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News Release

New Jersey Department of
Banking and Insurance

Commissioner Marlene Caride

For Immediate Release:
October 31, 2018

For Further Information:
Trish Graber
Marshall McKnight
(609) 292-5064

Department of Banking and Insurance Advises Health Insurance Consumers
and Industry that new Federal Regulations do not Preempt
New Jersey Consumer Protections laws 

Department Provides Guidance on Short-Term Limited Duration, Association Health Plans

TRENTON — The New Jersey Department of Banking and Insurance today issued two bulletins that advise the public, including carriers, brokers and stakeholders, that federal regulations aimed at weakening consumer protection provisions of the Affordable Care Act do not supersede New Jersey laws that protect its residents. The bulletins cover the federal expansion of association health plans (AHPs) which is a type of Multiple Employer Welfare Arrangements (MEWAs) and another federal rule adoption that promotes longer use of short-term, limited-duration individual health insurance policies.

“While the Trump Administration is working to promote skimpy health plans and junk insurance, we want to provide clear guidance to industry and the public that these plans, which fail to meet the standards of New Jersey law, are prohibited in the state,” said Commissioner Marlene Caride. “Short-term limited duration plans cannot be sold in New Jersey and Association Health Plans must comply with state law. We are committed to working to protect the right of New Jersey consumers to have access to affordable health care. The Department is prepared to fully enforce our laws and we ask that anyone aware of the sale or marketing of prohibited products in the state report it to us immediately.”

In June, the United States Department of Labor adopted a final rule that permitted an association to form solely to offer an association health plan to its members who shared a “commonality of interest.” It also allowed sole proprietors and other business owners who do not have employees to qualify as employers to enable participation in an AHP. The Department’s AHP bulletin clarifies that health benefits plans offered by MEWAs must comply with New Jersey’s insurance laws, including the Individual Health Coverage (IHC) Program Act and the Small Employer Health (SEH) Benefits Act.

Effective earlier this month, the Federal Internal Revenue Service, Employee Benefits Security Administration and the Department of Health and Human Services adopted rule amendments that lengthen the maximum duration of short-term, limited-duration insurance. The Department issued a bulletin today that advises carriers, brokers and other interested parties of the continued prohibition in New Jersey on the sale of short-term, limited duration health insurance policies. Laws protecting consumers from these policies have been in existence since the creation of the State’s Individual Health Coverage Program market in August 1993.

The bulletins also provide notices to carriers, brokers or other entities found to be marketing, selling, soliciting, or negotiating short-term, limited-duration or AHP plans to New Jersey residents that do not comply with New Jersey law will be subject to enforcement action. To report the marketing, sale, solicitation or negotiating of such plans, the public is urged to file a written complaint as described here:

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