Garden State Policy Round-Up

Garden State Policy Round-Up

Over the past month, there have been several critical policy developments out of the state of New Jersey that could impact your group health insurance plan in the year ahead.

Update to New Jersey Employer Reporting Guidance

We have learned that many national Affordable Care Act (ACA) reporting providers are not planning to file health coverage information with the state of New Jersey on behalf of their employer clients for 2019. So many employers with self-funded plans who need to provide coverage information to the state to comply with its new individual mandate may need to self-report to New Jersey and other jurisdictions using data from their federal reporting vendor by March 31, 2020. The problem is, due to New Jersey’s unique data formatting and transmission requirements as well as state and federal privacy requirements, many affected business owners will not be able to complete their filing independently. However, in response to employer concerns, the State of New Jersey updated its guidance and reporting methodology on February 11, 2020, to make compliance easier for entities that need to report on only a few individuals.

The state is still requiring all affected employers, carriers, and self-funded plans to submit their 1095 B and 1095 C statements to the state using the DORES MFT Secure Transport system via strictly defined XML files. However, New Jersey just created this Fillable Form NJ-1095. Entities who cover 50 or fewer individuals may use this free method to file their forms manually, one form at a time. The NJ-1095 form is valid for federal filers of either 1095-B or 1095-C forms. Larger plans and employers may still need to utilize the help of a vendor to meet New Jersey’s unique data formatting and transmission requirements and also comply with state and federal privacy requirements.

If you sponsored a self-funded health plan (including level-funded health plans) during 2019 and you had employees enrolled in the plan who resided in New Jersey during 2019, and you need a recommendation for a vendor who can assist with the filing, please contact your Kistler Tiffany Benefits’ Consultant or Account Executive.

To read the communication that was sent out on February 6, 2020, providing an overview of the NJ reporting requirements, please click here.

Final Earned Sick Leave Regulations Approved

New Jersey’s Division of Labor and Workforce Development released a final regulation concerning the state’s Earned Sick Leave Law, enacted in 2018.  This measure applies to employers of all sizes and establishes that most employees in the state have a right to accrue up to 40 hours of earned sick leave per year.  New Jersey employers need to provide new hires with written notice about the law when they begin employment and follow other requirements, all outlined in the new rules.

New Law Will Impact Prescription Drug Costs in New Jersey

New Jersey lawmakers also finalized a measure to require health insurance carriers in the state to offer a certain number of plan options each year with capped out of pocket costs for prescription drugs.  A.B. 2431 will limit patient cost-sharing for pharmaceuticals to $150 or $250 a month depending on the health-benefit plan level, in a certain percentage of each carrier’s product offerings. In the case of prescription drug benefits offered in conjunction with a qualified high-deductible health plan and a health savings account, the prescription drug cost-sharing cap will not apply until the plan beneficiary meets their deductible. For individual plans and large and small group coverage offered in the state, the provisions of the law will be effective for plans sold on or after January 1, 2021.  The law will apply to contracts purchased by the State Health Benefits Program and the School Employees’ Health Benefits Program in 90 days.

Stop-Loss Cap Bill Pocket-Vetoed by Governor Murphy

Finally, legislation passed by the New Jersey General Assembly on January 13, 2020, to limit stop-loss insurance coverage for small employers will not become law in the Garden State.  In the face of strong opposition from state business owners, union leaders, and many health insurance brokers, Governor Murphy elected not to sign the measure before the official end to the 218th legislative session. This tactic, known as a “pocket veto,” only can happen to a bill passed within the last ten days of a two-year legislative session and is a way of stopping a controversial measure without taking an active position on it.

If Governor Murphy had signed the bill, then stop-loss carriers providing coverage to small businesses with self-funded or level-funded group plans would have been forced to operate in a way that more closely mirrored traditional fully-insured coverage options.  Since Governor Murphy elected to squash the measure, all small-group level-funded and self-funded plan options will be able to continue without change.