Purpose of this Buyers' Guide
This Buyers’ Guide explains the basic rules that apply to health coverage for small employers in New Jersey. Also, it contains examples and answers to some frequently asked questions. This guide can help you:
- determine if you are eligible for coverage in the small employer market;
- understand your rights and obligations if you purchase coverage in the small employer market;
- and, understand the coverage options that may be available to you.
You still may need to consult a carrier, broker or agent, an accountant or an attorney to help determine if you are a small employer, and how to structure a benefits program for your group. If you purchase coverage, read your health benefits plan contract carefully for the details of your specific rights and obligations under the terms of the contract.
Overview of the Law and Small Employer Health Benefits Program
In 1992, New Jersey enacted the Individual Health Coverage (IHC) Program Act (codified at N.J.S.A. 17B:27A-2 et seq.), and the Small Employer Health Benefits (SEH) Program Act (codified at N.J.S.A. 17B:27A-17 et seq.). These laws established that eligible individuals and small groups have guaranteed access to health coverage, and will not lose coverage because of changes in health status. The two laws limit the use of pre-existing condition limitation clauses, require forms of community rating for both markets, and established Boards of Directors to oversee each program, giving each Board the authority to develop standard health benefits plans for the separate markets.
In 1996, the federal government passed the Health Insurance Portability and Accountability Act (HIPAA), which established some of the same rights and restrictions already addressed by New Jersey law, and also set standards regarding privacy and security of health information. (The U.S. Department of Labor provides information about HIPAA regarding access and portability of health coverage. The U.S. Department of Health and Human Services provides HIPAA-related information about privacy and security of transactions.) In March of 2010, the federal government enacted the Patient Protection and Affordable Care Act, or PPACA (Public Law 111-148, as amended by the Health Care and Education Reconciliation Act, Public Law 111-152). PPACA revises some of the terms for individual and small employer coverage, and may alter the way some individuals and small employers purchase health coverage beginning in January 2014.
At present, the SEH Program applies to groups of two to 50 full-time employees. The law defines “full-time employee” for purposes of SEH Program eligibility, establishes the percentage of full-time employees who must participate in the small employer’s program in order to obtain and keep the small employer health benefits plan, and sets forth the minimum percentage of premium that an employer must contribute to the group coverage in order to obtain and keep the small employer health benefits plan. Please be aware not every employer with two to 50 employees will qualify as a small employer for purposes of the SEH Program.