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RULE CHANGES 2009
The Division of Pensions and Benefits posts proposed rules, new rules, amended rules, and readoptions of existing rules on this Web site to inform members, retirants, employers and other interested parties. Proposed rules are first published in the New Jersey Register, a bi-weekly publication prepared by the Office of Administrative Law. The Division then posts, on this site, summaries of the proposed rules. After adoption, a rule becomes part of the New Jersey Administrative Code. If you would like to learn more regarding a proposed rule, the numbers in the parentheses before the proposed rule refer to the volume and page number in which the entire proposal is found in the Register. N.J.A.C. refers to the New Jersey Administrative Code, and the numbers identify the title and specific chapter citations. View the New Jersey Register and New Jersey Administrative Code online. Proposed changes are either in bold print or are underlined. Deletions are bracketed [so]. Public Notices There are no Public Notices for 2009 at this time. Please use the links below to view Public Notices from previous years.
Proposed Rules Proposed Amendment N.J.A.C. 17:2-8.3, Prosecutors Part (Public Employees' Retirement System) Proposed Amendment N.J.A.C. 17:4-4.1, Creditable Compensation (Police and Firemen's Retirement System) Proposed Amendment N.J.A.C. 17:2-2.1 (Public Employees' Retirement System) Proposed Amendment N.J.A.C. 17:3-2.1 (Teachers' Pension and Annuity Fund) Proposed Readoption with Amendments: N.J.A.C. 17:9 (State Health Benefits Commission) Adoptions Adopted Amendment: N.J.A.C. 17:3-2.1; Cite as 41 N.J.R. 3111(a) (TPAF) - August 17, 2009. Adopted Amendment: N.J.A.C. 17:2-2.1; Cite as 41 N.J.R. 3110(a) (PERS) - August 17, 2009. Readoption with Amendments: N.J.A.C. 17:9; Cite as 41 N.J.R. 2037(a) (SHBP) - May 4, 2009. PROPOSED RULES TREASURY -- GENERAL 41 N.J.R. 3040(a) Proposed Amendment: N.J.A.C. 17:2-8.3 Click here to view Interested Persons Statement Public Employees' Retirement System Prosecutors Part Authorized By: Public Employees' Retirement System Board of Trustees, Kathleen Coates, Board Secretary. Authority: N.J.S.A. 43:15A-17. Calendar Reference: See Summary below for explanation of exception to calendar requirement. Proposal Number: PRN 2009-239. Submit comments by October 16, 2009 to:
The agency proposal follows: Summary P.L. 2001, c. 366, which became law on January 7, 2002, established a separate part of the Public Employees' Retirement System (PERS), which has specific retirement benefits for prosecutors. Chapter 366 established within the PERS a special Prosecutors Part for any county prosecutor, first assistant county prosecutor or assistant county prosecutor; the Director of the Division of Criminal Justice in the Department of the Law and Public Safety; any assistant director, deputy director, assistant attorney general or deputy attorney general employed by the Department of Law and Public Safety and assigned to the Division of Criminal Justice; and any criminal investigator in the Division of Criminal Justice ineligible for enrollment in the Police and Firemen's Retirement System (PFRS). These positions are defined as prosecutors for the purpose of this law. The prosecutors must serve as a prosecutor on or after the effective date of the law to be eligible in the Prosecutors Part. P.L. 2001, c. 366, §3 provides that "prosecutors shall contribute at a rate established by the board . . ." this grants the Board the statutory authority to establish member contribution rates. Further, N.J.S.A. 43:15A-19, provides that at "least once in every 3-year period, the actuary shall make an actuarial investigation . . . and shall make a valuation of the assets and liability of the various funds created by this act." On December 18, 2002 the Board of Trustees established the initial contribution rate at 7.5 percent based on the recommendations of the Fund's actuary. The rate was effective January 7, 2002, the date Prosecutors Part was established. N.J.A.C. 17:2-8, Prosecutors Part, was effective January 24, 2005 and will expire on January 24, 2010. The rate provisions were promulgated as part of these implementing rules for the Prosecutors Part and published as N.J.A.C. 17:2-8.3. The existing rule confirmed the rate of contribution that was previously established by the Board of Trustees and provided that the rate shall be reviewed by the System's actuaries and adjusted by the Board of Trustees as necessary. The proposed amendments to N.J.A.C. 17:2-8.3, Contribution rate, amend subsections (a) and (b) to bring greater clarity to the procedure for review and adjustment of the contribution rate for Prosecutors Part. The proposed amendment to Existing subsection (a) deletes the 7.5 percent rate of contribution and provides that the Board shall establish the rate upon recommendation of the actuary using consistent and generally-accepted actuarial standards, as established by the Governmental Accounting Standards Board. This is the procedure that was initially used to establish the rate at 7.5 percent and is the procedure under which the current rate of 8.5 percent was established. This actuarial standard is required by law pursuant to N.J.S.A. 43:3C-13. Under the proposed amendment, the percentage rate established by the Board of Trustees is not set forth the rule. Further, existing subsection (b) states that the rate of contribution shall be reviewed by the System's actuaries periodically and adjusted by the Board as necessary. The amendment to subsection (b) provides that the Board of Trustees will review the contribution rate at every three-year period as part of the valuation by the PERS's actuary and whenever the PERS, PFRS, Teachers' Pension and Annuity Fund (TPAF) or State Police Retirement System (SPRS) rate is adjusted by the Legislature. The proposed amendment provides that adjustments shall be made as necessary by the Board and that notice of any change in the rate shall be published through Notice in the New Jersey Register and shall become effective on the date authorized by the Board. This amendment provides additional notice to the public and effected employees of a contribution rate adjustment. Heretofore, notice of proposed changes in the rate is provided by the Board through action taken at its open pubic meeting and publication of its agenda in advance of its meetings. This provision will provide additional notice through publication of notice in the New Jersey Register. The change in rate will be effective at the date authorized by the Board. A 60-day comment period is provided for this notice of proposal and, therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice is not subject to the provision of N.J.A.C. 1:30-3.1 and 3.2 governing rulemaking calendars. Social Impact The proposed amendment to N.J.A.C. 17:2-8.3 will provide those eligible for the Prosecutors Part with clarification of contribution rates since they will be provide notice in the New Jersey Register of any changes to the rate and its effective date, rather than a fixed rule (for example, 7.5 percent) limited to N.J.A.C. 17:2-8.3(a). The Board is not aware of any provisions in the proposed amendment that would impose any hardship or costs on the members of the State-administered retirement system in New Jersey or on the public in general. Economic Impact The proposed amendment provides an economic benefit by clarifying and detailing how the member contribution rate is established. Pursuant to the proposed amendment; the 7.5 percent as set forth in the rule (subsection (a)) will be deleted but actuary review and recommendations based on actuarial standards is required, Board action at a public meeting continues to be required, and the rule increases the notice afforded by requiring publication of an adjusted rate in the New Jersey Register. Accordingly, since these amendments clarify the existing method of establishing the contribution rate, there is no economic impact to the proposed amendment. The Division of Pensions and Benefits does not have any other information to provide an economic impact on this amendment. Federal Standards Statement A Federal standards analysis is not required because N.J.S.A. 43:15A-17 governs the subject of the proposed amendment to N.J.A.C. 17:2-8.3, and there is no Federal requirement or standard that affects the subject to this rulemaking. Jobs Impact The Board does not anticipate any creation or loss of jobs as a result of the proposed amendment. Agriculture Industry Impact The proposed amendment will not have any impact on the agriculture industry. Regulatory Flexibility Statement A regulatory flexibility analysis is not required since the proposed amendment does not have any effect on small businesses as the term is defined in N.J.S.A. 52:14B-16 et seq., the Regulatory Flexibility Act, and only affects members of the Prosecutors Part of the Public Employee's Retirement System. Smart Growth Impact The proposed amendment will not have any impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan. Housing Affordability Impact Since the proposed amendment rules apply to the contribution rate of the Prosecutors Part of the Public Employee's Retirement System, it will have no impact on the average cost of housing or on affordable housing in New Jersey. Smart Growth Development Impact The proposed amendment will not have any impact on new construction with Planning Areas 1 and 2, or within designated centers, under the State Development and Redevelopment Plan and will have an insignificant impact on smart growth, as the rule pertains to the contribution rate of the Prosecutors Part of PERS. Full text of the proposal follows (additions indicated in boldface thus; deletions indicated in brackets [thus]): SUBCHAPTER 8. PROSECUTORS PART 17:2-8.3 Contribution rate (a) The rate of contribution to the Prosecutors Part of the Public Employees' Retirement System shall be [7.5] a percent of base salary as established by the Board of Trustees. The amount of the members' contribution rate shall be established upon recommendation of the actuary using consistent and generally-accepted actuarial standards, as established by the Governmental Accounting Standards Board. (b) The rate of contribution shall be reviewed by the System's actuaries periodically and adjusted by the Board as necessary. The Board of Trustees shall review the contribution rate at every three-year period as part of the valuation by the PERS System's actuary and whenever the PERS, PFRS, TPAF or SPRS rate is adjusted by the Legislature. A notice of any change in the rate shall be published through a notice in the New Jersey Register and shall become effective on the date authorized by the Board. TREASURY — GENERAL
[page=2776] The agency proposal follows: TREASURY GENERAL 41 N.J.R. 1712(a) Proposed Amendment: N.J.A.C. 17:2-2.1 Click here to view Interested Persons Statement Public Employees' Retirement System
The agency proposal follows: The Public Employees' Retirement System (PERS) proposes to amend N.J.A.C. 17:2-2.1, Social Security coverage, as a result of legislative pension reform. P.L. 2008, c. 89 (Chapter 89) (codified at N.J.S.A. 43:15A-7), increases the salary threshold for participation and stipulates that the Director of the Division of Pensions and Benefits (Divisions) adjust the minimum annual salary each year, in accordance with changes in the Consumer Price Index (CPI). These changes will affect those individuals who become members of the system on or after November 2, 2008. Chapter 89 provides the Division Director with the necessary authority to adjust the minimum annual salary each year, by regulation. As the higher salary threshold did not become effective until November 2, 2008 and adoption of the amendment cannot occur until 2009; the initial indexing of the minimum salary will not take place until the beginning of the calendar year following the adoption of the proposed amendment (January 1, 2010). Chapter 89 requires the Director's annual adjustment to be in accordance with changes in the CPI but by no more than four percent. Further, the CPI is defined in Chapter 89 as "the average of the annual increase, expressed as a percentage, in the consumer price index for all urban consumers in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor." The Division is required to provide the participating employers with the minimum annual salary before the end of each calendar year. However, the United States Department of Labor does not release the CPI data until after the end of each calendar year. Therefore, the Division is interpreting the use of "preceding year" to mean the last year in which CPI data is available. The Division therefore, proposes to use data from the prior year in the calculation to ensure that employers can receive these updates well in advance of the new calendar year. To determine the annual minimum dollar amount the Division will divide the CPI index from New York City (NYC) and from Philadelphia (PH) for the first full calendar year prior to July 31 of the current year by the CPI of NYC and PH for the second full calendar year prior to July 31 of the current year. The percentage of increase shall be no less than zero and no more than four percent for any given year. Further, the final calculated dollar amount shall be rounded down to the nearest $ 100.00. At N.J.A.C. 17:2-2.1, the Division proposes to delete the heading, "Social Security coverage" and add the new heading "Enrollment eligibility." The heading will then reflect the addition of a salary requirement, which is also a prerequisite for participation in the PERS. Subsection (a) is amended to further clarify that the position must be covered by Social Security. Also, since both subsection (a) and (b) discuss Social Security coverage, subsection (b) is being merged with existing subsection (a). New subsections (b) and (c) are proposed to identify those who will be affected by the changes to the law (employees hired after November 2, 2008) and also to define the method in which the annual dollar threshold will be indexed on a yearly basis, as discussed above. New paragraphs (b)1 through 3 are added to explain the Division's procedure for calculating the adjustment to the minimum annual salary. Proposed new subsection (d) contains a description of how the Division will adjust the minimum annual base salary. The example that follows shows how the Division would calculate the 2009 minimum annual base salary, if such a calculation were to be made: 1.025 x $ 7,500 = 2009 minimum annual base salary $ 7,687.50 = 2009 minimum annual base salary (not rounded) $ 7,600 = 2009 minimum annual base salary (rounded) As the Division has provided a 60-day comment period on this notice of proposal, this notice is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)5. The proposed amendment benefits the members, retirees, beneficiaries and participating employers of the various pension systems. These members rely on the efficient operation of the pension systems to provide them with monthly retirement benefits, with proper crediting of service, with death benefits and with the information they need regarding their individual accounts. They also rely upon the presence and predictability of the rules, which guide the administration of their benefits. The protections and guarantees that these rules afford its members mandate their continued existence. The rules of the Public Employees' Retirement System provide for the efficient operation of the pension systems administered by the State of New Jersey. The efficient operation of the system provides a benefit to members and retirees, as well as to public employers, by allowing for the timely delivery of retirement benefits. The proposed amendments will not present any economic effects on the public; but rather provide employers with the minimum annual salary upon which employees shall be eligible for enrollment in the retirement system, pursuant to Chapter 89. The proposed amendments will also help the Division continue to provide for the continued delivery of retirement benefits, as well as the proper accounting of members' service credit and contributions to the pension systems without change. Further, the proposed amendments will now, and in the future, enable the Division to continue to provide for the retirement benefits of the retirees in a manner that more than adequately, meets the statutory and contractual requirements. Without the administrative rules to provide for the efficient operation of the pension systems, financial chaos may occur, thus adversely affecting the taxpayers whose employee contributions help to fund the systems. A Federal standards analysis is not required for the proposed amendments because there are no Federal requirements or standards that affect the subject of this rulemaking, except that there is reference to compliance with the Consumer Price Index as reported by the United States Department of Labor, Bureau of Labor Statistics, but this standard is not exceeded. The operation of the proposed amendments will not result in the generation or loss of jobs. The Division invites any interested parties to submit any data or studies concerning the jobs impact of these proposed amendments with their written comments. The proposed amendments will not have an impact on the agriculture industry. A regulatory flexibility analysis is not required because the proposed amendments have no affect on small businesses as the term is defined in N.J.S.A. 52:14B-16 et seq., and only affects members and retirees of the public pension systems in New Jersey. The proposed amendments will not have any impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan. The proposed amendment will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the rule would evoke a change in the average costs associated with housing because the rule only applies to how the PERS minimum salary requirements will be annually updated. The proposed amendment will have an insignificant impact on smart growth and there is an extreme unlikelihood that the rule would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the rule only applies to how the PERS minimum salary requirements will be annually updated. TREASURY GENERAL 41 N.J.R. 1713(a)
TREASURY GENERAL 41 N.J.R. 101(a) Proposed Readoption with Amendments: N.J.A.C. 17:9 Proposed New Rule: N.J.A.C. 17:9-1.9 Proposed Repeal and New Rule: N.J.A.C. 17:9-5.9 Click here to view Interested Persons Statement State Health Benefits Program Submit comments by March 6, 2009 to:
The agency proposal follows: The State Health Benefits Commission (Commission) is responsible for reviewing the administrative rules governing the State Health Benefits Program (SHBP) within N.J.A.C. 17:9. When the Commission becomes aware of a change in the laws or a court decision that affects the SHBP, the administrative rules are reviewed and, if changes are mandated, then steps are taken to propose rule changes to conform to the new statute or court decision. Additionally, the rules are periodically reviewed to ascertain if the current rules continue to be necessary and/or cost efficient. As the Commission has provided a 60-day comment period, this proposal is excepted from the rulemaking calendar requirement pursuant to N.J.A.C. 1:30-3.3(a)(5). Accordingly, the Commission proposes to readopt the current rules within N.J.A.C. 17:9, which expire on April 7, 2009, pursuant to N.J.S.A. 52:14B-5.1c with the following amendments, deletions and new rules. The current rules deal with the administration, coverage, dependents, employees, charges, retirement, termination, prescription drug program and dental expense programs associated with the SHBP. Members and participating employers rely on the SHBP for the efficient and cost effective administration of their health benefits. They rely upon the presence and predictability of the rules that guide the administration of health benefits. The protections and guarantees that these rules afford the members mandate the rules continued existence. The rules proposed for readoption and the proposed amendments and new rules reflect the requirements for eligibility, enrollments, charges and terminations that are mandated within the statutes governing the SHBP. Chapter 9 originally became effective prior to September 1, 1969. Pursuant to Executive Order No. 66 (1978), the chapter was readopted in 1983. Pursuant to Executive Order No. 66 (1978), Chapter 9 expired on June 6, 1988 and was subsequently adopted as new rules effective October 3, 1988 and was thereafter readopted in 1993, 1998 and 2003. N.J.A.C. 17:9-1 addresses Commission meetings, the issue of what is considered a public record, appeals from Commission decisions, employer participation in the SHBP, the voluntary termination of employers, and the required notice of termination, the default of an employer, prohibition of employer incentives for non-enrollment, definitions of words and terms used in this chapter. Amendments to N.J.A.C. 17:9-1.1 are proposed to provide clarity as to the notice required by the Open Public Meetings Act, N.J.S.A. 10:4-13, and reflect the changes made in the composition of the Commission. Specifically, the reference to the Public Employees' Committee of the AFL-CIO or the New Jersey Education Association is deleted from the text since the enactment of P.L. 2007, c. 103 created the School Employees' Health Benefits Commission. Additionally, the rule has been amended to reflect that if State Ethics Commission training is required, the Commission members shall complete same prior to hearing any appeals before the Commission. N.J.A.C. 17:9-1.2, Records, addresses meeting minutes and their availability to the public. The amendments proposed provide that minutes of the Commission meetings may be inspected under supervision of a representative of the SHBP or other representatives of the office, and not the Manager of Policy and Planning. The minutes of closed sessions pertaining to individual claims information or any other personal information will be redacted in compliance with the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA). Additionally, the Division of Pensions and Benefits is referred to as the Division throughout the text and is defined at N.J.A.C. 17:9-1.8. N.J.A.C. 17:9-1.3, Appeals from Commission decisions, refers to members who disagree with the decision of the claims administrator and have exhausted all appeals within the plan, and who may request that the matter be considered by the Commission. The Commission is also responsible for notifying members in writing of all Commission decisions. Amendments are proposed in this section by deleting reference to the Traditional Plan since it is no longer offered in the statute. The State Health Benefits Commission is referred to as Commission and the State Health Benefits Program is referred to as SHBP throughout the text of the rule and both are defined at N.J.A.C. 17:9-1.8. Thus, subsection (a) refers to the SHBP in its entirety. Subsection (b) has been deleted in its entirety as it refers to NJ PLUS and has been revised through the amendments to subsection (a). N.J.A.C. 17:9-1.4, Employer participation, addresses employers joining the SHBP and their responsibility to adopt a resolution furnished by the Division to comply with the statutes and rules associated with the SHBP. An amendment is proposed to remove the reference to the State Health Benefits Commission by referring to it as the Commission. N.J.A.C. 17:9-1.5, Voluntary termination of employer; notice, addresses when a participating employer voluntarily terminates coverage for the employer's active and retired employees a resolution must be received by the Commission and all active employees must receive notification of the termination of coverage. The Division will notify the COBRA participants and retired members of the termination of coverage. Amendments are proposed in subsection (a) to require the governing body of the local employer and State independent authorities to approve a resolution to terminate. In subsections (b) and (d), the reference to N.J.S.A. 52:14-17.29k was added to the list of individuals to receive notice of termination of coverage. In subsection (d) the Division also amended the COBRA language. N.J.A.C. 17:9-1.6, Default of employer; notice, refers to participating employers that do not provide payment to the SHBP and are considered in default after 31 days of the coverage period for which charges were due. Amendments are proposed in this section to include the offices of the State Treasurer and the Department of Community Affairs. The reference to Local Finance is changed to the Division of Local Government Service to accurately reflect the title of the agency. The reference to the Alternative Benefits Program carriers is deleted as these carriers are no longer responsible for deducting any SHBP cost from their distributions. Any such costs are billed directly by the SHBP. Subsection (b) was further amended to include those participants eligible to be enrolled pursuant to N.J.S.A. 52:14-17.29k. Lastly, subsection (c) was added to reflect the requirement of P.L. 2008, c. 24, that the Division of Revenue shall be responsible for collecting any outstanding debt. N.J.A.C. 17:9-1.7, Employer incentives for non-enrollment, addresses local employers other than the State that offer an incentive to waive coverage if that employee is eligible for other health coverage. The word prohibited was deleted from the heading as the rule deals with when an incentive for waiver of coverage is permitted. Amendments are proposed in subsection (a) to eliminate all references to the former chapter laws to provide for one reference to the current statute providing clarity in reading. Subsection (b) reflects the change in the law that expanded to all local employers the option to offer an incentive for waiver of coverage, pursuant to P.L. 2007, c. 92. Subsection (c) was added to eliminate confusion about the need to file a resolution for adoption of the wavier incentive. N.J.A.C. 17:9-1.8 Definitions, pertains to words and terms frequently used in this chapter. Amendments are proposed in this section. Specifically, base salary was removed as it has differing definitions throughout the rules and is defined within each rule that uses the term. "Category of coverage" has been amended to include member and spouse/partner and whether prescription drug coverage is provided in the health coverage and to update the reference to retirees with Medicare coverage. The following words and terms, which are used in the rules are added: Chapter 375 Dependents; civil union partner; COBRA, dependent; Director; Division; eligible employer; local-administered pension fund; local employer; member; NJ DIRECT 10; NJ DIRECT 15; participating local employers; pension fund; PPO; SHBP (as the acronym used to replace all references to the State Health Benefits Program) spouse; State-administered pension fund; State employer; State biweekly employer; State monthly employer; and successor plan. The phrases "State biweekly sub-group" and "State monthly sub-group" have been deleted since they are subcategories of the definition eligible State employer and have been individually defined. The term "subscriber" is deleted from the rules, since the term "participants" can be inserted for both members and employer groups. New N.J.A.C. 17:9-1.9, Certifying officer (employer), pertains to the responsibilities and duties of the certifying officer as described in N.J.S.A. 52:14-17.43. Proposed new rule 17:9-1.9 is added to further clarify the duties and responsibilities of the certifying officer, since it has never been specifically defined under the SHBP. The addition identifies the duties and provides consistency in the relationship between the Division and local employers who also participate in the various State-administered pension systems. N.J.A.C. 17:9-2.1, Enrollment and charges, addresses employee eligibility for enrollment in the SHBP. Amendments are proposed in this section. The word "charges" is deleted from the heading, since N.J.A.C. 17:9-5.3 addresses charges. Local participating employers are removed to clarify that those eligible employees and their dependents must enroll in the same plan. The enactment of P.L. 2007, c. 62, provided for premium sharing for local employee coverage, which was previously prohibited and therefore allows for local employers to negotiate, through the collective bargaining process, the employee health benefit coverage. N.J.A.C. 17:9-2.2, Enrollment form, describes the responsibility of the employee to file an enrollment form and supply appropriate legal documentation verifying dependent relationship. Amendments are proposed in this section. The proposed amendments provide clarification that appropriate legal documentation verifying the dependent's relationship with the subscriber is required before enrollment is approved. The examples of appropriate legal documentation are set forth at N.J.A.C. 17:9-3.3(a). In addition, if more than 60 days pass since the first eligibility for enrollment, then the employee may file the enrollment during the next open enrollment period with coverage to be effective according to the schedule for that open enrollment. N.J.A.C. 17:9-2.3, Annual open enrollment period, describes the procedures associated with the open enrollment period. Amendments are proposed in this section. These proposed amendments would add the phrase "according to the schedule for that open enrollment period," for the same reasons set forth above. N.J.A.C. 17:9-2.4, Coverage changes; exceptions, describes the types of coverage changes that are permitted and the responsibility of the employee to report such changes by completing the required enrollment form. Amendments are proposed in this section. The proposed amendments would provide clarification throughout this section to include civil unions since the State of New Jersey recognizes these partnership as having all the rights and privileges as married couples. In paragraph (a)8, the circumstances for a child resuming eligibility as a dependent are defined and an application is required within 60 days of the qualifying event. New paragraph (a)11 is added to codify the provisions of P.L. 2007 c. 62, which allows local employers the flexibility to negotiate health benefits with employees. Local employer contracts provide for a variety of health plan arrangements and this section permits the employer to implement those provisions at other times besides regular open enrollment. N.J.A.C. 17:9-2.5, Employee coverage requirements, addresses the conditions and requirements in which coverage shall become effective. Amendments are proposed in this section in that a new paragraph (a)6 is included to codify the requirement that employees must provide full legal documentation in order to cover dependents. N.J.A.C. 17:9-2.6, Effective date for new hires; State employees and dependents, addresses the procedure to establish an effective date of coverage. There are no amendments proposed. N.J.A.C. 17:9-2.7, Effective date for new hires; local employees and dependents, refers to the procedure to establish an effective date for the local employee. There are no amendments proposed. N.J.A.C. 17:9-2.8, Transfers, addresses the procedure and requirements for transferring an employee from one SHBP participating employer to another. There are no amendments proposed. N.J.A.C. 17:9-2.9, HMO; elections, addresses service area for a participating HMO and procedure should a subscriber move out of the HMO service area. Proposed amendments to paragraph (b)2 remove the text referring to the "Traditional Plan, NJ PLUS or an eligible HMO." Since the enactment of P.L. 2007, c. 103, these plans have been replaced with a successor plan to the Traditional and NJ PLUS plans, NJ DIRECT 10 and NJ DIRECT 15, respectively, as well as two eligible HMOs. N.J.A.C. 17:9-2.10, Coverage for survivors-death of active employee, addresses the continuity of coverage in the event of accidental or ordinary death of subscriber. Amendments are proposed in this section, which include the addition of civil union partners and, in subsection (c), retroactive coverage for up to one year may be granted to the eligible survivor provided payment of health benefits charges is made. This is to clarify the existing administrative procedures for coverage of survivors in the death of an active employee. The one-year limit is consistent with current Division practice and reflects annual budgeting processes for both State and local employers. In N.J.A.C. 17:9-2.11, the heading has been amended to "Out-of-network, NJ DIRECT; eligible charges at enrollment (local employees)" and only the plan names have been changed in this section. The proposed amendments reflect the plans available in the SHBP. Subsection (a), (b) and (c) are amended to delete the Traditional Plan, major medical coverage or NJ PLUS and include NJ DIRECT, since the enactment of P.L. 2007, c. 103. Subsection (c) is further amended to remove language pertaining to charges that would have been paid by the "basic plan," if the employee had such coverage. This statement no longer applies to current health benefit contracts and is referring to an obsolete plan design. N.J.A.C. 17:9-2.12, Extension of coverage charges, addresses the charges associated with the payment of claims in respect to illness while under the extension provisions. There are no amendments to this section. N.J.A.C. 17:9-2.13, Duplication of benefits, details that benefits under two plans cannot duplicate each other. Therefore, they are not considered eligible for reimbursement under the employee's medical plan. There are no amendments in this section. N.J.A.C. 17:9-2.14, Policy provisions adoption, addresses the provisions contained in the SHBP contracts. This section is amended to include the prescription drug plan, since it is a benefit available under the SHBP and its provisions are included in the SHBP contracts. Also, reference to the plans' handbook supplements the master contracts are included to clarify that the plans' provisions can periodically change and these amendments can be readily updated through the plans' handbooks. The Commission proposes to amend N.J.A.C. 17:9-3.1 and 3.2 to include civil union partners throughout the sections. N.J.A.C. 17:9-3.1, Dependents and children defined, addresses words and terms used in this chapter. A minor amendment has been made to this section in that civil union partners have been added. In N.J.A.C. 17:9-3.2, Military service, dependents that enlist in the military service shall not be considered eligible for coverage during military service. A minor amendment has been made to this section in that the phrase civil union partner is added. N.J.A.C. 17:9-3.3, Certification of dependency, addresses the issue that appropriate documentation must be submitted for each dependent to be enrolled verifying the dependent's relationship with the subscriber. This section is amended to clarify existing administrative procedure that appropriate legal documentation for each dependent to be enrolled verifying the dependent's relationship with the subscriber must be provided with the health benefit enrollment application. Examples of acceptable documentation are relocated from subsection (b) to (a). N.J.A.C. 17:9-3.4, Children with disabilities age 23 or older; determination of eligibility for continuation of coverage, describes the procedure for the continuation of coverage for children with disabilities. N.J.A.C. 17:9-3.5, Multiple coverage; employee and spouse, addresses the procedures associated with any plan offered by the SHBP other than an HMO, an employee who is the spouse or eligible partner of another employee may elect to forego coverage as an employee and be enrolled for coverage as a dependent. The amendments in this section refers to any plan other than a HMO. Further, the language is amended to remove Traditional Plan coverage and include civil union partner throughout the section. N.J.A.C. 17:9-4.1, State employee defined; 4.2, State; full-time defined; and 4.3, Ineligible employees defined; are all proposed without change. N.J.A.C. 17:9-4.4, State; ineligible employees defined, college or university or payroll agencies identified in N.J.A.C. 17:9-4.1 are added to paragraph (a)5, to more accurately reflect current administrative practice. N.J.A.C. 17:9-4.5, Local; employee defined is proposed without change. At N.J.A.C. 17:9-4.6, Local; full-time defined, the Commission proposes an amendment to subsection (b) to remove the Department of Personnel's rulemaking authority, since the enactment of P.L. 2008, c. 29 abolished this Department. N.J.A.C. 17:9-4.7, Multiple positions, addresses full-time employment of an employee who holds multiple positions with the same employer; no changes are proposed in this section. N.J.A.C. 17:9-5.1, Separate experience; State and Local, refers to the experience of claims for the purposes of determining rates. There are no changes in this section. In N.J.A.C. 17:9-5.2, Charges; interest charge, the Commission proposes an amendment to remove the language referencing the Traditional Plan since this plan has been eliminated as a result of the enactment of P.L. 2007, c. 103. The employer may request a premium delay of 30 or 60 days after the customary due date for such charges. In N.J.A.C. 17:9-5.3, Local Employer payment of charges, the obligations of the participating employer other than the State to pay premium or periodic charges for health benefits coverage may be determined by means of a binding collective negotiations agreement. The proposed amendment to subsection (b) includes the language that "in the absence of any collective negotiations agreement, the employer may modify the payment obligations as it deems appropriate." This addition better reflects current administrative practice since there are employees that have no collective bargaining unit. N.J.A.C. 17:9-5.4, Local employer resolution; P.L. 1974, c. 88; P.L. 1979, c. 54; P.L. 1999, c. 48, describes the requirements of these statutes. Only minor amendments have been proposed in this section. The proposed amendments to this section include the language "partners" referring to both domestic and civil union partners. Also, reference to the Traditional Plan and NJ PLUS is removed and is replaced with NJ DIRECT. In addition, subsection (e) is amended to require that the employee must meet the retirement system service credit and employment service requirement established by the resolution adopting the provisions of P.L. 1999, c. 48. This addition clarifies current administrative practice. N.J.A.C. 17:9-5.5, Medicare refunds, describes the procedure for reimbursements made for Medicare Part B. Amendments are proposed in this section to include the use of the phrase civil union partner throughout, along with a technical correction. N.J.A.C. 17:9-5.6, Refunds rejected, addresses refunds that are requested and denied. The Commission proposes to remove the word "domestic" since the word "partner" includes both domestic and civil union partners. N.J.A.C. 17:9-5.7, Retroactive charges; payment due, addresses the calculation of charges when retroactive periods of coverage are involved. There are no changes in this section. In N.J.A.C. 17:9-5.8, Charges and coverage; 10-month employees, employees hired on a 10-month contract shall have any premiums deducted from their wages they receive in September to establish coverage at the beginning of their employment. There are no changes in this section. N.J.A.C. 17:9-5.9, Premium-sharing for active employee State Health Benefits Coverage, is proposed for repeal and replaced with a new rule, Health contribution for active employee State Health Benefit Coverage, which states, pursuant to P.L. 2007, c. 103, codified at N.J.S.A. 51:14-17.28b, a deduction in the amount of 1.5 percent of base salary shall be made for each covered employee. The new rule further states that for purposes of this section, base salary is defined as an employee's annual base salary, not including any bonuses, overtime or longevity payment. N.J.A.C. 17:9-6.1, Retired employee defined, is amended at paragraph (b)2 and subparagraph (b)3ii to delete the words "employer-paid" since some retired employees of educational and local employers participating in this program may not be eligible for employer-paid coverage but may be eligible for continuing coverage at their own cost. Thus, the words were unnecessary and were eliminated to avoid confusion. In subparagraph (b)4iii, the language "either directly or through the retirement system or fund" is deleted, since the enactment of P.L. 2007, c. 103 created a separate fund outside of the pension plans for funding and payment of post-retirement medical benefits for retired State and educational employees. In addition, in subsections (d) and (h) civil union is added and domestic is removed since the language "partner" refers to both domestic and civil union partners. At subsection (i), the language "or terminates" is deleted because a retired employee can waive a specific coverage, if necessary. If the retired employee "terminates" from coverage, then he or she cannot reenroll back into the terminated coverage. N.J.A.C. 17:9-6.2, Coverage for prospective retirants, describes the continuity of coverage for retired members and the necessity for the Board of Trustees to approve retirement applications. Should there be a gap in active to retired health benefits; the employee must submit personal payments to the SHBP in order to continue coverage. Proposed amendments to this section remove the language "under the Alternate Benefits Program" since investment carrier can refer to both the Alternate Benefits Program and the Defined Contribution Retirement Program (DCRP). The DCRP was enacted by P.L. 2007, c. 92. Multiple investment carriers are associated with these retirement systems. In paragraph (a)3, the word "domestic" is removed. In subsection (b), eligible domestic partner is removed and text is added that any retired employee or eligible survivor not responding to the second notice within a 30-day period will not be permitted to enroll in the SHBP at a later date. This addition better reflects the administrative practice of the SHBP. N.J.A.C. 17:9-6.3, Retiree coverage; limitation, addresses the issue that only the retiree is permitted to change coverage to include dependents provided that appropriate legal documentation verifying the dependent's relationship with the subscriber is submitted within 60 days of a change in family status. The Commission proposes to amend this section to include the phrase "along with appropriate legal documentation described at N.J.A.C. 17:9-3.3(a)" throughout this section to reflect current administrative practice. In addition, "civil union" is included and "domestic" is removed since partnership refers to both domestic and civil union partners. In subsection (b) the reference to pension or pension check is removed since retirement allowance already exists in the text and is a better description of the benefit. Subsection (c) is deleted since the enactment of P.L. 2007 c. 103 eliminated the NJ PLUS plan and several of the HMO plans were eliminated through the public bid process and the text in subsection (d) with the relocation of the word "coverage" is recodified as subsection (c). N.J.A.C. 17:9-6.4, Suspension of allowance, pertains to the termination of SHBP coverage when a retiree's retirement allowance is suspended, and is restored when the allowance is reinstated. No amendments are proposed. N.J.A.C. 17:9-6.5, Discontinuance of allowance, pertains to when a retired member's or beneficiary's retirement allowance is discontinued then the health benefit coverage may be terminated. The proposed amendments to this section pertain to when the retirement allowance is reinstated, the health insurance coverage will resume and may be retroactive to the date of reinstatement "but in no case for more than one year." It is the administrative practice of the SHBP for coverage to be retroactive for up to one year only. This is consistent with the practice of the Division and allows State and local employers to budget for this retroactive coverage. N.J.A.C. 17:9-6.6, Beneficiary, dependent or survivor, pertains to the termination of dependent for the survivor upon the death of the retired member and the opportunity for the survivor to continue coverage in the SHBP. The proposed amendments in this section eliminate the word "domestic" when referring to domestic or civil union partners. N.J.A.C. 17:9-6.7, Coverage for PFRS and SPRS accidental death benefit recipients, addresses the accidental death benefits for the surviving spouse, eligible partner and children as defined by statute and their participation in the SHBP. Proposed amendments to this section eliminate the word "domestic" when referring to domestic or civil union partners. N.J.A.C. 17:9-6.8, Premium-sharing for retired employee State Health Benefit Coverage and reimbursement for Medicare Part B costs, pertains to the reimbursement for Medicare Part B after retirement up to a cap of $ 46.10 for those State employees hired prior to July 1, 1995, who accrue 25 years of service credit or retire on a disability retirement after July 1, 1997 and have retiree premium-sharing obligations. There are several amendments proposed in this section. The Commission proposes to amend this section by removing all reference to the Traditional Plan and NJ PLUS and adding NJ DIRECT 10 and NJ DIRECT 15 throughout. The enactment of P.L. 2007, c. 103 created a successor plan to the Traditional Plan and a replacement for NJ PLUS, thus eliminating them. This section also adds and/or amends key dates for the accrued years of service when electing retiree health coverage and the dates of acquiring 25 years of service credit to determine if a premium deduction for health coverage is applicable. Subsection (b) is amended so that those employees hired before December 11, 1995, who accrue 25 years of service or retire on a disability retirement after July 1, 1997 but before July 1, 2000, will have payroll deductions for the NJ DIRECT 10 coverage using a base salary as of the first pay period of the calendar year in which retirement occurred. In addition, premium-sharing for retired employees has several amendments with regard to employment date of hire and the retirement date for establishing the rate of payment for participation in the SBHP. In paragraph (e)3, language has been added regarding the enactment of P.L. 2007, c. 103, which created a health contribution of 1.5 percent of the retirement allowance for participation in the SHBP plans. The Retiree Wellness Program is also referenced in this section, for those retirees who chose to waive the health contribution by participating in this program. N.J.A.C. 17:9-6.9, Eligibility for State payment of retiree coverage under, P.L. 1997, c. 330, pertains to certain retirees of the Police and Firemen's Retirement System, Consolidated Police and Firemen's Retirement System and Public Employees' Retirement System that may be eligible for health benefit coverage under this statute. There are only minor proposed amendments in this section in that the word "domestic" is being removed from subsection (e) as partner refers to both civil union partner and domestic partner. N.J.A.C. 17:9-6.10, Retiree prescription drug plan, which contains the terms associated with this program and the process whereby retirees can participate in the program is described is proposed without change. N.J.A.C. 17:9-6.11, Aggregation of nonconcurrent pension credit to qualify for employer-paid retired SHBP benefits under P.L. 2001, c. 209, pertains to employer-paid SHBP coverage based on combined service in more than one New Jersey public retirement system. There are no changes in this section. N.J.A.C. 17:9-7.1, Termination effective date, pertains to the cessation of active SHBP employee coverage and identifies the circumstances and effective date of the termination. The Commission proposes to add the phrase "provided the member makes the appropriate remittance for coverage" in this section to clarify that the participant must provide the remittance for coverage in order to maintain their SHBP coverage. N.J.A.C. 17:9-7.2, Termination of eligibility, addresses the circumstances for termination of an employee's and eligible dependents coverage. One amendment is proposed, which adds, coverage for dependents will end if the dependent child becomes eligible for SHBP coverage due to employment, since this is an established administrative practice of the SHBP and once a dependent child is employed and eligible for SHBP coverage, that individual ceases to be a qualified dependent. N.J.A.C. 17:9-7.3, Continuation of coverage, describes the circumstances when an employee or an employee's eligible dependent may continue coverage. An amendment is proposed to make the sentence read grammatically correct and to add the word "partner" in Subparagraph (a)3i. N.J.A.C. 17:9-7.4, Voluntary termination, pertains to the circumstances when a subscriber or the subscriber's dependents may elect to voluntarily terminate coverage at any time. N.J.A.C. 17:9-8.1, Employee Prescription Drug Plan, describes the establishment of the plan and the rules associated with the provisions of N.J.S.A. 52:14-17.29(f). An amendment is proposed to eliminate paragraph (c)2 since it is no longer necessary to specify that there is no right to conversion in the plan, pursuant to P.L. 2007, c. 103. N.J.A.C. 17:9-8.2, Prescription drug cards, pertains to the identification cards issued by the carrier upon enrollment into the plan. There are no changes in this section. N.J.A.C. 17:9-8.3, Termination, effective date, addresses the effective date of health coverage termination, which is the last day of the coverage period or month that the last payroll deduction was made from the employee's salary for the coverage. The Commission proposes to delete the words "of dependents" in subsection (a) because of changes in premium share, which permit employers to charge premium sharing for the employee, as well as, the dependent. N.J.A.C. 17:9-9.1, Employee Dental Plans, pertains to the establishment, and rules of the Dental Expense Plan and the Dental Plan Organization. The language in paragraph (c)1 is deleted. There is no conversion privilege permitted in any of the plans in the SHBP, therefore, it is not necessary to site it in this paragraph. The School Employees' Health Benefits Program is referenced in paragraphs (c)6 and 7, since the enactment of P.L. 2007, c. 103 established this program. N.J.A.C. 17:9-9.2, Dental identification cards, addresses the dental cards that are issued by the dental carrier. There are no amendments to this section. In N.J.A.C. 17:9-9.3, Enrollment charges, the employee authorizes the taking of deductions to pay for the employee's share of the cost of the coverage. There are no amendments in this section. N.J.A.C. 17:9-9.4, Waiting period--Orthodontics under the Dental Expense Plan, pertains to the 10 months or more of continuous service required before the participant can become eligible for orthodontics. There are no amendments in this section. N.J.A.C. 17:9-9.5, Covered expenses, refers to the dental plans handbooks that contains the specific provisions of the program. There are no amendments to the section. N.J.A.C. 17:9-9.6, Deductible, refers to the annual employee dental plans deductible. There are no amendments to this section. N.J.A.C. 17:9-10.1 though 10.23 pertain to the rules governing the procurement of contracts by the SHBP. There are no proposed amendments to this subchapter. N.J.A.C. 17:9-11.1, Establishment of the Part-time Employees Group, pertains to the establishment of this group by the provisions of N.J.S.A. 52:14-17.33a. An amendment is proposed in subsection (d), which removes the language that there is no right of conversion from the Part-Time Employees Group to non-group coverage since there is no conversion privilege in any of the SHBP plans. N.J.A.C. 17:9-11.2 is amended to remove part-time faculty at county colleges since these are not SEHBP locations. N.J.A.C. 17:9-11.3 is amended to remove the language NJ PLUS and replace it with NJ DIRECT 15 since the enactment of P.L. 2007, c. 103 eliminated the NJ PLUS plan. N.J.A.C. 17:9-11.4, 11.5 and 11.6 pertains to payment, cost and effective date of coverage and there are no amendments to these sections. N.J.A.C. 17:9-11.7, Effect of full-time employment on participation in the part-time employees group, the Commission proposes to remove the phrase "employer-paid" and add the words as a full time employee, which explains the eligibility for coverage more fully and avoids confusion. N.J.A.C. 17:9-11.8, Termination of coverage due to non payment of premiums, and N.J.A.C. 17:9-11.9, Termination of coverage due to termination of employment with an eligible employer, are proposed without change. N.J.A.C. 17:9-11.10, Coverage in retirement, states that the employee that participates in the Part-time Employee Group and retires shall not be eligible for employer-paid or State-paid health benefits in retirement. The employee shall be eligible to continue coverage at retirement at his or her own expense. An amendment is proposed throughout this section to remove the language "NJ PLUS" and replace it with "NJ DIRECT 15" since the enactment of P.L. 2007, c. 103 eliminated the NJ PLUS plan. In addition, in subsection (b), the language "or pension check" was deleted because retirement allowance is provided in the rule and has the same meaning. N.J.A.C. 17:9-12.1, The Retiree Dental Expense Plan, pertains to the establishment and rules contained in the provisions of N.J.S.A. 52:14-17.29(f). The Commission proposes to amend this section to include the School Employees' Health Benefits Program since the enactment of P.L. 2007, c. 103 created this new program. In addition, paragraph (c)2 is deleted since there is no conversion privileges associated with any of the SHBP plans. N.J.A.C. 17:9-12.2, Plan Premiums, pertains to the premiums payments that are deducted directly from the retiree's monthly retirement allowance. No amendments are proposed in this section. N.J.A.C. 17:9-12.3, Plan progressive coinsurance and design, describes the plan's three tier coinsurance. There are no amendments in this section. N.J.A.C. 17:9-12.4, Covered expenses, pertains to the plan handbook, which contains the specific provisions for services. There are no amendments proposed. N.J.A.C. 17:9-12.5, Deductible, pertains to the charges incurred by a retiree prior to enrollment in the Plan and there are no proposed amendments. N.J.A.C. 17:9-13.1, Eligible criteria, pertains to dependents that remain in the SHBP after age 23 under the provisions of P.L. 2005, c. 375 and supplemented by P.L. 2008, c. 38, codified at N.J.S.A. 52:14-17.29k. There is one amendment in this section. The Commission proposes to amend subsection (a) to include eligibility when a dependent is 30 years of age or younger. N.J.A.C. 17:9-13.2, Enrollment, addresses the enrollment process for Chapter 375 dependents. In paragraph (a)1, the text "certificate of creditable coverage" was added because the certificate is a requirement of HIPAA regulations, the dependent must have had prior coverage within a 30-day period to be eligible for enrollment. N.J.A.C. 17:9-13.3, Coverage available, pertains to medical plan coverage since dental or vision benefits are not eligible for Chapter 375 dependents. N.J.A.C. 17:9-13.4, Premium rates and payment for coverage, is amended so that the Commissio shall determine the premium rates for the Chapter 375 Dependent coverage as provided by P.L. 2008, c. 38. Initially the premium rates were set on the basis of the anticipated experience of the group. The section is also amended to include the language or dependent is responsible for the cost of the SHBP coverage since the dependent is also one of the responsible parties for the cost of the SHBP coverage. N.J.A.C. 17:9-13.5, Termination of coverage, pertains to the events that shall terminate Chapter 375 dependent coverage. Paragraph (a)1 is amended to include that the dependent is eligible for coverage until his or her 31st birthday under the provisions of Chapter 375. Additionally, paragraph (a)4 includes the language dependent, since Chapter 375 dependents are considered one of the responsible parties for the cost of the premium payment. N.J.A.C. 17:9-13.6, Notice of Termination of coverage for nonpayment of premiums, pertains to the Division's notification process to Chapter 375 dependents for non-payment of premiums. There is an amendment proposed in subsection (a) that includes the term "dependent," since Chapter 375 dependents are considered one of the responsible parties for the cost of the premium payment. A 60-day comment period is provided for this notice of proposal; therefore, pursuant to N.J.A.C. 1:30-3.3(a)5, this notice of proposal is not subject to the provisions of N.J.A.C. 1:30-3.1 and 3.2 governing rulemaking calendars. The rules involving the SHBP affect, and work to the benefit of, the past, present and future public employees who are or willing to be participants in the SHBP. In the past, the rules of the SHBP provided for the efficient operation of the benefits programs administered by the Division. The efficient operation of these programs provided a social benefit to members and retirees, as well as to public employers by allowing for the efficient delivery of health benefits at affordable group rates. The rules proposed for readoption with amendments and new rules would continue the existing, longstanding, regulatory requirements, which provided for the efficient administration and operation of the SHBP. The proposed new rules will provide for the continued delivery of health benefits systems. The participating retirees, survivors of retirees, active members and participating employers, rely on the efficient operation of the SHBP to provide them with comprehensive group health benefit coverage. Participants rely upon the presence and predictability of the rules, which guide the administration of their benefits and the stability of the SHBP. The protections and guarantees that these rules afford members mandate their continued existence. The taxpaying public is affected by these rules in the sense that public monies are used to fund the benefits and they, too, benefit from the proper and efficient administration of the SHBP that the rules require. Many of the proposed amendments are of a purely technical nature, such as providing language reflecting the offering of benefits to dependents, which include spouse, civil union partner and domestic partner deleting "NJ PLUS" and the "Traditional Plan" and replacing them with "NJ DIRECT 15" and "NJ DIRECT 10," and defining certain terms used throughout the rules. Other proposed amendments will have a social impact specifically on members, retirees, beneficiaries and former members of the SHBP, and not society as a whole. However, there is a general societal interest in making sure the health plan for public employees is administered effectively and efficiently. The proposed amendments would have a social impact through the changes to the rules guiding the Commission. They also have a social impact on participating employers, as well as employees. The proposed amendments make it more clear when coverage takes effect for new employers and more clearly define what premium-share arrangements may be provided. The proposed amendments also detail who the employer must notify if they terminate participation, when coverage ceases if the employer is in default, what incentives are available and when they may be used by employers. Amendments explaining the procedure regarding retroactive participation in the plan clarifies this situation for those affected. Clarifying what documentation is acceptable to establish dependent eligibility is also helpful and will assist the Division in preventing fraud. In the past, the rules of the SHBP provided for the efficient operation of the benefit programs administered by the Division. The efficient operation of these health benefit programs provided a benefit to all participants, as well as to public employers by allowing for the timely delivery of benefits at affordable group rates. Readoption of the rules and the proposed amendments and new rules themselves will not present any economic effects on the public because the readoption will merely continue existing, long-standing, regulatory requirements. The rules proposed for readoption and the proposed amendments and new rules will serve to preserve the efficient administration and operation of the SHBP. Further, the rules proposed for readoption with amendments will enable the Division to continue to provide for the health benefits of participants in a manner, which more than adequately meets the statutory and contractual requirements. The current procedures as set forth in N.J.A.C. 17:9 have proven to be effective over time in the proper administration of the SHBP. Without the administrative rules to provide for the efficient operation of the SHBP, financial chaos may occur. In the future, the rules proposed for readoption will continue to guide the efficient operation of the SHBP. The proposed amendments and new rules would have an economic impact by permitting employer incentives, which would allow specific employers to save money by permitting employees with other coverage to waive employer paid coverage. This would also be an economic benefit to the employee who would receive a financial incentive to waive coverage. The proposed amendments and new rules would also have an economic impact on participating employees. The clarifications regarding when an employee must file for coverage, when open enrollments take place, when changes of coverage take effect and what exceptions there are for coverage changes would be an economic benefit to employees by allowing them to add dependents or obtain coverage through the employer and not have to pay for the entire cost of coverage. When termination of coverage is a possibility, it is an economic benefit to know what the termination process is, under what circumstances coverage may continue, what premiums the member must pay and when a member may re-enroll after a voluntary or involuntary termination of coverage. The general public also benefits when health plans for public employees are administered in an efficient and cost effective manner. To the extent that the proposed amendments and new rules reiterate statutory requirements; they will have no new economic impact. The Division will continue to monitor the impact of these rules through research and review of new legislation. The Division is not aware of any provisions in these rules, which would impose any hardship or costs on the participants of the SHBP or on the public in general. A Federal standards analysis is not required for the rules proposed for readoption with amendments, a repeal and new rules because N.J.S.A. 52:14-17.27 governs the subject of this rulemaking. There are no Federal requirements or standards that affect the subject of this rulemaking, except that there is a reference to compliance with the Health Insurance Portability and Accountability Act (HIPAA), 42 U.S.C. §§1320d et seq., but this law is not exceeded. The rules proposed for readoption with amendments, new rules and a repeal will not result in the generation or loss of jobs. The Division invites any interested parties to submit any data or studies concerning the jobs impact of the proposed readoption of the rules with amendments, new rules and a repeal with their written comments. The rules proposed for readoption with amendments, a repeal and new rules will not have any impact on the agriculture industry. The rules of the SHBP only affect participating public employers, employees, retirees and survivors. Thus, the rules proposed for readoption with amendments, a repeal and new rules do not impose any reporting, recordkeeping or other compliance requirements upon small businesses, as defined under the Regulatory Flexibility Act, N.J.S.A. 52:14B-1 et seq. Therefore, a regulatory flexibility analysis is not required. The rules proposed for readoption with amendments, a repeal and new rules will not have any impact on the achievement of smart growth and implementation of the State Development and Redevelopment Plan. The proposed amendments will have an insignificant impact on affordable housing in New Jersey and there is an extreme unlikelihood that the amendments would evoke a change in the average costs associated with housing because the rules concern the administration of the State Health Benefits Commission. The proposed amendments will have an insignificant impact on smart growth and there is an extreme unlikelihood that the amendments would evoke a change in housing production in Planning Areas 1 or 2 or within designated centers under the State Development and Redevelopment Plan in New Jersey because the rules concern the administration of the State Health Benefits Commission.
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ADOPTIONS
TREASURY -- GENERAL
DIVISION OF PENSIONS AND BENEFITS
TEACHERS' PENSION AND ANNUITY FUND
41 N.J.R. 3111(a)
Adopted Amendment: N.J.A.C. 17:3-2.1
Enrollment Eligibility
Proposed: April 20, 2009 at 41 N.J.R. 1713(a).
Adopted: July 2, 2009 by the Teachers' Pension and Annuity Fund Board of Trustees, Mary Ellen Rathbun, Secretary.
Filed: July 16, 2009 as R.2009 d.253, without change.
Authority: N.J.S.A. 18A:66-4 and 18A:66-56.
Effective Date: August 17, 2009.
Expiration Date: April 21, 2013.
Summary of Public Comment and Agency Response:
No comments were received.
Federal Standards Statement
A Federal standards analysis is not required for the adopted amendments because there are no Federal requirements or standards that affect the subject of this rulemaking, except that there is reference to compliance with the Consumer Price Index as reported by the United States Department of Labor, Bureau of Labor Statistics, but this standard is not exceeded.
Full text of the adoption follows:
SUBCHAPTER 2. ENROLLMENT
17:3-2.1 Enrollment eligibility
(a) Any person appointed by the State, local board of education or charter school to a position listed in the definition of "teacher" found at N.J.S.A. 18A:66-2(p) or as a regular, full-time or part-time employee in a position that meets the following conditions shall be required to become a member of the Fund effective as of the date of their employment:
1.-2. (No change)
3. Prior to November 2, 2008, the salary for the position is $ 500.00 or more within a year.
(b)-(f) (No change)
(g) Pursuant to the provisions of N.J.S.A. 18A:66-4, for individuals who became members of TPAF on or after November 2, 2008, the $ 7,500 minimum annual base salary for participation in the retirement system shall be adjusted annually by the Director of the Division in accordance with changes in the Consumer Price Index, but by no more than four percent. For the calendar year beginning January 1, 2010, the minimum base annual salary required for enrollment will be adjusted annually to reflect increases in the Consumer Price Index. For purposes of this calculation, "Consumer Price Index" means the average of the annual increase in the consumer price index for all urban consumers, not seasonally adjusted for all items, in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor, Bureau of Labor Statistics.
1. The adjustment factor for a calendar year shall be calculated as a fraction, pursuant to the following:
i. The numerator shall be the annual Consumer Price Index for all urban consumers in the New York City metropolitan statistical area for the calendar year ending December 31 of the first year preceding the July 1 calculation date, plus the annual Consumer Price Index for all urban consumers in the Philadelphia metropolitan statistical area for the same time period; and
ii. The denominator shall be the annual Consumer Price Index for all urban consumers in the New York City metropolitan statistical area for the calendar year ending December 31 of the second year preceding the July 1 calculation date, plus the annual Consumer Price Index for all urban consumers in the Philadelphia metropolitan statistical area for the same time period.
2. If the value of the calculation in (g)1 above is less than zero for a calendar year, then the adjustment factor for the calendar year shall be equal to zero. If the value of that fraction is greater than 1.04 for a calendar year then the adjustment factor for the calendar year shall be equal to 1.04.
3. The adjustment shall be calculated on or about July 1 each calendar year to become effective on January 1 of the subsequent calendar year.
4. Increases in the minimum annual base salary shall be made in multiples of $ 100.00, except that any increase, which is not a multiple of $ 100.00 will be rounded to the next lowest multiple of $ 100.00. Each annual adjustment shall not be more than four percent when compared to the preceding year's minimum annual base salary.
(h) The calculation and any needed adjustment pursuant to (g) above shall be published via a notice of administrative change in the New Jersey Register revising the minimum annual base salary.
TREASURY -- GENERAL
DIVISION OF PENSIONS AND BENEFITS
PUBLIC EMPLOYEES' RETIREMENT SYSTEM
41 N.J.R. 3110(a)
Adopted Amendment: N.J.A.C. 17:2-2.1
Social Security Coverage
Proposed: April 20, 2009 at 41 N.J.R. 1712(a).
Adopted: July 15, 2009 by the Public Employees' Retirement System Board of Trustees, Kathleen Coates, Secretary.
Filed: July 16, 2009 as R.2009 d.252, without change.
Authority: N.J.S.A. 43:15A-7 and 43:15A-17.
Effective Date: August 17, 2009.
Expiration Date: January 24, 2010.
Summary of Public Comment and Agency Response:
No comments were received.
Federal Standards Statement
A Federal standards analysis is not required for the adopted amendment because there are no Federal requirements or standards that affect the subject of this rulemaking, except that there is reference to compliance with the Consumer Price Index as reported by the United States Department of Labor, Bureau of Labor Statistics, but this standard is not exceeded.
Full text of the adoption follows:
SUBCHAPTER. 2. ENROLLMENT
17:2-2.1 Enrollment eligibility
(a) A position with a public employer must be covered by Social Security as a prerequisite for membership in the system. In the case of multiple employments, Social Security coverage is required in each position or employment for each to qualify for membership.
(b) Subsection (c) below shall only be applicable to individuals who become members of PERS on or after November 2, 2008.
(c) Pursuant to the provisions of N.J.S.A. 43:15A-7, the $ 7,500 minimum annual base salary for participation in the retirement system shall be adjusted annually by the Director of the Division in accordance with changes in the Consumer Price Index, but by no more than four percent. For the calendar year beginning January 1, 2010, the minimum base annual salary required for enrollment will be adjusted annually to reflect increases in the Consumer Price Index. For purposes of this calculation, "Consumer Price Index" means the average of the annual increase in the consumer price index for all urban consumers, not seasonally adjusted for all items, in the New York City and Philadelphia metropolitan statistical areas during the preceding calendar year as reported by the United States Department of Labor, Bureau of Labor Statistics.
1. The adjustment factor for a calendar year shall be calculated as a fraction, pursuant to the following:
i. The numerator shall be the annual Consumer Price Index for all urban consumers in the New York City metropolitan statistical area for the calendar year ending December 31 of the first year preceding the July 1 calculation date, plus the annual Consumer Price Index for all urban consumers in the Philadelphia metropolitan statistical area for the same time period; and
ii. The denominator shall be the annual Consumer Price Index for all urban consumers in the New York City metropolitan statistical area for the calendar year ending December 31 of the second year preceding the July 1 calculation date, plus the annual Consumer Price Index for all urban consumers in the Philadelphia metropolitan statistical area for the same time period.
2. If the value of the calculation in (c)1 above is less than zero for a calendar year, then the adjustment factor for the calendar year shall be equal to zero. If the value of that fraction is greater than 1.04 for a calendar year, then the adjustment factor for the calendar year shall be equal to 1.04.
3. The adjustment shall be calculated on or about July 1 each calendar year to become effective on January 1 of the subsequent calendar year.
4. Increases in the minimum annual base salary shall be made in multiples of $ 100.00, except that any increase, which is not a multiple of $ 100.00 will be rounded to the next lowest multiple of $ 100.00. Each annual adjustment shall not be more than four percent when compared to the preceding year's minimum annual base salary.
(d) The calculation and any needed adjustments pursuant to (c) above shall be published via a notice of administrative change in the New Jersey Register revising the minimum annual base salary.
TREASURY -- GENERAL
DIVISION OF PENSIONS AND BENEFITS
41 N.J.R. 2037(a)
Readoption with Amendments: N.J.A.C. 17:9
Adopted New Rule: N.J.A.C. 17:9-1.9
Adopted Repeal and New Rule: N.J.A.C. 17:9-5.9
State Health Benefits Program
Proposed: January 5, 2009 at 41 N.J.R. 101(a).
Adopted: April 1, 2009 by the State Health Benefits Commission, Frederick J. Beaver, Secretary.
Filed: April 6, 2009 as R.2009 d.150, with substantive and technical changes not requiring additional public notice and comment (see N.J.A.C. 1:30-6.3).
Authority: N.J.S.A. 52:14-17.27.
Effective Dates: April 6, 2009, Readoption;
May 4, 2009, Amendments and New Rules.
Expiration Date: April 6, 2014.
Summary of Public Comments and Agency Responses:
Two comments were received from Paul L. Kleinbaum, Esquire, on behalf of the New Jersey State Police Benevolent Association (PBA) by letter dated March 2, 2009. The two comments are as follows:
1. COMMENT: The first comment involved N.J.A.C. 17:9-5.9, wherein the PBA asserts that the proposed new rule appears to go far beyond P.L. 2007, c. 103, which revised N.J.S.A. 52:14-17.28b. The PBA asserts that the statutory changes only apply to State employees. They argue that there are many local government employees who are participants in the State Health Benefits Plan (SHBP). Additionally, the PBA asserts that the State may have imposed a contribution rate of 1.5 percent for certain employees for whom there is no majority representative and certain unions representing State employees may have agreed to such a contribution rate in collective bargaining. However, unions representing other State employees, notably PBA Local 105, have not agreed to any contribution rate.
RESPONSE: The State Health Benefits Commission (SHBC) thanks the commenter for his comments. The commenter correctly points out that this change in law applies only to State employees and that employees in unions who have not yet settled their contracts are not currently subject to this health benefit contribution. Therefore, the text of the rule has been changed to be more clear and reflect same. The use of the word "State" appears before employee and "as negotiated" at the end of the relevant sentence.
2. COMMENT: This comment involved a very similar issue as the first comment, as it relates to N.J.A.C. 17:9-6.8(e)3. The PBA argues that the proposed rule appears to apply to any retiree of a State-administered retirement system, whether an employee of a State, or of any local, government. The PBA also asserts that the applicable provisions of the law apply only to retirees of employment with the State and for whom there was no majority representative. The contribution rate, if any of a retiree formerly employed by the State, not retirees of municipal or county government, who was represented by a majority representative would be based on the terms of a binding collective bargaining agreement.
RESPONSE: The SHBC thanks the PBA for this comment. The SHBC acknowledges the concerns of the Commenter herein and revised the rule to conform with the statutory language. Therefore, the word "State" appears before retirees and "as negotiated" were added to the text of the rule.
Summary of Agency-Initiated Change:
At N.J.A.C. 17:9-1.8, the definition of civil union partner, the Division found it necessary to add to the adopted language, "from other jurisdictions" in order to comply with governing legislation, N.J.S.A. 37:1-2 and advice received from the Attorney General.
Federal Standards Statement
A Federal standards analysis is not required for the rules readopted with amendments, repeal and new rules because N.J.S.A. 52:14-17.27 governs the subject of this rulemaking. There are no Federal requirements or standards that affect the subject of this rulemaking, except that there is reference to compliance with the Health Insurance Portability and Accountability Act (HIPAA), 42 U.S.C. §§1320d et seq., but this law is not exceeded.
Full text of the readopted rules can be found in the New Jersey Administrative Code at N.J.A.C. 17:9.
Full text of the adopted amendments and adopted new rules follows (additions indicated in boldface *thus*; deletions indicated in brackets *[thus]*):
SUBCHAPTER 1. ADMINISTRATION
17:9-1.1 Commission meetings
(a) The State Health Benefits Commission shall meet, as necessary, at the call of the Chairperson or the Secretary provided that the required public notice has been given, pursuant to the provisions of the Open Public Meetings Act, N.J.S.A. 10:4-13.
(b) (No change.)
(c) If a member is unable to attend a meeting, the member, if a member who is authorized by statute to appoint a designee, shall designate, in writing, an alternate. The person so designated shall be permitted to vote on business brought before the Commission.
(d) All Commission members and alternates shall complete all mandatory training required by either the implementing regulations of the Federal Health Insurance Portability and Accountability Act of 1996 (HIPAA) or the State Ethics Commission prior to hearing any appeals before the Commission.
17:9-1.2 Records
(a) The Secretary of the Commission shall maintain minutes of the Commission meetings in compliance with the Open Public Meetings Act (OPMA), N.J.S.A. 5:10-1 et seq. Public session minutes are public records subject to access under the Open Public Records Act (OPRA), N.J.S.A. 47:1-1 et seq and the requirements of the Federal Health Insurance Portability and Accountability Act (HIPAA), 42 U.S.C. §§3210d et seq. Minutes of closed sessions pertaining to the claims of any individual shall be redacted of all personal identifying information unless the individual member waives his or her privacy interest and consents in writing to disclosure in accord with HIPAA. Minutes of executive sessions shall be subject to disclosure pursuant to the OPMA after the Commission determines the need for confidentiality no longer exists. Records of the Commission subject to public access under OPRA may be inspected during regular business hours at the office of the Division under supervision of a representative of the State Health Benefits Program or other representatives of the office. All requests for records under OPRA shall be made in writing on the required form and submitted to the Department of the Treasury Government Records Unit.
(b) To protect the personal privacy of individual participants and their families, the mailing addresses of active and retired participants and all matters related to an individual's files related to an individual's coverage and claims shall be maintained as confidential. Protected health information shall not be released to any person except as permitted under HIPAA in response to a valid HIPAA Authorization for Release of Information in a form acceptable to the Division as described in 45 CFR 164.508 or as otherwise authorized by HIPAA. The requesting party shall have the burden of demonstrating to the satisfaction of the Division that the confidential materials may be released under HIPAA.
17:9-1.3 Appeals from Commission decisions
(a) Any member of the SHBP who disagrees with the decision of the claims administrator and has exhausted all appeals within the plan, may request that the matter be considered by the Commission. Requests for consideration must be directed to the Secretary of the Commission, and must contain the reason for the disagreement and all available supporting documentation. Appeals shall be considered at the regular meetings of the Commission. It shall be the responsibility of the member to provide the Commission with any medical or other information that the Commission may require in order to make a decision.
(b) Any person who disagrees with a determination made by the Division regarding their enrollment or eligibility in SHBP, may request that the matter be considered by the Commission.
Recodify existing (d) and (e) as (c) and (d) (No change in text.)
17:9-1.4 Employer participation
(a) An employer joining the SHBP must adopt the resolution furnished by the Division and must agree to comply with the statutes and rules adopted by the Commission. The effective date of coverage for employers with fewer than 250 employees, COBRA participants and retired members will be the first day of the month following a period beginning 75 days after the receipt by the Commission of the completed resolution. The effective date of coverage for employers with 250 or more employees, COBRA participants and retired members will be the first day of the month following a period beginning 90 days after the receipt by the Commission of the completed resolution.
(b)-(c) (No change.)
17:9-1.5 Voluntary termination of employer; notice
(a) A resolution furnished by the Division must be approved and completed by the governing body of the employers who wish to voluntarily terminate their participation in the program.
(b) When a participating employer voluntarily terminates coverage, the coverage for the employer's active and retired employees, participants under N.J.S.A. 52:14-17.29k and COBRA participants shall terminate as of the first of the month following a 60-day period beginning with the receipt of the resolution by the Commission.
(c) (No change.)
(d) The Division shall act to notify all affected COBRA participants, participants under N.J.S.A. 52:14-17.29k, and retired members of the termination of coverage. Upon request from the employer, the Division shall forward a list of the names and addresses of terminating retirees, participants under N.J.S.A. 52:14-17.29k, and COBRA participants so that the employer may offer them an opportunity to enroll under its new group health insurance plan.
17:9-1.6 Default of employer; notice
(a) (No change.)
(b) The Secretary of the Commission will notify the offices of the State Treasurer; the Attorney General; the Department of Community Affairs, Division of Local Government Service; and the Department of Education, if applicable. The Division will notify the employer and affected COBRA participants, participants under N.J.S.A. 52:14-17.29k and retired subscribers of the termination of coverage. The employer is responsible for notifying its active employees affected by this termination.
(c) Under the provisions of P.L. 2008 c. 24, the Division of Revenue of the Department of the Treasury will be responsible for collecting any outstanding debt. If necessary, the amount owed will be deducted from any amount that might otherwise be remitted by any State agency to the debtor.
17:9-1.7 Employer incentives for non-enrollment
(a) Except as allowed by N.J.S.A. 52:14-17.31a, an employer shall not offer a financial enticement of cash or anything else of value to an employee who elects not to enroll or to terminate enrollment in the SHBP.
(b) Any participating local employer, other than the State is allowed to pay an employee an incentive to waive coverage if that employee is eligible for other health coverage. The incentive may be up to 50 percent of the amount saved by the employer in such a case. The employee may enroll immediately into the program if the other coverage or the waiver ends but must repay, on a pro rata basis, any amount received, which represents an advance payment for a period of time during which coverage is resumed. An employee who waives coverage under this rule is not precluded from continuing coverage into retirement.
(c) As the employer's certifying agent must sign each individual waiver application, no general resolution is required for the adoption of the waiver incentive.
17:9-1.8 Definitions
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise:
. . .
"Category of coverage" means one of the options used for determining the rates for the premium or periodic charges for different levels of coverage under the program, which include single, member and spouse/partner, parent and child, and family coverage, and whether prescription drug coverage is provided in the health coverage. For retirees only, the category also reflects the Medicare entitlement of the member and spouse/partner.
"Chapter 375 Dependents" means all adult children, which are defined as dependents in their parent's State health benefits coverage pursuant to P.L. 2005, c. 375 and supplemented by P.L. 2008, c. 38, which is codified at N.J.S.A. 52:14-17.29k.
"Civil union partner" means a person, who is of the same sex as the employee, with whom a legally recognized union is formed. The relationship must also satisfy the definition of a civil union as set forth in N.J.S.A. 37:1-2*[, civil]**. Civil* union certificates issued to same-sex couples *from other jurisdictions* are accepted under the New Jersey civil union statutes. Whenever reference is made to "marriage," "husband," "wife," "spouse," "family," "immediate family," "dependent," "next of kin," "widow," "widower," "widowed" or another word, which in a specific context denotes a marital or spousal relationship, the same shall include a civil union partner; or a domestic partnership formed outside the State of New Jersey.
. . .
"COBRA" means the Federal Consolidated Omnibus Budget Reconciliation Act of 1985, 42 U.S.C. §§1161-1168, which requires most employers sponsoring group health plans to offer employees and their eligible dependents the opportunity to temporarily extend their group health coverage in certain instances where coverage under the plan would otherwise end.
. . .
"Dependent" refers to any individual covered under the SHBP in addition to the subscriber (see N.J.A.C. 17:9-4.1).
"Director" means the Director of the Division of Pensions and Benefits.
"Division" means the Division of Pensions and Benefits.
. . .
"Eligible Employer" is a public agency, the employees of which, if otherwise eligible, may join any of the retirement systems established by statute to provide retirement benefits for public employees. The term does not apply to school employers or their employees.
"Local employer" means public employers, such as counties, municipalities and authorities, including independent State authorities not designated as "State employers" for SHBP purposes.
"Locally-administered retirement system" means an agency established under State law to provide a system of retirement benefits for public employers, which is not administered by the Division.
"Member" means any individual covered under the SHBP, regardless of whether the person is a subscriber or a dependent.
"NJ DIRECT10" means the coverage created by P.L. 2007, c. 103 as a successor plan to the "Traditional Plan" indemnity coverage.
"NJ DIRECT15" means the State's managed care plan created by P.L. 2007, c. 103 as a replacement to the "NJ PLUS" coverage.
. . .
"PPO" means Preferred Provider Organization duly authorized to operate in the State which is under contract with the Commission to participate in the program.
"SHBP" means the State Health Benefits Program.
"Spouse" means a person of the opposite sex to whom one has been joined in a properly recorded legal ceremony authorized by law (as defined by N.J.S.A. 37:1-1). New Jersey recognizes legal marriages performed in other states or jurisdictions but does not recognize "common law" or any other form of marriage without a formal license (N.J.S.A. 37:1-10).
"State-administered pension fund" means a retirement system administered by the Division, including such systems as the Alternate Benefits Program.
"State-administered retirement system" means an agency established under State law to provide a system of retirement benefits for public employees.
"State biweekly employer" means an agency whose employees are paid through the State's Centralized Payroll System.
"State Employer" means the State of New Jersey and those agencies so designated by statute as "State employers" for SHBP purposes.
"State monthly employer" means an agency defined by statute as a "State employer" for SHBP purposes but independent of the State's Centralized Payroll System.
"Successor plan" means a managed care plan that replaces the Traditional Plan and provides an in-network level of benefits as well as out-of-network benefits to participants with a payment of 80 percent of reasonable and customary.
17:9-1.9 Certifying officer (employer)
(a) The chief fiscal officer or other officer duly designated by a resolution of each county, municipality or public agency, and the personnel officer of the Division, Bureau or Institution of the State locations, shall serve as certifying officer for that unit.
(b) The certifying officer shall be responsible for the duties described by N.J.S.A. 52:14-17.43, including providing documentation requested by the Commission or the Division in a timely manner.
(c) The certifying officer shall be responsible for all other duties relating to matters concerning the SHBP.
(d) Upon the request of the Commission, the certifying officer shall be required to sign a statement, verifying that any information reported is accurate to the best of the officer's knowledge, and conforms with the statutes and rules governing the SHBP.
SUBCHAPTER 2. COVERAGE
17:9-2.1 Enrollment
An eligible employee shall be eligible to enroll for coverage for the employee and the employee's eligible dependents. The employee and any dependents must enroll in the same plan.
17:9-2.2 Enrollment form
Within 60 days of the time an employee first becomes eligible to apply for coverage, the employee shall file a completed enrollment form indicating the employee's election to enroll or not to enroll for coverage on the employee's own behalf; and the employee's election to enroll or not to enroll any eligible dependents for coverage under one of the SHBP options. A dependent must be listed on the enrollment form to be enrolled for coverage. Appropriate legal documentation, as described in N.J.A.C. 17:9-3.3(a), verifying the dependent's relationship with the subscriber is required before enrollment is approved. If more than 60 days have passed since first eligible for enrollment, then the enrollment form shall not be processed and will be returned to the employer. The employee may then file the enrollment form during the next open enrollment period with coverage to be effective according to the schedule for that open enrollment period.
17:9-2.3 Annual open enrollment period
(a) Except as permitted under N.J.A.C. 17:9-2.4, any active employee or COBRA subscriber who did not elect to enroll for coverage for themselves or for their dependents at the time such employee or dependent first becomes eligible for coverage shall subsequently be permitted to enroll themselves and their dependents only during the annual open enrollment period, with coverage effective according to the schedule for that open enrollment period.
(b) (No change.)
(c) The Commission may establish a special enrollment period at any time it deems necessary to do so.
17:9-2.4 Coverage changes; exceptions
(a) An employee may change the employee's enrollment and the enrollment of the employee's dependents to any type of coverage if such changes result from a change in the family, dependency or employment status of the employee or the employee's dependents. Such changes will be permitted under the following conditions:
1. Marriage, civil union and eligible domestic partnerships. Any employee who marries or enters into an eligible domestic partnership or a civil union may enroll the employee and eligible dependents, if any, for any appropriate type of coverage by applying for coverage within the period beginning 60 days prior to the marriage, domestic partnership or civil union and ending 60 days after such marriage, domestic partnership or civil union. In the event that the spouse or partner is already enrolled as an employee, the provisions of N.J.A.C. 17:9-3.5 shall apply to such spouse's or partner's enrollment. A copy of the marriage certificate or certificate of domestic partnership or civil union must be submitted with the completed application to add the spouse/partner.
2. Divorce; separation; termination of domestic partnership or end of civil union. Any employee who has been enrolled or has been covered as a dependent of an enrolled employee and is subsequently divorced or ends a civil union pursuant to N.J.S.A. 2A:34 or terminates a domestic partnership pursuant to N.J.S.A. 26:8A-10 may enroll and delete from coverage or cover any eligible dependents by completing and forwarding a new enrollment form within 60 calendar days after the divorce or termination of the domestic partnership or civil union of such employee or dependent of an employee who was covered previously under the spouse's/partner's contract. A change of enrollment of this nature may also be made in the case of separation.
3. Death of spouse, civil union partner, eligible domestic partner or dependent child. Any employee who is enrolled as the dependent of their spouse/partner who dies may thereupon enroll as an employee, and may enroll any eligible dependents, for any appropriate coverage by completing and forwarding a new enrollment form within 60 days following the death.
4. (No change.)
5. When last dependent child reaches age 23, marries or enters into a civil union prior to that time. Any employee who shall have enrolled one or more dependent children as dependents may enroll for any coverage at the time the last such dependent child reaches age 23, marries prior to that time, enters into a domestic partnership or civil union or becomes otherwise ineligible, by completing and forwarding a new enrollment form.
6. An employee, spouse, eligible domestic or civil union partner or dependent ceases to be covered by other group health coverage. If the employee, spouse, domestic or civil union partner or other dependent has other group health coverage, and then becomes ineligible for that other coverage due to qualifying events, such as termination of employment, divorce, termination of domestic or civil union partnership, death, or reduction in hours worked, the employee may enroll in any plan or for any coverage in the SHBP provided that the employee submits a new enrollment application accompanied by proof of the prior coverage, within 60 days of the qualifying event.
7. (No change.)
8. A child resuming eligibility as a dependent child. An employee may enroll, for any coverage, an otherwise eligible child under age 23 who, having previously been ineligible as a dependent child, resumes dependent status, resides with the parent and is financially dependent upon the parent. This applies to children whose marriage, civil union, or domestic partnership has been dissolved, as well as to children who had been considered independent by nature of employment. The employee and child must enroll in the same plan. An application for coverage shall be submitted within 60 days of the entry of a judgment of divorce or dissolution of the civil union or termination of the domestic partnership or the date the child ends employment in order to obtain coverage retroactively to the date of the re-qualifying event. Otherwise, enrollment shall be permitted only during an open enrollment.
9.-10. (No change.)
11. Deference to local employer contracts. When a local employer's contract limits coverage choices of an employee for a specified period of time after the employee's hire date, the employee may increase coverage levels provided an enrollment application is submitted within 60 days following the attainment of additional benefits provided in the contract.
(b) An employee may change the employee's enrollment and the enrollment of the employee's eligible dependents to any type of coverage under conditions other than those specified in (a) above, only during the annual enrollment period, or during a special SHBP open enrollment period.
(c) An employee who wishes to change the employee's enrollment and the enrollment of the employee's eligible dependents for any of the reasons included in (a) above, but who has failed to complete and forward the required enrollment form within the time limits therein prescribed, may effect such change of enrollment only during the annual enrollment period or during a special SHBP open enrollment period. For provisions governing coverages and charges for 10-month employees, see N.J.A.C. 17:9-5.8(c).
17:9-2.5 Employee coverage requirements
(a) For each employee who shall elect to be covered, coverage shall become effective only after all of the following conditions have been satisfied:
1.-3. (No change.)
4. An enrollment form has been legibly completed by the employee and the certifying officer of the employer and filed with the Health Benefits Bureau of the Division within the prescribed time limits;
5. The employee has provided a valid Social Security number for each individual to be enrolled. A Tax Identification Number will be accepted when an employee or dependent is not eligible for a Social Security number. The employee must submit a valid Social Security number within six months of the birth or adoption of a child. Employees and dependents who are foreign nationals must provide a valid Social Security number once it is obtained; and
6. The employee has provided appropriate legal documentation for each dependent to be enrolled showing the dependent's relationship with the subscriber, as set forth in N.J.A.C. 17:9-3.3(a).
17:9-2.9 HMO; elections
(a) (No change.)
(b) Subscribers who are participating in an eligible HMO but who move out of the area serviced by that HMO will have a 30-day period to select one of the following options:
1. (No change.)
2. Transfer participation to one of the other plans available under the SHBP.
17:9-2.10 Coverage for survivors--death of active employee
(a) (No change.)
(b) Unless the employer or the State pays for surviving spouses or surviving eligible domestic or civil union partners, the eligible survivor of the deceased employee must submit personal payments to the health benefits program in order to continue coverage. Once the survivor's annuity begins, the cost of benefits shall be deducted directly from the retirement benefit.
(c) Should coverage lapse through no fault of the survivor, who would be eligible to continue such coverage, retroactive coverage up to one year may be granted provided the payment of charges is made.
17:9-2.11 Out-of-network NJ DIRECT; eligible charges at enrollment (local employees)
(a) For purposes of local coverage, all eligible charges incurred by an eligible employee or the employee's covered dependents, from January 1 of a calendar year to the effective date of coverage for the employee's participating employer, will be considered toward satisfying the deductibles and coinsurance required under the out-of-network NJ DIRECT.
(b) For purposes of retiring members with local coverage, all eligible charges incurred by eligible retirees and their covered dependents from January 1 of a calendar year to the effective date of coverage will be considered toward satisfying the deductibles and coinsurance required under the out-of-network NJ DIRECT coverage.
(c) The charges considered are to be eligible charges under out-of-network NJ DIRECT contract. No charges will be used to satisfy the deductibles and coinsurance for which the employee has been reimbursed by any source.
17:9-2.14 Policy provisions adoption
The Commission adopts by reference all of the policy provisions contained in the contracts between the health, prescription drug and dental plans and the Commission, as well as any subsequent amendments thereto, to the exclusion of all other possible coverages. The plans handbook supplements the master contracts and contains the specific provisions for services to be covered and those which are excluded.
SUBCHAPTER 3. DEPENDENTS
17:9-3.1 Dependents and children defined
The following words and terms, when used in this chapter, shall have the following meanings, unless the context clearly indicates otherwise.
"Children" includes stepchildren, legally adopted children, children placed in the employee's custody pending adoption, foster children and children of an eligible domestic or civil union partner who are substantially dependent upon the employee for support and maintenance. This includes children in a guardian-ward, legal relationship who are living with the employee.
"Dependents" means an employee's spouse, eligible domestic or civil union partner and the employee's unmarried children through the end of the calendar year in which they reach the age of 23 years who live with the employee in a regular parent-child relationship. "Dependents" also means unmarried children and those not in a domestic partnership or civil union, covered by their parents under the SHBP prior to the attainment of age 23, who:
1.-3. (No change.)
"Living with" shall be defined so as to include children in the case of divorce or termination of a domestic partnership or civil union who may not actually be living with the covered parent, but where such covered parent is required to provide for the support and maintenance of such children, and the parent's application for dependent coverage is documented by a copy of an appropriate court order. Stepchildren and children of an eligible domestic or civil union partner must reside with the employee.
17:9-3.2 Military service
A spouse, eligible domestic or civil union partner or child enlisting or inducted into military service shall not be considered eligible for coverage during such military service.
17:9-3.3 Certification of dependency
(a) An employee who elects to enroll an eligible dependent for any coverage shall report such dependent's relationship or status on the enrollment form and provide appropriate legal documentation for each dependent to be enrolled verifying the dependent's relationship with the subscriber. Examples of acceptable documentation include birth certificates, sworn affidavits, marriage certificates, certificates of domestic partnership or civil union, divorce and separation decrees, custody agreements and court orders. This list is not meant to be all inclusive and does not imply acceptance of any of the above without proper authentication. Such listing of the dependent shall constitute the required certification that at the time of enrollment such dependent is substantially dependent upon the employee for support and maintenance.
(b) A person who, although listed as an eligible dependent, is found to be ineligible shall be removed from coverage by the SHBP and the level of coverage of the employee or retiree shall be adjusted accordingly. Coverage for that person as a dependent shall be restored if acceptable documentation is provided to the Division, by the employee or retiree, within 60 days of written notification of the dependent's termination. If acceptable documentation is received after 60 days, the dependent shall not be restored retroactively and can only be added at the next permissible enrollment opportunity.
17:9-3.4 Children with disabilities age 23 or older; determination of eligibility for continuation of coverage
(a) The determination as to the continuation of certain children with disabilities as "dependents" as defined by N.J.A.C. 17:9-3.1 shall be made by the SHBP's medical advisors. A form requesting continuance of enrollment for an eligible dependent with disabilities must be submitted to the SHBP no later than January 31 of the year following the calendar year in which the child attained the age of 23.
(b) Children with disabilities who are age 23 or older at the time their parents obtain coverage under the SHBP who are determined by the SHBP's medical advisors to be incapable of self-sustaining employment by reason of mental or physical disabilities and who meet the requirements of "dependents" as defined by N.J.A.C. 17:9-3.1, shall not be enrolled for coverage as "dependents" as defined by N.J.A.C. 17:9-3.1 unless:
1. They were covered as dependents under a public employer's group plan immediately preceding that employer's entrance into the SHBP; or
2. They were covered as dependents under a public employer's group plan immediately preceding their parents' entrance into the SHBP under the provisions of N.J.S.A. 52:14-17.32f (qualified retirees of the Teachers' Pension and Annuity Fund), 52:14-17.32f1 (qualified retirees of the Public Employees' Retirement System who retired from boards of education or county colleges), 52:14-17.32i (qualified firefighter or law enforcement retirees from the Police and Firemen's Retirement System, Public Employees' Retirement System and Consolidated Police and Firemen's Pension Fund) or the provisions of the Intergovernmental Transfer Program (established under N.J.S.A. 11A:2-11).
17:9-3.5 Multiple coverage; employee and spouse
(a) In any plan offered other than an HMO, an employee who is the spouse or eligible domestic or civil union partner of another employee may elect to forego coverage as an employee and to be enrolled for coverage as a dependent, in which event no coverage shall be provided for such spouse or eligible partner as an employee while covered as a dependent. The employee of an employer other than the State, who has enrolled such spouse or eligible partner, and who is required to pay the full cost of dependent coverage, may receive a refund from the Division equivalent in amount to the employer's cost for single coverage pursuant to N.J.S.A. 52:14-17.31. When both spouses or eligible partners are covered as employees, only one may enroll their children as dependents.
(b) A similar refund shall be authorized in the case of an employee of a local participating employer who is paying the full cost of dependent coverage for a spouse or eligible partner who is an employee of the State and eligible for coverage.
(c) If spouses or eligible partners are both eligible for coverage under the program as employees:
1. Each may elect coverage as an employee and for their qualified dependents, including the spouse or eligible partner, under any plan offered other than an HMO, but only one may elect coverage for the employee and for their qualified dependents, including the spouse or eligible partner, in a participating health maintenance organization; and
2. Each may elect single coverage in any participating health maintenance organization, provided that the employee is not covered under a participating health maintenance organization as a dependent of a spouse or eligible partner.
SUBCHAPTER 4. EMPLOYEES
17:9-4.4 State; ineligible employees defined
(a) For purposes of State coverage, "employee" shall not mean any person who is paid:
1.-4. (No change.)
5. Any person who is not on a State, college or university payroll or payroll of agencies identified in N.J.A.C. 17:9-4.1;
6. (No change.)
17:9-4.6 Local; full time defined
(a) (No change.)
(b) Where an otherwise eligible employee elects a voluntary furlough, as authorized by P.L. 1993, c. 297 for State employees and extended to local employers pursuant to N.J.A.C. 4A:6-1.23(b), coverage shall continue with the employer paying the costs as if the member were an active employee, provided that the employee remits in advance to the employer the amount required, if any, as the employee's contribution for coverage.
17:9-5.2 Charges; interest charges
(a) (No change.)
(b) For the purpose of local coverage, the employer must remit to the Division charges covering a one-month period by the due date printed on the bill.
(c) If the transmittal report and full payment of health benefits charges are not received within 15 days of the due date, as cited on the monthly transmittal mailed from the Division, interest at the rate of one percent per annum above the average annualized daily rate of return on the State Cash Management Fund as published by the Division of Investment for the most recent fiscal year shall be applied to the total transmittal of health benefits charges from the 16th day until the payment is received. The interest penalty will also be applied if payment is received by the Health Benefits Bureau without the transmittal report for proper distribution.
17:9-5.3 Local employer payment of charges
(a) (No change.)
(b) With respect to employees for whom there is no majority representative for collective negotiations purposes, the employer may, in its sole discretion, modify the respective payment obligations set forth in law for the employer and such employees for the coverage of the employee and enrolled dependents in a manner consistent with the terms of any collective negotiations agreement binding on the employer. In the absence of any collective negotiations agreement, the employer may modify the payment obligations as it deems appropriate.
(c)-(g) (No change.)
17:9-5.4 Local employer resolution; P.L. 1974, c. 88; P.L. 1979, c. 54; P.L. 1999, c. 48
(a) A local employer will satisfy the requirements of P.L. 1974, c. 88, by adopting a resolution designed to:
1.-2. (No change.)
3. Provide for local employer reimbursement of Federal Medicare charges for eligible pensioners and/or their spouses and partners, as well as the payment of health insurance charges required by the program, on a basis comparable to the reimbursement made by the State to its eligible pensioners and their spouses and partners in accordance with the provisions of P.L. 1972, c. 75 (see N.J.A.C. 17:9-5.5);
4. Require the local employer to pay the full cost of NJ DIRECT or HMO coverage;
5. (No change.)
(b) A local employer may also adopt an additional resolution designed to apply to all eligible pensioners and their dependents who retired on or after July 1, 1964, in accordance with the provisions of P.L. 1979, c. 54. Such resolution shall meet the prescriptions of (a) above.
(c) Under the provisions of P.L. 1981, c. 436, as amended, an educational or local employer may also adopt an additional resolution designed to apply the provision of P.L. 1974, c. 88 to surviving spouses and eligible partners of qualified retirees.
(d) Under the provisions of P.L. 1981, c. 436, as amended, an educational or local employer may also adopt an additional resolution designed to apply the provision of P.L. 1974, c. 88 to those former employees who retired since the employer adopted the provisions of the SHBP but who did not continue coverage because of the cost to the member.
(e) Under the provisions of P.L. 1999, c. 48 (N.J.S.A. 52:14-17.38), a participating local employer, excluding employers deemed to be covered by N.J.S.A. 52:14-17.28b or employees of school boards covered by N.J.S.A. 52:14-17.32f, 17.32f1 and 17.32f2 may by resolution adopt any of the age and service requirements found in N.J.S.A. 52:14-17.38 in determining eligibility to qualify for employer-paid post-retirement medical benefits. A participating local employer may also negotiate payment obligations with their employees for post-retirement medical benefits. The payment obligations of the participating local employer shall be the payment obligations applicable to the employee on the date the employee retires on a disability pension or the date the employee meets the retirement system service credit and employment service requirements for the employer payment of coverage as established by the resolution adopting the provisions of P.L. 1999, c. 48.
17:9-5.5 Medicare refunds
(a) (No change.)
(b) Where authorized by law, a participating local employer paying for the cost of coverage for enrollment in an SHBP Plan for a retiree may reimburse the retiree for all or part of the cost of Part B of the Federal Medicare program for the retiree and enrolled spouse or eligible domestic or civil union partner, as appropriate. The participating local employer is responsible for the payment of such reimbursements.
(c) All reimbursements made pursuant to (b) above shall be made payable to the retiree constituting the most timely payment for Medicare Part B coverage. The amount of the reimbursement shall be determined by law or, through a collective bargaining agreement or contract, but in no case shall it exceed the standard monthly cost of Medicare Part B. The reimbursement shall be made as frequently as determined by the participating local employer, but not less frequently than annually. As with the State, local employers are limited by budget allocations; therefore, retroactive refunds are limited to one year.
(d) In no event shall duplicate reimbursements be made to any retiree for the retiree or the retiree's spouse or eligible domestic or civil union partner. If the spouse or eligible partner of a retiree receives reimbursement for Medicare Part B by the State in their retirement allowances, then the spouse or partner shall only be eligible for the Medicare Part B reimbursement based upon their employment and not the retiree's employment. Spouses or partners reimbursed directly by their employer and not through the State must submit proof that they have waived that other Medicare Part B reimbursement in order to be reimbursed as a spouse or partner of the retiree. In addition, the retiree is not eligible to receive reimbursement for the difference between the amounts reimbursed to a spouse or partner from other Medicare Part B reimbursement and the amounts reimbursed to the retiree under the SHBP.
(e) (No change.)
17:9-5.6 Refunds rejected
Any request for refund not specified in N.J.A.C. 17:9-3.5 and 5.5 shall be denied. For example, a member and spouse or eligible partner may be employed in the same or in different locations, each location participating in the SHBP and both having family coverage, or both having member and spouse/partner coverage; in spite of the apparent duplication of coverage, neither of the covered employees would be eligible for a refund. Or, the spouse or eligible partner carries only single employee coverage under the State program while the member is covered by a plan in private industry where the employer pays for employee and dependent coverage; no refund would be payable since both would have to have been in public employment covered by the SHBP. Or, if one spouse or eligible partner applies for Medicare reimbursement for the member and spouse or eligible partner, the other shall not receive duplicate reimbursement.
17:9-5.9 Health Contribution for active employee State Health Benefit Coverage
Pursuant to P.L. 2007, c. 103, (N.J.S.A. *[51:14]**52:14*-17.28b), a deduction in the amount of 1.5 percent of base salary shall be made for each covered *State* employee*, as negotiated*. For purposes of this section, base salary means an employee's annual base salary, not including any bonuses, overtime or longevity payment.
SUBCHAPTER 6. RETIREMENT
17:9-6.1 Retired employee defined
(a) "Retired employee" means a person who is eligible for coverage under the SHBP's retiree group. This "retired employee" status, once established, shall continue in effect even though the employer is subsequently disbanded and no successor agency is created upon the dissolution of such employer.
(b) The definition of "retired employee" also includes the following classes of retired employees who are eligible for coverage:
1. (No change.)
2. Retired employees of educational and local employers participating in this Program who were eligible for coverage as active employees immediately prior to retirement and who continued coverage at retirement;
3. Retired employees of educational and county college employers, regardless of the employer's participation in the SHBP who:
i. (No change.)
ii. Were eligible for group health plan coverage prior to leaving employment; and
iii. Retired on disability retirements or on benefits based upon 25 or more years of service credit in the Teachers' Pension and Annuity Fund, the Public Employee's Retirement System, the Alternate Benefits Program or in a locally administered pension fund established by N.J.S.A. 18A:66-94 et seq. under the provisions of P.L. 1987, c. 384, P.L. 1992, c. 126 or P.L. 1995, c. 357 ( N.J.S.A. 52:14-17.32f, 52:14-17.32f1 and 52:14-17.32f2);
4. Qualified retired employees of boards of education who receive a retirement benefit from a State or locally administered retirement system and who:
i.-ii. (No change.)
iii. Within 60 days of enrollment in Parts A and B of the Federal Medicare Program, elect to join the SHBP under the provisions of P.L. 1993, c. 8 (N.J.S.A. 52:14-17.32h). A retired employee, upon enrollment in the SHBP pursuant to this rule, who qualified for benefits under the provisions of N.J.S.A. 52:14-17.32f, 17.32f1 or 17.32f2 shall be eligible for coverage paid by the State;
5. Qualified retired employees of local or educational employers who are enrolled for coverage in that employer's plan and who enroll in the SHBP when the employer joins the SHBP;
6. Qualified retired employees of participating local employers who retired before the employer joined the SHBP but who enroll when offered coverage due to the employer's adoption of the provisions of P.L. 1979, c. 54 (N.J.S.A. 52:14-17.38);
7. Qualified retired employees of participating local employers who did not continue coverage into retirement but who elect to enroll in the SHBP when offered coverage due to the employer's adoption of the provisions of P.L. 1981, c. 436 (N.J.S.A. 52:14-17.38); and
8. Qualified retired employees under the provisions of P.L. 1997, c. 330 (N.J.S.A. 52:14-17.32i) codified at N.J.A.C. 17:9-6.9.
(c) "Retired employee" also means an employee whose coverage terminated prior to retirement, if that employee is awarded a disability retirement allowance. Eligibility for retired coverage in the SHBP shall begin on the employee's retirement date, but should the approval of the retirement allowance be delayed, coverage shall not be retroactive for more than one year.
(d) The definition of "retired employee" shall include the spouse or eligible domestic or civil union partner of an active or retired employee, provided the spouse or eligible partner was covered as a dependent under the SHBP immediately preceding the death of the active or retired employee, and further provided that in the case of death of an active employee, the spouse or eligible partner is receiving a periodic pension or survivorship benefit from a State or locally administered retirement system or plan.
(e) The definition of "retired employee" shall also include the spouse or eligible partner of the employee, provided the spouse or partner was eligible for coverage immediately preceding retirement and is enrolled for coverage when the employee retires or is added to coverage pursuant to N.J.A.C. 17:9-6.3(a).
(f)-(g) (No change.)
(h) The definition of "retired employee" shall include any former employee, who retired from a State or locally administered retirement system or the spouse or eligible partner of the former employee of an employer who becomes a participating employer if the employee, spouse or eligible partner:
1.-2. (No change.)
3. Elects to enroll in the SHBP at the time the employer becomes a participating employer.
(i) The definition of "retired employee" shall include an employee who is eligible for continuation of coverage in the SHBP at the time of retirement who waives coverage at that time, or at a later date, because the employee has health benefit coverage (active or retired) through an employer or eligible retiree association as a dependent or as an active employee and who applies for continuation of coverage within 60 days after termination of coverage as a dependent or active employee. An eligible retiree association is an association whose membership is limited based on the employment of the employee or the employee's dependent. A certificate of continued coverage or employer or association letter certifying when coverage terminated must accompany the retiree application.
(j) The definition of "retired employee" shall not include an employee who on cessation of employment, elects a vested, deferred retirement benefit under which payments begin at a future date unless that employee is eligible for coverage under the provisions of P.L. 1987, c. 384 or P.L. 1992, c. 126 (N.J.S.A. 52:14-17.32f and 52:14-17.32f1).
(k) (No change.)
17:9-6.2 Coverage for prospective retirants
(a) For purposes of retired coverage, continuity of coverage may be extended until such time as the application for retirement is formally approved or denied by the Board of Trustees of the retirement system paying the benefit or by the investment carrier underwriting the individual annuity contracts.
1. If it is not necessary for a Board of Trustees to approve the application, then the retirement application will be considered approved when the necessary action has been taken by the Division, the local retirement system, or the investment carrier.
2. (No change.)
3. Should coverage lapse through no fault of the retired employee, the retired employee's spouse or eligible partner who would be eligible to continue such coverage, retroactive coverage for no more than six months may be granted, provided that the retroactive and currently due premiums are received.
(b) Any employee, upon retirement, or an eligible survivor of such employee will be notified by regular mail of the right to continuous coverage in the SHBP. The retired employee or eligible survivor must, within a 30-day period following the receipt of the letter offering retired coverage, submit the appropriate application and, if required, the charges for such coverage. Any retired employee or eligible survivor not responding within the 30-day period shall receive a second notice. Any retired employee or eligible survivor not responding to the second notice within a 30-day period will not be permitted to enroll in the SHBP at a later date.
17:9-6.3 Retiree coverage; limitation
(a) A retiree, but not the retiree's surviving dependent, may change coverage to include a spouse, eligible partner and other dependents by submitting a completed application along with appropriate legal documentation, described at N.J.A.C. 17:9-3.3(a), verifying the dependent's relationship with the subscriber within 60 days of a change in family status (marriage, domestic partnership, civil union, birth or adoption of a child, or a significant change in health coverage due to a spouse's or partner's employment). The dependent shall be enrolled retroactively to the date of the qualifying event.
1. If a retiree, but not the retiree's surviving dependent, wishes to add an eligible spouse, eligible partner or dependent and the completed application and legal documentation is not received within 60 days of a family status change, there shall be a minimum waiting period of two full months upon the Division's receipt of a completed application and legal documentation to change coverage. A dependent may be enrolled as of the first day of the month following the two-month waiting period. A dependent added in this manner may be added to a retiree's contract only once.
(b) Retired employees, whose retirement allowance is less than the charge to be deducted to pay for the cost of the coverage for such retired employees, will be permitted to continue coverage provided that the retired employee pays for the cost of such coverage in advance on a monthly basis, in which case there will be no health benefit deduction from the retirement allowance.
(c) Any person who is otherwise eligible for benefits as a retired employee or dependent of a retired employee, but who, although eligible to enroll in the Federal Medicare program by reason of age or disability, is not covered by the Federal Medicare Part A and B coverage, is ineligible for coverage under the SHBP.
(d) A retired employee or dependent, who has maintained coverage in the SHBP following retirement and is subsequently removed from such coverage for not having the Federal Medicare Parts A and B coverage as required by statute, will be permitted to obtain prospective reentry into the SHBP once proof of Federal Medicare Part A and B coverage has been provided to the Division.
Recodify existing (f) and (g) as (e) and (f) (No change in text.)
17:9-6.5 Discontinuance of allowance
When a retired employee's or beneficiary's retirement allowance is discontinued, the retired employee's or beneficiary's coverage may be terminated upon such discontinuance. Upon the reinstatement of the individual's retirement allowance, health insurance coverage will be resumed and may be made retroactive to the date of reinstatement of the retirement allowance, but in no case for more than one year.
17:9-6.6 Beneficiary, dependent or survivor
(a) (No change.)
(b) An eligible surviving spouse or eligible partner will be offered the opportunity to continue participation in the SHBP subsequent to the death of the retired member. The coverage will be no greater than the coverage that was in effect at the time of the retired member's death and will be limited to only those dependents covered at the time of the member's death. If the surviving spouse or partner is not the recipient of any monthly retirement allowance from a State-administered retirement system upon the death of the retired member, the Division will bill the surviving spouse or partner at the group rate.
17:9-6.7 Coverage for PFRS and SPRS accidental death benefit recipients
(a) For the purposes of this section, "eligible person" means the surviving spouse, eligible partner pursuant to N.J.A.C. 17:1-5.5 and child, as defined in N.J.S.A. 43:16A-1, of a member of the Police and Firemen's Retirement System, to or for whom an accidental death benefit is payable under N.J.S.A. 43:16A-10, and the surviving spouse, eligible partner and child, as defined in N.J.S.A. 53:5A-3, of a member of the State Police Retirement System, to or for whom an accidental death benefit is payable under N.J.S.A. 53:5A-14.
(b) An eligible person may participate in the SHBP regardless of whether the member's employer is a participating employer. The premiums for the coverage shall be paid by the State of New Jersey, as provided in P.L. 1989, c. 271.
(c) Persons eligible to participate in the program under this section shall participate in the retiree group. If there is a surviving spouse or eligible partner, eligible children shall participate as dependents of the surviving spouse or partner. If there is no surviving spouse or partner, eligible children shall participate as members of the program, and their eligibility to participate shall continue, as long as they qualify as children under the laws governing the retirement system of the deceased member.
(d) (No change.)
17:9-6.8 Premium-sharing for retired employee State Health Benefit Coverage and reimbursement for Medicare Part B costs
(a) All State employees, except nonaligned uniformed State Police officers, who accrue 25 years of service credit in a State-administered retirement system or retire on a disability retirement after July 1, 1997, for whom there is no majority representative for collective negotiations purposes, and who were hired by the State prior to July 1, 1995, shall, upon retirement, receive Medicare Part B reimbursement after retirement up to a cap of $ 46.10 per month per eligible employee and the employee's spouse or eligible partner and be subject to payroll deductions for coverage in advance of the coverage period in accordance with standard payroll procedures as set forth below. State employees, except nonaligned uniformed State Police officers, who accrue 25 years of service credit in a State-administered retirement system or who retire on a disability retirement after July 1, 1997, for whom there is no majority representative for collective negotiations purposes, and who were hired by the State on or after July 1, 1995, shall not be entitled to receive Medicare Part B reimbursement after retirement.
(b) For employees hired before December 11, 1995, who accrue 25 years of service credit in a State-administered retirement system or retire on a disability retirement after July 1, 1997 but before July 1, 2000, payroll deductions for NJ DIRECT10 coverage shall be determined using a base salary as of the first pay period of the calendar year in which retirement occurred, as follows:
1. Upon retirement, retirees with a base salary of $ 40,000 or more in the year of retirement shall pay the difference between the cost of the NJ DIRECT10 and the average cost for NJ DIRECT15 and participating HMOs as determined hereinafter.
2. (No change.)
(c) Employees hired on or after December 11, 1995 who accrue 25 years of service credit in a State-administered retirement system after July 1, 1997 but before July 1, 2000 or retire on a disability retirement after July 1, 1997 but before August 1, 2000, shall, upon retirement, pay the difference between the cost of NJ DIRECT10 and the average cost to the State for NJ DIRECT15 and participating HMOs as determined hereinafter.
(d) The average cost for NJ DIRECT15 and participating HMOs for each category of coverage for a rate time period shall be determined as follows:
1. Multiply the number of retirees who elected the category of coverage at the beginning of the rate time period immediately preceding the current rate time period by the premium or periodic charge rate for the category of coverage for the current rate time period for NJ DIRECT15 and each participating HMO.
2. Determine the total premium and periodic charges for all retirees who elected the category of coverage by adding the amounts determined under (d)1 above for NJ DIRECT15 and the participating HMOs.
3. Divide the total premium and periodic charges for all retirees who elected the category of coverage determined under (d)2 above by the total number of retirees who elected the category of coverage at the beginning of the immediately preceding rate time period for NJ DIRECT15 and the participating HMOs.
(e) For retirees who accrue 25 years of service credit in a State-administered retirement system on or after July 1, 2000 but before June 30, 2007 or retire on a disability retirement after July 1, 2000 but on or before July 1, 2007, payroll deductions for NJ DIRECT10 coverage shall be determined as follows:
1. Retirees electing NJ DIRECT10 shall pay 25 percent of the cost of that plan's premium as established by the Commission pursuant to N.J.S.A. 52:14-17.32b;
2. Retirees electing NJ DIRECT15 or an HMO shall have no premium payment; and
3. For *State* retirees who accrue 25 years of service credit in a State-administered retirement system on or after July 1, 2007, or retire on a disability retirement after July 1, 2007, shall pay a health contribution for NJ DIRECT15 or HMO coverage of 1.5 percent of their retirement allowance*, as negotiated,* or 1.5 percent of 50 percent of the highest salary received in the last five years of employment for Alternate Benefit Program members. The health contribution is waived for retirees who participate in the Retiree Wellness Program. Retirees must elect to participate in the Retiree Wellness Program within 60 days of the date of retirement. If the Retiree Wellness Program is not elected within this time period, the retiree will be required to pay the health contribution of 1.5 percent of the retirement benefit. Retirees not electing to participate in the program when first eligible may elect to participate in the Retiree Wellness Program only during the Division's annual open enrollment.
(f)-(g) (No change.)
17:9-6.9 Eligibility for State payment of retiree coverage under P.L. 1997, c. 330
(a) For the purposes of this section, "qualified retiree" means a person who:
1. Is a retiree from:
i.-ii. (No change.)
iii. The Public Employees' Retirement System of New Jersey (N.J.S.A. 43:15A-6 et seq.), hereinafter referred to as PERS, from a position included in the definition of "law enforcement officer" under section 1 of P.L. 1955, c. 257 (N.J.S.A. 43:15A-97), from a PFRS-covered position that would have made the member eligible for enrollment in the PFRS but for age, from a position that would have been eligible for enrollment in the PFRS had the employer joined the PFRS by referendum under the provisions of N.J.S.A. 43:16A-3(2) or from a position that is eligible for participation in PFRS as provided in section 9 of P.L. 1989, c. 204 (N.J.S.A. 43:16A-1.2);
2.-4. (No change.)
(b) Pursuant to P.L. 1997, c. 330 (N.J.S.A. 52:14-17.32i et seq.), a qualified retiree and his or her eligible dependents, as defined in section 2 of P.L. 1961, c. 49 (N.J.S.A. 52:14-17.26), but not survivors, are eligible to participate in the SHBP in accordance with the laws and rules governing the program, regardless of whether the retiree's employer participated in the program, and for State payment of an amount of the premium or periodic charges for the category of coverage elected by the qualified retiree equal to 80 percent of the premium or periodic charges for that category of coverage under the State-managed care plan or health maintenance organization, which provides services in the 21 counties of the State and the lower premium or periodic charges.
(c) The following persons are not eligible for benefits under P.L. 1997, c. 330 (N.J.S.A. 52:14-17.32i et seq.).
1. A retired State employee whose premium or periodic charges for health benefits under the SHBP are paid by the State pursuant to section 8 of P.L. 1961, c. 49 (N.J.S.A. 52:14-17.32) or section 6 of P.L. 1996, c. 8 (N.J.S.A. 52:14-17.28b);
2. A retiree of an employer other than the State for whom the employer pays any amounts for health benefits under the SHBP, including Medicare B reimbursements, as authorized by section 7 of P.L. 1964, c. 125 (N.J.S.A. 52:14-17.38) and pursuant to a collective negotiations agreement, ordinance, or resolution on or after July 1, 1998;
3.-6. (No change.)
(d) (No change.)
(e) The surviving spouse or eligible partner of a retiree who was eligible or was enrolled for benefits under N.J.S.A. 52:14-17.32i et seq., shall be eligible to continue coverage, at full cost, in the SHBP. If the deceased retiree would have been eligible for such coverage but was not enrolled due to active health benefit coverage as an employee or dependent, the surviving spouse or eligible partner may enroll in the SHBP, on a prospective basis, within six months after the retiree's death. The surviving spouse or eligible partner must inform the SHBP that they wish to enroll for coverage and must fill out an enrollment form and pay the required premiums before coverage may become effective.
(f) (No change.)
17:9-7.1 Termination effective date
(a)-(b) (No change.)
(c) Unless the subscriber requests termination of coverage, SHBP coverage for a member who is awaiting approval of a retirement benefit shall continue until the retirement is either approved or denied provided the member makes the appropriate remittance for coverage. Any retroactive SHBP premiums owed by the subscriber shall be deducted from the retirement benefit when approved, the withdrawal check, the return of pension contributions, or from any retirement or death benefit received by the member's surviving dependent.
17:9-7.2 Termination of eligibility
(a)-(c) (No change.)
(d) In addition to the above, coverage for dependents will end if:
1.-2. (No change.)
3. The dependent enters the Armed Forces;
4. The subscriber fails to make required premium payment(s) for dependents; or
5. The dependent child becomes eligible for SHBP coverage due to employment.
17:9-7.3 Continuation of coverage
(a) The coverage of an employee, and an employee's dependents, may be continued if:
1. The employee has an award pending or received an award of periodic benefits under Workers' Compensation and the employee is not otherwise covered as an employee or retiree under the SHBP. The employee may continue coverage and the coverage of the employee's dependents, provided that the employee shall pay to the employer in advance that portion, if any, of the charges due from the employee to continue the coverage;
2. (No change.)
3. The employee is on an approved State or Federal Family Leave.
i. The State Family Leave Act (N.J.S.A. 34:11B-1 et seq.) entitles an employee to continue 12 weeks of SHBP coverage in any 24-month period at the expense of their employer. This includes all health care benefits, including Prescription Drug, Dental and Vision Care benefits if the employer provides them. State Family Leave includes leave from employment to provide care for the birth or adoption of a child, or the serious illness of a child, parent, spouse or partner. It does not provide for a leave due to the personal illness of the employee.
ii.-iv. (No change.)
17:9-7.4 Voluntary termination
A subscriber may elect voluntarily to terminate coverage for the subscriber or the subscriber's dependents at any time, but termination of the subscriber's own coverage shall automatically terminate the coverage of the subscriber's dependents. Such voluntary termination shall be effected by written notice thereof to the State Health Benefits Bureau by use of the New Jersey SHBP application. Coverage may be reinstated for active employees after termination for the eligible employee and eligible dependents in accordance with the provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and during any subsequent open enrollment period. Coverage may be reinstated for retirees after termination of the retiree and eligible dependents only as permitted in N.J.A.C. 17:9-6.
17:9-8.1 Employee Prescription Drug Plan
(a)-(b) (No change.)
(c) The rules for eligibility and for determining the effective dates of coverage are the same as those of the SHBP as administered by the Commission in accordance with the provisions of N.J.S.A. 52:14-17.25 et seq. with the following exceptions:
1. (No change.)
2. Employers, other than the State of New Jersey, may offer to their employees and eligible dependents enrollment in the State Employee Prescription Drug Plan, or another free-standing prescription drug plan, or elect to have prescription drug coverage under the offering of their SHBP medical plans.
i. If the employer elects to offer a free-standing prescription drug plan, the employee's share of the cost for this prescription drug plan may be determined by a formula different from that used to determine the employee's share of the cost of health coverage. The employee may pay a share of the cost of prescription drug coverage for the employee and for the employee's covered dependents as required by a bargaining unit agreement. The employer may establish by ordinance or resolution, rules for the employee's share of the cost for those employees not covered under a bargaining agreement.
ii. If an employer, other than the State of New Jersey, offers a free-standing prescription drug plan other than the State Employee Prescription Drug Plan, this plan must be comparable in design, as determined by the Commission, to the State Employee Prescription Drug Plan. If an employee declines the employer's offering of a prescription drug plan, no reimbursement for prescription drugs will be provided under the SHBP medical plan in which the member is enrolled; and
3. Prescription drug classifications that are not eligible for coverage under the employer's prescription drug plan are also not eligible for coverage under the SHBP medical plans except as Federally or State mandated.
17:9-8.3 Termination; effective date
(a) The effective date of termination shall be the last day of the coverage period corresponding to the payroll period or month in which the last payroll deduction was made from the employee's salary for the coverage, if any are required, or the last charge shall have been paid by the State for employee's and/or his or her dependents' coverage or by the local employer for the employee and/or his or her dependents, as the case may be. Coverage may continue under the conditions set forth in N.J.A.C. 17:9-7.3.
(b) (No change.)
17:9-9.1 Employee Dental Plans
(a)-(b) (No change.)
(c) The rules are the same as those of the SHBP as administered by the Commission in accordance with the provisions of N.J.S.A. 52:14-17.25 et seq. with the following exceptions:
Recodify existing 2. and 3. as 1. and 2. (No change in text.)
3. All employees enrolled for coverage are required to participate in the Plan for a minimum 12-month period while eligibility for coverage exists unless the minimum enrollment requirement is waived by the Commission;
Recodify existing 5. and 6. as 4. and 5. (No change in text.)
6. An employer who does not participate in the SHBP or School Employees' Health Benefits Program is ineligible for participation in the Employee Dental Plans; and
7. An employer who elects to participate in the Employee Dental Plans must remain in the Plans for a minimum of 12 months before terminating coverage unless the employer terminates participation in the SHBP or School Employees' Health Benefits Program.
SUBCHAPTER 10. PROCUREMENT OF STATE HEALTH BENEFITS PROGRAM CONTRACTS
17:9-10.1 Purpose
This subchapter establishes the rules governing the procurement of contracts by the Commission for health benefit services and related actuarial and auditing services. The Commission, created by Section 3 (N.J.S.A. 52:14-17.26) of the New Jersey Health Benefits Program Act, P.L. 1961, c. 49 (N.J.S.A. 52:14-17.25 et seq.) as amended and supplemented, is responsible for negotiating and arranging for the purchase of such services.
17:9-11.1 Establishment of Part-time Employees Group
(a) The SHBP Part-Time Employees Group was established under the provisions of P.L. 2003, c. 172 (N.J.S.A. 52:14-17.33a).
(b) (No change.)
(c) The laws and rules governing the SHBP, except as modified in this subchapter, are construed to apply to part-time employees or faculty members and their dependents to the extent possible.
(d) Except under the provisions of the Federal COBRA law, coverage is not continued in the event of death, or other termination of the group coverage.
(e)-(h) (No change.)
17:9-11.2 Eligible part-time employees
Part-time employees of the State, including employees of the State colleges and universities, New Jersey Building Authority, New Jersey State Library, Palisades Interstate Parkway Commission, and the Commerce and Economic Growth Commission participating in the SHBP, are eligible to enroll if they are members of the State-administered retirement system.
17:9-11.3 Coverage available
(a) The State Managed Care Plan is NJ DIRECT15.
(b) Pursuant to P.L. 2003, c. 172 (N.J.S.A. 52:14-17.33a), members of the Part-time Employees Group shall be eligible for coverage in NJ DIRECT15. Members shall also be eligible for coverage under the State Employee Prescription Drug Plan. There shall be no prescription drug coverage under NJ DIRECT15.
(c) Eligible employees may waive enrollment in the State Employee Prescription Drug Plan, but in no case shall they be allowed to enroll in the State Employee Prescription Drug Plan without also being enrolled in NJ DIRECT15.
(d) There is no eligibility for dental or vision or any other benefit created by P.L. 2003, c. 172.
17:9-11.5 Cost of coverage
The Commission may adopt separate rates for the Part-time Employees Group reflecting the actual cost of the benefit plus administrative costs.
17:9-11.7 Effect of full-time employment on participation in the Part-time Employees Group
A member of the Part-time Employees Group who changes from part-time to full-time status cannot be enrolled for full-time employee coverage until the employee has established eligibility for coverage by serving the normal waiting period prescribed for new enrollees. In no event will the waiting period for full-time coverage include any part-time service rendered by the employee.
17:9-11.10 Coverage in retirement
(a) Participation in the Part-time Employees Group pursuant to this section shall not qualify the employee or faculty member for employer-paid or State-paid health care benefits in retirement. Upon retirement, such employees or faculty members who were enrolled in NJ DIRECT15 immediately prior to retirement shall be eligible to continue NJ DIRECT15 coverage as a retiree at their own expense. Prescription drug benefits shall be provided through the Retiree Prescription Drug Card Plan (N.J.A.C. 17:9-6.10).
(b) Whenever possible, the cost of retiree coverage will be deducted directly from the retirement allowance. Where the available retirement allowance is less than the charge for coverage, no amount will be deducted to pay for the cost of the coverage; instead, the retiree will be permitted to continue coverage if the retiree pays for the full cost of coverage in advance on a monthly basis.
(c) An eligible surviving spouse or eligible partner will be offered the opportunity to continue participation in NJ DIRECT15 subsequent to the death of the retiree. Coverage will be limited to only those dependents covered at the time of the retiree's death. The surviving spouse or eligible partner must pay the full costs.
17:9-12.1 Retiree Dental Expense Plan
(a) The Retiree Dental Expense Plan (Plan) was established under the provisions of N.J.S.A. 52:14-17.29(F) and became effective as of January 1, 2005. The Plan is available to retirees eligible for participation in the SHBP and School Employees' Health Benefit Program and their eligible dependents. New retirees may enroll by completing an application at the time of retirement. The Plan is a Dental Expense Plan, which is a traditional indemnity-type plan, which allows the employee to select any licensed dentist for dental care.
(b) (No change.)
(c) The rules are the same as those of the SHBP as administered by the Commission in accordance with the provisions of N.J.S.A. 52:14-17.25 et seq., with the following exceptions:
1. Coverage is not continued in the event of termination from the SHBP. There is no eligibility to continue retired dental coverage under the Federal COBRA law;
Recodify existing 3. and 4. as 2. and 3. (No change in text.)
SUBCHAPTER 13. CHAPTER 375 DEPENDENTS
17:9-13.1 Eligibility criteria
(a) In order for a dependent to qualify for and remain eligible for SHBP coverage after age 23 as a Chapter 375 dependent, the dependent must be a covered person's child by blood or law who:
1. Is 30 years of age or younger;
2.-5. (No change.)
17:9-13.2 Enrollment
(a) Enrollment of a Chapter 375 eligible dependent is voluntary. A separate election will be required for enrollment, change in or a voluntary termination of coverage for a Chapter 375 eligible dependent. If an employee or retiree (subscriber) does not elect coverage for a Chapter 375 eligible dependent by December 31, 2007, the subscriber may thereafter enroll the dependent as follows:
1. Submission of an enrollment application and certificate of creditable coverage to the Division no later than 30 days after the dependent meets all eligibility criteria under N.J.A.C. 17:9-13.1. Coverage will be effective the first coverage period of the month, 60 days after the dependent meets all eligibility criteria.
2. (No change.)
(b) (No change.)
17:9-13.3 Coverage available
(a) An enrolled Chapter 375 dependent shall be provided coverage in the same medical plan in which the subscriber is enrolled. In the event the subscriber participates in a SHBP prescription drug plan, the Chapter 375 dependent shall also qualify for participation in the same SHBP prescription drug plan.
(b) (No change.)
17:9-13.4 Premium rates and payment for coverage
The Commission shall determine premium rates for enrolled Chapter 375 dependents as provided by P.L. 2008, c. 38. The subscriber or dependent is responsible for the cost of the SHBP coverage for each enrolled Chapter 375 dependent.
17:9-13.5 Termination of coverage
(a) SHBP coverage for a Chapter 375 dependent shall terminate in the event:
1. The Chapter 375 dependent no longer meets all of the criteria for eligibility at N.J.A.C. 17:9-13.1 except that the dependent shall be eligible for coverage until his or her 31st birthday;
2.-3. (No change.)
4. The employee, retiree or dependent fails to make required premium payments for the Chapter 375 dependent; or
5. (No change.)
(b)-(c) (No change.)
17:9-13.6 Notice of Termination of coverage for nonpayment of premiums
(a) If a subscriber or dependent fails to make a required premium payment for a Chapter 375 dependent by the end of the month in which premium payment is due, the Division shall notify the subscriber or dependent of the overdue amount on the next billing statement. Such notice shall advise the subscriber or dependent that the Chapter 375 dependent's right to continue coverage will be terminated if payment of the overdue premium payment and the current premium payment due is not remitted to the Division within 30 days. If payment is not remitted within 30 days, the Division shall terminate the Chapter 375 dependent's coverage effective the last day of the month for which premiums were paid.
(b) (No change.)
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