Sponsored by:
Assemblyman MICHAEL INGANAMORT
District 24 (Morris, Sussex and Warren)
Co-Sponsored by:
Assemblywoman Fantasia and Assemblyman Auth
SYNOPSIS
Requires certain disclosure of earned income by health insurance producers.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning certain income earned by health insurance producers and amending and supplementing chapter 22A of Title 17 of the Revised Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) a. An insurance producer shall disclose to the purchaser, with any health insurance vendor contract recommendation made by the producer to a purchaser of the insurance, the total annual revenue received by the producer from each recommended vendor, pursuant to all contracts between the vendor and the employer of the insurance producer. The disclosure shall include revenue received by the producer from a third party to the contract that is paid as a result of or in connection with the recommendation.
b. A health insurance vendor shall certify, at least once during the year when a contract is in effect between the vendor and a purchaser of the insurance, the direct and indirect compensation that the vendor pays to an insurance producer, including any producer who works on behalf of a public entity in the State, and employees of the producer.
2. Section 25 of P.L.2008, c.38 (C.17:22A-41.1) is amended to read as follows:
25. a. An insurance producer licensed pursuant to P.L.2001, c.210 (C.17:22A-26 et al.) who sells, solicits, or negotiates health insurance policies or contracts to residents of this State shall notify the purchaser of the insurance, in writing, of the amount of any commission, service fee, brokerage, or other valuable consideration, direct or indirect, that the producer will receive as a result of the sale, solicitation or negotiation of the health insurance policy or contract. If the commission, fee, brokerage, or other valuable consideration is based on a percentage of premium, the insurance producer shall include that information in the notification to the purchaser.
b. [The commissioner may specify, by regulation, the information that shall be provided by an insurance producer in the notification to a purchaser of health insurance and the procedure for providing the notification] The information to be shared pursuant to subsection a. of this section shall be in accordance with section 202 of the “Consolidated Appropriations Act, 2021,” Pub.L.116-260 and, as already required of plans regulated pursuant to the “Employee Retirement Income Security Act of 1974,” 29 U.S.C.1001 et seq., shall be required for health insurance plans regulated by the State.
(cf: P.L.2008, c.38, s.25)
3. This act shall take effect immediately and shall be applicable to health insurance vendor contracts entered into on or after the date of enactment.
STATEMENT
This bill establishes requirements to enhance disclosure of certain earned income by health insurance producers. Specifically, the bill requires that information already required to be disclosed under State law is disclosed in accordance with federal law requirements addressing direct and indirect compensation and, as already required of plans regulated pursuant to ERISA, is required for health insurance plans regulated by the State. The disclosure is to include revenue received by the producer from a third party to the contract that is paid as a result of or in connection with the recommendation.
The bill also requires an insurance producer to disclose, with any health insurance vendor contract recommendation made by the producer to a purchaser of the insurance, the total annual revenue received by the producer from each recommended vendor, pursuant to all contracts between the vendor and the employer of the insurance producer. Lastly, a health insurance vendor is to certify, at least once during the year when a contract is in effect between the vendor and a purchaser of the insurance, the direct and indirect compensation that the vendor pays to an insurance producer, including any producer who works on behalf of a public entity in the State, and employees of the producer.