Notice of NJ Law Covering Dependents to Age 30

[Mary C]

Hope there are some NJ experts out there!

In January, the acting governor signed into law a bill that would amend the insurance code requiring any group contract issued or delivered in NJ after May 12, 2006, to cover children until age 30 provided certain qualifications are met. As we read it, the law requires the the employee or "child" (if you can call a 25-30 year old a child) to apply for this coverage in writing to the insurance carrier and pay necessary premium to the insurance carrier. The benefit then provided are identical to the group plan and employers are not required to contribute to the cost of coverage for these overage children.

Employers are, however, obligated to notify the employees of the law immediately before its effective date (May 12) and when any child would age out of the plan otherwise (we use age 19 and 23 for full time students). My question is this, we currently have several fully insured HMO's in the state of NJ that provide coverage. Our plan renewal date is 7/1, after the effective date of the law. However, as of 7/1 we will only be offering a self-insured national plan. Are we still obligated to send out a blanket notice of the law to all NJ employees even though it will never apply to our plan?

[Guest mjb]

I dont think there is an answer because there are no regulations on how the law to to apply including who qualifies as a dependent. The HMOs should be in a better position to to give you an answer.

[Don Levit]

Mary:

I just want to get some clarification.

Are you saying that the firm you work for will offer only one plan, that of a self funded arrangement on a nationwide basis?

If so, I am curious what led your firm to this change?

My personal opinion is that you would have a responsibility to alert the participants who would be effected between May 12 and July 1, and for those effected until July 1 of 2007, just to be safe.

A self funded plan need not abide by state mandated benefits, unless they happened to mirror the federally mandated benefits.

Don Levit

[leevena]

My suggestion would be to look to your current insured plans for some direction, they are usually the best source. I am not in NJ but usually your type of a situation is usually addressed. The state will either allow you to wait until your renewal date to implement the change, or will require it to be done on the date the law takes effect.

Hope this helps.

[Mary C]

Don -

Yes, we are going to one plan, 3 options - high PPO benefit, low PPO benefit and an HDHP - nationwide on a self insured basis with stop loss coverage. Our reasoning is mainly economy of scale and control. We currently have 94 different HMO's providing coverages with 94 different sets of benefits and different administrative, reporting and payment requirements. And 46 state mandates, like NJ's, to be aware of. After the change, we will have two carriers, both nationwide and both self insured with one plan design per option, one set of administrative requirements, and one electronic format for reporting eligibliity. Which carrier is offered where depends on the qualify of the provider network in that area of the country.

We were partially self-insured back in '91-'94 and jumped on the HMO bandwagon when that promised to curb cost of providing coverage. Now it seems we've come full circle seeing 20% + increases in rates.