SENATE BUDGET AND APPROPRIATIONS COMMITTEE
STATEMENT TO
[Second Reprint]
SENATE, No. 2875
with committee amendments
STATE OF NEW JERSEY
DATED: JUNE 24, 2024
The Senate Budget and Appropriations Committee reports
favorably and with committee amendments Senate Bill No. 2875 (2R).
As amended, the bill makes certain changes to the minimum loss
ratio requirements for the individual and small employer health
insurance markets. Generally, a minimum loss ratio requires health
insurers to spend a certain portion of each premium dollar on claims
payment and on quality improvement. The remaining portion of each
premium dollar may be spent on administrative expenses.
Under the bill, the 80 percent minimum loss ratio for the previous
year is required to be calculated based on a three-year rolling average.
In addition, the bill requires the Department of Banking and Insurance
to issue regulations for both the individual and small employer markets
requiring a health insurance carrier’s minimum loss ratio to be
calculated by aggregating the data for a three-year period which
includes the data for the previous calendar year whose minimum loss
ratio is being calculated, including three months of runout through the
first quarter of the subsequent year and the data for the two years
immediately preceding the year for which the minimum loss ratio is
being calculated.
As amended and reported by the committee, Senate Bill No. 2875
(2R) is identical to Assembly Bill No. 3972 (2R).
COMMITTEE AMENDMENTS :
The committee amended the bill to remove from the bill language
requiring a carrier’s minimum loss ratio to meet the requirements of
federal guidance or regulations.
FISCAL IMPACT:
This bill has not been certified for a fiscal note.