Employers' Pensions and Benefits Administration Manual (EPBAM)
   

 

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State Health Benefits Program /
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TABLE OF CONTENTS

General Information

Enroll Eligible Employees

Determine Eligibility

SHBP/SEHBP Coverage and Members of the State Legislature

SHBP/SEHBP Coverage for State Part-time Employees

Have Employee Complete SHBP Application

Employer Certifies Application

Employer Provides Employee with Written Notification of Federal COBRA and HIPAA Requirements

Enrollment of Eligible Dependents

Continuing Coverage for Over Age Children with Disabilities

Coverage of Dependent Children until Age 31 under Chapter 375, P.L. 2005

Effective Dates of Coverage

Timetable for SHBP/SEHBP Enrollment

SHBP/SEHBP Coverage Upon Termination of Employment, Ten-month Employees

Timetable for SHBP/SEHBP Termination

Open Enrollment Periods

Changes in Coverage and Family Status

Coverage While on Leave of Absence

Approved Leaves of Absence for Illness

Approved Leaves of Absence Other Than Illness

Family Leave Act (Federal and State)

Furlough

Workers' Compensation

Suspension from Employment

Upon Return From a Leave

Reenrollment

Return from Military leave

Return from Suspension

Change of Status (Full-time vs. Part-time)

Waivers of Coverage (Local Government/Education Employees Only)

Waivers of Coverage (State Locations)

Identification Cards

SHBP/SEHBP Main Page

SHBP/SEHBP Financial

COBRA-HIPAA Information

COBRA Rates

SHBP/SEHBP Employee Support Tasks

 




Enroll Eligible Employees

The employer benefits representative should enroll eligible employees as soon as possible so their applications can be processed and the necessary information can be provided to the insurance carrier prior to the effective date of coverage. Generally, enrollment is effective approximately 60 days after the date of hire. The effective date of coverage for State biweekly employees is determined by the payroll schedule of Centralized Payroll, but will also be approximately 60 days after hire.

The four employer responsibilities in enrollment are:

  1. To determine employee eligibility;
  2. To ensure and assist the eligible employee to complete the appropriate Health Benefits Application;
  3. To certify and submit the Health Beneifts Application to the Division of Pensions and Benefits in a timely manner; and
  4. To provide new employee with with written notification of the requirements of the federal COBRA and HIPAA laws.

1. Determine Eligibility

Eligibility for Coverage, State Employees

To be eligible for coverage, a State employee must meet the "actively at work" requirements, and work full-time or be an appointed or elected officer of the State of New Jersey.

For State employees, "full-time" means the normal full-time weekly schedule for the particular title held; 35 hours per week is normally required for "full-time" status.

Any newly appointed or elected official is required to work a minimum of 35 hours per week to be considered "full-time" and eligible for coverage under the SHBP.

Under Chapter 172, P.L. 2003, certain part-time employees of the State of New Jersey, and part-time faculty members at New Jersey public institutions of higher education (State colleges, State universities, and county community colleges), who are members of a State-administered retirement system, are eligible for enrollment for coverage in the State Health Benefits Program. (See below for details).

Certain State intermittent employees are also eligible for SHBP coverage, see below.

Eligibility for Coverage, Local Employees

To be eligible for local employer SHBP/SEHBP coverage, a local employee must appear on regular payroll and work full-time or be an appointed or elected officer receiving a salary.

Any newly appointed or elected official is required to work a minimum of 35 hours per week to be considered "full-time" and eligible for coverage under the SHBP/SEHBP.

Certain part-time local employees — part-time faculty members at New Jersey county community colleges — are now eligible for SHBP coverage, see below. 

In the case of local employer coverage, the average number of hours per week required for a local employee to have "full-time" status shall be prescribed by the governing body of the participating employer.

In order for an employee of a local employer hired after May 21, 2010 to be eligible for coverage under the SHBP/SEHBP, he or she will be required to work a minimum number of hours per week as determined by resolution of the governing body of the local employer but in no instance will the minimum hours be less than 25.

Any employee or officer of the local employer or the State who met the minimum work hour requirements prior to May 21, 2010 will be eligible for continued coverage under the SHBP/SEHBP provided there is no break in the employee’s service or reduction in work hours.

Resolution to establish the number of hours constituting "full-time" status.

Full-time also means employment for 12 months per year, except in the case of employees whose regular and normal work schedule is contractually established at 10 months per year.

Appointed or Elected Officials: An appointed or elected officer of a local employer who is compensated on a fee basis as the method of payment of wages or salary, but who is not a self-employed independent contractor compensated on a fee basis, may also be eligible for local employee coverage. To qualify for coverage as an appointed officer, a person must be appointed to an office specifically established by law, ordinance, resolution, or another official action required by law as a method of establishing a public office by an appointing authority.

An individual appointed under a general authorization, that is, the specific office to which the person is appointed has not been established by law, ordinance, resolution, or another official action required by law to establish a public office by an appointing authority, is not eligible to participate in the program as an appointed officer. An officer appointed under a general authorization must qualify for participation in the SHBP/SEHBP as a full-time employee.

Eligibility for Coverage, State Part-time Employees and Part-time Faculty Members Employed at NJ Public Institutions of Higher Education (NJ State Colleges, State Universities, and County Community Colleges)

Chapter 172, P.L. 2003, effective January 1, 2004, extends eligibility for enrollment for coverage in the SHBP/SEHBP to some part-time employees of the State of New Jersey and part-time faculty members employed at New Jersey public institutions of higher education (New Jersey State colleges, State universities, or county community colleges), as long as they are members of a State-administered retirement system.

Part-time employees of the Palisades Interstate Parkway Commission, the New Jersey Building Authority, and the New Jersey Commerce and Economic Growth Commission are also eligible.

Eligible part-time employees may enroll in a SHBP/SEHBP medical plan and corresponding Prescription Drug Plan, or a medical plan only, and must pay the full cost of coverage for the level of coverage selected. The SHBP/SEHBP determines whether an employee is eligible for coverage.

Part-time employees who enroll in the SHBP/SEHBP will be billed monthly for the cost of the coverage selected. There are separate rate charts listing the cost of this coverage.

Employees eligible for this coverage should use the appropriate Part-time Employees Group — Health Benefits Application to enroll. Otherwise, employers should follow the same steps for SHBP/SEHBP enrollment as for other employees eligible for SHBP/SEHBP coverage.

For more information about coverage for part-time employees, please see Fact Sheet #66, Health Benefits Coverage for Part-time Employees.

Available Medical Plan for Intermittent State Employees

Certain intermittent State employees who have worked a minimum of 750 regular pay status hours within the previous fiscal year (i.e., July to June) are eligible for enrollment in NJ DIRECT15 and the Employee Prescription Drug Plan. Intermittent employees who maintain 750 hours of work per fiscal year will receive coverage for the next fiscal year (at least through the period covered by the labor contract in effect).

Intermittent State employees who meet the minimum pay status hours outlined above must also be covered under the labor contract between the CWA and the State of New Jersey that committed the State to provide SHBP coverage to intermittent employees.

Employers must certify that their intermittent employees have at least 750 regular pay status hours in the prior fiscal year to qualify for coverage in subsequent years. The Human Resource Offices of the Department of Labor and the Department of the Treasury will re-certify eligibility of every intermittent employee with SHBP coverage each year.

Full-time Status and Eligibility for Coverage: Sabbaticals, Approved Leaves of Absence, and Multiple Public Positions—State and Local Employees

A State or local employee who is on sabbatical or an approved leave absence will have "full-time" status and be eligible for coverage if the compensation paid is 50 percent or more of the salary granted just prior to the leave and the period of eligibility terminates with the end of the fiscal year.

An employee holding multiple public positions at the same time will be considered "full-time" if the employee satisfies the definition of full-time in any one of the positions he or she holds.

State and Local Employee Ineligibility for SHBP/SEHBP Coverage

State and local employees who are ineligible for coverage include: 

  • Those who have less than two months of continuous service; 

  • Those who are employed on a short-term, seasonal, intermittent or emergency basis; 

  • Those who are paid an hourly rate; and

  • Those who are not on payroll.

State statute specifically prohibits two members who are each enrolled in the SHBP/SEHBP plans from covering each other. Therefore, an eligible individual may only enroll in the SHBP/SEHBP as an employee or retiree, or be covered as a dependent.

Eligible children may only be covered by one participating subscriber.

For example, a husband and wife both have coverage based on their employment and have children eligible for coverage. One may choose Family coverage, making the spouse and children the dependents and ineligible for any other SHBP/SEHBP coverage; or one may choose Single coverage and the spouse may choose Parent and Child(ren) coverage.

New Jersey State Legislators and SHBP Coverage

Chapter 308, P.L. 2003, signed into law on January 14, 2004, prohibits members of the State Legislature who elect health coverage from their legislative position from having primary health insurance coverage from another public employer.

Chapter 308, P.L. 2003 applies to members of the State Legislature who are at the same time employed by or take employment with another public employer in New Jersey that provides health benefits coverage. In such cases, the member must waive his or her health coverage from the other public employment in order to retain the health coverage through employment in the State Legislature; or, the member may waive health benefits coverage through the legislative position and accept primary coverage from the other public employer.

For more information, please see the the SHBP letter regarding Chapter 308, P.L. 2003.

1. Have Employee Complete a Health Benefits Application

Eligible employees must complete the appropriate application.  

Those part-time State employees who are eligible for SHBP/SEHBP coverage (see above) should complete the appropriate application.

Failure to complete an application or neglecting to add an eligible family member when first becoming eligible for coverage will delay enrollment until the next Open Enrollment period. 

2. Employers should check for completeness, accuracy, and any required attachments.

3. Employer Certifies Application

The employer certification portion of the Health Benefits Application is located on the upper right corner of the form. All completed applications must be certified by the employer and mailed to the Health Benefits Bureau. (When completing the employer certification portion of the Part-time Employees Group — Health Benefits Application, for part-time faculty members eligible for coverage under Chapter 172, P.L. 2003, Certifying Officers of New Jersey State colleges, State universities and county community colleges should use the same union code as for other adjunct faculty members.)

4. Employer Provides Written Notification of Federal COBRA and HIPAA Requirements, and Other Federal Health Insurance Regulations

Under federal law, employers are required to notify all employees and dependents enrolling in their health plan of the provisions of the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 and the Health Insurance Portability and Accountability Act (HIPAA) of 1996.

The COBRA and HIPAA notifications are intended to inform employees of their rights and obligations under these federal laws, and must be distributed to all new employees and their dependents enrolling in the SHBP within 90 days of enrollment. The initial COBRA notification and HIPAA notification must be addressed to the employee and dependents and mailed to the address furnished by the employee. The employer must keep a record of the notification. The chart below shows the specific forms and documents that an employer must provide to newly enrolled employees and dependents:

For COBRA Notification:

For HIPAA Notification:

The federal Consolidated Omnibus Budget Reconciliation Act (COBRA) of 1985 requires that most employers sponsoring group health plans offer employees and their eligible dependents the opportunity to temporarily extend their group health coverage in certain instances where coverage under the plan would otherwise end. For SHBP/SEHBP participants, COBRA is not a separate health program; it is a continuation of SHBP/SEHBP coverage under the provisions of the federal law.

Click here for more information about COBRA.

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) is a federal law that includes important new protections for millions of working Americans and their families who have preexisting medical conditions, or might suffer discrimination in health coverage based on a factor that relates to an individual's health. This Act requires health plans, such as the SHBP/SEHBP, to maintain the privacy of any personal information relating to its members' physical or mental health.
Click here for more information about HIPAA.

 

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Enrollment of Eligible Dependents

Enrollment of dependents normally occurs when the employee enrolls. If the employee fails to enroll a dependent when first eligible (at initial enrollment or within 60 days of becoming a dependent), then the employee will have to wait until the annual Open Enrollment period to add them to coverage. The only exceptions to this rule would be in cases covered by the federal Health Insurance Portability and Accountability Act (HIPAA).

An employee's eligible dependents are his or her spouse, and children under age 26. Effective January 1, 2011, coverage of a member's children was extended through December 31 of the year in which a child turns 26, in compliance with the federal Patient Protection and Affordable Care Act (ACA).

Under the ACA, a ‘child” is defined as an enrollee’s child until age 26, regardless of the child’s marital, student, or financial dependency status – even if the young adult no longer lives with his parents. A photocopy of the child’s birth certificate that includes the covered parent’s name must be submitted, along with the application (and additional supporting documentation for foster or stepchildren).

Please note that under the provisions of Chapter 375, P.L. 2005, as amended by Chapter 38, P.L. 2008, certain over age children may be eligible for coverage until age 31. For information about continuing Health Benefits coverage for over age children until age 31, please click here.

Dependent coverage includes children who are away at school. If the employee is divorced, the children who do not live with the parent are still eligible for coverage if the employee is legally required to support these children.

A copy of the divorce decree or court order must be submitted with the enrollment application to provide proof of dependent status in cases where the children do not reside with the covered employee. (Please see note below regarding overage children with disabilities and SHBP/SEHBP coverage; for information about continuing coverage for over age children until age 31, please click here.)

Stepchildren, foster children, and legally adopted children are also eligible for coverage, provided they live with the employee and are dependent upon the employee for support and maintenance. Affidavits of Dependency and legal documentation, including recent court orders, guardianship papers, adoption papers, etc. are required with enrollment forms for these cases. Click here for a copy of an Affidavit of Dependency.

Effective Dates of SHBP/SEHBP Coverage

There is a waiting period of approximately 2 months (60 days) following an employee's date of hire before SHBP/SEHBP coverage becomes effective. (For exceptions, see below.)

The timely submittal of the correct Health Benefits Enrollment Application, properly completed and signed, to the Division's Health Benefits Bureau is very important, allowing the employee's coverage to start immediately following the two-month waiting period. (See Timetables below.)

SHBP Coverage for State Employees

SHBP coverage for the State biweekly employee begins on the first day of the employee's fifth payroll period. The exact date of coverage for State biweekly employees will be determined by the payroll schedule issued by the State's Centralized Payroll.

SHBP coverage for the State employee paid on a monthly basis begins on the first day following two months of employment. A State monthly employee who starts employment on May 14 will have a SHBP coverage effective date of July 14.

SHBP/SEHBP Coverage for Employees of Participating Local Employers

Coverage for the employee of a participating local employer begins on the first day following two months of employment. For example: if the employee starts work on June 14, SHBP/SEHBP begins on August 14 (assuming that the employee's properly completed and signed SHBP Enrollment Application has been submitted in a timely manner).

There are three exceptions to this effective date of coverage rule, which can be found in the Health Benefits Summary Program Description

  • If an employee had at least two months of service on the date the employer joins SHBP/SEHBP, coverage starts on the date the employer enters the program;
  • If an employee has an annual contract, is paid on a 10-month basis, and begins work at the beginning of the contract year, coverage begins on September 1 (see SHBP/SEHBP Coverage Effective Dates for Ten-month Employees below);
  • If an employee was enrolled in the SHBP/SEHBP with a previous employer and the employee's coverage is still in effect on the day work begins with the current employer (COBRA coverage excluded), coverage begins immediately so there is no break in coverage.

SHBP/SEHBP Coverage Effective Dates for Ten-month Employees

SHBP/SEHBP coverage begins on the first of the month in which employment began, for employees of local and State monthly employers working under a ten-month contract who begin employment at the start of the school year. In such cases, the two months preceding the first of the month in which the contract began are regarded as the two-month waiting period.

For example, a teacher who starts working for a school district at the beginning of the school year in September, under a ten-month contract, will have SHBP/SEHBP coverage effective as of September 1, with the preceding July and August regarded as the two-month waiting period.

For State biweekly employees working under a ten-month contract who begin employment at the start of the school year, SHBP coverage will begin on the first day of the pay period closest to September 1, with the four preceding pay periods regarded as the two-month waiting period.

Timetables for SHBP/SEHBP Enrollment

Timetable for Enrollment in the SHBP/SEHBP for Local and State Monthly Employers

Date of Hire

Date Forms Must be Received at the Division of Pensions and Benefits

Date Coverage Begins

January 1 - 31

February 5

March 1 - 31

February 1 - 28*

March 5

April 1 - 28 **

March 1 - 31

April 5

May 1 - 31

April 1 - 30

May 5

June 1 - 30

May 1 - 31

June 5

July 1 - 31

June 1 - 30

July 5

August 1 - 30

July 1 - 31

August 5

September 1 - October 1 **

August 1 - 31

September 5

October 1 - 31

September 1 - 30

October 5

November 1 - 30

October 1 - 31

November 5

December 1 - 31

November 1 - 30

December 5

January 1 - 31

December 1 - 31

January 5

February 1 - March 1 **

* February 29 during leap years.
** Since all months are not of equal length, there may be a difference in the "Date Coverage Begins" for certain employees. For example, if an employee began employment on July 31, coverage is not effective until October 1, the first day after the completion of 2 full months. Months are calculated from date to date (i.e., Jan. 1 to Feb. 1 constitutes one full month). If you have a question about a specific employee, contact the Division of Pensions and Benefits, Health Benefits Bureau.

SHBP/SEHBP Coverage Upon Termination of Employment, Ten-month Employees

For the purposes of BOTH State and local employee coverage:

An employee paid under a 10-month contract that starts work at the beginning of the school year and terminates service with the employer at the end of that school year, will be entitled to a full year's coverage comparable to that of any employee paid on a 12-month basis, AS LONG AS THE FOLLOWING IS TRUE: The employee has worked for the number of months prescribed by the contract or arrangement with the employer for that school year.

This means that SHBP/SEHBP coverage for ten-month employees and their dependents will continue during the summer months subsequent to the end of the school year (July and August), provided that any contributions or Premiums are made as required by the State or local employer.

For example, a teacher with a ten-month contract who begins employment at the start of the school year in September and then terminates employment on the last day of school in June will have coverage continue through the months of July and August immediately following the end of that school year.

Please note, however, that when the termination of employment at the end of the school year is because of the member's July 1 retirement, coverage under the active group ends August 1, at which time eligiblity for coverage under the retired group becomes effective.

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Timetables for SHBP/SEHBP Termination

Timetable for Termination in the SHBP/SEHBP
for Local and State Monthly Employers*

Date of Termination**
Date Forms Must be Received at the Division of Pensions and Benefits
Date Coverage Ends
January 6 - February 5 February 5 March 1
February 6 - March 5 March 5 April 1
March 6 - April 5 April 5 May 1
April 6 - May 5 May 5 June 1
May 6 - June 5 June 5 July 1
June 6 - July 5 July 5 August 1***
July 6 - August 5 August 5 September 1
August 6 - September 5 September 5 October 1
September 6 - October 5 October 5 November 1
October 6 - November 5 November 5 December 1
November 6 - December 5 December 5 January 1
December 6 - January 5 January 5 February 1

*The coverage ending dates in this chart apply to State monthly dental coverage, and State monthly and local employer medical and prescription drug coverage, including all local employer stand-alone prescription plans.

**Please Note: The Transmittal of Deletions form indicates that coverage termination is effective the first of the month following the first full month for which no salary was paid; however, deletions received between the first and the fifth of the previous month will also take effect on the first of the month that follows. Termination due to a member's death always take effect on the first of the month following the member's date of death.

*** 12-month employees or ten-month employees who retire on July 1 will be terminated on August 1. Ten-month employees who terminate employment will be covered until September 1, see SHBP/SEHBP Coverage Upon Termination of Employment, Ten-month Employees .


Open Enrollment Periods

An annual Open Enrollment period is held for all eligible State employees and local participating employees. The Open Enrollment period is normally during the month of October; however, specific dates are announced in advance by the Health Benefits Bureau.

Coverage changes made during the Open Enrollment period are effective the first biweekly payroll period of the new plan year for State employees paid through the State's Centralized Payroll Unit, and January 1 of the new plan year for all other State and local employees.

If making changes during the Open Enrollment, completed health benefits applications must be returned to the employee's human resources representative or payroll officer by the deadline indicated in the Open Enrollment announcement materials.

The annual Open Enrollment period is the employee's opportunity to make changes to the coverage provided to themselves and any dependents. During the Open Enrollment period, employees may:

  • Enroll in any of the medical, prescription, and/or dental plans offered for which the employee is eligible, if not previously enrolled;
  • Change to another eligible medical, prescription, and/or dental plan (dental plans require a minimum enrollment of 12 months);
  • Add eligible dependents who have not previously enrolled (including over age children eligible under Chapter 375, P.L. 2005); and
  • Delete dependents (this can also be done at any time during the year).

For State Employees

Special Open Enrollment Periods are occasionally conducted because of changes that occur during the plan year that impact employees' coverage or cost. When these changes occur, the State Health Benefits Commission/School Employees' Health Benefits Commission will authorize a special Open Enrollment.

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Changes in Coverage and Family Status

Generally, active employees cannot change their plan, level of coverage, or dependent coverage until the next Open Enrollment period. There are exceptions when an employee may change coverage.  These exceptions are:
  • An employee who marries or enters into a civil union or same-sex domestic partnership may enroll their spouse/partner and/or newly eligible dependent children. A health benefits application must be filed within 60 days of the marriage/partnership.

  •  When the birth or adoption of a child occurs, a health benefits application must be filed within 60 days of the birth or adoption. Adoption requires additional legal documentation filed with application.

  •  When a change in family status involving the loss of a family member occurs (divorce, death, child turns age 26*, see below for exceptions ).
  • The employee is on a leave of absence and cannot afford to pay for coverage. Coverage can be reduced from family to single or parent and child while employee is on the leave. When the employee returns to work, coverage can be increased back to family coverage.

  •  An employee's spouse/partner loses health benefit coverage; the employee has 60 days from the date of the loss of coverage to add a spouse/partner to his or her coverage. The enrollment application must be accompanied by the spouse/partner's HIPAA certification form showing the date coverage was lost.

Coverage changes involving the addition of dependents are effective retroactively to the date of the event of eligibility, if the health benefits application is filed within 60 days of the event. Active employees may decrease dependent coverage at any time. Deletions of dependent coverage are effective on a timely or prospective basis, that is, when they are processed by the Health Benefits Bureau.

*A dependent child covered under an employee's SHBP/SEHBP health plan becomes ineligible for continued coverage on December 31 of the year in which (s)he turns 26 years of age.

However, an over age child who is disabled due to mental illness, mental retardation, or a physical disability and dependent upon a member for support, can remain covered as a dependent if the child's disabled status is approved by the SHBP/SEHBP. See Fact Sheet #51, Continuing Health Benefits Coverage for Over Age Children with Disabilities for more information.

Under Chapter 375, P.L. 2005, members may extend SHBP coverage for their over age children until age 31 as long as specific conditions are met. The covered parent is responsible for the entire cost of coverage for the eligible dependent, and will be billed directly for the coverage cost. For more information, see Fact Sheet #74, Health Benefits Coverage of Children until Age 31 Under Chapter 375, P.L. 2005.

Employer's Responsibilities under Leaves of Absence

The employer has responsibilities to:

  • Advise employees of the status of their health benefits if they take a leave of absence.

  • Let employees know that they may reduce coverage level (for financial reasons) while on leave and increase it again when they return.

  • Provide employee and/or dependents with a specific COBRA Notice when a COBRA event occurs.

  • Maintain records that demonstrate your compliance with the COBRA law.

  • Advise employees of the status of their health benefits when they return from a leave of absence.

  • Provide Open Enrollment information to employees on a leave of absence.

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Leave of Absence without Pay for Illness

An employee can continue health coverage while on an approved leave of absence without pay for illness. State biweekly employee coverage will be provided by the State for the first six biweekly pay periods following the last day the employee would normally be covered. Coverage may be obtained for an additional 20 biweekly pay periods provided the employee pays the full cost of the coverage.

State monthly employee coverage would be provided by the State for the first three months following the last day the employee would normally be covered. Coverage may be continued for an additional nine months provided the employee pays the full cost of the coverage. If an employer does not extend coverage for the three-month period, the employee may only elect to continue coverage for a maximum of nine months.

Local public employers may provide for payment of the first three months of approved sick leave with the employee being able to extend coverage by prepayment for an additional nine months. If the employer does not extend coverage for the three-month period, the employee may elect to continue coverage for a maximum of nine months only. The employer may not discriminate against any eligible employee or groups of employees.

Certain local educational agencies may agree to adopt the provisions of Chapter 127, P.L. 1989. Chapter 127 applies only to eligible employees of local boards of education, regional boards of education, county colleges, educational service commissions, jointure commissions, county special services school districts, county vocational-technical school districts, or any boards or commissions under the authority of the Commissioner of Education or State Board of Education. 

Chapter 127 permits the employer to continue to pay for the coverage of an employee granted an approved leave of absence (with or without pay) for up to a two-year period, provided that the employee has worked for the location for at least three years.

Contact the Health Benefits Bureau at the Division of Pensions and Benefits, PO Box 299, Trenton, NJ 08626-0299 to obtain a copy of the Chapter 27 resolution.

Leave of Absence without Pay for Reasons Other Than Illness

An employee who is permitted to take an approved leave of absence for reasons other than illness, family leave, or furlough, may continue health coverage under the SHBP/SEHBP for up to nine months or 20 biweekly pay periods. The full cost of the coverage must be paid to the employer in advance. If the employee remains on leave beyond the time for which coverage has been purchased, then the Active Group coverage will terminate. The coverage may be extended under COBRA for a period not to exceed the 18 months, including the total leave time. However, leave that qualifies under the Federal or State Family Leave Act is not deducted from the total COBRA eligibility period.

Family Leave

An employee who is taking family leave is entitled under the State Family Leave Act (NJFLA) to continue 12 weeks of health care coverage in any 24 month period at the expense of his or her employer while on family leave. This includes all health care benefits, including Prescription Drug, Dental, and Vision Care benefits if the employer provides them. State Family Leave is defined as leave from employment to provide care for the birth or adoption of a child, or the serious illness of a child, parent, or spouse.

The Federal Family Leave Act (FMLA) has benefits similar to the State Family Leave Act with the exception that the federal act also requires that leaves of up to 12 weeks in any 12 month period be permitted for the employee's own serious illness.

Leave usually counts for both State and federal entitlements, except in the instance where an employee could be eligible for up to 24 weeks of leave in one year under certain circumstances. An employee could request a leave for maternity and then childcare leave. The leave for maternity, which qualifies as personal illness, counts toward the FMLA. The employee would still be entitled to an additional 12 weeks under the NJFLA to care for the newborn child.

To be eligible for family leave, an employee must be employed for at least 12 months. Family leave can be taken on a continuous or intermittent basis, or by way of a reduced leave schedule under the conditions of the law.

In cases where the employee has a deduction, the employer must make arrangements with the employee on family leave to receive direct payment for the required employee contribution. If the Division of Pensions and Benefits does not receive full payment from the employer, then the employee's benefit coverage will be terminated under the termination provisions of the SHBP/SEHBP.

The time an employee spends on federal or State family leave will not count as part of the COBRA eligibility period, should an employee receive approval from his or her employer to extend the leave. 

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Furlough

If an employee takes an approved furlough, the SHBP/SEHBP coverage will continue at the employer's expense. The employee must remit in advance the employee portion of premiums normally paid, if any.

A State employee eligible for a voluntary furlough extension beyond the 30 days allowed will be treated as an exceptional case. The employee will have to pay the full cost of coverage for his or her extended furlough days in 10-day increments, or drop the coverage for the entire furlough extension benefit period(s) in which the employee takes a furlough day.

Workers' Compensation

An employee who has a Workers' Compensation award pending or has received an award of periodic benefits may have coverage continue and may continue the coverage of dependents. The employee must pay the employer, in advance, that portion of the premiums that would normally be paid, if any.

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Suspension

An employee who is suspended from employment is not eligible for benefits. If coverage is terminated as a result of suspension, the employee's only options for continuing group coverage are through COBRA or conversion to an individual, direct payment coverage from his or her SHBP/SEHBP health plan carrier. See the Summary Program Description for a more extended discussion.

If the suspension is for "gross misconduct," the employee will not be eligible for coverage through COBRA. Since the federal COBRA law does not precisely define "gross misconduct", the employer should seek legal counsel before denying continuation of benefits through COBRA. (In light of this lack of precision in defining terms, some employers choose to simply offer continuation through COBRA regardless of the terms of termination.)

Employer's Responsibility for an Employee
Who Returns from a Leave of Absence

The employer must advise an employee, upon returning from an approved leave of absence, as to the status of the health benefit coverage for the employee and eligible dependents. 

  • If coverage lapsed during the leave of absence, the employee must complete a health benefits application to reinstate health benefit coverage (including prescription and dental coverage, if applicable). The employer must certify the date the employee returned to work on the application.

  • Coverage becomes effective on the date the employee returns to work if the employee is a State monthly or local employee. If the employee is a State biweekly, coverage will be effective on the first day of the pay period in which the employee returned to work.

  • If an employee reduced coverage levels while on an approved leave, the employee may return to the former level of coverage upon returning to work.

  • If an employee is on leave during an Open Enrollment period, the employee may elect to make coverage changes upon returning to work. The employer must advise the employee that he or she must complete and submit an application within 60 days of returning to work; the effective date of these changes will be the date the employee returned to work.

  • If an employee's coverage was terminated during a leave, or the employee purchased COBRA coverage while on leave, the employee must file a new application within 60 days of the first day the employee returns to work.

Return from Military Leave

An employee, upon returning from a military leave without pay, may enroll and receive appropriate coverage by completing and forwarding the appropriate application within 60 days after the date of return to active full-time employment. Any eligible dependents may, of course, be included.

If a Local group or State monthly employee applies for coverage immediately upon returning from the military leave of absence, the coverage is effective on the first day of the month of return. Coverage for State biweekly employees is effective on the first day of the pay period of return. No benefits are available prior to the actual date of return to active employment.

In the event a dependent of an employee is discharged from military service, the employee may enroll such dependent for appropriate coverage within 60 days of discharge. Coverage will be effective the date of return to dependency upon the employee.

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Return from Suspension

When an employee returns from a suspension which was long enough to terminate coverage, the effective date for reinstatement would be the same as if the member returned from a leave of absence. If a court order or administrative ruling canceled the suspension and required the retroactive reinstatement of the employee's benefits, coverage will be reinstated retroactively, provided that a copy of the court order or ruling is submitted with the appropriate application. If the employee pays for any portion of health benefits coverage, then the employee must pay the back payments to the employer.

Changes in Status

Part-time Employment

When an employee changes from active full-time employment to part-time employment, the employee's coverage in the SHBP will be terminated, unless the employee is eligible for SHBP coverage as a State part-time employee or a part-time faculty member employed at a New Jersey public institution of higher education, see above. The employee may continue coverage under the federal COBRA program. Should employment resume to full-time status, the employee must reestablish eligibility for coverage and wait 2 months before coverage will become effective.

Dependent Eligibility

Dependent children are covered under their parent's enrollment until December 31 of the calendar year in which they reach age 26*, at which time coverage will cease. The child will not be given notice of coverage ending. If the dependent child intends to continue coverage under COBRA, the employee must notify the employer of this qualifying event. An application should be submitted noting the removal of the over age child from the member's coverage. Two exceptions are outlined below:

Chapter 375 — Over Age Children until Age 31

Under Chapter 375, P.L. 2005, certain over age children may be eligible for coverage under the SHBP/SEHBP until age 31. This includes a child by blood or law who:

  • is under the age of 31;
  • unmarried;
  • has no dependent(s) of his or her own;
  • is a resident of New Jersey or is a full time student at an accredited public or private institution of higher education; and
  • is not provided coverage as a subscriber, insured, enrollee, or covered person under a group or individual health benefits plan, church plan, or entitled to benefits under Medicare.

The covered parent is responsible for the entire cost of dependent coverage under Chapter 375, and will be billed directly by the SHBP/SEHBP for the coverage cost. For more information, please see Fact Sheet #74, Health Benefits Coverage of Children until Age 31 under Chapter 375, P.L. 2005.

Over Age Dependent with Disabilities

A dependent child who is physically or mentally incapable of self-support at the end of the calendar year in which age 26 is reached may continue coverage under the plan while remaining incapacitated and unmarried, subject to the coverage remaining in effect.

The employee must request a Continuance of Enrollment for an Eligible Dependent with Disabilities from the Health Benefits Bureau. This form is to be completed by the employee and the dependent's physician. This form must be submitted to the Health Benefits Bureau no later than January 31st of the year following the calendar year in which the child reaches age 26.  To request a Continuance of Enrollment for an Eligible Dependent with Disabilities form, the member must contact the Division of Pensions and Benefits, Active Health Benefits Group, in writing, prior to November of the year in which the disabled dependent reaches age 26. See Fact Sheet #51, Continuing Health Benefits Coverage for Over Age Children with Disabilities for more information.

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Waivers of Coverage

Waiver for State Monthly, State Biweekly Employees

State employees are permitted to waive their SHBP medical and prescription coverage provided they have other health care coverage of their own or as a dependent. State employees who waive coverage can thereby avoid the contribution of a percentage of the premiums for health and/or prescription drug coverage required under Chapter 78, P.L.2011 .

There is no additional annual payment, or incentive, to State employees who waive SHBP medical and prescription coverage.

A State Health Benefits Program Coverage Waiver/Reinstatement Form and an application must be submitted through the employer to the SHBP in order to waive SHBP medical and prescription coverage.

To reinstate coverage under the SHBP, a State employee must once again complete a State Health Benefits Program Coverage Waiver/Reinstatement Form along with an application. The member must notify the SHBP within 60 days of the loss of the other coverage and provide proof of loss of that coverage. Reinstatement will be effective immediately following the loss of the employee's other health plan coverage. Reinstatement will be effective immediately following the loss of the employee's other health plan coverage.

Waiver for Local Government/Education Employers

Local Government/Education Employers that participate in the SHBP/SEHBP, or in another group health plan, may permit an employee to waive the health benefits coverage offered by the employer (local government/education employer), if the employee is eligible for any other employer provided health care coverage of their own or as a covered dependent.

The local government/education employer may then pay the employee an annual amount, or incentive, which cannot be more than 25% of the amount saved by the local government/education employer or $5,000, whichever is less, because of the employee's waiver of health plan coverage. The employing local government/education location establishes what the annual amount payable to an employee choosing to waive the health benefits coverage will be.

The decision of the local government/education employer to allow its employees to waive coverage, and the amount of the incentive to be paid, cannot be subject to the collective bargaining process.

An employee who has waived coverage under the provisions of this law may immediately resume health coverage under his or her employer's health plan in the event that the other health care coverage is terminated, provided the member notifies the SHBP/SEHBP within 60 days of the loss of the other coverage and provides proof of loss of that coverage.

Historical Note: Chapter 259, P.L. 1995 originally allowed only municipalities to permit employees to waive their group health benefits in exchange for an agreed-upon incentive; through Chapter 189, P.L. 2001 municipal authorities were also included. The above waiver provisions now extend to county colleges through Chapter 3, P.L. 2003. Chapter 3 also expanded the waiver provisions by allowing employees to waive employee health care coverage if they are eligible for any other coverage, not just in the case where they are eligible for dependent coverage through a spouse's plan. Chapter 92, P.L. 2007 (Section 48) extends to all local public employers the current authorization to provide financial incentives to employees who waive coverage under the SHBP if the employee is eligible for other health care coverage. Chapter 2, P.L. 2012 changed the waiver incentive for local government/education employers to either 25% of the amount saved by the employer or $5,000, whichever is less.

To Waive SHBP/SEHBP Coverage

Employees of county colleges, municipalities, and municipal authorities participating in the SHBP/SEHBP who wish to waive coverage in order to receive an incentive must file a Health Benefits Coverage Waiver/Reinstatement Form along with the appropriate application.

Reinstatement of Coverage

To reinstate coverage under the SHBP/SEHBP, an employee must complete a Health Benefits Coverage Waiver/Reinstatement Form along with the appropriate application. The member must notify the SHBP/SEHBP within 60 days of the loss of the other coverage and provide proof of loss of that coverage. Reinstatement will be effective immediately following the loss of the employee's other health plan coverage.

Note: Any local government/education employer contemplating exercising its right to offer a cash incentive to waive health benefits should discuss the federal income tax consequences of such an action on its employees with legal counsel knowledgeable in federal and state tax matters, especially with regard to employee benefits plans. If a cash incentive provided by an employer is not part of an Internal Revenue Code Section 125 plan, the health benefits provided to its other employees may be subject to federal taxes.

Identification Cards

Identification cards for SHBP/SEHBP medical, prescription drug, and dental plans are issued from the plan's claims administrators or carriers directly to the employees. These cards are mailed to the employee's home address, and should be carefully reviewed for accuracy. If the identification card has an error in the spelling of the name or ID number, advise the employee to call the Office of Client Services at (609) 292-7524. If there is an error in the listing of the Primary Care Physician or primary dentist, the employee should contact the insurance carrier immediately.  The contact number for each provider appears on the card itself.

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Last Updated: July 2, 2013