The New Jersey Department of Banking and Insurance Takes Action with Regard to Health Benefits Plans Issued Within the State

The New Jersey Department of Banking and Insurance (“Department”) has issued two marketplace bulletins to address health benefit plans issued within the state. The first, Bulletin No. 19-05, extends the transition for certain insurance policies previously identified by the Center for Medicare and Medicaid (CMS) for Limited Non-Enforcement Policy through 2020 despite non-compliance with the Affordable Care Act (ACA). The New Jersey Bulletin confirms the Department’s decision to similarly extend the transitional policy for the full period outlined in CMS’ March 25, 2019 memorandum, which is available here. 

The Department’s second Bulletin, Bulletin No. 19-06, amends the minimum standards for health benefits plans sold in the individual and small employer marketplaces, either on or off the Federally Facilitated Exchange to facilitate the availability of Bronze high deductible health plans effective for Plan Year 2020.

The Department’s amendment is based upon its understanding that when using the maximum permissible deductible under New Jersey rules of $3,000 for a Bronze plan and the highest maximum out- of -pocket permitted for a High Deductible Health Plan (HDHP) as defined in the ACA of $6,750, it is impossible to satisfy the specific actuarial value (AV) standards required by the ACA and implementing federal regulations for a Bronze HDHP. Specifically, the AV, using the Federal Government’s 2020 calculator, exceeds the maximum permissible AV for a Bronze plan. Even if the out-of-pocket maximum limit increases as expected for 2020, it remains impossible to have a Bronze HDHP in 2020. Accordingly, the Department will permit carriers in the individual and small employer markets only to use an individual network deductible of up to $3,500 for Bronze HDHPs that could be used in conjunction with an Health Savings Account. However, the Bulletin confirms that the $2,500 individual network deductible limit set forth in N.J.A.C. 11:22-5.3(a)2 will continue to apply to any large group health benefits plans and those Gold, Silver, and Platinum health benefits plans offered in the individual and small employer markets. Bronze plans that are not HDHPs may use an individual network deductible of up to $3,000, as was previously set forth in the Department’s Bulletin No. 15-04.

Questions should be referred to Cynthia Borrelli.