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|What Is New Jersey Health Insurance Reform?|
|The New Jersey Legislature in 1992 created two programs
to guarantee access to health coverage for individuals
and small employers, regardless of health status, age,
claims history, or any other risk factor. The Individual
Health Coverage Program ("IHC") and the Small Employer
Health Benefits Program ("SEH") have reformed the
individual and small employer
health insurance markets. The Legislature also created a third program, New Jersey
Health Access ("Health Access"), to provide subsidies for people
who could not afford to purchase individual health coverage. Health Access later became a part of NJ FamilyCare.
Since August 1, 1993, standard individual health benefits plans approved by the IHC Programs have been available on an open enrolled, community rated basis to anyone who is a resident of New Jersey and does not have access to employer-based group insurance or Medicare. Beginning in 2009, carriers will be allowed to offer individual health benefits plans with modified community rates, based on an individual's age. The SEH Program went into effect on January 1, 1994, with the sale of standardized, open-enrolled, modified community rated plans. Small employers (those with 2-50 full-time employees) may choose to purchase standardized health benefits plans, offered by all carriers, or, under certain conditions, they may purchase or renew pre-reform ("non-standard") plans. The small employer market is a "modified community rated" market, which permits carriers to consider the age and gender of the employees and the location of the business in determining rates.Beginning in 2003, carriers offering standard individual health benefits plans have been required to offer “Basic & Essential” healthcare services plans (B&E Plans) as well. B&E Plan benefits are more limited than those of the standard health benefits plans, although carriers may offer enhanced benefit riders to the B&E Plans, and some do. B&E Plans are modified community rated, taking into consideration the age, gender and location of the applicant. Access to B&E Plans is substantially the same as for the standard individual health benefits plans – they are both guaranteed issue and guaranteed renewable regardless of any person’s health status.
The IHC and SEH Programs are each run by a Board of Directors responsible for implementing health insurance reform and regulating the market. The IHC Board consists of nine people representing carriers, consumers, the AFL-CIO, and the Commissioner of Insurance. The SEH Board is similar in makeup, and consists of 18 members, including insurance agents, a doctor, representatives of small business, and others. Members of the boards meet periodically throughout each year, and serve without compensation. The Boards are State agencies with rulemaking authority and are funded entirely by assessments of carriers.
|Highlights of the IHC and SEH Programs are the following:|
B&E Plans offered to individuals are also community rated, but may be modified community rated based on the age, gender and location of the applicant. Rating on health status is not permissible. The ratio for the highest rates for a B&E Plan to the lowest rates for the same B&E Plan cannot be more than 3.5:1.
In the small employer market, the plans may be rated only on the basis of age, gender, family status of the employees in the group, and the location of the business in the State - not on health status. The ratio for the highest rates for a small employer plan to the lowest rates for the same small employer plan cannot exceed 2:1.
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State of New Jersey
New Jersey Department of Banking and Insurance