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Vitale-Pou Bill Package to Reform, Stabilize Small Employer Benefits Program Advances

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Trenton – In an effort to reinvigorate and stabilize New Jersey’s Small Employer Health Benefits Program, the Senate released a two-bill legislative package that would revise certain requirements of individual and small employer health benefit plans, as well as study further market reforms to make coverage more affordable for small businesses.

Both bills are being sponsored by Senator Joe Vitale, Chair of the Senate Health, Human Services and Senior Citizens Committee, and Senator Nellie Pou, Chair of the Senate Commerce Committee.

“Health insurance costs remain a pressing concern for small businesses, which are a bedrock of our state’s economy. They want to offer quality coverage to their employees but it’s becoming more difficult to do so. These bills bring overdue adjustments that give small employers — as well as individuals — more affordable, flexible options in regard to health care coverage, and will give owners and entrepreneurs one more tool with which to grow their business,” said Senator Vitale (D-Middlesex).

The first bill, S-3480, entitled “The Small Business Health Insurance Affordability Act,” would encourage market participation by removing a provision of current law that requires health insurance carriers to offer individual health plans, through the Individual Health Coverage Program, as a condition of participation in the small employer health insurance market.

The bill would also align cost-sharing requirements for plans sold in the market with those required under the Affordable Care Act, and require the Small Employer Health Benefits Board to undertake an annual review of plan designs and publish annual findings on the DOBI website.

“New Jersey’s small business sector suffered severe losses during the shutdown months associated with the pandemic. Many of these businesses did not survive, and many New Jerseyans lost jobs. These bills, especially in a still uncertain economic climate, will help small business employers thrive, while at the same time offering affordable health insurance to their employees,” said Senator Pou (D-Passaic/Bergen).

The second bill, S-2824, would require DOBI to study further market reforms that could help make coverage more affordable for small businesses, namely:

  • examining the impact of merging the individual and small employer markets and extending reinsurance coverage to small businesses purchasing health insurance through the pooled market; and
  • examining the creation of a small employer subsidy and sustainable funding sources for such subsidy.

Health care enrollment in New Jersey’s small employer market peaked in 2005 at 981,000 covered lives and has been declining since. As of 2022 there were 285,000 covered lives. Market data and broker surveys indicate that the reduced participation is due to increased premiums. For plan year 2022, premiums in this market increased at an average rate of 10.4 percent.

The bills was released from the Senate by votes of 34-0, and 36-0.