New Jersey-2016-S1317-Introduced

An Act concerning premium assistance payments to certain small employers, supplementing P.L.1992, c.162 (C.17B:27A-17 et seq.), and making an appropriation.

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

1. a. The Commissioner of Banking and Insurance shall establish the "small employer premium assistance program," the purpose of which is to assist participating small employers in purchasing a small employer health benefits plan that provides health coverage for the small employer's eligible employees and their dependents. Under the premium assistance program, a participating small employer shall be eligible to claim a premium assistance payment equal to an amount set by the commissioner through regulation, but not more than 50% of the monthly premium paid by a participating small employer for a small employer health benefits plan that covers its eligible employees and their dependents. A participating small employer may claim a premium assistance payment in each month in which the small employer remains eligible for the program, pursuant to subsection c. of this section, for two consecutive plan years. The aggregate of the monthly claims for payment shall be distributed by the commissioner pursuant to a schedule established by regulation.

b. The commissioner shall:

(1) develop an application to be used by a small employer to apply for a premium assistance payment;

(2) establish time frames in which applications for participation in the program will be accepted for review, which shall be not less frequently than three times per year;

(3) review applications to determine whether a small employer is eligible, as provided in subsection c. of this section, to participate in the premium assistance program;

(4) report to each small employer the results of the review of its application;

(5) enroll participating small employers in the premium assistance program on a first-come, first-served basis, to the extent that the amount of claims for premium assistance payments shall not exceed $10,000,000 in any fiscal year;

(6) distribute premium assistance payments to participating small employers pursuant to a payment schedule established through regulation; and

(7) develop and maintain a waiting list for small employers who are eligible to participate in the premium assistance program, but who are unable to participate because the funding is unavailable.

c. To participate in the premium assistance program, a small employer:

(1) shall not have provided health benefits coverage to its eligible employees under a small employer health benefits plan during any of the five calendar years immediately prior to applying to participate in the program;

(2) shall, upon acceptance into the program, purchase a small employer health benefits plan to cover its eligible employees and their dependents, and require its eligible employees and their dependents to pay no more than 20% of the costs of the premium for the small employer health benefits plan or an amount set by the commissioner, whichever is less;

(3) shall employ an average of at least two but not more than five eligible employees each month during the plan year;

(4) shall not pay any employee, including a sole proprietor, partner of a partnership, or officer, more than $50,000 in gross compensation, including bonuses and commissions, during the plan year; and

(5) shall submit an application to the department and receive approval from the commissioner to participate in the premium assistance program for two consecutive health benefits plan years.

d. As used in this section:

"Participating small employer" means a small employer who has been approved by the commissioner pursuant to subsection b. of this section to participate in the premium assistance program.

2. The commissioner shall seek to secure the use of funds or other resources, as may be available from the federal government to effectuate the purposes of this act.

3. There is appropriated $10,000,000 from the General Fund to the Department of Banking and Insurance to effectuate the purposes of this act.

4. This act shall take effect on the 120th day after enactment.

STATEMENT

This bill establishes the small employer premium assistance program to encourage small employers to provide health benefits coverage to their employees and their employees' dependents.

Under the premium assistance program, qualified small employers are eligible each month to claim a premium assistance payment equal to an amount of no more than 50% of the cost that the small employer pays for the monthly premium of a small employer health benefits plan that covers eligible employees and their dependents. Participating small employers may claim the premium assistance payments, as long as they remain otherwise qualified, for two consecutive health benefits plan years.

Since the goal of the premium assistance program is to encourage small employers to offer coverage to their employees, enrollment is limited to those small employers who have not offered health benefits coverage to their employees during any of the five calendar years immediately prior to applying for the program. Upon acceptance into the program, a small employer must purchase coverage through the New Jersey Small Employer Health Benefits Program and may not require their employees to pay more than 20% of the cost of the coverage.

In addition, data suggest that very small employers are least likely to afford and provide coverage; thus enrollment is limited to those small employers that employ an average of at least two but not more than five eligible employees each month during the health benefits plan year. Enrollment is also limited to small employers who do not pay any employee, including a sole proprietor, partner of a partnership, or officer, more than $50,000 in gross compensation during the plan year. "Eligible employee" is defined in the law establishing the New Jersey Small Employer Health Benefits Program as a full-time employee who works a normal work week of 25 or more hours.

To enroll in the premium assistance program, small employers must apply to the Department of Banking and Insurance. The Commissioner of Banking and Insurance is required to: develop an application for the program; accept applications for review not less than three times per year under a "rolling admissions" model; notify applicants of the results of the review; enroll qualified small employers; distribute the assistance payments on a time schedule set through regulation; and secure any funding available from the federal government.

Enrollment in the program is limited based on the amount of money ($10 million) appropriated for the premium assistance program. Thus, qualified applicants will be accepted on a first-come, first-served basis, and the commissioner is required to develop a waiting list for those qualified applicants who would be eligible to participate but for funding limitations.

Finally, the bill appropriates $10 million to the Department of Banking and Insurance from the State's General Fund for the premium assistance program.