The State of New Jersey
NJ Department of Banking and Insurance
Search


Home > Division of Insurance > New Jersey Proposal for ACA Section 1332 State Innovation Waiver
New Jersey's ACA Section 1332 State Innovation Waiver
Background/Introduction

Senate Bill No. 1878, the “New Jersey Health Insurance Premium Security Act,” was signed into law on May 30, 2018 and is codified at N.J.S.A.17B:27A-10.1 et seq. This law contemplates the creation of a reinsurance plan to reimburse carriers for certain high-cost claims in the individual health insurance market. The law provides that the reinsurance plan would use a mix of federal and state funds to produce individual health insurance premiums that are 10% to 20% lower than they would be without the plan. Under the law, the reinsurance program will reimburse individual health carriers for a proportion (coinsurance amount) of the cost of certain high-cost claimants between a minimum lower bound (attachment point) and a maximum upper bound (cap).

Senate Bill No. 1878, which authorized the Commissioner of the Department of Banking and Insurance to apply for a 1332 Innovation Waiver to implement the bill, may be found here: www.njleg.state.nj.us/2018/Bills/AL18/24_.PDF

Pursuant to this law, the Department submitted a waiver application targeting a 15% premium reduction in the individual market and seeking federal funding to help achieve this target.  The waiver application was approved by the Centers for Medicare and Medicaid Services on August 16, 2018.
 
New Jersey Proposal for Section 1332 State Innovation Waiver

New Jersey’s Section 1332 Draft Waiver Application, which was updated during the public comment period, can be found here:

New Jersey's Section 1332 Final Waiver Application, submitted July 2, 2018, can be found here:

The final application is also available from the Department of Banking and Insurance by email request to: 1332WaiverApplication@dobi.nj.gov.


New Jersey received notification from the Centers for Medicare and Medicaid Services, dated July 13, 2018, of a preliminary determination by the federal government that its 1332 State Innovation Waiver Application was complete as of July 12, 2018. The letter, marking the beginning of the Federal public notice process and 180-day Federal decision-making period, may be found here:

New Jersey received notification from the Centers for Medicare and Medicaid Services, dated August 16, 2018, that the federal government approved New Jersey's State Innovation Waiver Application.

 
Public Comments

The Department of Banking and Insurance accepted public comments on New Jersey’s 1332 Innovation Waiver beginning on May 31, 2018, through Sunday, July 1, 2018.  The department invited comments at its two public hearings, via electronic mail to 1332WaiverApplication@dobi.nj.gov and by regular mail to:

State of New Jersey 1332 Innovation Waiver
Department of Banking and Insurance
PO Box 325, Trenton NJ 08625-0325

 
Public Hearings/Meetings

Notice of Annual Public Forum to be held November 12, 2021

The New Jersey Department of Banking and Insurance (Department) in conjunction with the New Jersey Individual Health Coverage Program Board (IHC Board) will hold a Public Forum regarding New Jersey’s 1332 Innovation Waiver which was used to create the reinsurance program for the New Jersey individual market. 

Please note: The Public Forum will take place virtually.

Public Forum Date: November 12, 2021  1:30 PM

The Virtual Public Forum will be held as a Live Event through Microsoft Teams - Click here

Or call in (audio only)
+1 856-338-7074
Phone Conference ID: 394 140 895#

To request reasonable accommodations, please contact Philip Gennace at philip.gennace@dobi.nj.gov by November 10, 2021 in order to ensure your request is processed.


Background


As provided in P.L. 2018, c.24, the New Jersey Health Insurance Premium Security Act, the Commissioner applied for and received approval for federal funds through a 1332 Innovation Waiver which supported the creation of a reinsurance program.  With the reinsurance program, carriers selling plans in the individual market request reimbursement for reinsurance-eligible claims and, as a result, were able to reduce individual health insurance rates.  As a result of the reinsurance program, 2020 individual health insurance premiums were 15 percent lower than they would have been without reinsurance. The first two years of operation for reinsurance program were 2019 and 2020.  This 2021 Forum is being held following completion of all requirements for the 2020 plan year.

The majority of the funding of reimbursement requests under the reinsurance program comes from federal funds made available through the 1332 Innovation Waiver. For plan year 2020, such federal funding was $190,015,727.  The balance of the necessary funding comes from revenue raised by the “New Jersey Health Insurance Market Preservation Act,” and the General Fund.

In compliance with Federal regulations, the Department of Banking and Insurance held two public hearings on New Jersey’s 1332 Innovation Waiver Application.

  • The first public hearing was held June 12, 2018 at 11:00 AM at the following location:

 

Department of Banking and Insurance
Mary Roebling Building, 2nd floor, Room 220
20 West State Street
Trenton NJ 08625

  • The second public hearing was held June 28, 2018 at 10:00 AM at the following location:

 

Rutgers Center for State Health Policy
IFH Building, 1st Floor Conference Room 120
112 Paterson Street
New Brunswick NJ 08901

The New Jersey Department of Banking and Insurance (Department), in conjunction with the New Jersey Individual Health Coverage Program Board (IHC Board), held a Post Award Forum regarding New Jersey’s 1332 Innovation Waiver.

  • The Post Award Forum was held June 11, 2019 at 11:00 AM at the following location:

 

Department of Banking and Insurance
Mary Roebling Building, 11th floor conference room
20 West State Street
Trenton NJ 08625

Since the program began operating in 2019, annual public forums must be held to comply with federal requirements.  The first annual public forum was held virtually on June 10, 2020. 
 
Additional Information

P.L. 2018, c.24, the New Jersey Health Insurance Premium Security Act (Act), directed the Commissioner of the Department to apply to the United States Secretary of Health and Human Services for a waiver of applicable provisions of the Affordable Care Act with respect to health insurance coverage in the State for a plan year beginning on or after January 1, 2019.  The Department applied for and received approval for federal funds for a reinsurance program through a 1332 Innovation Waiver.  Through the creation of a reinsurance program, carriers selling plans in the individual market may request reimbursement for certain high-cost claims and, as a result, lower individual health insurance rates.  2019 was the first year of operation for the reinsurance program. 

To be eligible for reimbursement for plan year 2019 and 2020, claims must satisfy the following payment parameters:  $40,000 attachment point/ 60% coinsurance/ $215,000 cap. For plan year 2021 and 2022, the payment parameters are: $35,000 attachment point/ 50% coinsurance/ $245,000.00 cap. The result for New Jersey consumers is individual health insurance premiums that are 15% lower than they would be without the reinsurance plan.

The majority of the funding of reimbursement requests under the reinsurance program will be federal funds made available through the 1332 Innovation Waiver. The balance of any necessary funding will come from revenue raised by the “New Jersey Health Insurance Market Preservation Act,” and, if necessary, the General Fund.

For plan year 2019, the State received $180,201,687 in federal funding for the program. The total cost of the program was $267,724,523.38.  For plan year 2020, the state received $190,015,727.   Federal funding for plan year 2021 has not been finalized.

 
Reports
 
OPRA
OPRA is a state law that was enacted to give the public greater access to government records maintained by public agencies in New Jersey.
line
Adobe Acrobat
You will need to download the latest version of Adobe Acrobat Reader in order to correctly view and print PDF (Portable Document Format) files from this web site.
state seal
Copyright © 2011, State of New Jersey
New Jersey Department of Banking and Insurance