The Governor signed S.2, which clarifies the role of health service corporations; requires timely publication of certain information by DOBI; regulates surplus; and adds two public members to the board of directors. After days of negotiation, the new law refrains from “raiding” surpluses for addiction treatment or anything else.
The bill provides that a health service corporation shall have a mission to:
(1) Provide affordable and accessible health insurance to its subscribers; and
(2) Promote the integration of the health care system to meet the needs of its subscribers.
The bill also requires a health service corporation to, on an annual basis and in a form and manner prescribed by the Department of Banking and Insurance, file with the department information relating to the health service corporation’s operations, including but not limited to the following: the health service corporation’s mission, activities, revenues, expenses, assets, liabilities, and total compensation provided to officers, directors, trustees and the five other highest compensated employees who are not an officer, director or trustee, which information shall be posted on the department’s website. The bill directs the commissioner to, on an annual basis, examine a health service corporation’s annual regulatory filings to determine whether the health service corporation’s surplus is within 550% to 725% of risk based-capital. If at any time the commissioner determines that a health service corporation’s surplus exceeds this range, the department is to notify the health service corporation and the health service corporation shall, within 30 days of notice from the commissioner, file a report with the commissioner to reduce the surplus to be within the range. The report shall include a plan to benefit subscribers, which may include but not be limited to, proposals to lessen potential rate increases in the future. The department is also directed to annually audit the financial statements and surplus of the health service corporation to verify risk-based capital. In order to implement this provision of the bill, the department may engage and retain independent actuaries, as necessary, at the expense of the health service corporation. Finally, the bill also supplements the “Health Care Quality Act” to require the Department of Banking and Insurance to publish on its website the annual financial statement of each New Jersey carrier, in the format adopted by the National Association of Insurance Commissioners (NAIC) and in use at the time the statement is due, within 30 days of the receipt of that statement.