Since August 1, 1993, standard individual health benefits plans approved by the IHC Programs have been available on an open enrolled, community rated basis to anyone who is a resident of New Jersey and does not have access to employer-based group insurance or Medicare. Beginning in 2009, carriers will be allowed to offer individual health benefits plans with modified community rates, based on an individual's age. The SEH Program went into effect on January 1, 1994, with the sale of standardized, open-enrolled, modified community rated plans. Small employers (those with 2-50 full-time employees) may choose to purchase standardized health benefits plans, offered by all carriers, or, under certain conditions, they may purchase or renew pre-reform ("non-standard") plans. The small employer market is a "modified community rated" market, which permits carriers to consider the age and gender of the employees and the location of the business in determining rates.Beginning in 2003, carriers offering standard individual health benefits plans have been required to offer “Basic & Essential” healthcare services plans (B&E Plans) as well.  B&E Plan benefits are more limited than those of the standard health benefits plans, although carriers may offer enhanced benefit riders to the B&E Plans, and some do.  B&E Plans are modified community rated, taking into consideration the age, gender and location of the applicant.  Access to B&E Plans is substantially the same as for the standard individual health benefits plans – they are both guaranteed issue and guaranteed renewable regardless of any person’s health status.

The IHC and SEH Programs are each run by a Board of Directors responsible for implementing health insurance reform and regulating the market. The IHC Board consists of nine people representing carriers, consumers, the AFL-CIO, and the Commissioner of Insurance. The SEH Board is similar in makeup, and consists of 18 members, including insurance agents, a doctor, representatives of small business, and others. Members of the boards meet periodically throughout each year, and serve without compensation. The Boards are State agencies with rulemaking authority and are funded entirely by assessments of carriers.

Standard Plans:
The IHC Board designs standard health benefits plans for carriers to offer.  One of the standard plans primarily addresses hospital expenses, while the others provide coverage for a more comprehensive set of health care services.  With the exception of the B&E Plan (which is not a standard health benefits plan designed by the Board), carriers may only offer standard health benefits plans to individual New Jersey residents. Small employers may purchase standard health benefits plans and may renew or purchase pre-reform plans under certain conditions. Carriers must offer standard health benefits plans on a guaranteed issue/guaranteed renewal basis, which means that an eligible person or small employer can never be denied coverage or renewal for reasons related to health status or claims history of an individual or any person in a group.

Community Rating:
The standard plans for individuals are community rated. From late 1993 through 2008, this has meant that a carrier must offer a standard individual health benefits plans to everyone at the same rate, regardless of the applicants' age, gender, profession, health status or geographical location in the State. In 2009, carriers may offer standard individual health benefits plans using community rating that considers age. The ratio of the highest rates for a standard individual health benefits plan to the lowest rates for the same standard individual health benefits plan cannot be more than 3.5:1.

B&E Plans offered to individuals are also community rated, but may be modified community rated based on the age, gender and location of the applicant.  Rating on health status is not permissible.  The ratio for the highest rates for a B&E Plan to the lowest rates for the same B&E Plan cannot be more than 3.5:1.

In the small employer market, the plans may be rated only on the basis of age, gender, family status of the employees in the group, and the location of the business in the State - not on health status. The ratio for the highest rates for a small employer plan to the lowest rates for the same small employer plan cannot exceed 2:1.

Portability and Pre-existing Conditions:
Generally, all conditions are covered by a standard plan as of the effective date, if an applicant's prior health coverage has not lapsed. An individual applicant without prior coverage may have to wait for up to one year for coverage of a pre-existing condition. In the small employer market, a pre-existing condition waiting period of up to six months may be imposed only on groups of two to five eligible emeployees that have no prior coverage. None may be imposed on groups of six to 50 eligible emeployees.

Minimum Loss Ratio:
Rates carriers charge for coverage are not subject to approval prior to use. However, a carrier participating in the IHC or SEH Program is required to pay out 75 cents in benefits for every dollar received in premiums (the result is referred to as the "loss ratio"). As of 2009, the required loss ratio is 80% in both the IHC and SEH markets. If this minimum loss ratio is not met, the carrier must refund some portion of the premium to the policyholder.