Specifies that members of State Health Benefits Plan Design Committee and School Employees' Health Benefits Plan Design Committee have fiduciary duty.

A5265

ASSEMBLY, No. 5265

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 15, 2026

Sponsored by:

Assemblyman� ROY FREIMAN

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

SYNOPSIS

���� Specifies that members of State Health Benefits Plan
Design Committee and School Employees� Health Benefits Plan Design Committee
have fiduciary duty.

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the duties of members of the State Health
Benefits Plan Design Committee and the School Employees� Health Benefits Plan
Design Committee and amending P.L.1961, c.49 and P.L.2007, c.103.

����
Be It
Enacted
by the Senate and General Assembly of
the State of New Jersey:

���� 1.� Section 3 of P.L.1961,
c.49 (C.52:14-17.27) is amended to read as follows:

���� 3. a. There is hereby created
a State Health Benefits Commission, consisting of five members: the State
Treasurer; the Commissioner of Banking and Insurance; the Chairperson of the
Civil Service Commission; a State employees' representative chosen by the
Public Employee Committee of the AFL-CIO; and the fifth member of the
commission shall be a local employees' representative chosen by the Public
Employee Committee of the AFL-CIO.

���� The treasurer shall be
chairman of the commission and the health benefits program authorized by
P.L.1961, c.49 shall be administered in the Treasury Department. The Director
of the Division of Pensions and Benefits shall be the secretary of the
commission. The commission and committee shall establish a health benefits
program for the employees of the State, the cost of which shall be paid as
specified in section 6 of P.L.1961, c.49 (C.52:14-17.30). The commission, in
consultation with the committee, shall establish rules and regulations as may
be deemed reasonable and necessary for the administration of P.L.1961, c.49.

���� The Attorney General shall be
the legal advisor of the commission and committee.

���� The members of the commission
and committee shall serve without compensation but shall be reimbursed for any
necessary expenditures. The public employee members shall not suffer loss of
salary or wages during service on the commission or committee.

���� The commission shall publish
annually a report showing the fiscal transactions of the program for the
preceding year and stating other facts pertaining to the plan. The commission
shall submit the report to the Governor and furnish a copy to every employer
for use of the participants and the public.

���� b.��� There is established a
State Health Benefits Plan Design Committee, composed of 12 members as
follows:�

���� six members who shall be
appointed by the Governor as representatives of public employers whose
employees are enrolled in the program;

���� three members who shall be
appointed by the Public Employee Committee of the AFL-CIO;

���� one member who shall be
appointed by the head of the union, that is not affiliated with the AFL-CIO,
that represents the greatest number of police officers in this State;

���� one member who shall be
appointed by the head of the union, that is not affiliated with the AFL-CIO,
that represents the greatest number of firefighters in this State; and

���� one member who shall be
appointed by the head of the State Troopers Fraternal Association.

���� The members of the committee
shall serve for a term of three years and until a successor is appointed and
qualified.� Of the initial appointments by the Governor, three members shall
serve for two years and until a successor is appointed and qualified, and two
shall serve for one year and until a successor is appointed and qualified.� Of
the initial appointment by the head of the union representing the greatest
number of police officers in the State, the member shall serve for two years
and until a successor is appointed and qualified.� Of the initial appointment
by the head of the union representing the greatest number of firefighters in
the State, the member shall serve for one year and until a successor is
appointed and qualified.

���� The members of the committee
shall select a chairperson from among the members, who shall serve for a term
of one year, with no member serving more than one term as chairperson until all
the members of the committee have served a term in a manner alternating among
the employer representatives and employee representatives, unless the committee
determines otherwise with regard to this process.

���� The committee shall have the
responsibility for and authority over the various plans and components of those
plans, including for medical benefits, prescription benefits, dental, vision,
and any other health care benefits, offered and administered by the program.�
The committee shall have the authority to create, modify, or terminate any plan
or component, at its sole discretion.� Any reference in law to the State Health
Benefits Commission in the context of the creation, modification, or
termination of a plan or plan component shall be deemed to apply to the
committee.

���� The members of the committee
shall have the same duty and responsibility to the program as do the members of
the commission
and shall act as a fiduciary in carrying out their duties and
responsibilities
.

���� If any matter before the
committee receives at least seven votes in the affirmative, the commission
shall approve and implement the committee's decision.

���� If any matter before the
committee receives six votes in the affirmative and six votes in the negative
or the committee otherwise reaches an impasse on a decision, the provisions of
section 55 of P.L.2011, c.78 (C.52:14-17.27b) shall be followed.�

(cf: P.L.2011, c.78, s.45)

���� 2.� Section 33 of P.L.2007,
c.103 (C.52:14-17.46.3) is amended to read as follows:

���� 33. a. There is hereby created
a School Employees' Health Benefits Commission, consisting of nine members:

���� (1)�� the State Treasurer and
the Commissioner of the Department of Banking and Insurance serving ex officio;

���� (2)�� a member appointed by
the Governor who is a New Jersey resident and is qualified by experience,
education, or training in the review, administration, or design of health
insurance plans for self-insured employers;

���� (3)�� a member appointed by
the Governor from among three persons nominated by the New Jersey School
Boards' Association, which member shall be qualified by experience, education,
or training in the review, administration, or design of health insurance plans
for self-insured employers;

���� (4)�� three members appointed
by the Governor from among five persons nominated by the New Jersey Education
Association, of whom two shall be qualified by experience, education, or
training in the review, administration, or design of health insurance plans for
self-insured employers;

���� (5)�� a member appointed by
the Governor from among three persons nominated by the education section of the
New Jersey State AFL-CIO, which member shall be qualified by experience,
education, or training in the review, administration, or design of health insurance
plans for self-insured employers; and

���� (6)�� a member appointed
pursuant to subsection b. of this section who shall be the chairperson.

���� b.��� The Governor shall
appoint the chairperson from among three persons nominated jointly by at least
six of the eight members appointed pursuant to subsection a. of this section.

���� c.���� If the Governor
declines to make an appointment from among the persons nominated for
membership, the Governor shall request that a new list of nominees be provided
in compliance with subsection a. of this section. If the Governor declines to
make an appointment from the new list, the process set forth in this subsection
shall be repeated until the Governor makes an appointment from a list of
nominees. Except with respect to the appointment of the chairperson, if a new
list of nominees is not submitted within 45 days of the Governor's request, the
Governor shall make the appointment without the need to select from any list of
nominees.

���� d.��� The initial terms of the
members of the commission shall be as follows:

���� (1)�� the member appointed
pursuant to paragraph (3) of subsection a. of this section and the two members
appointed pursuant to paragraph (4) of subsection a. of this section who are
required to be qualified by experience, education, or training shall serve for
a term of three years;

���� (2)�� the member appointed
pursuant to paragraph (2) of subsection a. of this section, the member
appointed pursuant to paragraph (4) of subsection a. of this section who is not
required to be qualified by experience, education, or training, and the member
appointed pursuant to paragraph (5) of subsection a. of this section shall
serve for a term of two years; and

���� (3)�� the chairperson shall
serve for a term of six years.

���� All subsequent terms shall be
for three years, except that the term of the chairperson shall be five years. A
member of the commission may be reappointed to succeeding terms without limit
in the same manner as the original appointment. A vacancy occurring on the
commission shall be filled in the same manner as the original appointment and
only for the unexpired term.

���� e.���� There is established a
School Employees' Health Benefits Plan Design Committee, composed of six
members as follows:�

���� three members who shall be
appointed by the Governor as representatives of public employers whose
employees are enrolled in the program;

���� two members who shall be
appointed by the New Jersey Education Association; and

���� one member who shall be
appointed by the education section of the New Jersey State AFL-CIO.

���� The members of the committee
shall serve for a term of three years and until a successor is appointed and
qualified.� Of the initial appointments by the Governor, two members shall
serve for two years and until a successor is appointed and qualified, and one
shall serve for one year and until a successor is appointed and qualified.� Of
the initial appointments by the New Jersey Education Association, one member
shall serve for one year and until a successor is appointed and qualified.�

���� The members of the committee
shall select a chairperson from among the members, who shall serve for a term
of one year, with no member serving more than one term as chairperson until all
the members of the committee have served a term in a manner alternating among
the employer representatives and employee representatives, unless the committee
determines otherwise with regard to this process.

���� The committee shall have the
responsibility for and authority over the various plans and components of those
plans, including for medical benefits, prescription benefits, dental, vision,
and any other health care benefits, offered and administered by the program.�
The committee shall have the authority to create, modify, or terminate any plan
or component, at its sole discretion.� Any reference in law to the School
Employees' Health Benefits Commission in the context of the creation,
modification, or termination of a plan or plan component shall be deemed to
apply to the committee.

���� The members of the committee
shall have the same duty and responsibility to the program as do the members of
the commission
and shall act as a fiduciary in carrying out their duties and
responsibilities
.

���� If any matter before the
committee receives at least four votes in the affirmative, the commission shall
approve and implement the committee's decision.

���� If any matter before the
committee receives three votes in the affirmative and three votes in the
negative or the committee otherwise reaches an impasse on a decision, the
provisions of section 55 of P.L.2011, c.78 (C.52:14-17.27b) shall be followed.

(cf: P.L.2011, c.78, s.46)

���� 3.� This act shall take effect
immediately.

STATEMENT

���� This bill specifies that
members of the State Health Benefits Plan Design Committee and the School
Employees� Health Benefits Plan Design Committee must act as fiduciaries in
carrying out their duties and responsibilities.� Under current law, the members
of the respective plan design committees owe the same duties as the State
Health Benefits Commission and School Employees� Health Benefits Commission,
respectively.� This bill explicitly requires that the members of the committees
have a fiduciary obligation in carrying out their duties and responsibilities.