined in the bill as well as some process changes.
We will provide an update after tomorrow’s committee hearings.
Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.