State Codes and Statutes
Statutes > New-jersey > Title-17b > Section-17b-26a > 17b-26a-1117B:26A-11. Additional remedies
9. In addition to any other applicable penalties for violation of the provisions of Title 17B of the New Jersey Statutes, the commissioner may require any health insurer violating the provisions of P.L.1982, c.94 (C.17B:26A-1 et seq.) to cease marketing any medicare supplement policy or certificate in this State which is related directly or indirectly to the violation, require that insurer to take such action as is necessary to comply with the provisions of that act, or both.
L.1992,c.163,s.9.
17B:26A-12.Findings, declarations on Medicare supplement insurance1. The Legislature finds and declares that:
a. As of April 1, 1995, individuals in the State of New Jersey under age 65 who became eligible for Medicare benefits due to a disability or because they suffer from the end stage of renal disease do not have access to Medicare supplement insurance, otherwise known as "Medigap" insurance.
b. Prior to that date only one health insurance carrier in New Jersey offered Medicare supplement insurance contracts to the under 65 population. Unsustainable losses, caused in part by the fact that this carrier was the only carrier providing such coverage, led to the carrier's withdrawal from the Medicare supplement insurance market for the under 65 population on March 31, 1995.
c. Because Medicare supplement insurance pays for many of the health care expenses not covered by Medicare, the absence of Medicare supplement insurance will eventually leave thousands of blind, AIDS, disabled and dialysis patients in New Jersey without any means of secondary insurance to supplement their Medicare coverage. For many of these people with serious illnesses, the 20 percent co-payments and deductibles charged by Medicare will cause financial hardship and emotional distress. If no action is taken, Medicare recipients under 65 years old will be forced to deplete their personal assets and may eventually be forced to resort to Medicaid to supplement their health care needs.
d. Therefore, the Legislature declares that it is in the public interest:
(1) to ensure that Medicare supplement insurance is available to the individuals under 65 years of age who become eligible for Medicare benefits;
(2) to require all health insurance carriers who currently sell Medicare supplement insurance to the over age 65 population to also offer, at a minimum, Medicare Supplement Plan C coverage to the under age 65 population;
(3) to establish a mechanism that will: allow the premiums on those Medicare supplement insurance policies and contracts to remain affordable; encourage insurance carriers to continue to serve or enter this market; and provide for the equitable sharing of any losses;
(4)to ensure that premiums for the more than 200,000 New Jersey residents who have purchased Medicare supplement insurance remain affordable and do not become subject to excessive rate increases; and
(5) that regulations necessary to effectuate the purposes of this act be promulgated by the Commissioner of Insurance expeditiously due to the urgency of the situation.
L.1995,c.229,s.1.
17B:26A-13.Medicare Supplement Plan C offered
2. a. No later than 60 days after the effective date of this act, every carrier issuing or renewing Medicare supplement insurance policies or contracts shall, as a condition of issuing or renewing health benefits plans in this State, offer, at a minimum, Medicare Supplement Plan C policies or contracts to persons in this State 50 years of age or older who are entitled to Medicare benefits due to disability, except as otherwise provided in subsection d. of this section.
b. No carrier shall deny or condition the issuance or renewal of a Medicare supplement insurance policy or contract available for sale in this State pursuant to subsection a. of this section nor discriminate in the pricing of such policy or contract because of the health status, claims experience, receipt of health care or medical condition of an applicant if an application for the policy or contract is submitted during the six-month period beginning with the first month in which an individual is enrolled for benefits under Medicare Part B or if the application for the policy or contract is submitted within six months after the effective date of this act.
c. Subsections a. and b. of this section shall not be construed as preventing the exclusion of benefits under a policy or contract during the first three months, based on a preexisting condition for which the insured received treatment or was otherwise diagnosed during the six months before the policy or contract became effective, except that the limitation shall not apply to an individual who has, under a prior health benefits policy or contract, with no intervening lapse in coverage, been treated or diagnosed by a physician for a condition under that policy or contract or satisfied a three-month preexisting condition limitation.
d. (1) Notwithstanding the provisions of subsection a. of this section to the contrary, a carrier that does not currently issue or renew individual Medicare supplement insurance policies or contracts and does issue and renew Medicare supplement insurance policies or contracts for groups whose membership in the group is not based on health status, claims experience, receipt of health care or medical condition, shall not be required to provide coverage to persons eligible for Medicare supplement insurance coverage pursuant to subsection a. of this section, other than to members of the group.
(2) No group to which the provisions of paragraph (1) of this subsection apply shall institute an age requirement for participation in the group after June 1, 1995.
e. (1) Rates for Medicare supplement insurance policies or contracts issued pursuant to this section shall be no greater than the lowest rate charged by a carrier for the same type of policies or contracts issued to persons 65 years of age and over and shall be formulated in accordance with the provisions of section 6 of P.L.1982, c.95 (C.17:35C-6) or section 6 of P.L.1982, c.94 (C.17B:26A-6), as appropriate, and any rules or regulations promulgated thereto.
(2) Following the close of each carrier's accounting year, if the commissioner determines that a carrier's loss ratio for policies or contracts issued pursuant to section 2 or 3 of this act was less than 75% for group policies or contracts or less than 65% for individual policies or contracts for that calendar year, the carrier shall be required to refund to the holders of any policy or contract the difference between the amount of net earned premium it received that year and the amount that would have been necessary to achieve the 75% or 65% loss ratio, as appropriate.
L.1995,c.229,s.2.
17B:26A-14.Rules, regulations; rates; plan provision
3. a. The commissioner shall adopt rules and regulations establishing a plan to provide Medicare Supplement Plan C coverage of the standardized Medicare supplement plans to persons under 50 years of age in this State who are entitled to Medicare benefits due to disability no later than 120 days after the effective date of this act.
b. The plan shall not deny or condition the issuance or renewal of a Medicare supplement insurance policy or contract available for sale in this State pursuant to subsection a. of this section nor discriminate in the pricing of such policy or contract because of the health status, claims experience, receipt of health care or medical condition of an applicant if an application for the policy or contract is submitted during the six-month period beginning with the first month in which an individual is enrolled for benefits under Medicare Part B or if the application for the policy or contract is submitted within six months after the effective date of this act.
c. Subsections a. and b. of this section shall not be construed as preventing the exclusion of benefits under a policy or contract during the first three months, based on a preexisting condition for which the insured received treatment or was otherwise diagnosed during the six months before the policy or contract became effective.
d. The plan shall provide for the appointment of a contracting carrier to provide the coverage specified in subsection a. of this section. The carrier shall have experience in providing and servicing standardized Medicare supplement insurance policies or contracts to persons in this State.
e. The rates for the plan established pursuant to subsection a. of this section shall be no greater than the lowest rate charged by the contracting carrier for Medicare Supplement Plan C policies or contracts issued by the contracting carrier to persons pursuant to subsection a. of section 2 of this act.
f. The plan shall provide for the appointment of a governing board which shall be responsible for implementing the provisions of this act consistent with the rules and regulations adopted pursuant to subsection a. of this section. The governing board shall include representatives from, among others, the carriers and health maintenance organizations subject to the provisions of section 4 of this act.
L.1995,c.229,s.3.
17B:26A-15.Procedures for equitable sharing of losses; conditions; filing statement4. The plan shall establish procedures for the equitable sharing of any losses incurred by the contracting carrier providing coverage under the plan pursuant to subsection a. of section 3 of this act as follows:
a. By March 1, 1996 and following the close of each calendar year thereafter, on a date established by the commissioner:
(1) (a) every carrier and health maintenance organization issuing health benefits plans or health maintenance organization subscriber contracts in this State shall file with the commissioner its net earned premium in the preceding calendar year ending December 31; and
(b) the contracting carrier issuing Medicare supplement insurance policies or contracts under the plan established pursuant to subsection a. of section 3 of this act shall file with the commissioner its net earned premium on those policies or contracts and the claims paid and the administrative expenses attributable to those policies or contracts in the preceding calendar year ending December 31; and
(2) No later than March 1, 1996 and following the close of each calendar year thereafter, on a date established by the commissioner, a contracting carrier issuing Medicare supplement insurance policies or contracts pursuant to subsection a. of section 3 of this act shall file with the commissioner a statement of any net loss on those policies or contracts in the calendar year ending December 31, along with any supporting information required by the commissioner. For purposes of this subsection, a loss shall occur if the claims paid and reasonable administrative expenses for Medicare supplement insurance policies or contracts issued to individuals under 50 years of age pursuant to subsection a. of section 3 of this act exceed the net earned premium and any investment income thereon.
b. (1) Every carrier and health maintenance organization authorized to provide health benefits plans or health maintenance organization subscriber contracts in this State shall be liable for an assessment to reimburse the contracting carrier issuing Medicare supplement insurance contracts or policies pursuant to subsection a. of section 3 of this act for any net loss incurred by the contracting carrier in the previous year, unless the carrier or health maintenance organization has received an exemption from the commissioner pursuant to paragraph (3) of this subsection.
(2) The assessment of each carrier and health maintenance organization shall be in the proportion that the net earned premium of the carrier or health maintenance organization for all health benefits plans or health maintenance organization subscriber contracts issued or renewed in the calendar year preceding the assessment bears to the net earned premium of all carriers and health maintenance organizations for all health benefits plans or health maintenance organization subscriber contracts issued or renewed in the calendar year preceding the assessment and shall be carried out in a form and manner to be determined by the commissioner.
(3) A carrier or health maintenance organization that is financially impaired may seek from the commissioner an exemption or a deferment in whole or in part from any assessment issued by the commissioner. The commissioner may exempt a carrier or health maintenance organization from an assessment or defer, in whole or in part, the assessment of a carrier or health maintenance organization if, in the opinion of the commissioner, the payment of the assessment would endanger the ability of the carrier or health maintenance organization to fulfill its contractual obligations. If an assessment against a carrier or health maintenance organization is deferred in whole or in part or if the carrier or health maintenance organization is exempt from the assessment, the amount by which the assessment is deferred or the amount that a carrier or health maintenance organization is exempted from paying may be assessed against the other carriers and health maintenance organizations in a manner consistent with the basis for assessment set forth in this section.
c. Payment of an assessment made under this section shall be a condition of issuing health benefits plans and health maintenance organization subscriber contracts in the State for a carrier or health maintenance organization. Failure to pay the assessment shall be grounds for forfeiture of a carrier's or health maintenance organization's authorization to issue health benefits plans and health maintenance organization subscriber contracts in the State, as well as any other penalties permitted by law.
d. Notwithstanding the provisions of this section to the contrary, no carrier or health maintenance organization shall be liable for an assessment to reimburse the contracting carrier pursuant to this section in an amount which exceeds 35% of the net loss of the contracting carrier. To the extent that this limitation results in any unreimbursed loss to the contracting carrier, the unreimbursed loss shall be distributed among all carriers and health maintenance organizations: (1) which owe assessments pursuant to subsection a. of this section; (2) whose assessments do not exceed 35% of the net loss of the contracting carrier; and (3) who have not received an exemption pursuant to paragraph (3) of subsection b. of this section.
L.1995,c.229,s.4.
17B:26A-16.Audit required, conditions
5. a. Whenever the contracting carrier reports a net loss to the commissioner pursuant to paragraph (2) of subsection a. of section 4 of this act, the related operations of the contracting carrier and any losses incurred by the contracting carrier regarding Medicare supplement insurance policies or contracts issued pursuant to subsection a. of section 3 of this act shall be subject to an audit conducted by a qualified independent certified public accountant prior to the imposition of any assessment pursuant to subsection b. of section 4 of this act.