Senate Bill No. 1878, the “New Jersey Health Insurance Premium Security Act,” was signed into law on May 30, 2018 and is codified at N.J.S.A.17B:27A-10.1 et seq. This law contemplates the creation of a reinsurance plan to reimburse carriers for certain high-cost claims in the individual health insurance market. The law provides that the reinsurance plan would use a mix of federal and state funds to produce individual health insurance premiums that are 10% to 20% lower than they would be without the plan. Under the law, the reinsurance program will reimburse individual health carriers for a proportion (coinsurance amount) of the cost of certain high-cost claimants between a minimum lower bound (attachment point) and a maximum upper bound (cap).

Senate Bill No. 1878, which authorized the Commissioner of the Department of Banking and Insurance to apply for a 1332 Innovation Waiver to implement the bill, may be found here: www.njleg.state.nj.us/2018/Bills/AL18/24_.PDF

New Jersey’s Section 1332 Draft Waiver Application, which was updated during the public comment period, can be found here:

New Jersey's Section 1332 Final Waiver Application, submitted July 2, 2018, can be found here:

The final application is also available from the Department of Banking and Insurance by email request to: 1332WaiverApplication@dobi.nj.gov.

New Jersey received notification from the Centers for Medicare and Medicaid Services, dated August 16, 2018, that the federal government approved New Jersey's State Innovation Waiver Application.

The Department of Banking and Insurance accepted public comments on New Jersey’s 1332 Innovation Waiver beginning on May 31, 2018, through Sunday, July 1, 2018.  The department invited comments at its two public hearings, via electronic mail to 1332WaiverApplication@dobi.nj.gov and by regular mail to:

State of New Jersey 1332 Innovation Waiver
Department of Banking and Insurance
PO Box 325, Trenton NJ 08625-0325

P.L. 2018, c.24, the New Jersey Health Insurance Premium Security Act (Act), directed the Commissioner of the Department to apply to the United States Secretary of Health and Human Services for a waiver of applicable provisions of the Affordable Care Act with respect to health insurance coverage in the State for a plan year beginning on or after January 1, 2019.  The Department applied for and received approval for federal funds for a reinsurance program through a 1332 Innovation Waiver.  Through the creation of a reinsurance program, carriers selling plans in the individual market may request reimbursement for certain high-cost claims and, as a result, lower individual health insurance rates.  2019 was the first year of operation for the reinsurance program. 

To be eligible for reimbursement for plan year 2019 and 2020, claims must satisfy the following payment parameters:  $40,000 attachment point/ 60% coinsurance/ $215,000 cap. For plan year 2021 and 2022, the payment parameters are: $35,000 attachment point/ 50% coinsurance/ $245,000.00 cap. The result for New Jersey consumers is individual health insurance premiums that are 15% lower than they would be without the reinsurance plan.

The majority of the funding of reimbursement requests under the reinsurance program will be federal funds made available through the 1332 Innovation Waiver. The balance of any necessary funding will come from revenue raised by the “New Jersey Health Insurance Market Preservation Act,” and, if necessary, the General Fund.

For plan year 2019, the State received $180,201,687 in federal funding for the program. The total cost of the program was $267,724,523.38.  For plan year 2020, the state received $190,015,727.   Federal funding for plan year 2021 has not been finalized.

• 2021 FINAL Annual Report
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• 2020 DRAFT and FINAL Annual Report
  • Attachment 1
• 2019 DRAFT Annual Report
• 2019 FINAL Annual Report
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