LEGISLATIVE FISCAL ESTIMATE

[Second Reprint]

SENATE, No. 3818

STATE OF NEW JERSEY

221st LEGISLATURE

 

DATED: DECEMBER 22, 2025

 

 

SUMMARY

 

Synopsis:

Requires third-party discounts and payments for individuals covered by health benefits plans to apply to copayments, coinsurance, deductibles, or other out-of-pocket costs for covered benefits.

Type of Impact:

Annual increase in local government costs.

Agencies Affected:

Department of Banking and Insurance; local governments; school districts.

 

 

Annual Fiscal Impact

 

Local Cost Increases

Indeterminate

 

·         The Office of Legislative Services (OLS) finds that local government and school district employers that provide employee health insurance coverage through the private market would experience an indeterminate increase in annual costs under the bill.  Generally, the expenditure increase would result from some insured individuals meeting their cost sharing requirements sooner than they otherwise would absent this bill, thereby shifting some of the health benefit costs of providing health insurance from the insured individual to the health insurance provider.  This shift would put upward pressure on health plan premiums.  The OLS lacks the informational basis to estimate the magnitude of any increase that may result.

·         There is the potential for annual local cost savings if the bill’s prohibition on the use of copay accumulator programs were to cause positive health outcomes that reduce future treatment costs.

 

 

BILL DESCRIPTION

 

This bill prohibits health insurance carriers and pharmacy benefits managers in New Jersey from using accumulators.  Under the bill, a carrier and a pharmacy benefits manager are required to give credit, when calculating the liability of an insured for a coinsurance, copayment, deductible, or other out-of-pocket expense for a covered benefit, for any discount provided or payment made by a third party for the amount of, or any portion of the amount of, the coinsurance, copayment, deductible or other out-of-pocket expense for the covered benefit.  In the case of a high-deductible health plan, credit is to be applied to the maximum extent permitted under federal law, or (1) to the extent permitted under federal law and (2) in accordance with certain stipulations in the Internal Revenue Code.

      Previous federal policy allowed health insurers to dismiss the use of third-party discounts or coupons when the carrier calculated an insured’s cost-sharing liability.  Through this bill, New Jersey joins a growing number of U.S. jurisdictions prohibiting insurers from dismissing assistance received by covered persons to help pay their share of cost-sharing to carriers.

     The bill does not apply to the following plans and programs: accident only; credit disability; long-term care; Medicare supplemental coverage; TRICARE supplemental coverage; Medicare services; the State Health Benefits Program; the School Employees' Health Benefits Program; self-insured plans governed by ERISA (Employee Retirement Income Security Act of 1974) provision; private passenger automobile insurance or hospital confinement indemnity coverage.

 

 

FISCAL ANALYSIS

 

EXECUTIVE BRANCH

 

      None received.

 

OFFICE OF LEGISLATIVE SERVICES

 

      The OLS finds that local government and school district employers that provide employee health insurance coverage through the private market would experience an indeterminate increase in annual costs under the bill.  Generally, the expenditure increase would result from some insured individuals meeting their cost sharing requirements sooner than they otherwise would absent this bill, thereby shifting some of the health benefit costs of providing health insurance from the insured individual to the health insurance provider.  This shift would put upward pressure on health plan premiums.  The OLS lacks the informational basis to estimate the magnitude of any increase that may result.

      Additionally, the fiscal impact of the bill would be affected by several unknown variables, such as the number of enrollees who would be affected under the bill, the terms of their health benefit plans regarding cost sharing requirements, and the value of any discounts offered by third parties toward an enrollee’s covered benefits.  The OLS also notes that the Department of Banking and Insurance may also incur some additional annual costs related to its administrative responsibilities under the bill.

      The OLS notes that federal statutes prohibit drug manufacturers from offering coupons for beneficiaries of federal healthcare programs, including Medicaid and Medicare, so no impacts on NJ FamilyCare are expected from the bill.  Moreover, there will not be any impact to the State Health Benefits Program or the School Employees’ Health Benefit Program since these plans are excluded from the bill’s provisions.

      The OLS notes that there is the potential for annual State and local cost savings if the bill’s prohibition on the use of copay accumulator programs were to cause positive health outcomes that reduce future treatment costs.

Section:

Commerce, Labor and Industry

Analyst:

John Gaudioso

Associate Fiscal Analyst

Approved:

Thomas Koenig

Legislative Budget and Finance Officer

 

This legislative fiscal estimate has been produced by the Office of Legislative Services due to the failure of the Executive Branch to respond to our request for a fiscal note.

 

This fiscal estimate has been prepared pursuant to P.L.1980, c.67 (C.52:13B-6 et seq.).