Other Important Features

Domestic Partners and Civil Union Partners
New Jersey law currently recognizes domestic partnerships and civil unions in addition to marriages between individuals of opposite gender.  Civil unions may be created only among individuals of the same gender.  Domestic partnerships include individuals of the same gender or of opposite genders, but for purposes of health coverage (and this Buyer’s Guide), only same-gender domestic partnerships are considered.  Note that same-gender domestic partnerships are no longer formed as a matter of law in New Jersey as of February 19, 2007. 

In general, the rights of spouses and partners of civil unions are the same for purposes of health coverage under New Jersey law.  If an employer offers dependent coverage to employees, the employer must permit an employee to cover a civil union partner.  Employers do not have to offer coverage to domestic partners when offering coverage to spouses or partners of civil unions.  However, when an employer opts to offer coverage to domestic partners, the employer must treat all domestic partners consistently.

Neither an employer nor a carrier may discriminate in the coverage of a child the employee claims as a dependent based on whether the child becomes a dependent of the employee pursuant to birth, adoption, marriage, civil union or domestic partnership.

“Dependent Under 31” Continuation Election
New Jersey law permits an employee’s child who no longer qualifies as a child dependent under the terms of an employer’s health benefits plan to elect to remain covered as an “over-age” dependent until that child’s 31st birthday, so long as s/he meets the other eligibility requirements associated with the “Dependent Under 31” continuation election.  In the case of a child who is aging-out of a parent’s coverage, the Dependent Under 31 continuation election right is in addition to the aging-out child’s right to make either a COBRA or NJSGC election.

Beginning with plan years on or after September 23, 2010, federal law (PPACA) requires that, when dependent coverage is offered, an employee be permitted to cover a child until the child is 26 years old, without regard to the child’s marital, financial or educational status.  Thus, upon aging-out on his or her 26th birthday (or such later date as may be stated in the health benefits plan), a child covered under a small employer health benefits plan may make a continuation election pursuant to COBRA or NJSGC with the expectation of continuing coverage for up to 36 months, or may make a Dependent Under 31 (DU31) election with the expectation of continuing coverage until age 31, so long as he continues to be DU31-eligible.

There are pros and cons to making a DU31 election instead of a COBRA or NJSGC election.  The cost of continuing coverage pursuant to a DU31 election will be lower for the over-age child than will be the cost of continuing coverage pursuant to a COBRA or NJSGC election because DU31 election coverage is priced at a child’s rate rather than the single adult rate.  However, an over-age child has more eligibility criteria to meet in order to maintain coverage pursuant to a DU31 election.  For instance, an over-age child will lose coverage continued pursuant to a DU31 election when he or she marries, obtains a dependent child or moves outside of New Jersey (and is not a full-time student in an institution of higher education). These types of events will not result in a loss of coverage under a COBRA or NJSGC election.

The right to make a DU31 election is not limited to the time period of the child’s age-out.  An over-age child may make a DU31 election whenever he or she can establish eligibility by showing proof of having had prior creditable coverage. The Department of Banking and Insurance has a more detailed discussion of the DU31 election, with questions and answers and a comparison chart between COBRA, NJSGC and DU31 on the Department’s web site.

Appealing Unfavorable Medical Necessity Decisions
The SEH Program health benefits plans permit carriers to consider whether many of the services covered under the contract or policy are medically necessary and appropriate for purposes of treatment of the covered person’s condition.  If a carrier determines that a service is not medically necessary and appropriate (including determinations that the service is experimental or investigational, cosmetic, or dental instead of medical), the covered employee or dependent has the right to appeal the unfavorable determination.

In New Jersey, carriers are required to have a two-stage internal appeal process.  In addition, if the outcome continues to be unfavorable and the employee or dependent continues to disagree, the appeal may be taken to an external independent utilization review organization through the Independent Health Care Appeals Program, which is under the auspices of the New Jersey Department of Banking and Insurance.

The covered employee or dependent may authorize a health care provider to make the appeals on behalf of the covered employee or dependent by providing written consent.  The small employer does not have to become involved with either the internal or external appeal process.

The New Jersey Department of Banking and Insurance has a more detailed discussion of the right to appeal medical necessity determinations both internally and through the Independent Health Care Appeals Program on the Department’s web site.