A2625

An Act concerning participation in the State Health Benefits Program and the School Employees’ Health Benefits Program and supplementing P.L.1961, c.49 (C.52:14-17.25 et seq.) and P.L.2007, c.103 (C.52:14-17.46.1 et seq.).

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. a. Notwithstanding the provisions of any other law, rule, or regulation to the contrary, any employer other than the State that elects to participate in the State Health Benefits Program on or after October 1, 2026 shall be required to remain enrolled in the program for a minimum period of five consecutive plan years following the effective date of the employer’s initial enrollment.

b. Any employer other than the State that voluntarily terminates its participation in the State Health Benefits Program on or after October 31, 2027, and subsequently re-enters the program, shall be required to remain enrolled in the State Health Benefits Program for an additional minimum period of five consecutive plan years following the date of re-enrollment, which shall be in addition to the initial five-year enrollment period. For each subsequent voluntary termination and re-entry into the State Health Benefits Program by the same employer, the mandatory participation period shall be extended by an additional five consecutive plan years and shall be applied cumulatively such that the employer shall remain enrolled for a total of 10 years after its first re-entry, 15 years after its second re-entry, 20 years after its third re-entry, and so on for each successive re-entry.

2. The Division of Pensions and Benefits, in consultation with the State Health Benefits Commission, shall develop and implement a participant balancing mechanism to mitigate the adverse impact of voluntary terminations by employers other than the State on overall program costs. This mechanism shall include, but not be limited to, efforts to identify and enroll other eligible employers into the program to maintain risk pool stability.

3. To promote transparency and fiscal accountability, the Division of Pensions and Benefits shall:

a. provide timely notice to all participating employers other than the State of any changes in premium rates, cost allocations, or benefit adjustments that affect the employer’s plan contributions, which notice shall be in writing and delivered prior to the start of the plan year; and

b. maintain and publish, on a publicly accessible website, a list of all employers other than the State that have voluntarily terminated participation in the program, including the name of the employer, the date of voluntary termination, and the number of employees or retirees covered under that employer at the time of the voluntary termination, which list shall be updated on an annual basis at the beginning of the plan year.

4. The Division of Pensions and Benefits shall publish an annual report, made available to the public and submitted to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing:

a. the number and identity of employers other than the State entering and exiting the State Health Benefits Program;

b. the number of employers subject to the minimum participation or re-enrollment restriction requirements established under section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill);

c. the performance and effectiveness of the participant balancing mechanism described in section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

d. any material trends in participation or cost-sharing that could impact the fiscal sustainability of the program.

5. The State Treasurer shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), including, but not limited to, procedures for enforcement, penalties for early voluntary terminations from the State Health Benefits Program, and criteria for re-entry.

6. a. Notwithstanding the provisions of any other law, rule, or regulation to the contrary, any employer that elects to participate in the School Employees’ Health Benefits Program on or after October 1, 2026 shall be required to remain enrolled in the program for a minimum period of five consecutive plan years following the effective date of the employer’s initial enrollment.

b. Any employer that voluntarily terminates its participation in the School Employees’ Health Benefits Program on or after October 31, 2027, and subsequently re-enters the program, shall be required to remain enrolled in the School Employees’ Health Benefits Program for an additional minimum period of five consecutive plan years following the date of re-enrollment, which shall be in addition to the initial five-year enrollment period. For each subsequent voluntary termination and re-entry into the School Employees’ Health Benefits Program by the same employer, the mandatory participation period shall be extended by an additional five consecutive plan years and shall be applied cumulatively such that the employer shall remain enrolled for a total of 10 years after its first re-entry, 15 years after its second re-entry, 20 years after its third re-entry, and so on for each successive re-entry.

7. The Division of Pensions and Benefits, in consultation with the School Employees’ Health Benefits Commission, shall develop and implement a participant balancing mechanism to mitigate the adverse impact of voluntary terminations by employers on overall program costs. This mechanism shall include, but not be limited to, efforts to identify and enroll other eligible employers into the program to maintain risk pool stability.

8. To promote transparency and fiscal accountability, the Division of Pensions and Benefits shall:

a. provide timely notice to all participating employers of any changes in premium rates, cost allocations, or benefit adjustments that affect the employer’s plan contributions, which notice shall be in writing and delivered prior to the start of the plan year; and

b. maintain and publish, on a publicly accessible website, a list of all employers that have voluntarily terminated participation in the program, including the name of the employer, the date of voluntary termination, and the number of employees or retirees covered under that employer at the time of the voluntary termination, which shall be updated on an annual basis at the beginning of the plan year.

9. The Division of Pensions and Benefits shall publish an annual report, made available to the public and submitted to the Governor, and to the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), detailing:

a. the number and identity of employers entering and exiting the School Employees’ Health Benefits Program;

b. the number of employers subject to the minimum participation or re-enrollment restriction requirements established under section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill);

c. the performance and effectiveness of the participant balancing mechanism described in section 7 of P.L. , c. (C. ) (pending before the Legislature as this bill); and

d. any material trends in participation or cost-sharing that could impact the fiscal sustainability of the program.

10. The State Treasurer shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), as necessary to implement the provisions of P.L. , c. (C. ) (pending before the Legislature as this bill), including, but not limited to, procedures for enforcement, penalties for early voluntary terminations from the School Employees’ Health Benefits Program, and criteria for re-entry.

11. This act shall take effect on October 31, 2027.

STATEMENT

This bill provides that any employer other than the State that elects to participate in the State Health Benefits Program (SHBP) or any employer that elects to participate in the School Employees’ Health Benefits Program (SEHBP) on or after October 1, 2026 will be required to remain enrolled in the program for a minimum period of five consecutive plan years following the effective date of its initial enrollment.

The bill requires any employer other than the State that voluntarily terminates its participation in the SHBP, or any employer that voluntarily terminates its participation in the SEHBP, on or after October 31, 2027 and subsequently re-enters the program to remain enrolled for an additional minimum period of five consecutive plan years following the date of re-enrollment, which will be in addition to the initial five-year enrollment period. For each subsequent voluntary termination and re-entry into the SHBP or the SEHBP by the same employer, the mandatory participation period will be extended by an additional five consecutive plan years. This extension will apply cumulatively, meaning the employer will be required to remain enrolled for 10 years after its first re-entry, 15 years after its second re-entry, 20 years after its third re-entry, and so on for each successive re-entry.

The bill requires the New Jersey Division of Pensions and Benefits (NJDPB), in consultation with the State Health Benefits Commission and the School Employees’ Health Benefits Commission, to develop and implement a participant balancing mechanism to mitigate the adverse impact of voluntary terminations by employers on overall program costs. This mechanism will include, but not be limited to, efforts to identify and enroll other eligible employers into the program as a means to maintain risk pool stability.

To promote transparency and fiscal accountability, the bill requires the NJDPB to provide timely notice to all participating employers of any changes in premium rates, cost allocations, or benefit adjustments that affect the employer’s plan contributions. This notification must be in writing and delivered prior to the start of the plan year. The NJDPB must also maintain and publish, on a publicly accessible website, a list of all employers that have voluntarily terminated participation in the SHBP or the SEHBP, including the name of the employer, the date of the voluntary termination, and the number of employees or retirees covered under that employer at the time of voluntary termination. The list is required to be updated on an annual basis at the beginning of each plan year.

Under the bill, the NJDPB must publish an annual report, made available to the public and submitted to the Governor and the Legislature. The report will include the number and identity of employers entering and exiting the SHBP and the SEHBP; the number of employers subject to the minimum participation or re-enrollment restriction requirements established under the bill; the performance and effectiveness of the participant balancing mechanism described in this bill; and any material trends in participation or cost-sharing that could impact the fiscal sustainability of the program.

The bill requires the State Treasurer to adopt rules and regulations as necessary to implement the provisions of the bill, including, but not limited to, procedures for enforcement, penalties for early voluntary termination by an employer, and criteria for program re-entry.