Certifying Officer Letters

December 1998

To:	State Health Benefits Program Participating Employers
From:	Janice F. Nelson Assistant Director, State Health Benefits Program
Subject:	Health Insurance Portability and Accountability Act (HIPAA) Update

The federal Health Insurance Portability and Accountability Act (HIPAA) of 1996 contained a number of provisions that affected the State Health Benefits Program (SHBP) and its participating employers. The SHBP implemented several actions during 1997 and 1998 to comply with the requirements of HIPAA. These actions included:

establishing procedures to provide departing employees with certificates of coverage for use with their next health carrier;
amending SHBP rules to comply with HIPAA coverage requirements;
filing an exemption for 1998 to the provisions of mental heath parity in accordance with HIPAA procedures for the Traditional Plan and NJ PLUS; and
providing employers with a required notice of compliance with HIPAA to be distributed to all employees and their family members upon enrollment.

At the request of the State Health Benefits Commission (Commission), Buck Consultants has conducted an analysis of current mental health coverage under the Traditional Plan and NJ PLUS. They have outlined several mental health plan design alternatives that would be compliant with HIPAA requirements. The Commission will evaluate these alternatives for possible implementation in a future plan year. Since the mental health limitations currently in effect are detailed in the law governing the SHBP, a change in plan design may require legislative action.

A mental health parity exemption must be filed each plan year if a group plan is not HIPAA compliant. The Commission has voted to file an exemption for 1999. Therefore, mental health benefits will remain unchanged through 1999. Since HIPAA has a continuing notification requirement, a revised compliance notice reflecting this exemption from federal mental health parity requirements is attached for your use with newly enrolling employees and family members. You should send it at the same time you send the initial notice of COBRA rights.

A brief refresher on HIPAA is also attached for your information. If you have questions, contact Client Services at (609) 292-7524 or call the Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next business day.

encl.

FEDERAL HEALTH INSURANCE ACTS OF 1996

Three pieces of federal legislation were enacted in 1996 that established several requirements to group health plans and insured health products. These were the Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act. HIPAA included the reporting requirements covering all three pieces of legislation and is therefore used to refer to all three acts. The requirements of the legislation and SHBP status on each requirement are show below:

FEDERAL REQUIREMENT	SHBP STATUS
Issue Certificates of Coverage to all employees and or dependents who lose coverage.	Participating employers provided (August 1997) sample certificate to use to meet this requirement.
Limit restrictions of coverage for pre-existing conditions.	All SHBP plans exceed this requirement since they have no pre-existing condition restrictions.
Offer a special enrollment period toindividuals who meet certain conditions, i.e., an employee or employee's dependent, who declined coverage because of other medical coverage, must have an opportunity for special enrollment should the other coverage end.	All SHBP plans will comply with this HIPAA requirement for employees and family members.
Eliminate discrimination against participants and beneficiaries based on health status.	All SHBP plans comply with this requirement. (Note: the SHBP "actively at work" requirement is waived only for employees not at work due to illness).
Provide a minimum level of hospital coverage for newborns and mothers.	All SHBP plans meet this requirement.
Provide parity in mental health benefits	All SHBP HMO plans meet this requirement. The SHBP has exempted the Traditional Plan and NJ PLUS for 1998 and 1999 from mental health parity - different limits continue to exist for these plans.
Provide annual notice to covered members of any plan provisions not incompliance with HIPAA requirements.	Participating employers provided (December 1998 and December 1999) sample certificate to use to meet this requirement.

Notice to State Health Benefits Program Participants about Compliance with Federal Health Insurance Requirements

This notice is being provided to inform you about State Health Benefits Program (SHBP) conformance with federal health insurance regulations.

The Health Insurance Portability and Accountability Act (HIPAA), the Mental Health Parity Act, and the Newborns' and Mothers' Health Protection Act, federal laws enacted in 1996, contain a number of provisions that have affected the SHBP since January, 1998. HIPAA required all group health plans to implement the following provisions that are contained in the three federal laws:

#1 - Limit the use of pre-existing condition restrictions to a maximum of twelve months;

#2 - Offer a special enrollment period to employees and dependents who do not enroll in the plan when initially eligible because they have other coverage, and who subsequently lose that coverage;

#3 - Eliminate discrimination against participants and beneficiaries based on health status;

#4 - Provide a minimum level of hospital coverage for newborns and mothers, generally 48 hours for a vaginal delivery and 96 hours for a cesarean delivery; and

#5 - Provide parity in mental health benefits, that is, any dollar limitations applied to mental health treatment cannot be lower than those on medical and surgical benefits.

Since January 1, 1998,

all SHBP plans have met or exceeded HIPAA requirements #1 through #4 above. SHBP HMOs also have complied with requirement #5 above. The State Health Benefits Commission filed an exemption from HIPAA compliance on mental health parity (requirement #5) for 1998 for the Traditional Plan and NJ PLUS, as self-insured, non-federal governmental plans are permitted to do. The Commission has voted to continue that exemption through 1999. As a result, the mental health limits for the Traditional Plan and NJ PLUS that are described in the New Jersey State Health Benefits Program Medical Plans Information Handbook will remain in effect throughout 1999.

The SHBP has conducted a study to review the design of mental health benefits in the Traditional Plan and NJ PLUS. Several alternatives have been proposed, which the Commission will evaluate for possible implementation in future plan years.

January 20, 1999

To:	State Health Benefits Program Participating Local Employers
From:	Janice F. Nelson Assistant Director, State Health Benefits Program
Subject:	SHBP 1999 Open Enrollment

The State Health Benefits Program (SHBP) Open Enrollment period for local employees will begin on March 1, 1999, and end on March 31, 1999. Completed employer certified applications must arrive at the Health Benefits Bureau no later than April 9, 1999. All changes to coverage made during Open Enrollment will be effective on July 1, 1999.

The State Health Benefits Commission will finalize rates for July 1, 1999 later this month. We will send you a chart of the approved rates and plan information in mid February.

Three revised SHBP publications will be available to your employees during this Open Enrollment. A description of the publications and projected delivery dates follow:

A revised 1999 NJ PLUS Physician and Hospital Directory will be shipped in mid to late February. Initially, you will receive ten copies of this directory. You may order additional copies of the NJ PLUS Physician and Hospital Directory using the Request for Open Enrollment Support Form at enclosure 1.

Revised SHBP Plan Comparison Summary charts will be mailed to you by the end of February. You will be supplied sufficient copies for all of your SHBP participating employees.

A special Open Enrollment issue of the Health Capsule will be provided to you in the same shipment with the plan comparison chart mentioned above for distribution to your employees. This newsletter will provide information of practical use to your employees about the SHBP and Open Enrollment. It will include updates on any health plan name, service area, and benefit changes. It will also include important information about the federal HIPAA regulations.

If you wish to schedule educational presentations for your employees about the various plans available through the SHBP, that request can also be accommodated. You would have to provide a suitable room and a minimum of 10-15 employees for each session. Each session will last about 50 minutes. Use the Request for Open Enrollment Support Form attached as enclosure 1 to schedule your health fair or educational seminars. This form may be mailed or faxed to the address/number listed on the form. You may also contact your assigned Horizon BCBSNJ Account Manager to schedule your request. To facilitate scheduling and maximize your chances of our fulfilling your request, please submit your request as soon as possible.

We will be conducting regional seminars for employer benefits administrators during February. The seminars will provide an update on SHBP plan changes that have recently occurred, and an explanation of the new rates effective July 1999. A registration form listing seminar dates is attached as enclosure 2. Directions to the seminar sites are provided as enclosures 3a through 3e.

A 1999 SHBP Open Enrollment Milestone Chart that lists key events and dates is attached as enclosure 4. Separate this enclosure and use it to monitor the tasks you must accomplish and the receipt of materials we have promised in this letter.

If you have any questions about the Open Enrollment or the information in this letter, please call the Division of Pensions and Benefits' Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next work day.

Enclosures

February 8, 1999

TO:	State Biweekly Payroll Benefits Administrators
FROM:	Florence J. Sheppard Chief, Health Benefits Bureau
SUBJECT:	Special Open Enrollment for Employees Enrolled in HIP Health Plan of NJ

HIP Health Plan of New Jersey is being dissolved effective the close of business of March 31, 1999. Therefore, a Special Open Enrollment for employees enrolled in HIP will begin immediately. Properly completed New Jersey State Health Benefits Program applications, certified by the employer, must be at the Health Benefits Bureau no later than March 5, 1999 to ensure enrollment in the new health plan by the date HIP coverage ends. The effective date of plan changes made during the Special Open Enrollment will be based on the date of receipt of the applications at the Division. Applications received by February 19 will be effective on March 13. Applications received by March 5 will effective on March 27, 1999. Applications received after March 5, 1999 will still be processed, however, since HIP will be dissolved on March 31, 1999, a late plan change may result in a delay in new coverage.

If our records reflect coverage in HIP by any employees in your payroll location, a list of those employees is attached. Special Open Enrollment Applications should not be held until the end of the Open Enrollment, but should be submitted as received with the attached cover sheet. They should not be mixed with applications for the 1999 Open Enrollment, new employees, or regular coverage changes.

The Special Open Enrollment will follow normal Open Enrollment rules. That is, eligible employees may add dependents in addition to changing plans. The Special Open Enrollment is restricted, however, to medical plans only. Information provided for the 1998 Annual Open Enrollment is still valid for this Special Open Enrollment. Employees who wish to see if their current physician participates in other SHBP managed care plans should check the Unified Provider Directory at the following address on the Internet:

http://www.state.nj.us/treasury/pensions/shbp.htm

An employee who changes plans during this Special HIP Open Enrollment may also participate in the regular 1999 Open Enrollment.

Please do not allow new employees to enroll in HIP Health Plan of NJ. If a new employee has recently elected HIP and the coverage has not yet started, contact us to arrange replacement coverage.

If you have any questions, please contact Client Services at (609) 292-7524.

February 8, 1999

FROM:	Florence J. Sheppard Chief, Health Benefits Bureau
SUBJECT:	Special Open Enrollment for Employees Enrolled in HIP Health Plan of NJ

HIP Health Plan of New Jersey is being dissolved effective the close of business on March 31, 1999. Therefore, a Special Open Enrollment for employees enrolled in HIP will begin immediately. Properly completed New Jersey State Health Benefits Program applications, certified by the employer, must be at the Health Benefits Bureau no later than March 15, 1999 to ensure enrollment in the new health plan by April 1, 1999 when HIP coverage ends. Applications received after March 15, 1999 will still be processed, however, since HIP will be dissolved on March 31, 1999, a late plan change may result in a delay in new coverage.

If our records reflect coverage in HIP by any of your employees, a list of those employees is attached. Special Open Enrollment Applications should not be held until the end of the Open Enrollment, but should be submitted as received with the attached cover sheet. They should not be mixed with applications for the 1999 Open Enrollment, new employees, or regular coverage changes.

http://www.state.nj.us/treasury/pensions/shbp.htm

An employee who changes plans during this Special Open Enrollment may also participate in the regular 1999 Open Enrollment.

Please do not allow new employees to enroll in HIP Health Plan of NJ. If a new employee has recently elected HIP and the coverage has not yet started, contact us to arrange replacement coverage.

If you have any questions, please contact Client Services at (609) 292-7524.

February 19, 1999

To:	State Health Benefits Program Participating Local Employers
From:	Janice F. Nelson Assistant Director for Health Benefits
Subject:	SHBP 1999 Open Enrollment

Enclosed you will find approved rates and plan information that will assist your employees in making informed decisions concerning their health care coverage during the 1999 Open Enrollment.

In addition to benefit changes to the health plans offered by the SHBP since the last Open Enrollment, there have been changes to some of the plan names, service coverage areas, and general contact information. The following list provides important changes since the last plan year.

NJ PLUS, Plan #001, has added 1,200 physicians to their network and three hospitals - East Orange General and Montclair Community Hospitals in Essex County, and Riverview Medical Center in Monmouth County. Beginning July 1, 1999, employees who are members of the NJ PLUS and have access to a separate prescription drug plan through their employer will no longer be able to submit prescription drug copayment amounts to Horizon Blue Cross Blue Shield of New Jersey for reimbursement through NJ PLUS.
NJ PLUS members whose employer does not offer a separate prescription drug plan are not affected by this change. They will continue to receive reimbursement for prescription drug costs under their NJ PLUS benefits.

Exception: For NJ PLUS members with a separate prescription drug card plan that does not cover drugs used for an approved In Vitro Fertilization (IVF) program, NJ PLUS will continue to cover the necessary IVF drugs.
Traditional Plan, Plan #002, Beginning July 1, 1999, employees who are members of the Traditional Plan and have access to a separate prescription drug plan through their employer will no longer be able to submit prescription drug copayment amounts to Horizon Blue Cross Blue Shield of New Jersey for reimbursement through major medical benefits.
Traditional Plan members whose employer does not offer a separate prescription drug plan are not affected by this change. They will continue to receive reimbursement for prescription drug costs under their Traditional Plan's major medical benefits.

Exception: For Traditional Plan members with a separate prescription drug card plan that does not cover drugs used for an approved In Vitro Fertilization (IVF) program, the Traditional Plan will continue to cover the necessary IVF drugs.
HMO Blue, HMO #010, has changed its name to Horizon HMO.
HIP Health Plan of New Jersey, HMO #013, is being liquidated as of April 1, 1999, and is no longer available to SHBP members.
Prudential HealthCare, HMO #017, may be purchased by Aetna/US Healthcare, HMO #019. Specific details on the sale are yet to be worked out and a final date for the acquisition is undetermined. Prudential HealthCare will remain a separate plan within the SHBP until further notice.
Aetna/US Healthcare, HMO #019, has changed its telephone number to 1-800-309-2386. This new number is dedicated exclusively to serving members of the SHBP.
CIGNA CoMED, HMO #020, has changed its name to CIGNA HealthCare and expanded its service area to include all Zip Codes in New Jersey, Pennsylvania, New York, Connecticut and Delaware. CIGNA HealthCare has also changed its telephone number to 1-800-832-3211.
Oxford Health Plan, HMO #028, no longer services Pennsylvania. As of January 1, 1999, the vendor for Oxford's prescription drug benefits changed to Diversified Pharmaceutical Services, Inc. Oxford members whose employer does not offer a separate prescription drug plan and receive their prescription drug benefits through the HMO can call Diversified's customer service line at 1-800-417-8172 for help with questions regarding their prescription drug benefits.
NYLCare, HMO #029, has been acquired by Aetna/US Healthcare, HMO #019. Employees enrolled in NYLCare who wish to change to another plan have the opportunity to do so during this Open Enrollment. Unless otherwise requested, employees enrolled in NYLCare will have their coverage automatically transferred to Aetna/US Healthcare effective July 1, 1999.
First Option Health Plan, HMO #034, changed its name to Physicians Health Services.

In addition, there have been the following changes to the State Prescription Drug Program for the July 1999 plan year:

Thirty day supply - the maximum dispensable amount for any drug at a retail pharmacy under the State Prescription Drug Program will be a 30 day supply.

Mail order - the mail order component of the State Prescription Drug Program will continue, but will reinstate a $5 copayment for name brand drugs and a $1 copayment for generic drugs that has been waived for the past few years. This still represents a savings equivalent to two copayments for a 90 day supply.

The above information is current as of the date of this letter. The special Open Enrollment edition of the Health Capsule newsletter will provide more details of plan changes indicated above. You will be notified of any future changes that affect your employees.

The new SHBP rates for local employer groups, effective July 1, 1999, are enclosed. The rate changes, reflected in the summary chart below, compare favorably nationwide. Increases of similar type plans industry wide range from 1% to 4% higher than SHBP increases.

   
PERCENTAGE OF RATE CHANGE FOR PLAN YEAR EFFECTIVE JULY 1, 1999

PLAN	ACTIVE EMPLOYEES
PLAN	Drug Coverage Included in Medical Plan	No Drug Coverage in Medical Plan
NJ PLUS	+8.0%	+5.0%
Traditional Plan	+9.5%	+7.5%
Horizon HMO, #010	+3.8%	+1.2%
Prudential HealthCare HMO, #017	+9.2%	+7.5%
Aetna/US Healthcare, #019	+6.0%	+4.5%
CIGNA HealthCare, #020	-5.0%	-5.0%

PERCENTAGE OF RATE CHANGE FOR PLAN YEAR EFFECTIVE JULY 1, 1999

PLAN	ACTIVE EMPLOYEES
PLAN	Drug Coverage Included in Medical Plan	No Drug Coverage in Medical Plan
Oxford Health Plan, #028	+7.9%	+7.9%
AmeriHealth HMO Plan, #033	+9.2%	+5.3%
Physicians Health Services, #034	+6.8%	+4.6%
University Health Plans, Inc, #036	+9.0%	+8.2%
State Prescription Plan	NA	+13.9%

We have included rate charts for employees with and without prescription drug coverage. Rate charts for retirees will be sent in March as we have not yet completed action on the Medicare HMO rates. In addition, we have enclosed a chart showing the available SHBP medical plans with contact information and a chart providing contact names for arranging a Health Fair at your location.

During the first week of March, you will receive your initial ten copies of the NJ PLUS Physician and Hospital Directory, and sufficient copies of the SHBP Plan Comparison Summary chart and the Health Capsule newsletter for distribution to all of your employees.

If you have any questions about the Open Enrollment or the information in this letter, please contact our Client Services staff at (609) 292-7524, or call our Employer Hotline at (609) 777-1082 and leave a message. A staff member will return your call on the next business day.

February 23, 1999

TO:	Certifying Officers Public Employees Retirement System
FROM:	Margaret M. McMahon Director
SUBJECT:	Enrollment Eligibility of Professors and Instructors Employed on a Temporary, Provisional or Adjunct Basis by Public Institutions of Higher Education

The Public Employees Retirement System (PERS) Board of Trustees recently adopted N.J.A.C. 17:2-2.6. This rule clarifies the eligibility requirements for enrollment into the PERS of professors and instructors employed on a temporary, provisional or adjunct basis at public institutions of higher education. In accordance with the rule, a professor or instructor not employed in a regularly appointed teaching or administrative staff position, civil service position, or regularly budgeted positions will be eligible for enrollment in PERS if (s)he

earns more than the minimum threshold salary ($1,500 per year or $10,000 per year for members retired from PERS),
works for the normal school year, i.e., two consecutive semesters, and
is renewed for the succeeding school year.

A professor or instructor who teaches courses which provide no academic credit and vary in length from the normal school term will not be eligible for enrollment, or service and salary credit on the basis of those courses.

Employees meeting the criteria for enrollment should be enrolled in the PERS. Employees not meeting the criteria for enrollment should not be enrolled in the PERS. Contributions that may have been made from employees not eligible for membership based upon this rule should discontinue as of April 1, 1999. Any contributions made and service earned will not be taken away for those already credited for such service. If PERS membership becomes inactive because of the application of this rule, the membership of those with less than ten years of service credit will expire in two years in accordance with system rules, unless the member obtains employment that meets eligibility requirements.

If you have any questions, please call Client Services at (609) 292-7524.

March 3, 1999

TO:	State Monthly Human Resource Directors/Benefits Administrators
FROM:	Janice F. Nelson Assistant Director for Health Benefits
SUBJECT:	SHBP 1999 OPEN ENROLLMENT

The State Health Benefits Program (SHBP) Open Enrollment period for State monthly employees will begin on April 1, 1999, and end on April 30, 1999. Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than May 5, 1999. Open enrollment applications should not be sent with other applications submitted at the same time. Also, a member's medical and dental applications should be sent together to facilitate processing. All changes to coverage made during this Open Enrollment period will be effective on July 1, 1999.

Enclosed you will find rates and plan information that will help you assist your employees in making informed decisions concerning their health care coverage during the 1999 Open Enrollment.

NJ PLUS, Plan #001, has added to its network 1,200 physicians and three hospitals - East Orange General and Montclair Community Hospitals in Essex County, and Riverview Medical Center in Monmouth County.

Beginning July 1, 1999, State employees who are members of the NJ PLUS will no longer be able to submit prescription drug copayment amounts for reimbursement through NJ PLUS.
Traditional Plan, Plan #002 - Beginning July 1, 1999, State employees who are members of the Traditional Plan will no longer be able to submit prescription drug copayment amounts for reimbursement through major medical benefits.
HMO Blue, HMO #010, has changed its name to Horizon HMO.
HIP Health Plan of New Jersey, HMO #013, is being liquidated as of April 1, 1999, and is no longer available to SHBP members.
Aetna/US Healthcare, HMO #019, has changed its telephone number to 1-800-309-2386. This new number is dedicated exclusively to serving members of the SHBP.
CIGNA CoMED, HMO #020, has changed its name to CIGNA HealthCare and expanded its service area to include all Zip Codes in New Jersey, Pennsylvania, New York, Connecticut, and Delaware. CIGNA HealthCare has also changed its telephone number to 1-800-832-3211.
Oxford Health Plan, HMO #028, no longer services Pennsylvania.
NYLCare, HMO #029, has been acquired by Aetna/US Healthcare, HMO #019. Employees enrolled in NYLCare who wish to change to another plan have the opportunity to do so during this Open Enrollment. Unless otherwise requested, State monthly employees enrolled in NYLCare will have their coverage automatically transferred to Aetna/US Healthcare effective July 1, 1999.
First Option Health Plan, HMO #034, changed its name to Physicians Health Services and expanded its service areas to include all of Connecticut as well as Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester counties of New York.

The following changes have been made to the State Prescription Drug Program for the plan year beginning July 1999.

Thirty day supply - the maximum dispensable amount for any drug at a retail pharmacy under the State Prescription Drug Program will be a 30 day supply.
Mail order - the mail order component of the State Prescription Drug Program will continue, but the $5 copayment for name brand drugs and a $1 copayment for generic drugs will be reinstated. This still represents a savings equivalent to two copayments for a 90 day supply.

In addition, the following change to the State Dental Program is effective for the plan year beginning July 1999.
Two DPO plans will not be continued for the new plan year - Dental Group of New Jersey, Inc., DPO #314 and John D. Kernan, DMD, DPO #318. Employees enrolled in either of these plans must select a new dental plan during the Open Enrollment or they will be without dental coverage after July 1, 1999.
Managed Dental Choice, DPO #317, has changed its name to Horizon Dental Choice.

The new SHBP rates for State employer groups, effective July 1, 1999, are enclosed. The rate changes, reflected in the summary chart below, compare favorably nationwide. Increases of similar type plans industry wide range from 1% to 4% higher than our SHBP increases.

During the first week of March, you will receive your initial ten copies of the NJ PLUS Physician and Hospital Directory. You may order more directories using the enclosed Request for Open Enrollment Support form. Participating provider information for all SHBP plans is available in the Unified Provider Directory through our SHBP homepage at: http://www.state.nj.us/treasury/pensions/shbp.htm

Sufficient copies of the SHBP Plan Comparison Summary chart and the Open Enrollment issue of the Health Capsule newsletter, will be shipped to your location approximately March 15. Please distribute these informative publications to all participating SHBP members. State employees paid through the State's Centralized Payroll Unit will receive these publications with their March 19 pay checks. An Open Enrollment announcement flyer providing a list of medical and dental plans and their costs has been prepared and enclosed. This generic flyer for State employees not paid through Centralized Payroll is a master copy and may be reproduced to meet your needs. In addition, if we provided you with a tailored flyer for your location last year, we have included a copy for your reference - Do not use this flyer. At your request, we will again tailor this flyer for 1999 Open Enrollment. Contact Kathy Coates, no later than March 19, by telephone at (609) 633-1462, or Fax (609) 633-9590, with the information you require on your flyer, e.g. date of first deduction, number of pay periods over which the deductions are taken, when and to whom applications must be submitted. We will provide you with a customized master copy for you to reproduce.

The Division of Pensions and Benefits is available to support your Open Enrollment program. If you are having a health fair for your employees, a representative from Horizon Blue Cross Blue Shield of New Jersey (Horizon BCBSNJ), on behalf of the SHBP, or from the Division of Pensions and Benefits, can attend and answer questions regarding the Traditional Plan, NJ PLUS, and the HMOs. Lists of all the SHBP medical and dental plans with their service areas and telephone numbers are enclosed for your use in identifying and contacting HMOs and DPOs to attend your health fair. If you wish to schedule educational presentations for your employees about the various plans available through the SHBP, that request can also be accommodated. You must provide a suitable room and a minimum of 10-15 employees for each session. Each session will last about 50 minutes. Use the enclosed Request for Open Enrollment Support form to schedule your health fair or educational seminars. This form may be mailed or faxed to the address/number listed on the form. You may also contact your assigned Horizon BCBSNJ Account Manager to schedule your request. To facilitate scheduling and maximize your chances of having your request fulfilled, please submit your request as soon as possible.

A 1999 SHBP Open Enrollment Milestone Chart that lists key events and dates is attached. Use this chart to monitor the tasks you must accomplish and the receipt of the materials we have promised in this letter.

March 3, 1999

TO:	State Department Human Resource Directors State Biweekly Benefits Administrators
FROM:	Janice F. Nelson Assistant Director for Health Benefits
SUBJECT:	SHBP 1999 OPEN ENROLLMENT

The State Health Benefits Program (SHBP) Open Enrollment period for State biweekly employees will begin on April 1, 1999, and end on April 30, 1999. Completed employer-certified health benefits and/or dental applications must arrive at the Health Benefits Bureau no later than May 5, 1999. Open enrollment applications should not be sent with other applications submitted at the same time. Also, a member's medical and dental applications should be sent together to facilitate processing. All changes to coverage made during this Open Enrollment period will be effective on July 3, 1999 with any required deductions taken beginning with pay period 14 (pay check of June 25, 1999).

Enclosed you will find rates and plan information that will help you assist your employees in making informed decisions concerning their health care coverage during the 1999 Open Enrollment.

NJ PLUS, Plan #001, has added to its network 1,200 physicians and three hospitals - East Orange General and Montclair Community Hospitals in Essex County, and Riverview Medical Center in Monmouth County.

Beginning July 1, 1999, State employees who are members of the NJ PLUS will no longer be able to submit prescription drug copayment amounts for reimbursement through NJ PLUS.
Traditional Plan, Plan #002 - Beginning July 1, 1999, State employees who are members of the Traditional Plan will no longer be able to submit prescription drug copayment amounts for reimbursement through major medical benefits.
HMO Blue, HMO #010, has changed its name to Horizon HMO.
HIP Health Plan of New Jersey, HMO #013, is being liquidated as of April 1, 1999, and is no longer available to SHBP members.
Aetna/US Healthcare, HMO #019, has changed its telephone number to 1-800-309-2386. This new number is dedicated exclusively to serving members of the SHBP.
CIGNA CoMED, HMO #020, has changed its name to CIGNA HealthCare and expanded its service area to include all Zip Codes in New Jersey, Pennsylvania, New York, Connecticut, and Delaware. CIGNA HealthCare has also changed its telephone number to 1-800-832-3211.
Oxford Health Plan, HMO #028, no longer services Pennsylvania.
NYLCare, HMO #029, has been acquired by Aetna/US Healthcare, HMO #019. Employees enrolled in NYLCare who wish to change to another plan have the opportunity to do so during this Open Enrollment. Unless otherwise requested, State biweekly employees enrolled in NYLCare will have their coverage automatically transferred to Aetna/US Healthcare effective July 3, 1999.
First Option Health Plan, HMO #034, changed its name to Physicians Health Services and expanded its service areas to include all of Connecticut as well as Bronx, Dutchess, Kings, Nassau, New York, Orange, Putnam, Queens, Richmond, Rockland, Suffolk, and Westchester counties of New York.

The following changes have been made to the State Prescription Drug Program for the plan year beginning July 1999.

Thirty day supply - the maximum dispensable amount for any drug at a retail pharmacy under the State Prescription Drug Program will be a 30 day supply.

Mail order - the mail order component of the State Prescription Drug Program will continue, but the $5 copayment for name brand drugs and a $1 copayment for generic drugs will be reinstated. This still represents a savings equivalent to two copayments for a 90 day supply.

In addition, the following change to the State Dental Program is effective for the plan year beginning July 1999.

Two DPO plans will not be continued for the new plan year.

- Dental Group of New Jersey, Inc., DPO #314 and John D. Kernan, DMD, DPO #318. Employees enrolled in either of these plans must select a new dental plan during the Open Enrollment or they will be without dental coverage after July 3, 1999.

- Managed Dental Choice, DPO #317, has changed its name to Horizon Dental Choice.

The new SHBP rates for State employer groups, effective July 3, 1999, are enclosed. The rate changes, reflected in the summary chart below, compare favorably nationwide. Increases of similar type plans industry wide range from 1% to 4% higher than our SHBP increases.

During the first week of March, you will receive your initial ten copies of the NJ PLUS Physician and Hospital Directory. You may order more directories using the enclosed Request for Open Enrollment Support form. Participating provider information for all SHBP plans is available in the Unified Provider Directory through out SHBP homepage at: http://www.state.nj.us/treasury/pensions/shbp.htm

A copy of the SHBP Plan Comparison Summary chart, the special Open Enrollment issue of the Health Capsule newsletter, and an Open Enrollment announcement flyer providing a list of medical and dental plans and their costs will be distributed with the March 19 pay checks to all State employees paid through Centralized Payroll.

If you wish to schedule educational presentations for your employees about the various plans available through the SHBP, that request can also be accommodated. You must provide a suitable room and a minimum of 10-15 employees for each session. Each session will last about 50 minutes. Use the enclosed Request for Open Enrollment Support form to schedule your health fair or educational seminars. This form may be mailed or faxed to the address/number listed on the form. You may also contact your assigned Horizon BCBSNJ Account Manager to schedule your request. To facilitate scheduling and maximize your chances of having your request fulfilled, please submit your request as soon as possible.

We will be conducting seminars for benefits administrators on March 16 in Trenton (State Police Museum - West Trenton) and on March 18 in Newark (Horizon BCBSNJ Auditorium). The seminars will provide an update on the new rates for premium sharing effective July 3, 1999, and SHBP medical and dental plan changes that have occurred since the last open enrollment. A registration form listing seminar dates is attached. Directions to the seminar sites are enclosed. A 1999 SHBP Open Enrollment Milestone Chart that lists key events and dates is attached. Use this chart to monitor the tasks you must accomplish and the receipt of the materials we have promised in this letter.

TO:	Certifying Officers
FROM:	John D. Megariotis Assistant Director, Finance
SUBJECT:	Reporting Salary for Part-time Hourly Employees in PERS

The Division of Pensions and Benefits is considering changing a rule concerning the reporting of salary for part-time hourly employees enrolled in the Public Employees' Retirement System (PERS) and would like to get your input on whether you would like to see this rule changed. The Division has received comments from many employers and employees on this subject. Employers are concerned about problems with estimating the annual salary and employees have complained about not having their benefit calculated on actual salary. Please complete the enclosed survey on this issue and return it to our office by March 31, 1999. You may return the survey by mail or fax it to us at (609) 396-9784.

Currently, employers are asked to estimate the annual salary that a part-time hourly employee will receive, divide that into even monthly amounts, and report that salary on each quarterly report. The advantage to this method is that the salary and pension deductions remain constant from month to month, thereby requiring no changes to the quarterly report of salary and contributions when the employee's hours vary.

The proposed change to this rule would require employers to report the actual base salary paid to the employee. This would eliminate the guesswork of estimating the hours of work and annual salary while simplifying payroll procedures since deductions would be based on actual salary. It would also eliminate any requirement to manage the hours worked in any given quarter to approximate the estimate. At the same time, however, it would require the employer to adjust the quarterly report each time to reflect the change in salary, pension contribution and contributory life insurance contribution since the last quarter. Benefits would be calculated on actual salary paid, as many employees have requested, rather than estimated salary.

Please note that this change would affect part-time hourly employees only. All other employees would continue to be reported as they have in the past. If you have any questions regarding the survey, please contact the Division's Audit/Billing Section at (609) 984-4808.

enclosure

TO: Benefits Managers, SHBP Participating Local Employers Benefits Managers, SHBP Participating Educational Employers

FROM: Janice Nelson, Assistant Director, State Health Benefits Program

DATE: April 15, 1999

SUBJECT: Legislation Change: SHBP Participating Employer Payment of Post-Retirement Medical Costs

Governor Whitman recently signed into law, Chapter 48, P.L. 1999. This law changes the rules of the State Health Benefits Program (SHBP) regarding a participating employer's payment of medical coverage for its retirees. Chapter 48 provides considerable flexibility to employers to manage their post-retirement medical costs and brings SHBP eligibility standards for employer paid coverage into alignment with local government laws. The new law essentially does the following:

It gives an employer greater flexibility in defining which employees qualify for post retirement medical benefits by using the age and service requirements of the local government laws (NJSA 40A:10-23).

It allows an employer to negotiate payment obligations for post-retirement medical coverage.

It is important to note that Chapter 48 applies only to post-retirement medical coverage. It does not allow the SHBP participating employer to negotiate payment obligations for coverage of its active employees.

The attached set of Questions and Answers (Qs & As) describe the new law and its impact on SHBP rules regarding employer payment of post-retirement medical coverage. The Chapter 48 Resolution form, required by the law and described in the Qs & As, is available upon request.

If you have any questions after reading the Qs & As, you may write us at the address above, Email us at "pensions.nj@treas.state.nj.us", or call the SHBP Employer Hotline at (609) 777-1082. Leave your name, location, telephone number, and question and a staff member will get back to you.

attachment

Chapter 48, P.L. 1999 Questions and Answers

General

1. Q - What is Chapter 48, P.L. 1999?

A - Chapter 48, P.L. 1999 is a new law that changes the State Health Benefits Program (SHBP) rules applicable to the eligibility requirements and payment of SHBP premiums for retirees. It is applicable to public employers other than the State, State colleges and universities, the Palisades Interstate Parkway Commission, and the New Jersey Commerce and Economic Growth Commission.

2. Q - What did the old law require?

A - The old SHBP law, known as Chapter 88, required participating employers to treat all their retirees in a uniform manner. It stated that if the employer wanted to pay for retiree health coverage, they had to pay for the full cost of the coverage and reimburse full Part B Medicare premiums for all their eligible retirees and their covered dependents. This included all past as well as future retirees. An eligible retiree was one who retired with 25 or more years of service credit in a state or locally administered public retirement system or with a disability retirement. All 25 years of service did not have to be with the employer of the retiring employee. The employer had the option of providing coverage to surviving spouses of "free" retirees. To pay for retiree coverage, the employer filed a Chapter 88 Resolution with the SHBP.

3. Q - What changes were made to SHBP rules?

A - The new law essentially does two things. First, it gives an employer greater flexibility in defining which employees qualify for post-retirement medical benefits by using the age and service requirements of the local government laws (NJSA 40A:10-23 - described below). Second, it allows an employer to negotiate payment obligations for post-retirement medical coverage.

The New Rules

Eligibility

4. Q - What are the qualifications for employer-paid post-retirement medical coverage under NJSA 40A:10-23?

A - NJSA 40A:10-23 gives the employer the discretion, under uniform conditions, to assume the cost of post-retirement medical coverage for employees (and their dependents) who have: retired on a disability pension; and/or retired with 25 or more years of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement, such period as established by the employer; or retired upon or after the attainment of age 65 or more with 25 or more years of service credit in a State or locally administered retirement system and a period of service of up to 25 years with the employer at the time of retirement, such period as established by the employer; or retired upon or after the attainment of age 62 or more with at least 15 years of service with the employer.
(Note: The period of time a county law enforcement officer has been employed by any county or municipal police department, sheriff's department or county prosecutor's office, may be counted cumulatively as service with the employer for the purpose of qualifying for payment of health insurance premiums by the county.)

5. Q - If the employer establishes the age requirement of 65 for payment of post-retirement medical benefits, does that mean the employee cannot retire until age 65 to qualify for the employer paid coverage?

A - Yes, if the employee retires before reaching age 65, the employee would not be eligible for the employer paid coverage.

6. Q - If the employer adopts the provision of age 62 and 15 years of service with the employer, does that mean the employee cannot retire until age 62 to qualify for the employer paid coverage?

A - Yes, if the employee retires before reaching age 62, the employee would not be eligible for the employer paid coverage.

7. Q - Does this law affect employees of the State, State colleges and universities or TPAF members?

A - Generally, no. However, it does allow school boards and county colleges participating in the SHBP to pay for retirees aged 62 with 15 years of service that they could not pay for under the old law.

Contributions - Payment for Coverage

8. Q - Must the employer pay the full cost of coverage of its retirees under this law?

A - No, for employees covered under a negotiated (union/bargaining) agreement, the employer may negotiate any level of payment, ranging from none to all, of the retired coverage and the Part B Medicare premiums. See question #13 for employees not covered under a negotiated agreement.

9. Q - Does the new law require the employer to pay the cost of coverage for an eligible retiree'