New Jersey Assembly Bill A1224

New Jersey 2022-2023 Regular Session

• Introduced: 1/11/22
• Refer: 1/11/22

Caption

Clarifies charitable role of health service corporations, revises membership of board of directors, establishes process to determine efficient level of surplus, and requires timely publication of certain information by DOBI.

Impact

The bill is expected to enhance the accountability of health service corporations by implementing a public process for the determination of what constitutes an efficient surplus level. It also mandates annual reporting and transparency of financial dealings, making certain financial documents accessible to the public. The implications of A1224 extend to potentially improved health outcomes as surplus funds are directed towards health initiatives and underserved populations, addressing long-term poverty and health inequities prevalent in New Jersey.

Summary

Assembly Bill A1224 aims to revise the governance and operational mandates of health service corporations in New Jersey. The bill establishes that every health service corporation shall operate with a charitable mission, which includes obligations such as being an insurer of last resort, providing affordable insurance, and supporting health care initiatives for uninsured individuals. A key aspect of this bill is its emphasis on maintaining an efficient surplus level, requiring health service corporations to evaluate their surplus and potentially reduce it if deemed excessive. If no agreement is reached on how to reduce an excess surplus, funds must be deposited into the newly created New Jersey Quality Health and Wellness Fund, which will be appropriated by the Legislature for public health benefits.

Contention

While supporters of the bill highlight the benefits of creating a streamlined approach towards managing health service corporation surpluses, critics worry about the impact on smaller health service corporations that may struggle with new regulatory burdens. There are concerns that the requirement for public processes may complicate and slow down necessary business decisions regarding surplus funds. Moreover, ensuring adequate participation and representation of subscribers in board elections has been a point of discussion, focusing on how to effectively integrate subscriber voices into the decision-making processes of these corporations.