LEGISLATIVE FISCAL ESTIMATE
SENATE COMMITTEE SUBSTITUTE FOR
SENATE, No. 4415
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JUNE 29, 2026
SUMMARY
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Synopsis: |
Strengthens oversight and enforcement of network adequacy requirements for health insurance carriers; requires health insurance carriers to make network directory available. |
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Type of Impact: |
Annual State revenue and expenditure increases. |
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Agencies Affected: |
Department of Banking and Insurance; Department of Human Services. |
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Office of Legislative Services Estimate |
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Fiscal Impact |
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Annual |
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State Revenue Increase |
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Indeterminate |
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State Expenditure Increase |
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Indeterminate |
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· The Office of Legislative Services (OLS) determines that the bill will result in an indeterminate increase in State revenue derived from the enforcement provisions of the bill related to network adequacy requirements for health insurance carriers.
· The bill will also result in an indeterminate increase in State expenditures from increased enforcement and administrative activities.
BILL DESCRIPTION
The bill amends P.L.2018, c.32 to strengthen the oversight and enforcement of network adequacy requirements for health insurance carriers in this State and require health insurance carriers to make available their provider directories in a certain format provided by the bill.
The bill extends the scope of certain provisions of P.L.2018, c.32, concerning the submission of an annual audit of a carrier’s provider network and the enforcement of certain network adequacy laws, to certain carriers, which includes insurance companies, health service corporations, hospital service corporations, medical service corporations, or health maintenance organizations authorized to issue health benefits plans in this State, and includes the State Health Benefits Program, the School Employees' Health Benefits Program, the Medicaid program, and a Medicaid managed care organization.
The bill provides that, at a minimum, any carrier that fails to meet network adequacy requirements in accordance with applicable federal or State law will be penalized no less than $5,000 per day until the carrier has demonstrated full compliance with the network adequacy requirements. In addition to such penalty imposed, any resident, who can demonstrate that the resident suffered harm as a result of a carrier’s failure to meet its network adequacy requirement, may file a private cause of action seeking damages for demonstrated harm.
The bill requires the Department of Banking and Insurance and the Department of Human Services to jointly prepare a guidance document that establishes the format for the submission of the annual audit and establishes reporting requirements for the departments concerning their enforcement activities related to the enforcement of network adequacy oversight requirements provided under current law.
The bill also requires that each carrier’s network directory be made available in a downloadable, machine-readable format to support independent research, public accountability, and government oversight and ensure that carriers are meeting statutory and contractual network adequacy and access requirements. The bill provides that a carrier will be expressly prohibited from seeking to protect the noncommercial use, publication, or dissemination of the carrier’s network directory through copyright or any other means.
FISCAL ANALYSIS
EXECUTIVE BRANCH
None received.
OFFICE OF LEGISLATIVE SERVICES
The OLS determines that the bill will result in an indeterminate increase in State revenue derived from the enforcement provisions of the bill related to network adequacy requirements for health insurance carriers. The factors involved in developing a forecast of these potential penalties include the frequency of occurrence, the duration of any violation, and amount of the daily penalty assessed. The OLS lacks the informational basis to make an accurate forecast of the potential revenue given the variability in each of these factors.
The OLS finds that the bill will result in an indeterminate increase in State expenditures from increased enforcement and administrative activities. The Department of Banking and Insurance and the Department of Human Services will jointly create a guidance document establishing the format for the submission of the annual audit and establishing reporting requirements for the departments concerning their enforcement activities related to the enforcement of network adequacy oversight requirements provided under current law. Carriers who fail to meet the adequacy standards will be assessed penalties as determined by the appropriate department. In addition to the audit review and penalty assessment determinations, the departments will also incur an indeterminate increase in expenditures to develop, promulgate, and maintain rules and regulations related to the bill’s provisions.
While the bill contains a provision for a private cause of action for any resident who can demonstrate that the resident suffered harm as a result of a carrier’s failure to meet its network adequacy requirement, the OLS determines that this provision will not result in any additional financial risk for the State. Plans offered by the State Health Benefits Program, the School Employees' Health Benefits Program, and the State Medicaid program have extensive provider networks which exceed the network adequacy requirements.
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Section: |
Commerce, Labor and Industry |
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Analyst: |
Associate Fiscal Analyst |
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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.).