New Jersey-2010-A1139-Introduced

An Act concerning health service corporations and amending P.L.1985, c.236.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 6 of P.L.1985, c.236 (C.17:48E-6) is amended to read as follows:

6. The board of a health service corporation which is formed as the result of a merger between a medical service corporation and a hospital service corporation shall be composed of not more than 15 members. Initially, after the merger has been effected, the board shall be constituted as follows:

a. Four members of the board shall be public members, who shall be appointed by the Governor with the advice and consent of the Senate. The public members so appointed shall be persons whose background and experience indicate that they are qualified to act in the broad public interest, who may or may not have coverage under a contract or contracts issued by the corporation, its subsidiaries or affiliates, and who, or whose spouses or minor children, are not officers, directors or owners of more than 10% of the stock of a corporation whose aggregate sales to hospitals, other health care facilities or other providers of health care services exceed 5% of its total sales. The remaining eleven members shall be selected by the board of directors of the health service corporation in accordance with the provisions of its certificate of incorporation and bylaws.

b. Of the initial members of the board, as provided for in subsection a. of this section, one public member and three members selected by the board of the health service corporation shall serve for a term of one year; one public member and three members selected by the board of the health service corporation shall serve for a term of two years; and two public members and five members selected by the board of the health service corporation shall serve for a term of three years. Thereafter, all members of the board shall serve for a term of three years, and shall hold office until their successors are elected and qualified.

c. After the constitution of the initial board as provided in subsection b. of this section, and as the initial terms expire as provided for in that section, the board shall be constituted as follows:

(1) [Four] Ten members shall be public members of the board appointed by the Governor with the advice and consent of the Senate; [and]

(2) [Eleven] Five members shall be elected by the board of directors, as provided in the bylaws; and

(3) On and after the effective date of P.L. , c. (pending before the Legislature as this bill), additional public members shall be appointed as provided in paragraph (1) upon the expiration of the next six terms of members elected by the board of directors whose terms first expire after that date.

d. The provisions of subsection c. of this section shall not be construed to preclude the reappointment or reelection of any member appointed or elected pursuant to subsection a. of this section.

(cf: P.L.1991, c.208, s.20)

2. Section 7 of P.L.1985, c.236 (C.17:48E-7) is amended to read as follows:

7. The board of directors of a health service corporation which is established in accordance with paragraph (1) of subsection a. of section 2 of P.L.1985, c.236 (C.17:48E-2) shall have [four] ten public members appointed by the Governor with the advice and consent of the Senate and [eleven] five members elected as provided in the bylaws.

(cf: P.L.1991, c.208, s.21)

3. This act shall take effect on the 90th day following enactment.

STATEMENT

The bill makes certain changes in the composition of the board of directors of a health service corporation established pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.). The bill increases the number of public members appointed by the Governor from four to ten and reduces the number of members elected by the board of directors from eleven to five.