S2305

An Act concerning the State Health Benefits Program and supplementing, amending, and repealing various parts of the statutory law.

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

1. (New section) a. (1) The State Health Benefits Program shall consist of the Essential Benefits Primary Plan, set forth in subsection b. of this section, extended benefits riders, set forth in subsection c. of this section, and alternative coverage under a health maintenance organization plan, pursuant to subsection d. of this section. The Essential Benefits Primary Plan shall be available to all full-time active State employees, employees of participating employers other than the State, qualified retirees, and their dependents.

(2) In the case of employees not subject to a collective negotiations agreement, the benefits provided pursuant to this section shall be available to the employees no later than 90 days following the effective date of P.L. , c. (pending before the Legislature as this bill).

(3) In the case of employees subject to a collective negotiations agreement, the benefits provided pursuant to this section shall be available to the employees on the effective date of the first collective negotiations agreement entered into between a bargaining unit and an employer following the effective date of P.L. , c. (pending before the Legislature as this bill).

b. The benefits provided under the Essential Benefits Primary Plan shall consist of:

(1) 90 days inpatient and outpatient hospital expenses, subject to a copayment set by the commission of no less than $250 per hospital visit;

(2) outpatient and ambulatory surgery, subject to a copayment set by the commission of no less than $100 per surgery;

(3) physicians’ fees connected with inpatient or outpatient hospital care, including, but not limited to, general acute care, surgery, and organ transplants;

(4) physicians’ fees connected with outpatient and ambulatory surgery;

(5) anesthesia and the administration of anesthesia;

(6) maternity benefits, including delivery room fees;

(7) coverage for newborns;

(8) treatment for complications of pregnancy;

(9) inpatient diagnostics tests and a $2,000 annual allowance, in the aggregate, for outpatient diagnostic tests for each covered person, including, but not limited to, pap smears, mammography, and prostate examinations and related diagnostic testing upon such terms and conditions established by the commission;

(10) intravenous solutions, blood, and blood plasma;

(11) oxygen and the administration of oxygen;

(12) radiation and x-ray therapy;

(13) laboratory fees incident to treatment in a hospital;

(14) inpatient physical therapy and hydrotherapy;

(15) up to 30 annual visits for outpatient physical therapy for each covered person, which shall include a per visit copayment determined by the commission;

(16) operating room fees;

(17) fees for a special care unit;

(18) treatment room fees;

(19) emergency room services for medically necessary treatment, subject to a $100 copayment per visit;

(20) pharmaceuticals dispensed in a hospital;

(21) dressings;

(22) splints and crutches;

(23) treatment for biologically-based mental illness, as defined in subsection a. of section 6 of P.L.1999, c.106 (C.17B:27A-7.5), which shall include up to 90 days of inpatient stay, subject to a copayment set by the commission of no less than $250 per stay;

(24) treatment for alcohol and substance abuse, which shall include up to 30 days of inpatient or outpatient care, subject to a copayment set by the commission of no less than $250 per visit;

(25) up to $800 annually per covered person for wellness and preventative care, subject to an annual deductible and a per service copayment set by the commission;

(26) up to $800 annually per covered person, in the aggregate, for physician office visits for a diagnosed illness or injury, subject to a copayment set by the commission;

(27) diabetic self-management education;

(28) dialysis;

(29) chemotherapy;

(30) hearing aids for certain persons 15 years old or younger; and

(31) childhood immunizations and lead screening.

c. (1) The State Health Benefits Commission shall develop extended benefits riders, which shall contain groupings of benefits that enhance the benefits offered in the Essential Benefits Primary Plan or provide additional benefits not included in the Essential Benefits Primary Plan. Extended benefits riders shall be offered to employees under terms and conditions established in P.L.1961, c.49 (C.52:14-17.25 et seq.) and by the commission pursuant to that act.

The extended benefits riders may:

(a) contain enhancements to the benefits in the Essential Benefits Primary Plan set forth in subsection b. of this section;

(b) provide increased coverage limits, lower deductibles, and lower copayments; and

(c) provide benefits in addition to those benefits in the Essential Benefits Primary Plan set forth in subsection b. of this section.

(2) The commission shall determine which additional benefits in the extended benefits riders to offer, which may include, but shall not be limited to: reimbursements for additional office visits; additional diagnostic tests; acupuncture; audiology services; chiropractic care; durable medical equipment; home health care; home hemophilia treatment; nutritional counseling; specialized pain management; private duty nursing; scalp hair prostheses; orthotics; shock therapy; allergy testing and related diagnostic and therapy services; skilled nursing facility charges; hospice care; speech therapy; occupational therapy; ambulance and other transportation charges; treatments for infertility; benefits for therapeutic treatment of inherited metabolic disease; forms of alternative medicine; and treatment for non-biologically-based mental illness.

(3) The commission shall establish such deductibles, copayments, and coinsurance for each extended benefits rider that it establishes. The deductible, copayment, and coinsurance need not be the same for every extended benefits rider that the commission establishes.

(4) Each employee may elect one or more of the available extended benefits riders. The commission shall formulate all groupings of additional benefits in the extended benefits riders in a manner that avoids adverse or duplicative selections by employees to the greatest extent possible. The groupings of enhanced or additional benefits may be subject to copayments and deductibles set by the commission applicable to the extended benefits riders, as a whole, or to individual benefits included within each extended benefits rider. Each employee may elect one or more of the available extended benefits riders offered by the employer in accordance with the terms and conditions established in P.L.1961, c.49 (C.52:14-17.25 et seq.) and by the commission pursuant to that act.

d. In addition to the Essential Benefits Primary Plan, the commission shall offer employees of the State, or of any participating employer other than the State, and retirees a choice of standard health maintenance organization plans; provided, however, that contributions to the cost of those plans by an employee shall be the same percentage of the cost of coverage as set forth in section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill). Participating employers, other than the State, shall not be required to offer their employees every health maintenance organization plan included in the State Health Benefits Program.

e. In its discretion, the commission may make available to an employee, at the employee’s option, one or more alternative health care arrangements through which the employee may elect alternative contribution plans with varying actuarial value.

f. (1) The Essential Benefits Primary Plan and any extended benefits riders offered in connection with the plan may be provided through a network-preferred provider organization or organizations, a health maintenance organization, or any other delivery system, selected by the commission. The commission shall establish the level of coinsurance applicable to out-of-network treatment.

(2) In the aggregate, benefits provided under the Essential Benefits Primary Plan and offered as extended benefits riders shall at least equal the benefit value of benefits of the State Health Benefits Program that are provided on the effective date of P.L. , c. (pending before the Legislature as this bill).

2. (New section) a. (1) Under the Essential Benefits Primary Plan, the copayment for in-network doctor’s office visits shall be $25 per visit with an annual maximum out-of-pocket cost of $500 for an individual and $1,100 for a family.

(2) Under the Essential Benefits Primary Plan, the deductible for out-of-network doctor’s office visits shall be $100 per visit for an individual and $250 per visit for a family. The covered person shall receive reimbursement for out-of-network charges at the rate of 80 percent of the reasonable and customary charges; provided, however, that the out-of-pocket maximum shall not exceed $2,000 for an individual and $5,000 for a family in each calendar year.

b. Under a health maintenance organization plan, the copayment for doctor’s office visits shall be $25 per visit. The covered person shall receive reimbursement for out-of-network charges at the rate of 70 percent of the reasonable and customary charges. The commission shall determine the in-network and out-of-network limits, exclusions, maximums, and deductions with periodic adjustments made as necessary by the commission.

c. Benefits under any health care plan provided pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.) may be subject to such limitations, exclusions, or waiting periods as the commission determines to be necessary or desirable to avoid inequity, unnecessary utilization, duplication of services or benefits, including coverage afforded under the laws of the United States, such as the federal Medicare program, or for any other reason identified by the commission.

d. In addition to the provisions of subsections a. and b. of this section, the commission shall provide for an optional high deductible plan that conforms with section 223 of the Internal Revenue Code (26 U.S.C. s.223).

3. (New section) a. Payment of expenses for benefits provided to employees, retirees, and dependents under the Essential Benefits Primary Plan, any extended benefits riders, or any other health care plan provided by the State Health Benefits Commission shall be made for medically necessary treatment for covered services provided by a health care provider licensed or certified by the State, another state, or foreign country, subject to such limitations, exclusions, or waiting periods as the commission establishes pursuant to subsection c. of section 2 of P.L. , c. (C. ) (pending before the Legislature as this bill). The commission shall establish procedures for determining if there are other coverage options for which a covered person may be eligible, including the coordination of benefits with the coverage of a dependent, benefits eligible for reimbursement under a private passenger automobile insurance policy pursuant to the provisions of P.L.1972, c.70 (C.39:6A-1 et seq.), and benefits available through federal programs, such as Medicare. The commission may establish pre-certification requirements for certain procedures and services and requirements and standards for determining the medical necessity of procedures and services.

b. The commission shall, in consultation with the plan administrator, adopt lists of valid diagnostic tests eligible for reimbursement. The commission may utilize lists compiled by professional licensing boards, including lists approved by the Commissioner of Banking and Insurance pursuant to section 12 of P.L.1998, c.21 (C.39:6A-4.7). The commission may request assistance from professional licensing boards concerning the efficacy and validity of particular diagnostic tests.

c. Payment of inpatient hospital expenses under the Essential Benefits Primary Plan may, at the discretion of the commission and in accordance with terms and conditions established by the commission, be subject to hospital administration review by the plan administrator on either a prospective or retrospective basis. An authorization provided by the plan administrator pursuant to this subsection shall be valid for 30 days. If the treatment or procedure does not take place within the 30-day authorization period, then the service provider shall contact the plan administrator, who may renew the authorization for an additional 30 days. With respect to emergency admissions for which prior admission review is not practical or possible, the covered person or provider shall contact the plan administrator no later than 48 hours following the admission. Failure to contact the plan administrator within 48 hours of the admission shall result in a charge to the employee determined by the commission. The commission may, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt regulations establishing the conditions under which the commission may waive the post-admission notification requirement set forth in this subsection.

4. (New section) a. Notwithstanding the provisions of subsection d. of section 13 of P.L.1983, c.362 (C.39:6A-4.3) or any other law to the contrary, an employee receiving health care coverage under a State Health Benefits Program plan shall not be eligible to receive plan benefits as primary coverage for injuries suffered in an automobile accident in lieu of personal injury protection coverage under an automobile insurance policy.

b. With respect to any benefits paid under a State health care plan for which recovery is subsequently made in any legal proceeding or otherwise, the State Health Benefits Commission shall have a lien on the recovery in the amount of the benefits paid to the employee or dependent under the State health care plan and shall exercise that lien.

5. (New section) a. The State Health Benefits Commission may contract with a carrier, or other entity licensed pursuant to P.L.2001, c.267 (C.17B:27B-1 et seq.) as a third party administrator, to administer the Essential Benefits Primary Plan and extended benefits riders in accordance with the provisions set forth by the commission in the plan.

b. The commission may contract directly with specialized providers, such as behavioral health organizations, organizations which provide chronic care management for specified conditions, or other organizations providing health care services as adjunct administrators of the plan. Organizations under contract for specialized services shall meet nationally recognized accreditation standards, including specified outcome measurements, and shall comply with a management plan containing objectives to be established by the commission for the specialized conditions.

c. The commission may contract with an independent utilization review organization to review the utilization and payment of benefits to optimize the cost-effectiveness of the administration of the Essential Benefits Primary Plan, extended benefits riders, and any health maintenance organization plans provided by the commission.

d. The commission may contract with the Essential Benefits Primary Plan administrator or with an independent organization for the management of large cases, cases identified as catastrophic, or cases which are otherwise likely to require prolonged or specialized treatment. The commission shall, in consultation with the plan administrator, develop protocols for the purpose of identifying such cases.

6. (New section) a. The State Health Benefits Commission shall contract directly with a pharmacy benefits manager for the provision of pharmaceuticals that shall be eligible for reimbursement under a pharmacy benefits plan and shall establish standards for the performance and management of the pharmacy benefits plan. The contract shall establish a dispensing fee payable to pharmacies, which the commission shall formulate in a manner that reasonably delineates the pharmaceutical products dispensed by retail pharmacies eligible for reimbursement under the plan.

b. The commission may establish a formulary of preferred pharmaceuticals and may establish copayment differentials based on whether a pharmaceutical is included in the formulary, is a generic pharmaceutical, or is a non-generic pharmaceutical not included in the formulary.

7. (New section) If the Essential Benefits Primary Plan or extended benefits riders covering an employee or an eligible dependent, after having been in effect for at least one month, are terminated through any means other than voluntary cancellation of enrollment, there shall be a 31-day period following the effective date of the termination during which the employee or dependent may exercise the option to convert, without evidence of good health, to coverage on a direct payment basis. The converted coverage shall include benefits of the same type provided under the Essential Benefits Primary Plan and shall be equivalent to the benefits which had been provided when the person was covered as an employee or dependent of an employee. The employee or dependent exercising the conversion option set forth in this section shall pay the full cost of coverage for the converted coverage and shall be subject to the terms and conditions that the plan normally prescribes for the type of coverage provided.

8. (New section) Every active employee enrolled in a plan provided by the State Health Benefits Commission shall enroll in Parts A and B of the federal Medicare program immediately upon becoming eligible for enrollment. The State, or a participating employer other than the State, shall reimburse an employee enrolled in Medicare for the basic premium charged by the federal government for Medicare Part B.

9. (New section) a. The amount of contribution to be paid by public employees of the State, or of employers other than the State, for health care benefits coverage for the Essential Benefits Primary Plan or a health maintenance organization for the employee and any dependent shall be as follows:

for family coverage or its equivalent -

an employee who earns less than $25,000 shall pay 3 percent of the cost of coverage;

an employee who earns $25,000 or more but less than $30,000 shall pay 4 percent of the cost of coverage;

an employee who earns $30,000 or more but less than $35,000 shall pay 5 percent of the cost of coverage;

an employee who earns $35,000 or more but less than $40,000 shall pay 6 percent of the cost of coverage;

an employee who earns $40,000 or more but less than $45,000 shall pay 7 percent of the cost of coverage;

an employee who earns $45,000 or more but less than $50,000 shall pay 9 percent of the cost of coverage;

an employee who earns $50,000 or more but less than $55,000 shall pay 12 percent of the cost of coverage;

an employee who earns $55,000 or more but less than $60,000 shall pay 14 percent of the cost of coverage;

an employee who earns $60,000 or more but less than $65,000 shall pay 17 percent of the cost of coverage;

an employee who earns $65,000 or more but less than $70,000 shall pay 19 percent of the cost of coverage;

an employee who earns $70,000 or more but less than $75,000 shall pay 22 percent of the cost of coverage;

an employee who earns $75,000 or more but less than $80,000 shall pay 23 percent of the cost of coverage;

an employee who earns $80,000 or more but less than $85,000 shall pay 24 percent of the cost of coverage;

an employee who earns $85,000 or more but less than $90,000 shall pay 26 percent of the cost of coverage;

an employee who earns $90,000 or more but less than $95,000 shall pay 28 percent of the cost of coverage;

an employee who earns $95,000 or more but less than $100,000 shall pay 29 percent of the cost of coverage;

an employee who earns $100,000 or more but less than $110,000 shall pay 32 percent of the cost of coverage;

an employee who earns $110,000 or more shall pay 35 percent of the cost of coverage;

for individual coverage or its equivalent -

an employee who earns less than $20,000 shall pay 4.5 percent of the cost of coverage;

an employee who earns $20,000 or more but less than $25,000 shall pay 5.5 percent of the cost of coverage;

an employee who earns $25,000 or more but less than $30,000 shall pay 7.5 percent of the cost of coverage;

an employee who earns $30,000 or more but less than $35,000 shall pay 10 percent of the cost of coverage;

an employee who earns $35,000 or more but less than $40,000 shall pay 11 percent of the cost of coverage;

an employee who earns $40,000 or more but less than $45,000 shall pay 12 percent of the cost of coverage;

an employee who earns $45,000 or more but less than $50,000 shall pay 14 percent of the cost of coverage;

an employee who earns $50,000 or more but less than $55,000 shall pay 20 percent of the cost of coverage;

an employee who earns $55,000 or more but less than $60,000 shall pay 23 percent of the cost of coverage;

an employee who earns $60,000 or more but less than $65,000 shall pay 27 percent of the cost of coverage;

an employee who earns $65,000 or more but less than $70,000 shall pay 29 percent of the cost of coverage;

an employee who earns $70,000 or more but less than $75,000 shall pay 32 percent of the cost of coverage;

an employee who earns $75,000 or more but less than $80,000 shall pay 33 percent of the cost of coverage;

an employee who earns $80,000 or more but less than $95,000 shall pay 34 percent of the cost of coverage;

an employee who earns $95,000 or more shall pay 35 percent of the cost of coverage;

for a covered person with child or spouse coverage or its equivalent -

an employee who earns less than $25,000 shall pay 3.5 percent of the cost of coverage;

an employee who earns $25,000 or more but less than $30,000 shall pay 4.5 percent of the cost of coverage;

an employee who earns $30,000 or more but less than $35,000 shall pay 6 percent of the cost of coverage;

an employee who earns $35,000 or more but less than $40,000 shall pay 7 percent of the cost of coverage;

an employee who earns $40,000 or more but less than $45,000 shall pay 8 percent of the cost of coverage;

an employee who earns $45,000 or more but less than $50,000 shall pay 10 percent of the cost of coverage;

an employee who earns $50,000 or more but less than $55,000 shall pay 15 percent of the cost of coverage;

an employee who earns $55,000 or more but less than $60,000 shall pay 17 percent of the cost of coverage;

an employee who earns $60,000 or more but less than $65,000 shall pay 21 percent of the cost of coverage;

an employee who earns $65,000 or more but less than $70,000 shall pay 23 percent of the cost of coverage;

an employee who earns $70,000 or more but less than $75,000 shall pay 26 percent of the cost of coverage;

an employee who earns $75,000 or more but less than $80,000 shall pay 27 percent of the cost of coverage;

an employee who earns $80,000 or more but less than $85,000 shall pay 28 percent of the cost of coverage;

an employee who earns $85,000 or more but less than $100,000 shall pay 30 percent of the cost of coverage;

an employee who earns $100,000 or more shall pay 35 percent of the cost of coverage.

Base salary shall be used to determine what an employee earns for the purposes of this provision.

As used in this section, "cost of coverage" means the annual cost of coverage attributable to the coverage selected by the person under the Essential Benefits Primary Plan or health maintenance organization as set forth in section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) for medical and prescription drug plan coverage, but not for dental, vision, or other health care benefits; extended benefits riders established and made available pursuant to subsection c. section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill); or the annual cost of health care coverage attributable to the coverage selected by the person for health care, prescription drug, dental, vision, or for any other health care benefits provided pursuant to N.J.S.40A:10-16 et seq. or any other law adopted by a local unit, or agency thereof, an independent State authority, as defined in section 13 of P.L. , c. (C. ) (pending before the Legislature as this bill), and a local authority as defined in section 12 of P.L. , c. (C. ) (pending before the Legislature as this bill) when the employer is not a participant in the State Health Benefits Program or the School Employees' Health Benefits Program.

b. With respect to any extended benefits rider elected by a person, as provided in subsection c. section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), the cost of coverage for each rider shall be calculated on the basis of the aggregate loss experience for each rider, plus administrative costs, and the level of contribution of the person shall be the same as established for the Essential Benefits Primary Plan pursuant to subsection a. of this section.

10. (New section) a. Notwithstanding the provisions of any other law to the contrary, public employees of the State and employers other than the State shall contribute, through the withholding of the contribution from their pay, salary, or other compensation, toward the cost of health care benefits coverage for the employees and any dependents provided under the State Health Benefits Program in an amount that shall be determined in accordance with section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill).

The amount payable by any employee under this subsection shall not, under any circumstance, be less than the 1.5 percent of base salary that is provided for in subsection c. of section 6 of P.L.1996, c.8 (C.52:14-17.28b) and subsection a. of section 7 of P.L.1964, c.125 (C.52:14-17.38). An employee who pays the contribution required under this subsection shall not also be required to also pay the contribution of 1.5 percent of base salary under those subsections listed above.

This section shall apply to employees for whom the employer has assumed a health care benefits payment obligation, to require that such employees pay, at a minimum, the amount of contribution specified in this section for health care benefits coverage.

b. The contribution required pursuant to subsection a. of this section shall commence upon the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) for employees who do not have a majority representative for collective negotiations purposes or upon the expiration of any relevant collective negotiations agreement setting contributions in effect on the effective date of P.L. , c. (C. ) (pending before the Legislature as this bill) for employees who do have a majority representative for collective negotiations purposes.

c. The provisions of law permitting the determination of an amount of contribution at the discretion of the employer or by means of a binding collective negotiations agreement, and by means of the application of the terms of such an agreement to employees who do not have a majority representative for collective negotiations purposes, or the modification of the respective payment obligations of the employer and those employees in a manner consistent with the terms of such an agreement, shall remain in effect with regard to contributions, whether as a share of the cost of coverage or otherwise, in addition to the contributions required under subsection a. of this section. All other provisions of law concerning contributions for health care benefits shall remain applicable to the extent not inconsistent with this section.

d. Part-time State employees participating under section 1 of P.L.2003, c.172 (C.52:14-17.33a) shall not pay less than the contribution specified in subsection a. of this section. Paragraph (6) of subsection c. of section 6 of P.L.1996, c.8 (C.52:14-17.28b) shall not be deemed to apply with regard to contributions specified and made under this section. Paragraph (7) of subsection c. of P.L.1996, c.8 (C.52:14-17.28b) shall apply with regard to contributions specified and made under this section.

11. (New section) a. Notwithstanding the provisions of any other law to the contrary, public employees, as specified herein, of a local unit or agency thereof, herein referred to as an employer, shall contribute, through the withholding of the contribution from the employee’s pay, salary, or other compensation, toward the cost of health care benefits coverage for the employee and any dependent provided pursuant to N.J.S.40A:10-16 et seq. in an amount that shall be determined in accordance with section 9 of P.L. , c. (C. ) (pending before the Legislature as this bill).

The amount payable by any employee under this subsection shall not, under any circumstance, be less than the 1.5 percent of base salary that is provided for in subsection b. of N.J.S.40A:10-21. An employee who pays the contribution required under this subsection shall not also be required to pay the contribution of 1.5 percent of base salary under subsection b. of N.J.S.40A:10-21.

This subsection shall apply to employees for whom the employer has assumed a health care benefits payment obligation pursuant to N.J.S.40A:10-21, to require that such employees pay, at a minimum, the amount of contribution specified in this section for health care benefits coverage, with an employer including a county college.

d. This section shall apply when the health care benefits are provided through self-insurance, the purchase of commercial insurance or reinsurance, an insurance fund or joint insurance fund, or in any other manner, or any combination thereof.

12. (New section) As used in this section, "local authority" means an "authority" as defined under the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.).

Notwithstanding the provisions of any other law to the contrary, public employees of a local authority who are not subject to the provisions of sections 10 and 11 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall contribute, through the withholding of the contribution from the employee’s pay, salary, or other compensation, toward the cost of health care benefits coverage for the employee and any dependent provided by the local authority during active service in an amount that shall be determined, as closely as possible, in accordance with sections 9 and 11 of P.L. , c. (C. ) (pending before the Legislature as this bill).

13. (New section) As used in this section, "independent State authority" means a public authority, board, commission, corporation, or other agency or instrumentality of the State allocated, in but not of, a principal department of State government pursuant to Article V, Section IV, paragraph 1 of the New Jersey Constitution, or which is not subject to supervision or control by the department in which it is allocated, and a regional authority, but shall not include a college or university.

Notwithstanding the provisions of any other law to the contrary, public employees of an independent State authority who are not subject to the provisions of section 10 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall contribute, through the withholding of the contribution from the employee’s pay, salary, or other compensation, toward the cost of health care benefits coverage for the employee and any dependent provided by the local authority during active service in an amount that shall be determined, as closely as possible, in accordance with sections 9 and 10 of P.L. , c. (C. ) (pending before the Legislature as this bill).

14. Section 2 of P.L.1961, c.49 (C.52:14-17.26) is amended to read as follows:

2. As used in P.L.1961, c.49 [(C.52:14-17.26 et seq.)] (C.52:14-17.25 et seq.):

(a) The term "State" means the State of New Jersey.

(b) The term "commission" means the State Health Benefits Commission, created by section 3 of P.L.1961, c.49 (C.52:14-17.27).

(c) (1) The term "employee" means an appointive or elective officer, a full-time employee of the State of New Jersey, or a full-time employee of an employer other than the State who appears on a regular payroll and receives a salary or wages for an average of the number of hours per week as prescribed by the governing body of the participating employer which number of hours worked shall be considered full-time, determined by resolution, and not less than 20.

(2) After the effective date of P.L.2010, c.2, the term "employee" means (i) a full-time appointive or elective officer whose hours of work are fixed at 35 or more per week, a full-time employee of the State, or a full-time employee of an employer other than the State who appears on a regular payroll and receives a salary or wages for an average of the number of hours per week as prescribed by the governing body of the participating employer which number of hours worked shall be considered full-time, determined by resolution, and not less than 25, or (ii) an appointive or elective officer, an employee of the State, or an employee of an employer other than the State who has or is eligible for health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.) or sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 et seq.) on that effective date and continuously thereafter provided the officer or employee is covered by the definition in paragraph (1) of this subsection. For the purposes of [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.), an employee of Rutgers, The State University of New Jersey, shall be deemed to be an employee of the State, and an employee of the New Jersey Institute of Technology shall be considered to be an employee of the State during such time as the Trustees of the Institute are party to a contractual agreement with the State Treasurer for the provision of educational services. The term "employee" shall further mean, for purposes of this act, a former employee of the South Jersey Port Corporation, who is employed by a subsidiary corporation or other corporation, which has been established by the Delaware River Port Authority pursuant to subdivision (m) of Article I of the compact creating the Delaware River Port Authority (R.S.32:3-2), as defined in section 3 of P.L.1997, c.150 (C.34:1B-146), and who is eligible for continued membership in the Public Employees' Retirement System pursuant to subsection j. of section 7 of P.L.1954, c.84 (C.43:15A-7).

For the purposes of [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.), the term "employee" shall not include persons employed on a short-term, seasonal, intermittent or emergency basis, persons compensated on a fee basis, persons having less than two months of continuous service or persons whose compensation from the State is limited to reimbursement of necessary expenses actually incurred in the discharge of their official duties, provided, however, that the term "employee" shall include persons employed on an intermittent basis to whom the State has agreed to provide coverage under P.L.1961, c.49 (C.52:14-17.25 et seq.) in accordance with a binding collective negotiations agreement. An employee paid on a 10-month basis, pursuant to an annual contract, will be deemed to have satisfied the two-month waiting period if the employee begins employment at the beginning of the contract year. The term "employee" shall also not include retired persons who are otherwise eligible for benefits under [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.) but who, although they meet the age or disability eligibility requirement of Medicare, are not covered by Medicare Hospital Insurance, also known as Medicare Part A, and Medicare Medical Insurance, also known as Medicare Part B. A determination by the commission that a person is an eligible employee within the meaning of [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.) shall be final and shall be binding on all parties.

(d) (1) The term "dependents" means an employee's spouse, partner in a civil union couple or an employee's domestic partner as defined in section 3 of P.L.2003, c.246 (C.26:8A-3), and the employee's unmarried children under the age of 23 years who live with the employee in a regular parent-child relationship. "Children" shall include stepchildren, legally adopted children and children placed by the Division of Child Protection and Permanency in the Department of Children and Families, provided they are reported for coverage and are wholly dependent upon the employee for support and maintenance. A spouse, partner in a civil union couple, domestic partner or child enlisting or inducted into military service shall not be considered a dependent during the military service. The term "dependents" shall not include spouses, partners in a civil union couple or domestic partners of retired persons who are otherwise eligible for the benefits under [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.) but who, although they meet the age or disability eligibility requirement of Medicare, are not covered by Medicare Hospital Insurance, also known as Medicare Part A, and Medicare Medical Insurance, also known as Medicare Part B.

(2) Notwithstanding the provisions of paragraph (1) of this subsection to the contrary and subject to the provisions of paragraph (3) of this subsection, for the purposes of an employer other than the State that is participating in the State Health Benefits Program pursuant to section 3 of P.L.1964, c.125 (C.52:14-17.34), the term "dependents" means an employee's spouse or partner in a civil union couple and the employee's unmarried children under the age of 23 years who live with the employee in a regular parent-child relationship. "Children" shall include stepchildren, legally adopted children and children placed by the Division of Child Protection and Permanency in the Department of Children and Families provided they are reported for coverage and are wholly dependent upon the employee for support and maintenance. A spouse, partner in a civil union couple or child enlisting or inducted into military service shall not be considered a dependent during the military service. The term "dependents" shall not include spouses or partners in a civil union couple of retired persons who are otherwise eligible for benefits under P.L.1961, c.49 (C.52:14-17.25 et seq.) but who, although they meet the age or disability eligibility requirement of Medicare, are not covered by Medicare Hospital Insurance, also known as Medicare Part A, and Medicare Medical Insurance, also known as Medicare Part B.

(3) An employer other than the State that is participating in the State Health Benefits Program pursuant to section 3 of P.L.1964, c.125 (C.52:14-17.34) may adopt a resolution providing that the term "dependents" as defined in paragraph (2) of this subsection shall include domestic partners as provided in paragraph (1) of this subsection.

(e) The term "carrier" means [a voluntary association, corporation or other organization] an insurer licensed to do business in this State, including a health maintenance organization as defined in section 2 of the "Health Maintenance Organizations Act," P.L.1973, c.337 (C.26:2J-2), or a third party administrator licensed pursuant to P.L.2001, c.267 (C.17B:27B-1 et seq.), which is lawfully engaged in [providing or paying for or reimbursing the cost of,] administering personal health services on behalf of an
employer, including hospitalization, medical and surgical services[, under insurance policies or contracts, membership or subscription contracts, or the like, in consideration of premiums or other periodic charges payable to the carrier].

(f) The term "hospital" means (1) an institution operated pursuant to law which is primarily engaged in providing on its own premises, for compensation from its patients, medical diagnostic and major surgical facilities for the care and treatment of sick and injured persons on an inpatient basis, and which provides such facilities under the supervision of a staff of physicians and with 24 hour a day nursing service by registered graduate nurses, or (2) an institution not meeting all of the requirements of (1) but which is accredited as a hospital by the Joint Commission on Accreditation of Hospitals. In no event shall the term "hospital" include a convalescent nursing home or any institution or part thereof which is used principally as a convalescent facility, residential center for the treatment and education of children with mental disorders, rest facility, nursing facility or facility for the aged or for the care of drug addicts or alcoholics.

(g) The term “State [managed] health care plan" means a health care plan under which comprehensive health care services and supplies are provided to eligible employees, retirees, and dependents: (1) through a group of doctors and other providers employed by the plan; or (2) through an individual practice association, preferred provider organization, or point of service plan under which services and supplies are furnished to plan participants through a network of doctors and other providers under contracts or agreements with the plan on a prepayment or reimbursement basis and which may provide for payment or reimbursement for services and supplies obtained outside the network. The plan [may] shall be provided [on an insured basis through contracts with carriers or] on a self-insured basis, and may be operated and administered by the State [or] , by carriers , or by other administrators of health care benefits plans under administrative services only contracts with the State.

(h) The term "Medicare" means the program established by the "Health Insurance for the Aged Act," Title XVIII of the "Social Security Act," Pub.L.89-97 (42 U.S.C. s.1395 et seq.), as amended, or its successor plan or plans.

(i) The term "traditional plan" means a health care plan which provides basic benefits, extended basic benefits and major medical expense benefits as set forth in section 5 of P.L.1961, c.49 (C.52:14-17.29) by indemnifying eligible employees, retirees, and dependents for expenses for covered health care services and supplies through payments to providers or reimbursements to participants.

(j) The term "successor plan" means a State [managed] health care plan that shall replace the traditional plan and that shall provide benefits as set forth in [subsection (B) of section 5 of P.L.1961, c.49 (C.52:14-17.29) with provisions regarding reimbursements and payments as set forth in paragraph (1) of subsection (C) of section 5 of P.L.1961, c.49 (C.52:14-17.29)] the Essential Benefits Primary Plan, established pursuant to subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), and any optional riders offered in connection with that plan.

(k) The term "reasonable and customary charges" means charges based upon the 90th percentile of the usual, customary, and reasonable (UCR) fee schedule determined by the Health Insurance Association of America or a similar nationally recognized database of prevailing health care charges.

(l) The term “cost of coverage” means the actual cost of the health care benefits set forth in the plan, plus any anticipated loss development for the subsequent coverage period, as determined by the administrator or health maintenance organization, plus administrative costs paid to the administrator, pharmacy benefits manager, or any other ancillary organization engaged to manage the administration of the plan or plans.

(m) The term “Essential Benefits Primary Plan” means the health care plan established in subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(n) The term “extended benefits riders” means benefits that are purchased separately from the Essential Benefits Primary Plan and provide additional or supplementary benefits, as authorized in subsection c. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill).

(o) The term “same terms and conditions” means that a health care plan does not apply different copayments, deductibles, or benefit limits to benefits for specialized conditions enumerated in P.L.1961, c.49 (C.52:14-17.25 et seq.) than those applied to general surgical and medical benefits.

(cf: P.L.2012, c.16, s.137)

15. Section 3 of P.L.1961, c.49 (C.52:14-17.27) is amended to read as follows:

3. a. There is hereby created a State Health Benefits Commission, consisting of [five] seven members: the State Treasurer; the Commissioner of Banking and Insurance; the Chairperson of the Civil Service Commission; a State employees' representative chosen by the Public Employee Committee of the AFL-CIO; [and the fifth member of the commission shall be] a local employees' representative chosen by the Public Employee Committee of the AFL-CIO ; and two public members appointed by the Governor with the advice and consent of the Senate.

The treasurer shall be chairman of the commission and the health benefits program authorized by P.L.1961, c.49 (C.52:14-17.25 et seq.) shall be administered in the [Treasury] Department of the Treasury. The Director of the Division of Pensions and Benefits shall be the secretary of the commission. The commission [and committee] shall establish a health benefits program , which shall consist of the Essential Benefits Primary Plan established in accordance with the provisions of subsection b. of section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill), for the employees of the State, and employees of employers other than the State, retirees, and dependents, the cost of which shall be paid as specified in section 6 of P.L.1961, c.49 (C.52:14-17.30). The commission, in consultation with the committee, shall establish rules and regulations as may be deemed reasonable and necessary for the administration of P.L.1961, c.49 (C.52:14-17.25 et seq.).

The commission may periodically propose changes to the Essential Benefits Primary Plan. The Legislature shall approve, by law, any proposed changes to the Essential Benefits Primary Plan before the changes take effect. The commission shall have the sole authority to decide which proposed changes to the Essential Benefits Primary Plan are submitted to the Legislature for approval.

The Attorney General shall be the legal advisor of the commission and committee.

The members of the commission and committee shall serve without compensation but shall be reimbursed for any necessary [expenditures] actual expenditure. The public employee members shall not suffer loss of salary or wages during service on the commission [or committee].

The commission shall publish annually a report showing the fiscal transactions of the program for the preceding year and stating other facts pertaining to the plan. The commission shall submit the report to the Governor and furnish a copy to every employer for use of the participants and the public.

b. There is established a State Health Benefits Plan Design Committee, composed of [12] 13 members as follows:

[six] seven members who shall be appointed by the Governor as representatives of public employers whose employees are enrolled in the program;

three members who shall be appointed by the Public Employee Committee of the AFL-CIO;

one member who shall be appointed by the head of the union, that is not affiliated with the AFL-CIO, that represents the greatest number of police officers in this State;

one member who shall be appointed by the head of the union, that is not affiliated with the AFL-CIO, that represents the greatest number of firefighters in this State; and

one member who shall be appointed by the head of the State Troopers Fraternal Association.

The members of the committee shall serve for a term of three years and until a successor is appointed and qualified. Of the initial appointments by the Governor, three members shall serve for two years and until a successor is appointed and qualified, and two shall serve for one year and until a successor is appointed and qualified. Following the effective date of P.L. , c. (pending before the Legislature as this bill), the seventh member appointed by the Governor shall serve for a full three-year term. Of the initial appointment by the head of the union representing the greatest number of police officers in the State, the member shall serve for two years and until a successor is appointed and qualified. Of the initial appointment by the head of the union representing the greatest number of firefighters in the State, the member shall serve for one year and until a successor is appointed and qualified.

The members of the committee shall select a chairperson from among the members, who shall serve for a term of one year, with no member serving more than one term as chairperson until all the members of the committee have served a term in a manner alternating among the employer representatives and employee representatives, unless the committee determines otherwise with regard to this process.

The committee shall [have the responsibility for and authority over the various plans and components of those plans, including for medical benefits, prescription benefits, dental, vision, and any other health care benefits, offered and administered by the program. The committee shall have the authority to create, modify, or terminate any plan or component, at its sole discretion. Any reference in law to the State Health Benefits Commission in the context of the creation, modification, or termination of a plan or plan component shall be deemed to apply to the committee] consult with the commission on the development and composition of extended benefits riders that employees and retirees may purchase in connection with the Essential Benefits Primary Plan. The commission, however, shall retain sole authority over the development and composition of extended benefits riders.

[The members of the committee shall have the same duty and responsibility to the program as do the members of the commission.

If any matter before the committee receives at least seven votes in the affirmative, the commission shall approve and implement the committee's decision.

If any matter before the committee receives six votes in the affirmative and six votes in the negative or the committee otherwise reaches an impasse on a decision, the provisions of section 55 of P.L.2011, c.78 (C.52:14-17.27b) shall be followed.]

(cf: P.L.2011, c.78, s.45)

16. Section 4 of P.L.1961, c.49 (C.52:14-17.28) is amended to read as follows:

4. a. The commission shall negotiate with and arrange for the [purchase] provision of health care benefits covering employees of the State and their dependents, in accordance with the provisions of the State health care plan produced by the commission pursuant to sections 1 through 9 of P.L. , c. (C. ) (pending before the Legislature as this bill), on such terms as it deems to be in the best interests of the State and its employees, from carriers licensed to operate in the State or in other jurisdictions, as appropriate, [contracts providing hospital, surgical, obstetrical, and other covered health care services and benefits covering employees of the State and their dependents,] and shall execute all documents pertaining thereto for and on behalf and in the name of the State.

b. Except for contracts entered into after June 30, 2007 but before the effective date of P.L. , c. (pending before the Legislature as this bill), the commission shall [not enter into a contract under this act unless the benefits provided thereunder] provide health care benefits that equal or exceed the minimum standards specified in [section 5 of P.L.1961, c.49 (C.52:14-17.29) for the particular coverage which such contract provides, and unless coverage is] section 1 of P.L. , c. (C. ) (pending before the Legislature as this bill) and shall make those benefits available to all eligible employees and their dependents on the basis specified by section 7 of P.L.1961, c.49 (C.52:14-17.31), except that a State employee enrolled in the program on or after July 1, 2003 and all law enforcement officers employed by the State for whom there is a majority representative for collective negotiations purposes may not be eligible for coverage under the traditional plan as defined in section 2 of P.L.1961, c.49 (C.52:14-17.26) pursuant to a binding collective negotiations agreement or pursuant to the application by the commission, in its sole discretion, of the terms of any collective negotiations agreement binding on the State to State employees for whom there is no majority representative for collective negotiations purposes.

c. The commission shall [not enter into a contract] provide a heath care benefits plan under P.L.1961, c.49 (C.52:14-17.25 et seq.) [after June 30, 2007, unless the contract includes] after the effective date of P.L. , c. (pending before the Legislature as this bill) that includes the Essential Benefits Primary Plan as the successor plan, extended benefits riders, and one or more health maintenance organization plans [and a State managed care plan that shall be substantially equivalent to the NJ PLUS plan in effect on June 30, 2007, with adjustments to that plan pursuant to a binding collective negotiations agreement or pursuant to action by the commission, in its sole discretion, to apply such adjustments to State employees for whom there is no majority representative for collective negotiations purposes, and] . The commission shall not provide a heath care benefits plan unless coverage under the plan is available to all eligible employees and their dependents on the basis specified by section 7 of P.L.1961, c.49 (C.52:14-17.31), except as provided in subsection d. of this section.

d. Eligibility for coverage under the successor plan may be limited pursuant to a binding collective negotiations agreement or pursuant to the application by the commission, in its sole discretion, of the terms of any collective negotiations agreement binding on the State to State employees for whom there is no majority representative for collective negotiations purposes. Coverage under the successor plan and [under the State managed care plan required to be included in a contract entered into] extended benefits riders provided pursuant to subsection c. of this section shall be made available in retirement to all State employees who accrued 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems [before July 1, 2007. Coverage under the State managed care plan required to be included in a contract entered into pursuant to subsection c. of this section shall be made available in retirement to all State employees who accrue 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems on or after July 1, 2007].

e. Actions taken by the commission before the effective date of P.L.2007, c.103 in anticipation of entering into any contract pursuant to subsection c. of this section are hereby deemed to have been within the authority of the commission pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.). Actions taken by the commission before the effective date of P.L. , c. (pending before the Legislature as this bill) in anticipation of the promulgation of a State health care plan pursuant to subsection c. of this section are hereby deemed to have been within the authority of the commission pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.).

(cf: P.L.2007, c.103, s.21)

17. Section 6 of P.L.1996, c.8 (C.52:14-17.28b) is amended to read as follows:

6. a. Notwithstanding the provisions of any other law to the contrary, and except as otherwise provided in subsection b. of this section, the obligations of the State or an independent State authority, board, commission, corporation, agency, or organization to pay [the premium or periodic charges for] a portion of the cost of health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.) may be determined by means of a binding collective negotiations agreement, including any agreements in force at the time of the adoption of P.L.1996, c.8. With respect to State employees for whom there is no majority representative for collective negotiations purposes, the commission may, in its sole discretion, modify the respective payment obligations set forth in P.L.1961, c.49 (C.52:14-17.25 et seq.) for the State and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the State. With respect to employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective payment obligations set forth in P.L.1961, c.49 (C.52:14-17.25 et seq.) for such employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on such employer. The provisions of this subsection shall also apply to employees deemed or considered to be employees of the State pursuant to subsection (c) of section 2 of P.L.1961, c.49 (C.52:14-17.26).

b. (1) Notwithstanding the provisions of any other law to the contrary, for each State employee who accrues 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems before July 1, 1997, excepting the employee who elects deferred retirement, the State, upon the employee's retirement, shall pay the full cost of [the premium or periodic charges for] the health benefits provided to a retired State employee and dependents covered under the State Health Benefits Program, but not including survivors, and shall also reimburse the retired employee for premium charges under Part B of Medicare covering the retired employee and the employee's spouse.

(2) Notwithstanding the provisions of any other law to the contrary, and except as otherwise provided by section 8 of P.L.1961, c.49 (C.52:14-17.32) as amended by P.L.2005, c.341, and by subsection c. of this section, for each State employee who accrues 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems on or after July 1, 1997, excepting the employee who elects deferred retirement, the State, upon the employee's retirement, shall pay the [premium or periodic charges for] cost of the health benefits provided to a retired State employee and dependents covered under the State Health Benefits Program, but not including survivors, and shall reimburse the retired employee for premium charges under Part B of Medicare covering the retired employee and the employee's spouse: (a) in accordance with the provisions, if any, concerning health benefits coverage in retirement which are in the collective negotiations agreement applicable to the employee at the time of the employee's accrual of 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems, or (b) if the employee has no majority representative for collective negotiations purposes, in a manner consistent with the terms, if any, concerning health benefits coverage in retirement which are in any collective negotiations agreement deemed applicable by the State Health Benefits Commission to that employee at the time of the employee's accrual of 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems. The terms for the payment of [premiums or periodic charges] the cost of the health care coverage established pursuant to this paragraph for the traditional plan shall apply to the successor plan, and the terms for the payment of [premiums or periodic charges] the cost of the health care coverage established pursuant to this paragraph for the NJ PLUS plan shall apply to the State [managed] health care plan required [to be included in a contract entered into] pursuant to subsection c. of section 4 of P.L.1961, c.49 (C.52:14-17.28).

c. (1) Effective July 1, 2007, but, with respect to employees to whom this subsection applies who are paid through the State centralized payroll, effective with the first pay period beginning after July 1, 2007, the cost of benefits provided pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.) shall be shared by employees through the withholding of a contribution in an amount as determined in accordance with paragraph (2) of this subsection.

(2) The amount of the contribution required pursuant to paragraph (1) of this subsection as to State employees and employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is a majority representative for collective negotiations purposes shall be determined by means of a binding collective negotiations agreement. Commencing on the effective date of P.L.2010, c.2 and upon the expiration of any applicable binding collective negotiations agreement in force on that effective date, the amount of the contribution required pursuant to paragraph (1) of this subsection by State employees and employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is a majority representative for collective negotiations purposes shall be [1.5%] 1.5 percent of base salary, notwithstanding any other amount that may be required additionally pursuant to this paragraph by means of a binding collective negotiations agreement.

The amount of the contribution required pursuant to paragraph (1) of this subsection as to State employees for whom there is no majority representative for collective negotiations purposes shall be determined in a manner consistent with the terms, if any, concerning health benefits coverage which are in a collective negotiations agreement deemed applicable by the commission to the employee. The amount of the contribution required pursuant to paragraph (1) of this subsection as to employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is no majority representative for collective negotiations purposes shall be determined in a manner consistent with the terms, if any, concerning health benefits coverage which are in a collective negotiations agreement deemed applicable by the employer to the employee. The amount of the contribution required pursuant to paragraph (1) of this subsection as to State employees or employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is no majority representative for collective negotiations purposes shall be 1.5 percent of base salary, notwithstanding any other amount that may be required additionally pursuant to this paragraph by means of the application of the terms of a binding collective negotiations agreement.

(3) Except as provided in paragraph (5) of this subsection, the cost of benefits provided pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.) shall be shared by retirees to whom this subsection applies through the withholding of a contribution in an amount as determined in accordance with paragraph (4) of this subsection.

(4) The amount of the contribution required pursuant to paragraph (3) of this subsection as to State employees and employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is a majority representative for collective negotiations purposes who accrue 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems on or after July 1, 2007, and who retire on or after July, 1, 2007, excepting employees who elect deferred retirement, but including those who retire on a disability pension after July 1, 2007, shall be determined by means of a binding collective negotiations agreement applicable at the time of the employee's accrual of 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems. The amount of the contribution required pursuant to paragraph (3) of this subsection as to State employees or employees of an independent State authority, board, commission, corporation, agency, or organization for whom there is no majority representative for collective negotiations purposes who accrue 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems on or after July 1, 2007, and who retire on or after July 1, 2007, excepting employees who elect deferred retirement, but including those who retire on a disability pension after July 1, 2007, shall be determined in a manner consistent with the terms, if any, concerning health benefits coverage in retirement which are in any collective negotiations agreement deemed applicable by the commission to that employee at the time of the employee's accrual of 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems, except that for employees who accrue 25 years of nonconcurrent service credit in one or more State or locally-administered retirement systems in the period beginning July 1, 2007, and ending June 30, 2011, the contribution shall be 1.5 percent of the monthly retirement allowance, including any future cost-of-living adjustments, or, with respect to retirees for whom there is no majority representative and who are members of the alternate benefit program, an amount determined pursuant to a formula developed by the commission that shall be designed to result in a contribution that is comparable to the contribution that applies to retirees who are not members of the alternate benefit program.

(5) The contribution required pursuant to paragraph (3) of this subsection shall not take effect until the New Jersey Retirees' Wellness Program is open for enrollment and thereafter the contribution shall be waived for a retiree who participates in the New Jersey Retirees' Wellness Program. The Division of Pensions and Benefits shall issue a report on the New Jersey Retirees' Wellness Program. The report shall include, but need not be limited to, the claims experience with regard to retirees in the program, and the costs and savings realized. The report shall be issued at the end of the third year after the program's implementation or by December 30, 2010, whichever is earlier. The report shall be submitted to the Governor, the Legislature, and the State Treasurer.

(6) Any employee or retiree from whom withholding of a contribution is required pursuant to this subsection shall not be required to pay any percentage of the [premiums or periodic charges for] cost of coverage for health care benefits provided under P.L.1961, c.49 (C.52:14-17.25 et seq.), other than dental benefits.

(7) The contribution required pursuant to this subsection may be terminated only upon withdrawal from all health care benefits coverage as an employee or retiree, other than coverage for dental benefits, and the submission to the commission of written certification by the employee that the employee is covered by other health care benefits and that those benefits are in force. The commission shall not apply the written certification requirement to retirees or to employees to whom Article VI, Section VI, paragraph 6 of the New Jersey Constitution applies.

d. The amount of contribution required pursuant to paragraph (3) of subsection c. of this section in retirement as to a State employee and employee of an independent State authority, board, commission, corporation, agency, or organization who becomes a member of a State or locally-administered retirement system on or after the effective date of P.L.2010, c.2, for whom there is a majority representative for collective negotiations purposes and for whom there is no such representative, shall be 1.5 percent of the retiree's monthly retirement allowance, including any future cost-of-living adjustments, or with respect to members of the alternate benefit program, an amount determined pursuant to the formula specified in paragraph (4) of subsection c. of this section, notwithstanding any other amount that may be required additionally pursuant to paragraph (4) of subsection c. of this section by means of a binding collective negotiations agreement or by means of the application of the terms of such an agreement. The contribution required by this subsection or pursuant to paragraph (4) of subsection c. of this section for officers or employees specified in this subsection shall not be waived for a retiree who participates in the New Jersey Retirees' Wellness Program.

(cf: P.L.2010, c.2, s.1)

18. Section 1 of P.L.1997, c.94 (C.52:14-17.29b) is amended to read as follows:

1. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of this act that provides hospital or medical expense benefits, shall] provide coverage for a minimum of 72 hours of inpatient care following a modified radical mastectomy and a minimum of 48 hours of inpatient care following a simple mastectomy. The [contract] State health care plan shall also provide that [a carrier] the plan administrator shall not require a health care provider to obtain authorization from the [carrier] plan administrator for prescribing 72 or 48 hours, as appropriate, of inpatient care as provided for in this section.

The provisions of this section shall not be construed: to require a patient to receive inpatient care for 72 or 48 hours, as appropriate, if the patient in consultation with the patient's physician determines that a shorter length of stay is medically appropriate; or to relieve a patient or a patient's physician, if appropriate, of any notification requirements to the [carrier under the contract] plan administrator.

(cf: P.L.1997, c.94, s.1)

19. Section 2 of P.L.1999, c.441 (C.52:14-17.29e) is amended to read as follows:

2. a. The State health care plan established by the State Health Benefits Commission shall ensure that [every contract purchased] the health care benefits provided by the commission [on or after the effective date of this act that provides hospital or medical expense benefits] shall provide coverage for biologically-based mental illness under the same terms and conditions as provided for any other sickness under the [contract] State health care plan.

b. Nothing in this section shall be construed to change the manner in which a [carrier] plan administrator determines:

(1) whether a mental health care service meets the medical necessity standard as established by the [carrier] administrator; or

(2) which providers shall be entitled to reimbursement for providing services for mental illness under the [contract] State health care plan.

c. The commission shall provide notice to employees regarding the coverage required by this section in accordance with this subsection and regulations promulgated by the Commissioner of Health [and Senior Services] pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.). The notice shall be in writing and prominently positioned in any literature or correspondence and shall be transmitted [at the earliest of: (1) the next mailing to the employee; (2) the yearly informational packet sent to the employee; or (3) July 1, 2000] to each employee. The commission shall also ensure that the [carrier under contract with the commission] plan administrator, upon receipt of information that a covered person is receiving treatment for a biologically-based mental illness, shall promptly notify that person of the coverage required by this section.

d. As used in this section:

“Biologically-based mental illness” means a mental or nervous condition that is caused by a biological disorder of the brain and results in a clinically significant or psychological syndrome or pattern that substantially limits the functioning of the person with the illness, including, but not limited to, schizophrenia, schizoaffective disorder, major depressive disorder, bipolar disorder, paranoia and other psychotic disorders, obsessive-compulsive disorder, panic disorder, and pervasive developmental disorder or autism.

(cf: P.L.1999, c.441, s.2)

20. Section 6 of P.L.2001, c.227 (C.52:14-17.29f) is amended to read as follows:

6. The State health care plan established by the State Health Benefits Commission shall provide benefits to each person covered under the State Health Benefits Program for expenses incurred in conducting a Pap smear. [The benefits shall be provided to the same extent as for any other medical condition under the contract.]

As used in this section, and notwithstanding the provisions of this section to the contrary, "Pap smear" means an initial Pap smear and any confirmatory test when medically necessary and as ordered by the covered person's physician and includes all laboratory costs associated with the initial Pap smear and any such confirmatory test.

(cf: P.L.2001, c.227, s.6)

21. Section 1 of P.L.2001, c.284 (C.52:14-17.29g) is amended to read as follows:

1. a. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of P.L.2001, c.284 (C.52:14-17.29g) provides] provide that if an enrollee's or member's primary care physician's contract as a participating physician in a health maintenance organization or State [managed] health care plan will be terminated, the health maintenance organization or State [managed] health care plan administrator, as appropriate, shall provide the enrollee or member with 90-days' notice of the termination. If 90-days' notice cannot be provided because the termination will occur prior to the end of the 90-day period, the health maintenance organization or State [managed] health care plan administrator shall notify the enrollee or member as soon as the health maintenance organization or State [managed] health care plan has knowledge of the termination.

b. Notwithstanding the provisions of any policy governing open enrollment to the contrary, an enrollee or member who has been notified by a health maintenance organization or State [managed] health care plan pursuant to this section may change his coverage to another health [benefits] care plan under the State Health Benefits Program upon receiving notice that his primary care physician will no longer be a participating physician with the health maintenance organization or State [managed] health care plan, in which the person is currently enrolled.

(cf: P.L.2007, c.103, s.24)

22. Section 11 of P.L.2001, c.367 (C.52:14-29h) is amended to read as follows:

11. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased or renewed by the commission on or after the effective date of P.L.2001, c.367 (C.26:2S-6.1 et al.), which provides hospital or medical expense benefits through a managed care plan as defined in section 2 of P.L.1997, c.192 (C.26:2S-2), shall] meet the requirements of section 2 of P.L.2001, c.367 (C.26:2S-6.1).

(cf: P.L.2001, c.367, s.11)

23. Section 9 of P.L.2004, c.86 (C.52:14-17.29i) is amended to read as follows:

9. [a.] The State health care plan established by the State Health Benefits Commission shall provide benefits to each person covered under the State Health Benefits Program for expenses incurred in conducting:

(1) one baseline mammogram examination for women who are 40 years of age; a mammogram examination every year for women age 40 and over; and, in the case of a woman who is under 40 years of age and has a family history of breast cancer or other breast cancer risk factors, a mammogram examination at such age and intervals as deemed medically necessary by the woman's health care provider; and

(2) an ultrasound evaluation, a magnetic resonance imaging scan, a three-dimensional mammography, or other additional testing of an entire breast or breasts, after a baseline mammogram examination, if the mammogram demonstrates extremely dense breast tissue, if the mammogram is abnormal within any degree of breast density including not dense, moderately dense, heterogeneously dense, or extremely dense breast tissue, or if the patient has additional risk factors for breast cancer including but not limited to family history of breast cancer, prior personal history of breast cancer, positive genetic testing, extremely dense breast tissue based on the Breast Imaging Reporting and Data System established by the American College of Radiology, or other indications as determined by the patient's health care provider. The coverage required under this paragraph may be subject to utilization review, including periodic review, by the carrier of the medical necessity of the additional screening and diagnostic testing.

[b. The benefits shall be provided to the same extent as for any other medical condition under the contract.]

(cf: P.L.2013, c.196, s.9)

24. Section 10 of P.L.2005, c.251 (C.52:17-14.29j) is amended to read as follows:

10. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of this act that provides benefits for expenses incurred in the purchase of outpatient prescription drugs shall provide] provide benefits for expenses incurred in the purchase of prescription female contraceptives under the same terms and conditions as any other covered prescription.

For the purposes of this section, "prescription female contraceptives" means any drug or device used for contraception by a female, which is approved by the federal Food and Drug Administration for that purpose, that can only be purchased in this State with a prescription written by a health care professional licensed or authorized to write prescriptions, and includes, but is not limited to, birth control pills and diaphragms.

(cf: P.L.2005, c.251, s.10)

25. Section 7 of P.L.2005, c.375 (C.52:14-17.29k) is amended to read as follows:

7. a. As used in this section, "dependent" means a covered person's child by blood or by law who:

(1) is 30 years of age or younger;

(2) is unmarried;

(3) has no dependent of his own;

(4) is a resident of this State or is enrolled as a full-time student at an accredited public or private institution of higher education; and

(5) (a) is not actually provided coverage as a named subscriber, insured, enrollee, or covered person under any other group or individual health benefits plan, group health plan, church plan or health benefits plan, or entitled to benefits under Title XVIII of the Social Security Act, Pub.L.74-271 (42 U.S.C. s.1395 et seq.) at the time dependent coverage pursuant to this section begins or will begin; and

(b) there is evidence of prior, creditable coverage or receipt of benefits under a benefits plan or by law as set forth in subparagraph (a) of this paragraph.

b. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased or renewed by the commission on or after the effective date of P.L.2005, c.375 (C.17:48-6.19 et al.), prohibits] prohibit the termination of coverage of a dependent before the dependent's 23rd birthday by reason of age, and [complies] comply with the provisions of this section [of P.L.2008, c.38] concerning the coverage of a dependent by written election, as set forth in subsection d. of this section, until the dependent's 31st birthday.

c. Nothing within this section shall be construed to: (1) prevent any [contract purchased or renewed] State health care plan provided by the commission from providing coverage for a dependent which terminates at a specific age after the dependent child's 23rd birthday; or (2) require coverage for services provided to a dependent before the effective date of this section [of P.L.2008, c.38].

d. A dependent covered by [a covered person's contract] the State health care plan, which coverage under the [contract] plan terminates at a specific age on or before the dependent's 30th birthday, may make a written election for coverage as a dependent pursuant to this section, until the dependent's 30th birthday:

(a) within 30 days prior to the termination of coverage at the specific age provided in the [contract] State health care plan;

(b) within 30 days after meeting the requirements for dependent status as set forth in subsection a. of this section, when coverage for the dependent under the [contract] State health care plan previously terminated; or

(c) during an open enrollment period, as provided pursuant to the [contract] State health care plan, if the dependent meets the requirements for dependent status as set forth in subsection a. of this section.

e. (1) Coverage for a dependent who makes a written election for coverage pursuant to subsection d. of this section shall consist of coverage which is identical to the coverage provided to that dependent prior to the termination of coverage at the specific age provided in the [contract] State health care plan. If coverage is modified under the [contract] State health care plan for any similarly situated dependents for coverage prior to the termination of coverage at the specific age provided in the [contract] State health care plan, the coverage shall also be modified in the same manner for the dependent.

(2) Coverage for a dependent who makes a written election for coverage pursuant to subsection d. of this section shall not be conditioned upon, or discriminate on the basis of, lack of evidence of insurability.

f. (1) The [covered person's contract] State health care plan may require payment of [a premium] additional coverage costs by the covered person or dependent, as appropriate, for any period of coverage relating to a dependent's written election for coverage pursuant to subsection d. of this section. The [premium] additional coverage costs shall not exceed [102%] 102 percent of the applicable portion of the [premium] cost of coverage previously paid for that dependent's coverage under the [contract] State health care plan prior to the termination of coverage at the specific age provided in the [contract] State health care plan.

(2) The applicable portion of the [premium] cost of coverage previously paid for the dependent's coverage under the [contract] State health care plan shall be determined by the commission, based upon the difference between the [contract's] rating tiers for adult and dependent coverage or family coverage, as appropriate, and single coverage, or based upon any other formula or dependent rating tier deemed appropriate by the commission which provides a substantially similar result.

(3) Payments of the [premium] cost of coverage may, at the election of the payor, be made in monthly installments.

g. Coverage for a dependent provided pursuant to this section shall be provided until the earlier of the following:

(1) the date upon which the dependent is disqualified for dependent status as set forth in subsection a. of this section;

(2) the date upon which coverage ceases under the [contract] State health care plan by reason of a failure to make a timely payment [of any premium required under the contract] by the covered person or dependent for coverage provided pursuant to this section. The payment [of any premium] shall be considered to be timely if made within 30 days after the due date or within a longer period as may be provided for by the [contract] State health care plan; or

(3) the date upon which the [contract] State health care plan, under which coverage is provided to a dependent, ceases to provide coverage to the covered person.

Nothing herein shall be construed to permit the commission to refuse a written election for coverage by a dependent pursuant to subsection d. of this section, based upon the dependent's prior disqualification pursuant to paragraph (1) of this subsection, other than a disqualification based on age or lack of evidence of prior, creditable coverage or receipt of benefits.

h. Notice regarding coverage for a dependent as provided pursuant to this section shall be provided to a covered person by the commission:

(1) in the certificate of coverage or other equivalent document prepared for covered persons and delivered on or about the date of commencement of the covered persons' coverage; and

(2) in a notice delivered to covered persons on a quarterly basis.

(cf: P.L.2008, c.38, s.35)

26. Section 31 of P.L.2007, c.92 (C.52:14-17.29l) is amended to read as follows:

31. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of P.L.2007, c.92 (C.43:15C-1 et al.) to] provide benefits [under the State managed care plans includes] that include a disease and chronic care management plan for specified conditions meeting nationally recognized accreditation standards and including specified outcome measures and objectives for disease and chronic care management.

(cf: P.L.2007, c.92, s.31)

27. Section 9 of P.L.2007, c.345 (C.52:14-17.29m) is amended to read as follows:

9. The State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of this act that provides hospital or medical expense benefits, shall] , in at least one of the extended benefits riders offered by the commission but not in the Essential Benefits Primary Plan, provide benefits [to any person covered thereunder] for expenses incurred in obtaining an orthotic or prosthetic appliance from any licensed orthotist or prosthetist, or any certified pedorthist, as determined medically necessary by the covered person's physician.

As used in this section, "orthotic appliance," "prosthetic appliance," "licensed orthotist" and "licensed prosthetist" have the meaning assigned to them in section 3 of P.L.1991, c.512 (C.45:12B-3) and "certified pedorthist" has the meaning assigned to it in subsection j. of section 18 of P.L.1991, c.512 (C.45:12B-18).

b. On and after the effective date of [this act, a contract purchased by the commission] P.L.2007, c.345, the State health care plan shall reimburse for orthotic and prosthetic appliances at the same rate as reimbursement for such appliances under the federal Medicare reimbursement schedule.

[c. The benefits shall be provided to the same extent as for any other medical condition under the contract.]

(cf: P.L.2007, c.345, s.9)

28. Section 10 of P.L.2008, c.126 (C.52:14-17.29n) is amended to read as follows:

10. The State health care plan established by the State Health Benefits Commission shall [, on or after the effective date of this act,] provide benefits for medically necessary expenses incurred in the purchase of a hearing aid for a covered person 15 years of age or younger, as provided in this section.

The benefits shall include the purchase of a hearing aid for each ear, when medically necessary and as prescribed or recommended by a licensed physician or audiologist. The commission [may] shall limit the benefit provided in this section to $1,000 per hearing aid for each hearing-impaired ear every 24 months. A covered person may choose a hearing aid that is priced higher than the benefit payable under this section and may pay the difference between the price of the hearing aid and the benefit payable under this section, without financial or contractual penalty to the provider of the hearing aid.

(cf: P.L.2008, c.126, s.10)

29. Section 9 of P.L.2009, c.113 (C.52:14-17.29o) is amended to read as follows:

9. a. [Within 30 days of the effective date of this act, the] The State health care plan established by the State Health Benefits Commission shall provide [, in every health benefits plan that provides for maternity services,] for reimbursement in installments to an obstetrical provider licensed in New Jersey for maternity services rendered during the term of a covered person's pregnancy.

b. For the purposes of this section, "obstetrical provider licensed in New Jersey" means:

(1) an obstetrician/gynecologist licensed by the State Board of Medical Examiners or licensed by another state; or

(2) a midwife licensed by the State Board of Medical Examiners as a certified midwife or a certified nurse midwife or licensed or certified in another state.

(cf: P.L.2009, c.113, s.9)

30. Section 9 of P.L.2009, c.115 (C.52:14-17.29p) is amended to read as follows:

9. Notwithstanding any other provision of law to the contrary, the State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of this act that provides hospital or medical expense benefits shall] provide coverage pursuant to the provisions of this section.

a. The [contract] State health care plan shall provide coverage for expenses incurred in screening and diagnosing autism or another developmental disability.

b. When the covered person's primary diagnosis is autism or another developmental disability, the [contract] State health care plan shall provide coverage for expenses incurred for medically necessary occupational therapy, physical therapy, and speech therapy, as prescribed through a treatment plan. Coverage of these therapies shall not be denied on the basis that the treatment is not restorative.

c. When the covered person is under 21 years of age and the covered person's primary diagnosis is autism, the [contract] State health care plan shall provide coverage for expenses incurred for medically necessary behavioral interventions based on the principles of applied behavioral analysis and related structured behavioral programs, as prescribed through a treatment plan, subject to the provisions of this subsection.

(1) Except as provided in paragraph (3) of this subsection, the benefits provided pursuant to this subsection shall be provided to the same extent as for any other medical condition under the [contract] State health care plan, but shall not be subject to limits on the number of visits that a covered person may make to a provider of behavioral interventions.

(2) The benefits provided pursuant to this subsection shall not be denied on the basis that the treatment is not restorative.

(3) (a) The maximum benefit amount for a covered person in any calendar year through 2011 shall be $36,000.

(b) Commencing on January 1, 2012, the maximum benefit amount shall be subject to an adjustment, to be promulgated by the Commissioner of Banking and Insurance and published in the New Jersey Register no later than February 1 of each calendar year, which shall be equal to the change in the consumer price index for all urban consumers for the nation, as prepared by the United States Department of Labor, for the calendar year preceding the calendar year in which the adjustment to the maximum benefit amount is promulgated.

(c) The adjusted maximum benefit amount shall apply to [a contract that is delivered, issued, executed, or renewed, or approved for issuance or renewal, in] the 12-month period following the date on which the adjustment is promulgated.

(d) Notwithstanding the provisions of this paragraph to the contrary, the commission shall not be precluded from providing a benefit amount for a covered person in any calendar year that exceeds the benefit amounts set forth in subparagraphs (a) and (b) of this paragraph.

d. The treatment plan required pursuant to subsections b. and c. of this section shall include all elements necessary for the [carrier] State health care plan administrator to appropriately provide benefits, including, but not limited to: a diagnosis; proposed treatment by type, frequency, and duration; the anticipated outcomes stated as goals; the frequency by which the treatment plan will be updated; and the treating physician's signature. The [carrier] State health care plan administrator may only request an updated treatment plan once every six months from the treating physician to review medical necessity, unless the [carrier] plan administrator and the treating physician agree that a more frequent review is necessary due to emerging clinical circumstances.

e. The provisions of subsections b. and c. of this section shall not be construed as limiting benefits otherwise available to a covered person.

f. The provisions of subsections b. and c. of this section shall not be construed to require that benefits be provided to reimburse the cost of services provided under an individualized family service plan or an individualized education program, or affect any requirement to provide those services; except that the benefits provided pursuant to those subsections shall include coverage for expenses incurred by participants in an individualized family service plan through a family cost share.

g. The coverage required under this section may be subject to utilization review, including periodic review, by the [carrier] State health care plan administrator of the continued medical necessity of the specified therapies and interventions.

(cf: P.L.2009, c.115, s.9)

31. Section 9 of P.L.2011, c.188 (C.52:14-17.29r) is amended to read as follows:

9. a. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased on or after the effective date of this act that provides hospital or medical expense benefits shall] provide coverage for expenses for prescribed, orally administered anticancer medications used to kill or slow the growth of cancerous cells on a basis no less favorable than the [contract] State health care plan provides for intravenously administered or injected anticancer medications.

b. Pursuant to subsection a. of this section, coverage for expenses for prescribed, orally administered anticancer medications used to kill or slow the growth of cancerous cells shall not be subject to any prior authorization, dollar limit, copayment, deductible or coinsurance provision that does not apply to intravenously administered or injected anticancer medications.

c. [A] The State health care plan established by the State Health Benefits Commission [contract] shall not achieve compliance with the provisions of this section by imposing an increase in patient cost sharing, including any copayment, deductible or coinsurance, for anticancer medications, whether intravenously administered or injected or orally administered, that
are covered under the [contract] plan as of the effective date of [this act] P.L.2011, c.188.

(cf: P.L.2011, c.188, s.9)

32. Section 9 of P.L.2013, c.50 (C.52:14-17.29s) is amended to read as follows:

9. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract purchased by the commission on or after the effective date of this act that provides hospital or medical expense benefits that] include coverage for prescription eye drops[,] and shall provide coverage for expenses incurred for refills of prescription eye drops in accordance with the Guidance for Early Refill Edits of Topical Ophthalmic Products provided to Medicare Part D plan sponsors by the Centers for Medicare & Medicaid Services of the U.S. Department of Health and Human Services, provided that:

(1) the prescribing health care practitioner indicates on the original prescription that additional quantities of the prescription eye drops are needed; and

(2) the refill requested by the covered person does not exceed the number of additional quantities indicated on the original prescription by the prescribing health care practitioner.

(cf: P.L.2013, c.50, s.9)

33. Section 9 of P.L.2015, c.206 (C.52:14-17.29t) is amended to read as follows:

9. The State health care plan established by the State Health Benefits Commission shall [ensure that every contract under the State Health Benefits Program purchased on or after the effective date of this act, which provides benefits for pharmacy services, prescription drugs, or for participation in a prescription drug plan, shall], on at least one occasion per year for each covered person:

(1) apply a prorated daily cost-sharing rate to prescriptions that are dispensed by a network pharmacy for less than a 30 days' supply if the prescriber or pharmacist indicates the fill or refill is in the best interest of the covered person or is for the purpose of synchronizing the covered person's chronic medications;

(2) provide coverage for a drug prescribed for the treatment of a chronic illness dispensed in accordance with a plan among the covered person, the prescriber and the pharmacist to synchronize the refilling of multiple prescriptions for the covered person; and

(3) determine dispensing fees based exclusively on the total number of prescriptions dispensed; dispensing fees shall not be prorated or based on the number of the days' supply of medication prescribed or dispensed.

This section shall not apply to prescriptions for opioid analgesics. "Opioid analgesic" means a drug in the opioid analgesic drug class prescribed to treat moderate to severe pain or other conditions, whether in immediate release or extended release form, and whether or not combined with other drug substances to form a single drug product or dosage form.

(cf: P.L.2015, c.206, s.9)

34. Section 6 of P.L.1961, c.49 (C.52:14-17.30) is amended to read as follows:

6. (A) For each active covered State employee and for the eligible dependents the employee may have enrolled at the employee's option the State, from funds appropriated therefor, shall pay the [premium or periodic charges] cost of coverage for the benefits provided under the [contract] State health care plan in amounts equal to the [premium or periodic] charges due for the benefits provided under [such a contract] the plan covering the employee and the employee's enrolled dependents.

(B) An employee may, on an optional basis, enroll the employee's dependents for coverage under the [contract] State health care plan subject to such regulations and conditions as the commission and the [carrier] plan administrator may prescribe. There is hereby created a health benefits fund. Said fund shall be used to pay the [premiums or periodic charges] cost of coverage for which the State is responsible under [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.).

(cf: P.L.1996, c.8, s.3)

35. Section 7 of P.L.1961, c.49 (C.52:14-17.31) is amended to read as follows:

7. The coverage provided solely for employees shall, subject to the provisions below, automatically become effective for all eligible employees from the first day on or after the effective date of the program on which they satisfy the definition of "employee" contained in this act. The commission shall establish the rules and regulations governing the enrollment and effective dates of coverage of dependents of employees it deems necessary or desirable. The rules and regulations shall not defer coverage with respect to any qualified dependent an employee has on the date the employee's employer becomes a participating employer, provided the employee was, immediately prior to the date, insured with respect to the dependent under a group insurance plan of the employer which was in effect immediately prior to the date. Under the rules and regulations established by the commission, each employee shall be given the opportunity to enroll for coverage for dependents as of the earliest date the employee becomes eligible for enrollment. With respect to the traditional plan, an employee may elect to enroll dependents for both basic coverage and major medical expense coverage but may not enroll for either coverage alone.

In the event that the group health plan which covered an employee or dependents immediately prior to the date the employee's employer becomes a participating employer provides, after termination of coverage thereunder, any continuation of benefits, or would so provide in the absence of coverage pursuant to this act, no coverage shall be afforded pursuant to this act for any such expenses (i) which are covered, or which would be covered in the absence of coverage pursuant to this act, in whole or in part, by the prior insurance plan or (ii) which may be used in satisfaction of any deductible requirement under the prior insurance plan to establish entitlement to the continuation of benefits.

Each employee shall furnish the Division of Pensions and Benefits, in the prescribed form, the information necessary on account of the employee's own coverage and necessary to enroll dependents. Any employee not desiring coverage at the time the employee first becomes eligible, shall give the division written notice of that fact in the form prescribed by the division. The employee may not enroll thereafter except at the times and under the conditions prescribed by the commission.

Any person employed as a substitute teacher by a school district and who provides evidence of coverage under another health benefits program may waive coverage for the current school year on or after the date on which the person becomes an employee eligible for coverage.

Multiple coverage in the program as an employee, dependent, or retiree shall be prohibited and the prohibition shall be implemented in accordance with the rules and regulations promulgated by the commission. The provisions of this paragraph shall be applicable to the State Health Benefits Program and to the School Employees' Health Benefits Program to the extent not inconsistent with the provisions of sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 et seq.).

If a person who is eligible to enroll in the State health care plan because of the person’s status as an employee of the State, or of an employer other than the State, is the spouse, civil union partner, or domestic partner of another person who is eligible to enroll in the State health care plan because of the person’s status as an employee of the State, or of an employer other than the State, then one of the covered persons shall waive coverage pursuant to this section and shall be included as a dependent of the plan of the spouse, civil union partner, or domestic partner for as long as that dependent is an active member of the plan.

(cf: P.L.2010, c.2, s.12)

36. Section 36 of P.L.1995, c.259 (C.52:14-17.31a) is amended to read as follows:

36. a. Notwithstanding the provisions of any other law to the contrary, an employer other than the State which participates in the State Health Benefits Program, established pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.), may allow any employee who is eligible for other health care coverage to waive coverage under the State Health Benefits Program to which the employee is entitled by virtue of employment with the employer. The waiver shall be in such form as the Director of the Division of Pensions and Benefits shall prescribe and shall be filed with the division. After such waiver has been filed and for so long as that waiver remains in effect, no [premium] payment shall be required to be paid by the employer for the employee or the employee's dependents. Not later than the 180th day after the date on which the waiver is filed, the division shall refund to the employer the amount of any [premium] payment previously paid by the employer with respect to any period of coverage which followed the filing date.

b. Notwithstanding the provisions of any other law to the contrary, the State as an employer, or an employer that is an independent authority, commission, board, or instrumentality of the State which participates in the State Health Benefits Program, may allow any employee who is eligible for other health care coverage that is not under the State Health Benefits Program to waive the coverage under the State Health Benefits Program to which the employee is entitled by virtue of employment with the employer. The waiver shall be in such form as the Director of the Division of Pensions and Benefits shall prescribe and shall be filed with the division.

c. In consideration of filing a waiver as permitted in subsections a. and b. of this section, an employer may pay to the employee annually an amount, to be established [in the sole discretion of the employer] by the commission, which shall not exceed [50%] 50 percent of the amount saved by the employer because of the employee's waiver of coverage, and, for a waiver filed on or after the effective date of P.L.2010, c.2, which shall not exceed [25%] 25 percent, or $5,000, whichever is less, of the amount saved by the employer because of the employee's waiver of coverage. An employee who waives coverage shall be permitted to immediately resume coverage if the employee ceases to be eligible for other health care coverage for any reason, including, but not limited to, the retirement or death of the spouse or divorce. An employee who resumes coverage shall repay, on a pro rata basis, any amount received from the employer which represents an advance payment for a period of time during which coverage is resumed. An employee who wishes to resume coverage shall notify the employer in writing and file a declaration with the division, in such form as the director of the division shall prescribe, that the waiver is revoked. The decision of an employer to allow its employees to waive coverage and the amount of consideration to be
paid therefor shall not be subject to the collective bargaining process.

(cf: P.L.2010, c.2, s.11)

37. Section 48 of P.L.2007, c.103 (C.52:14-17.32a1) is amended to read as follows:

48. Effective July 1, 2007, health care benefits for retired State employees and their dependents for which the State is required to pay the [premiums or periodic charges] cost of coverage under the "New Jersey State Health Benefits Program Act,” P.L.1961, c.49 (C.52:14-17.25 et seq.), shall be funded and paid by the State through a separate fund established in the Department of the Treasury. Beginning with the valuation period ending June 30, 2007, the Director of the Division of Pensions and Benefits shall annually compute a contribution to fund these health care benefits which shall be the amount necessary to pay the anticipated [premiums or periodic charges] cost of coverage for the benefits for the following valuation period and to provide that the balance in the fund as of the end of the following valuation period shall be increased by 3/5 of [1%] one percent of the salary of the active members for the valuation period. If the assets in the fund are insufficient to pay the [premiums or periodic charges] cost of coverage for the benefits, they shall be paid directly by the State. Nothing herein above shall alter health care benefits for qualified retirees and their dependents or relieve the State from its acknowledged obligation to fund the benefits.

(cf: P.L.2007, c.103, s.48)

38. Section 8 of P.L.1970, c.231 (C.52:14-17.32b) is amended to read as follows:

8. The cessation of active full-time employment shall be deemed to occur on the last day of the coverage period for which [premiums] payments for the cost of coverage have been paid and such [premiums] payments will be required if the employee receives payment for any service rendered in the coverage period.

(cf: P.L.1970, c.231, s.8)

39. Section 1 of P.L.1974, c.192 (C.52:14-17.32d) is amended to read as follows:

1. Notwithstanding any other regulation or statutory authority pertaining to the continuation of coverage for those on an approved leave of absence, the coverage of any eligible State employee and of his dependents, if any, during any period of authorized leave of absence for illness without pay, shall be continued for a period of as much as 3 months or the equivalent number of payroll periods for those not reported on a monthly basis [; such] . Such period shall commence following the last payroll period or month for which the employee receives a salary payment. The [premium] cost of coverage for the coverage extended for such period of leave of absence shall be paid for by the State.

(cf: P.L.1974, c.192, s.1)

40. Section 2 of P.L.1974, c.192 (C.52:14-17.32e) is amended to read as follows:

2. The coverage of an eligible State employee and of his dependents, if any, during any period of authorized leave of absence without pay shall terminate on the last day of the coverage period for which [premiums] payments for the cost of coverage have been paid; provided, however, the coverage of the employee and the employee's dependents may be continued by such employee, if the employee shall pay in advance the total [premium] payment required for the employee's coverage and the coverage of the employee's dependents during such period of authorized leave of absence without pay; provided, further, that no period of such continued coverage shall exceed a total of 9 months, or the equivalent number of payroll periods for those not reported on a monthly basis, during which the employee receives no pay.

(cf: P.L.1978, c.179, s.1)

41. Section 3 of P.L.1987, c.384 (C.52:14-17.32f) is amended to read as follows:

3. A qualified retiree from the Teachers' Pension and Annuity Fund (N.J.S.18A:66-1 et seq.) and dependents of a qualified retiree, but not including survivors, are eligible to participate in the State Health Benefits Program until June 30, 2008, and beginning July 1, 2008, in the School Employees' Health Benefits Program, regardless of whether the retiree's employer participated in the program.

A qualified retiree is a retiree who:

a. Retired on a benefit based on 25 or more years of service credit;

b. Retired on a disability pension based on fewer years of service credit; or

c. Elected deferred retirement based on 25 or more years of service credit and who receives a retirement allowance.

The program shall reimburse a qualified retiree who participates in the program for the premium charges under Part B of the federal Medicare program for the retiree and the retiree's spouse. A qualified retiree who retired under subsections a. and b. of this section prior to the effective date of this 1987 amendatory and supplementary act is eligible for the coverage if the retiree applies to the program for it within one year after the effective date, and a qualified retiree as defined under subsection c. of this section whose retirement allowance commenced prior to the effective date of this 1992 amendatory act is eligible for the coverage if the retiree applies to the program for it within one year after the effective date.

The [premium or periodic charges] cost of coverage for benefits provided to a qualified retiree and the dependents of the retiree, and the cost for reimbursement of Medicare premiums shall be paid by the State. An employee who becomes a member of the Teachers' Pension and Annuity Fund on or after the effective date of P.L.2010, c.2 shall pay as a qualified retiree 1.5 percent of the retiree's monthly retirement allowance, including any future cost-of-living adjustments, through the withholding of the contribution, for health benefits coverage provided under P.L.2007, c.103 (C.52:14-17.46.1 et seq.) and the State shall pay the remainder of the [premium or periodic charges] cost of coverage for benefits provided to a qualified retiree and the dependents of the retiree, and the cost for reimbursement of Medicare premiums.

(cf: P.L.2010, c.2, s.2)

42. Section 2 of P.L.1992, c.126 (C.52:14-17.32f1) is amended to read as follows:

2. The provisions of section 3 of P.L.1987, c.384 (C.52:14-17.32f) shall apply to:

a. any employee of a board of education who retires on a benefit or benefits based in the aggregate upon 25 or more years of nonconcurrent service credit in one or more State or locally-administered retirement systems, or retires on a disability pension based upon fewer years of service credit in that system or systems, or elected deferred retirement based in the aggregate upon 25 or more years of nonconcurrent service credit in one or more State or locally-administered retirement systems and receives a retirement allowance from that system or systems;

b. any employee of a county college who retires on a benefit or benefits based in the aggregate upon 25 or more years of nonconcurrent service credit in one or more State or locally-administered retirement systems, or retires on a disability pension based upon fewer years of service credit in that system or systems, or elected deferred retirement based in the aggregate upon 25 or more years of nonconcurrent service credit in one or more State or locally-administered retirement systems and receives a retirement allowance from that system or systems; or who receives a disability benefit pursuant to section 18 of P.L.1969, c.242 (C.18A:66-184); and

c. any employee of a county college who retires on a benefit based upon 10 or more years of service credit in the alternate benefit program P.L.1969, c.242 (C.18A:66-167 et seq.) and who has additional years of service credited in another defined contribution retirement program as an employee of a private institution of higher education which, under contract with a county government, provided services as a county college and subsequently merged with a county technical institute to become a county college, which additional years of service when added to the service credited in the alternate benefit program totals 25 or more years and any such employee who retired prior to the effective date of P.L.1999, c.382 if the employee applies to the program for coverage within one year after the effective date of P.L.1999, c.382.

The [costs of the premium or periodic charges] cost of coverage for the benefits and reimbursement of [medicare] Medicare premiums provided to a retiree and the dependents of the retiree under this section shall be paid by the State. An employee who becomes a member of a State or locally-administered retirement system on or after the effective date of P.L.2010, c.2 shall pay as a qualified retiree 1.5 percent of the retiree's monthly retirement allowance, including any future cost-of-living adjustments, through the withholding of the contribution, for health benefits coverage provided under P.L.2007, c.103 (C.52:14-17.46.1 et seq.) and the State shall pay the remainder of the [premium or periodic charges] cost of coverage for benefits provided to a qualified retiree and the dependents of the retiree, and the cost for reimbursement of Medicare premiums.

(cf: P.L.2010, c.2, s.3)

43. Section 1 of P.L.1995, c.357 (C.52:14-17.32f2) is amended to read as follows:

1. The provisions of section 3 of P.L.1987, c.384 (C.52:14-17.32f) shall apply to any employee of a board of education who is a member of a pension fund created prior to January 5, 1996 under the provisions of article 2 of chapter 66 of Title 18A of the New Jersey Statutes (N.J.S.18A:66-94 et seq.) and who retires on a benefit based upon 25 or more years of service credit in the pension fund, or retires on a disability pension based upon fewer years of service credit in that pension fund, or elected deferred retirement based upon 25 or more years of service credit and receives a retirement allowance from that pension fund, except that the [costs of the premium or periodic charges] cost of coverage for the benefits and reimbursement of [medicare] Medicare premiums provided to a retiree and the dependents of the retiree under this section shall be paid by the State. An employee who becomes a member of the pension fund on or after the effective date of P.L.2010, c.2 shall pay in retirement 1.5 percent of the retiree's monthly retirement allowance, including any future cost-of-living adjustments, through the withholding of the contribution, for health benefits coverage provided under P.L.2007, c.103 (C.52:14-17.46.1 et seq.) and the State shall pay the remainder of the [premium or periodic charges] cost of coverage for benefits provided to a qualified retiree and the dependents of the retiree, and the cost for reimbursement of Medicare premiums.

An employee who retired prior to the effective date of [this act] P.L.1995, c.357 is eligible for the coverage if the employee applies
to the program for it within one year after the effective date.

(cf: P.L.2010, c.2, s.4)

44. Section 1 of P.L.1997, c.330 (C.52:14-17.32i) is amended to read as follows:

1. a. A qualified retiree from the Police and Firemen's Retirement System of New Jersey (C.43:16A-1 et seq.), hereinafter referred to as PFRS, the Consolidated Police and Firemen's Pension Fund (C.43:16-1 et seq.), hereinafter referred to as CPFPF, or the Public Employees' Retirement System of New Jersey (C.43:15A-1 et seq.), hereinafter referred to as PERS, and dependents, as defined in section 2 of P.L.1961, c.49 (C.52:14-17.26), of a qualified retiree, are eligible to participate in the program, in accordance with the law and rules governing the program, except as otherwise provided by [this act] P.L.1997, c.330 (C.52:14-17.32i et seq.), regardless of whether the retiree's employer participated in the program.

A qualified retiree is a retiree who:

(1) retired on a benefit based on 25 or more years of service credit in PFRS or CPFPF, or in PERS as a law enforcement officer as defined in section 1 of P.L.1955, c.257 (C.43:15A-97) or in a position eligible for participation in PFRS as provided in section 9 of P.L.1989, c.204 (C.43:16A-1.2); or

(2) retired on a disability retirement under PFRS or CPFPF, or under PERS as a law enforcement officer or in a position eligible for participation in PFRS, based on fewer years of service credit; and

(3) was eligible to receive health benefits coverage at the expense of the employer of the person immediately preceding retirement.

b. The State shall pay the amount of the [premium or periodic charges for the] cost of coverage for the qualified retiree and dependents, but not including survivors, equal to 80 percent of the [premium or periodic charges] cost of coverage for the category of coverage elected by the qualified retiree under the State [managed] health care plan or a health maintenance organization participating in the program which provides services in the 21 counties in the State, whichever provides the lower [premium or periodic charge] cost of coverage as determined by the commission. The qualified retiree shall pay the difference between the [premium or periodic charge for the] total cost of coverage applicable to the retiree and the amount paid by the State.

c. The State Health Benefits Commission shall annually certify to the State the cost for providing health benefits coverage to qualified retirees and their dependents under this section. The State shall annually remit to the commission the amount certified at a time specified by the State Treasurer.

d. The provisions of this section shall not apply to (1) a retired State employee whose [premium or periodic charges] cost of coverage for benefits under the program are paid by the State pursuant to section 8 of P.L.1961, c.49 (C.52:14-17.32) or section 6 of P.L.1996, c.8 (C.52:14-17.28b); and (2) a retiree of an employer other than the State which pays the [premium or periodic charges] cost of coverage for health care benefits for eligible retirees pursuant to section 7 of P.L.1964, c.125 (C.52:14-17.38) or N.J.S.40A:10-23 on the effective date of P.L.1997, c.330 (C.52:14-17.32i et al.).

(cf: P.L.1997, c.330, s.1)

45. Section 1 of P.L.2003, c.142 (C.52:14-17.32n) is amended to read as follows:

1. a. A qualified member of the organized militia, as defined in N.J.S.38A:1-1, and the member's dependents, as defined in section 2 of P.L.1961, c.49 (C.52:14-17.26), shall be eligible to participate in the State Health Benefits Program [and be covered under the "State managed care plan", as defined in section 2 of P.L.1961, c.49 (C.52:14-17.26), in accordance with the law and rules governing the program and plan], except as otherwise provided [by this act, P.L.2003, c.142 (C.52:14-17.32n)] in this section.

A qualified member is a member who is called to State active duty by an order of the Governor issued pursuant to law, when the written order directly applicable to that member states that active duty shall be for a period of 30 days within a 35 consecutive day period, provided the member (1) is not a compensated, full-time appointed or elected public officer or employee of the State or any political subdivision thereof when called to active duty; (2) had employer-provided health care benefits coverage that was cancelled due to the member's military service or does not have employer-provided health care benefits coverage; and (3) is not covered for health care benefits under a program, plan or policy as a dependent of the member's spouse when called to active duty. For the limited purpose of this [act] section, a qualified member shall be deemed a State employee, as defined in section 2 of P.L.1961, c.49 (C.52:14-17.26).

The member may waive coverage provided pursuant to this section by notifying the Division of Pensions and Benefits in writing.

b. The Department of Military and Veterans' Affairs shall notify the Division of Pensions and Benefits of the members who are eligible for health care benefits coverage pursuant to this section, and shall notify the members themselves of the coverage provided, by whatever means deemed efficient and expeditious.

c. The State Health Benefits Program shall not provide coverage for health care services and supplies provided to a member or the member's dependents prior to the first day of active duty. The department, or the member when so requested, shall provide to the division all information necessary on account of the member's coverage and to enroll the member's dependents pursuant to applicable law and regulations governing the program and plan. If information is not provided to the division in a timely manner, coverage shall commence only upon receipt by the division of all information deemed necessary by the division to provide the coverage. The division shall make such accommodation and provision for the addition of the member and the member's dependents to the program and plan as may be necessary under the circumstances.

d. The coverage provided pursuant to this section shall be extended for health care services and supplies commencing on the first day of active duty service until the last day of active duty service, provided the information requirements in subsection c. of this section are met in a timely manner.

e. The State shall be liable for the [premium or periodic charges for the] cost of coverage for the qualified member and member's dependents, including the program's expenses for the administration of this section, in such amount as determined and fixed by the State Health Benefits Commission. The commission shall annually certify to the State the cost for providing health care benefits coverage to qualified members and their dependents under this section. The State shall annually remit to the commission the amount certified at a time specified by the State Treasurer.

f. If a member or the member's dependents, or both, have health care benefits coverage, other than through the member's spouse, immediately preceding the call to active duty and that coverage continues, or is eligible to continue, during active duty status, the coverage provided pursuant to this section shall only be secondary to that primary coverage and shall not cover expenses which are covered, or which would be covered in the absence of coverage pursuant to this section, in whole or in part, by that prior existing coverage. If that coverage is terminated through the action or inaction of the member, the member's spouse or the member's employer, other than pursuant to terms and conditions in effect immediately preceding the call to active duty, the coverage under this section shall also terminate.

This section shall not be deemed to replace, supersede or modify health care benefits coverage received by the member, the member's spouse or dependents immediately preceding the call to active duty.

g. Health care benefits coverage shall be provided pursuant to this section only if the provision of such coverage by the State Health Benefits Program does not violate applicable federal statutes in a manner that would change the nature, governance or status of the program.

h. The Treasurer, in consultation with the Adjutant General, shall adopt regulations to effectuate the purposes of this [act] section pursuant to the "Administrative Procedure Act", P.L.1968, c.410 (C.52:14B-1 et seq.), except that the Treasurer may immediately adopt regulations the Division of Pensions and Benefits deems necessary to implement the provisions of this [act] section, upon the filing of such regulations with the Office of Administrative Law.

(cf: P.L.2007, c.103, s.26)

46. Section 9 of P.L.1961, c.49 (C.52:14-17.33) is amended to read as follows:

9. The Legislature shall annually make appropriations to cover the expense of [procuring the benefits contracts] providing health benefits under the programs provided in P.L.1961, c.49 (C.52:14-17.25 et seq.) and for the other purposes of [this] that act. No obligation of the State shall be incurred under [this act] P.L.1961, c.49 (C.52:14-17.25 et seq.) except within the limits of available appropriations. [Premiums or periodic charges for such contracts payable to carriers] The cost of the benefits as provided in P.L.1961, c.49 (C.52:14-17.25 et seq.) and the cost of the administration of the benefits from appropriated funds and from the health benefits fund shall be [remitted to said carriers at intervals not less frequent than monthly] disbursed in a manner determined by the commission and the State Treasurer.

(cf: P.L.1961, c.49, s.9)

47. Section 1 of P.L.2003, c.172 (C.52:14-17.33a) is amended to read as follows:

1. a. Notwithstanding any provision of P.L.1961, c.49 (C.52:14-17.25 et seq.) to the contrary, a part-time State employee, or a part-time faculty member, including part-time lecturers and adjunct faculty members, at a State public institution of higher education in this State if the public institution of higher education participates in the program, who is enrolled in a State-administered retirement system shall be eligible to participate in the State Health Benefits Program and may purchase health benefits coverage under the program in the State [managed] health care plan as defined in section 2 of P.L.1961, c.49 (C.52:14-17.26) for the employee or faculty member and the dependents of the employee or faculty member. If such an employee or faculty member elects to enroll in the program, the employee or faculty member shall pay the full cost of the coverage selected and the employer shall not be responsible for any costs in connection with the purchase of the coverage, unless the employer shall be obligated to pay all or a portion of such costs in accordance with the provisions of a binding collective negotiations agreement.

b. The State Health Benefits Commission may establish rules and regulations concerning the enrollment and termination of coverage of employees and faculty members in the State Health Benefits Program, pursuant to this section, and the procedures for the remittance to the program of the cost of coverage.

The employee or faculty member shall also be required to pay a proportionate share of administrative expenses of the program in such amounts and at such times as shall be determined and fixed by the commission. Amounts payable by a participating employee or faculty member for administrative expenses shall be collected in the same manner as [premiums or periodic charges are] the cost of coverage is paid and remitted to the State treasury and shall be used for such purposes.

c. The laws and regulations governing the State Health Benefits Program, except as modified in this section, are applicable to enrollments in the program under this section and shall be construed to apply to part-time employees or faculty members and their dependents in the same manner as to full-time employees or faculty members and their dependents to the extent possible.

d. Participation in the State Health Benefits Program pursuant to this section shall not qualify the employee or faculty member for employer or State-paid health care benefits in retirement in the program. Upon retirement, such employees or faculty members shall be permitted to enroll in the State [managed] health care plan they were enrolled in prior to retirement through the retired group at their own expense.

e. The State Health Benefits Commission shall advise eligible employees, and the State public institutions of higher education shall advise eligible faculty members, that they may enroll in the State Health Benefits Program pursuant to this section and shall further advise eligible employees and faculty members, as may be appropriate, of any benefits to which they are entitled upon the termination of their employment. The State Health Benefits Commission shall determine the manner and form of the advisory notice to the employees and faculty members.

(cf: P.L.2007, c.103, s.27)

48. Section 5 of P.L.1964, c.125 (C.52:14-17.36) is amended to read as follows:

5. a. The commission established by section 3 of chapter 49 of the laws of 1961, is hereby authorized to prescribe rules and regulations [satisfactory to the carrier or carriers] under which employers may participate in the health benefits program provided by that act. All provisions of that act will, except as expressly stated herein, be construed as to participating employers and to their employees and to dependents of such employees the same as for the State, employees of the State and dependents of such employees.

b. All changes in the provision of health care benefits through the program that are included in collective negotiations agreements between the State and its employees entered into on or after the effective date of P.L.2010, c.2 shall be made applicable by the commission to participating employers and their employees at the same time and in the same manner as to State employees. This subsection shall be applicable to the State Health Benefits Program and to the School Employees' Health Benefits Program to the extent not inconsistent with the provisions of sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 et seq.).

(cf: P.L.2010, c.2, s.8)

49. Section 1 of P.L.2005, c.135 (C.52:14-17.36a) is amended to read as follows:

1. a. Notwithstanding any provision of P.L.1961, c.49 (C.52:14-17.25 et seq.) or any other law to the contrary, an affiliate of a majority representative of State employees for collective negotiation purposes, as recognized by the Public Employment Relations Commission established pursuant to P.L.1941, c.100 (C.34:13A-1 et seq.), which affiliate represents State employees, may participate in the State Health Benefits Program pursuant to P.L.1961, c.49 (C.52:14-17.25 et seq.). All provisions of P.L.1961, c.49 (C.52:14-17.25 et seq.) shall be construed as to such participating employers and their elected officers and full-time employees, and their dependents, in the same manner as for participating local government employers, their employees and the dependents of such employees.

As used in this section, the phrase "an affiliate of a majority representative of State employees" means a local union affiliate that has some employees who are engaged in the day-to-day representation of State employees, and shall not mean a local union affiliate's parent or international union.

b. The Division of Pensions and Benefits shall certify to each such affiliate of a majority representative electing participation under the program the [premium rates and periodic charges] cost of coverage as determined for local government employees applicable to the coverage provided to the affiliate's elected officers and full-time employees and their dependents. The participating affiliate shall remit to the division the [premiums and periodic charges] cost of coverage, including administrative fees, in advance of their due dates, subject to the rules and regulations of the State Health Benefits Commission.

c. The State Health Benefits Commission shall adopt rules and regulations within 90 days of the effective date of this act, P.L.2005, c.135 (C.52:14-17.36a et seq.), to implement this section and such rules and regulations shall permit an affiliate of a majority representative electing participation under the program to begin participation on or after the 120th day following the effective date of [this act] P.L.2005, c.135 (C.52:14-17.36a et seq.).

(cf: P.L.2005, c.135, s.1)

50. Section 7 of P.L.1964, c.125 (C.52:14-17.38) is amended to read as follows:

7. a. The Division of Pensions and Benefits shall certify to the certifying agent of each employer electing participation under the program the [premium rates and periodic charges] per member cost applicable to the coverage provided for employees and dependents. The participating employer shall remit to the division all contributions to [premiums and periodic charges] the per member cost in advance of their due dates, subject to the rules and regulations of the commission.

Notwithstanding the provisions of any other law to the contrary, the obligations of a participating employer other than the State to pay the [premium or periodic charges] per member cost for health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.) may be determined by means of a binding collective negotiations agreement. With respect to employees for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective payment obligations set forth in law for the employer and such employees in a manner consistent with the terms of any collective negotiations agreement binding on the employer. Commencing on the effective date of P.L.2010, c.2 and upon the expiration of any applicable binding collective negotiations agreement in force on that effective date, employees of an employer other than the State shall pay 1.5 percent of base salary, through the withholding of the contribution, for health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.), notwithstanding any other amount that may be required additionally pursuant to this paragraph by means of a binding collective negotiations agreement or the modification of payment obligations.

b. (1) From funds allocated therefor, the employer other than the State, upon the adoption and submission to the division of an appropriate resolution prescribed by the commission, may pay the [premium or periodic charges] per member cost for the benefits provided to a retired employee and the employee's dependents covered under the program, if the employee retired from a State or locally-administered retirement system, excepting the employee who elected deferred retirement, and may also reimburse the retired employee for the employee's premium charges under Part B of Medicare covering the retired employee and the employee's spouse if the employee:

(a) retired on a disability pension; or

(b) retired after 25 or more years of nonconcurrent service credit in one or more State or locally-administered retirement systems, excluding service credited under the Defined Contribution Retirement Program established pursuant to P.L.2007, c.92 (C.43:15C-1 et al.), and a period of service of up to 25 years with the employer at the time of retirement, such period of service to be determined by the employer and set forth in an ordinance or resolution as appropriate; or

(c) retired and reached the age of 65 years or older with 25 years or more of nonconcurrent service credit in one or more State or locally-administered retirement systems, excluding service credited under the Defined Contribution Retirement Program, and a period of service of up to 25 years with the employer at the time of retirement, such period of service to be determined by the employer and set forth in an ordinance or resolution as appropriate; or

(d) retired and reached the age of 62 years or older with at least 15 years of service with the employer, excluding service credited under the Defined Contribution Retirement Program.

"Retired employee and the employee's dependents" may, upon adoption of an appropriate resolution therefor by the participating employer, also include otherwise eligible employees, and their dependents, who retired from one or more State or locally-administered retirement systems prior to the date that the employer became a participating employer in the New Jersey State Health Benefits Program or who did not elect to continue coverage in the program during such time after the employer became a participating employer that the employer did not pay [premium or periodic charges] the per member cost for benefits to retired employees and their dependents pursuant to this section. Eligibility and enrollment of such employees and dependents shall be in accordance with such rules and regulations as may be adopted by the State Health Benefits Commission.

The employer other than the State may, by resolution, pay the [premium or periodic charges] per member cost for the benefits provided to the surviving spouse of a retired employee and the employee's dependents covered under the program as provided in this section.

(2) Notwithstanding the provisions of any other law to the contrary, the obligations of an employer other than the State, except an independent State authority, board, commission, corporation, agency, or organization deemed to be covered by section 6 of P.L.1996, c.8 (C.52:14-17.28b) and except school boards whose employees are covered by section 3 of P.L.1987, c.384 (C.52:14-17.32f), section 2 of P.L.1992, c.126 (C.52:14-17.32f1) and section 1 of P.L.1995, c.357 (C.52:14-17.32f2), to pay the [premium or periodic charges] per member cost for health benefits coverage under the provisions of paragraph (1) may be determined by means of a binding collective negotiations agreement, including any agreement in force at the time of the adoption of this act, P.L.1999, c.48. With respect to employees for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, determine the payment obligations for the employer and the employees, except that if there are collective negotiations agreements binding upon the employer for employees who are within the same community of interest as employees in a collective negotiations unit but are excluded from participation in the unit by the "New Jersey Employer-Employee Relations Act," P.L.1941, c.100 (C.34:13A-1 et seq.), the payment obligations shall be determined in a manner consistent with the terms of any collective negotiations agreement applicable to the collective negotiations unit. An employee who becomes a member of a State or locally-administered retirement system on or after the effective date of P.L.2010, c.2 shall pay in retirement 1.5 percent of the retiree's monthly retirement allowance, including any future cost-of-living adjustments, through the withholding of the contribution, for health benefits coverage provided under P.L.1961, c.49 (C.52:14-17.25 et seq.), notwithstanding any other amount that may be required additionally pursuant to this paragraph by means of a binding collective negotiations agreement or the determination of payment obligations.

c. Notwithstanding the provisions of any other law to the contrary, the payment obligations of an employee of an employer other than the State, except an independent State authority, board, commission, corporation, agency, or organization, for health benefits coverage under subsection b. shall be the payment obligations applicable to the employee on the date the employee retires on a disability pension or the date the employee meets the service credit and service requirements for the employer payment for the coverage, as the case may be.

(cf: P.L.2010, c.2, s.5)

51. Section 2 of P.L.1989, c.103 (C.52:14-17.38a) is amended to read as follows:

2. Notwithstanding any other law to the contrary, the employer of a member of the Police and Firemen's Retirement System of New Jersey who retires under the provisions of special disability retirement pursuant to section 1 of P.L.1989, c.103 (C.43:16A-6.1) shall pay the [premium or periodic charges] cost of coverage for a continuation of all coverages provided to the member and any dependent of the member under section 5 of P.L.1961, c.49 (C.52:14-17.29) which are in effect at the time of retirement.

(cf: P.L.1989, c.103, s.2)

52. Section 8 of P.L.1964, c.125 (C.54:14-17.39) is amended to read as follows:

8. The [rates charged for any contract purchased under the authority of the New Jersey State Health Benefits Program Act] charges established under the "New Jersey State Health Benefits Program Act,” P.L.1961, c.49 (C.52:14-17.25 et seq.), shall [be established in accordance with the provisions of subsection (C) of section 5 of P.L.1961, c. 49; provided, however, that the] reasonably and equitable reflect the cost of the benefits provided, plus administrative costs, and shall be based on principles, which in the judgement of the commission, are actuarially sound. The commission may, in its discretion, prescribe that the rates for employee coverage and for dependents coverage be determined separately for State employees and employees of participating employers. The commission shall not apply increases in the cost of coverage retroactively.

(cf: P.L.1972, c.75, s.10)

53. Section 9 of P.L.1964, c.125 (C.52:14-17.40) is amended to read as follows:

9. An employee enrolling for coverage shall, at the time of enrollment, authorize the participating employer to withhold, on an advance basis, from his wages or salary the contribution required by such employer or by statute, as the case may be, for such coverage, which shall not exceed the [premium or periodic charge therefor] charges established by the commission for the coverage provided pursuant to section 8 of P.L.1964, c.125 (C.54:14-17.39). The remainder of the [premiums and periodic charges for] charges for the cost of employee and dependents coverage shall be paid by the participating employer out of its own funds.

(cf: P.L.2007, c.62, s.43)

54. Section 10 of P.L.1964, c.125 (C.52:14-17.41) is amended to read as follows:

10. There is hereby established a dependents premium fund consisting of all remittances received by the State treasury from participating employers in connection with dependents coverage [and said fund] which shall be used to pay the portion of the [premium and periodic charges] cost of coverage, including administrative costs, under the program attributable to the dependents coverage provided for employees of participating employers.

(cf: P.L.1964, c.125, s.10)

55. Section 11 of P.L.1964, c.125 (C.52:14-17.42) is amended to read as follows:

11. There is hereby established an employer health benefits fund consisting of all contributions to [premiums and periodic charges] the cost of coverage, including administrative costs, remitted to the State treasury by participating employers for employee coverage. All such contributions shall be deposited in the employer health benefits fund [and said fund] , which shall be used to pay the portion of the [premium and periodic charges] cost of coverage, including administrative costs, under the program attributable to employee coverage for employees of participating employers.

(cf: P.L.1964, c.125, s.11).

56. Section 49 of P.L.2007, c.103 (C.52:14-17.46a) is amended to read as follows:

49. Effective July 1, 2007, health care benefits for qualified retirees and their dependents as provided by section 3 of P.L.1987, c.384 (C.52:14-17.32f), section 2 of P.L.1992, c.126 (C.52:14-17.32f1) and section 1 of P.L.1995, c.357 (C.52:14-17.32f2) shall be funded and paid by the State through a separate fund established in the Department of the Treasury. Beginning with the valuation period ending June 30, 2007, the Director of the Division of Pensions and Benefits shall annually compute a contribution to fund these health care benefits which shall be the amount necessary to pay the anticipated [premiums or periodic charges] cost of coverage for the benefits for the following valuation period and to provide that the balance in the fund as of the end of the following valuation period shall be increased by 3/5 of [1%] one percent of the salary of the active members for the valuation period. If the assets in the fund are insufficient to pay the [premiums or periodic charges] cost of coverage for the benefits, such [premiums or periodic charges] cost of coverage shall be paid directly by the State. Nothing hereinabove shall alter health care benefits for qualified retirees and their dependents or relieve the State from its acknowledged obligation to fund the benefits.

(cf: P.L 2007, c.103, s.49)

57. The following sections are repealed:

Section 55 of P.L.2011, c.78 (C.52:14-17.27b);

Section 5 of P.L.1961, c.49 (C.52:14-17.29); and

Section 1 of P.L.1999, c.441 (C.52:14-17.29d).

58. This act shall take effect on the 180th day next following enactment, except the State Health Benefits Commission may take any anticipatory administrative action in advance as shall be necessary for the implementation of this act.

STATEMENT

This bill makes a number of changes to the State Health Benefits Plan. In lieu of the present benefits currently in the plan, the bill divides the existing plan into several parts, permitting persons covered by the plan to elect the benefits they want. The core of the plan is an Essential Benefits Primary Plan, the benefits in which are statutory; it would be the default plan for all covered persons. The Essential Benefits Primary Plan is modeled after the indemnity plans most commonly purchased in the 1950s and 1960s. The Essential Benefits Plan contains the basic health benefits that the majority of people use; a similar policy sold in the commercial insurance market in New Jersey until very recently proved to be very successful because individuals were able to obtain health cares at a lower cost than the cost of the other commercial policies. Under the provisions of the bill, no additions can be made to the statutory benefits listed in the Essential Benefits Primary Plan without the assent of the Legislature and the Governor by law.

As an adjunct to the Essential Benefits Primary Plan, the bill provides for the formulation of extended benefits riders, which would be groupings of additional benefits presently included in the State Health Benefits Plan, but which are not included in the Essential Benefits Primary Plan. These would include additional or enhanced benefits. The riders would be formulated by the State Health Benefits Commission with the assistance of the Health Benefits Design Committee. Each rider would be rated separately, based on its loss experience. Any new benefits added to the benefits plan, whether by negotiation or by statute, would be added to a plan rider. Riders are to be formulated as groupings of benefits in a manner that will avoid, to the extent possible, adverse selection with respect to the persons electing them.

The extent of coverage in the revised State Health Benefits Plan would be selected at the option of the covered person. If the covered person elected only the Essential Benefits Primary Plan, his contribution to his coverage would be reduced from his existing contribution because he would not be paying for benefits he may neither want, need, nor can afford. Taken together, the Essential Benefits Primary Plan and all of the extended benefits riders would contain all of the benefits now in the State Health Benefits Plan, giving covered persons the option of retaining their existing coverage, but their contributions to the coverage would not be reduced from present levels. The bill renews the existing contribution percentages required under current law, which were due to expire in 2015. The cost of coverage of the respective parts of the plan would be based on the actual loss experience of the benefits of those parts, plus any anticipated loss development for the subsequent coverage period, and the cost of administration.

The bill adds two public members to the State Health Benefits Commission. Their duties would include contracting with an administrator for the plan, which is self-insured, as well as any ancillary specialty organizations, which may assist in the administration of the plan, such as large case management, utilization review, and behavioral health. The commission would have the ultimate and sole control over the administration of the plan. The bill adds an additional member to the State Health Benefits Plan Design Committee, who would be a representative of public employers whose employees are enrolled in the program. The Design Committee would have a consultative and advisory role, including assisting in formulating the riders to be offered in conjunction with the Essential Benefits Primary Plan and in the administration of the plan.

The Essential Benefits Primary Plan and any extended benefits riders offered in connection with the plan may be provided through a network, preferred provider organization, or other delivery system selected by the commission. The commission would establish the level of coinsurance applicable to out-of-network treatment. In its discretion, the commission may make available to a covered person, at the covered person’s option, one or more alternative arrangements in which the employee may elect alternative contribution plans with varying actuarial value.

The commission could establish such limitations, exclusions, or waiting periods that it finds to be necessary or desirable to avoid inequity, unnecessary utilization, or duplication of services. The commission would be required, in conjunction with the administrator, to adopt lists of valid diagnostic tests eligible for reimbursement for the treatment of an illness or injury; the lists would be formulated in concert with the professional licensing boards in the Division of Consumer Affairs.

The bill would prohibit any covered person from using the benefits in the State Health Benefits Plan in lieu of the personal injury protection coverage under an automobile insurance policy. Personal injury protection coverage, which provides medical benefits under the no-fault law, is one of the least expensive benefits in an automobile insurance policy, and these costs would thus no longer be paid by public money, which adds considerably to the cost of the state’s health benefits coverage.

The bill is intended not only to reduce the cost of the State Health Benefits Plan for the state and local governments, but to give employees choices as to their coverage, which can reduce their costs as well by permitting them to select the coverage which is best suited to their needs; it is likely that many will elect the Essential Benefits Primary package, with or without one or more riders, but will not prohibit any person from selecting the full package of benefits now offered under the current plan. It is the sponsor’s indentation that to the extent that the total average cost of coverage per covered person in the state plan is reduced, it would be possible for the state and local employers to avoid paying the “Cadillac” tax due to be levied in several years by the federal government pursuant to the Patient Protection and Affordable Care Act.

In addition, the bill makes a number of editorial and technical changes to existing law to accommodate the fact that the plan is a self-insured plan, rather than an insured plan as in the past. This consists primarily of changes in terminology to reflect the manner in which the plan is now administered.