52:14-17.38c Company surcharge payable to State Health Benefits Program.

3. With respect to any policy or contract between a local board of education and an insurance company writing insurance pursuant to Title 17B of the New Jersey Statutes, hospital service corporation, medical service corporation, health service corporation, or health maintenance organization which provides hospital or medical expense benefits:

a. upon the commencement of any policy or contract entered into after the effective date of this amendatory and supplementary act, P.L.1993, c.8 (C.52:14-17.38b et al.); or

b. in the case of any policy or contract in effect as of the effective date of this act, no earlier than the second anniversary date after the effective date of this act of any such policy or contract, the insurance company, hospital service corporation, medical service corporation, health service corporation, or health maintenance organization shall annually pay to the State Health Benefits Program a surcharge in the form of a percentage of the claims paid by the insurance company, hospital service corporation, medical service corporation, health service corporation, or health maintenance organization which are attributable to the coverage of the employees of the board and their dependents for the time period from July 1 through the following June 30, except that if the commencement or the second anniversary date of the policy or contract occurs after July 1, the initial surcharge shall be prorated for the remainder of that year from July 1 through the following June 30. The surcharge shall be paid on or before December 31 of the time period for which it is payable in the manner prescribed hereinafter, except that if the commencement or second anniversary date of the policy or contract occurs on or after November 1, an estimated initial surcharge shall be paid no later than the end of the sixth month following the commencement or anniversary date of the policy or contract or July 1 following the commencement or anniversary date of the policy or contract, whichever is earlier, and the actual surcharge payable for the initial time period shall be determined and adjustments, if any, shall be made to the surcharge payable for the succeeding time period in the manner prescribed hereinafter.

The initial surcharge percentage for the time period July 1, 1993 through June 30, 1994 shall be 3.25%. The State Treasurer shall thereafter annually redetermine the surcharge percentage, which shall be the percentage of total claims paid for active employees and for retired employees receiving health care coverage under the State Health Benefits Program pursuant to section 3 of P.L.1987, c.384 (C.52:14-17.32f) or subsection a. of section 2 of P.L.1992, c.126 (C.52:14-17.32f1) who are not eligible for Medicare which is reasonably attributable to the excess claim cost for these retired employees. The State Treasurer shall annually provide an estimated surcharge percentage based upon the claims paid for the 12 months immediately preceding the time period for which the surcharge is payable. Except as otherwise provided herein in the case of the initial surcharge, each organization shall pay to the State Health Benefits Program an estimated surcharge on or before December 31 of the time period for which the surcharge is payable, which shall be the amount determined by multiplying the total claims paid by the organization for the coverage for the 12 months immediately preceding the time period for which the surcharge is payable by the estimated surcharge percentage. Within three months after the time period for which the surcharge is payable, the State Treasurer shall determine the actual surcharge percentage for the time period based upon the actual claims experience for the period. The surcharge for the succeeding time period shall be increased or decreased, as appropriate, by the difference between the estimated surcharge paid and the surcharge due based upon the actual claims experience.

This section shall apply to any policy or contract in which the insurer has reserved the right to change the premium.

Beginning July 1, 2008, a reference to the State Health Benefits Program in this section shall mean the School Employees' Health Benefits Program, established pursuant to sections 31 through 41 of P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11).

L.1993, c.8, s.3; mended 2007, c.103, s.45.