"Public School Employees' Health Benefits Trust Act."

A5285

ASSEMBLY, No. 5285

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 15, 2026

Sponsored by:

Assemblywoman� MARGIE DONLON, M.D.

District 11 (Monmouth)

Co-Sponsored by:

Assemblyman Angelozzi

SYNOPSIS

���� �Public School Employees� Health Benefits Trust Act.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
concerning the health benefits provided to all eligible
public school employees and their dependents, amending and supplementing
various parts of the statutory law, and making an appropriation.

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

���� 1.� This act shall be known
and may be cited as the �Public School Employees� Health Benefits Trust Act.�

���� 2.� (New Section) As used in
this act:

���� �Beneficiary� means any
employee or dependent who is eligible for health insurance coverage through the
trust pursuant to P.L.��� , c.��� (C.������� ) (pending before the Legislature
as this bill) and receives health insurance coverage through the trust.

���� �Board of trustees� or �board�
means the board of trustees of the Public School Employees� Health Benefits
Trust, established pursuant to section 4 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill).

���� �Dependents� means an
employee�s spouse, domestic partner, or partner in a civil union couple, and
unmarried children who live in a regular parent-child relationship with the
employee until the end of the calendar year in which the children attain the age
of 31.� The term �children� shall include stepchildren, legally adopted
children and children placed by the Division of Child Protection and Permanency
in the Department of Children and Families, provided they are reported for
coverage and are wholly dependent upon the employee for support and
maintenance.�

���� A spouse, domestic partner,
partner in a civil union couple, or child enlisting or inducted into military
service shall not be considered a dependent during the military service.

���� A determination by the board
that a person is a dependent, or not a dependent, for the purposes of the act
shall be final and binding on all parties.

���� �Employee� means a person
currently employed by an employer in a full-time capacity who appears on a
regular payroll and receives a salary or wages for an average of the number of
hours per week as prescribed by the governing body of the participating employer
which shall be considered full-time, determined by resolution, and not less
than 25 hours.� The term �employee� shall not include persons employed on a
short-term, seasonal, intermittent, or emergency basis, persons compensated on
a fee basis, persons having less than two months of continuous service or
persons whose compensation is limited to reimbursement of necessary expenses
actually incurred in the discharge of their official duties.� An employee paid
on a 10-month basis, pursuant to an annual contract, shall be deemed to have
satisfied the two-month waiting period if the employee begins employment at the
beginning of the contract year.� A determination by the board that a person is
an employee, or not an employee, for the purposes of the act shall be final and
binding on all parties.

���� �Employer� means local school
district, regional school district, county vocational school district, county
special services school district, jointure commission, educational services
commission, State-operated school district, charter school, county college, any
officer, board, or commission under the authority of the Commissioner of
Education or of the State Board of Education, and any other public entity which
is established pursuant to authority provided by Title 18A of the New Jersey
Statutes, but excluding the State public institutions of higher education and
excluding those public entities where the employer is the State of New Jersey.

���� �State� means the State of New
Jersey.

���� �Trust� means the Public
School Employees� Health Benefits Trust, established pursuant to section 3 of
P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill).

���� Unless otherwise defined in
this section, terms used in this act, P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill) shall have the same meaning as those set
forth in the School Employees� Health Benefits Program Act, P.L.2007, c.103
(C.52:14-17.46.1 et seq.) as of the effective date
of P.L. , c. (C. ) (pending
before the Legislature as this bill).

���� 3.� (New Section) a.� There is
established in, but not of, the Department of the Treasury a trust fund which
shall be known as the Public School Employees� Health Benefits Trust, which
shall consist of appropriations made pursuant to section 20 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill), and the
contributions made pursuant to section 9 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill).

���� b.� The trust shall be
governed by a board of trustees as set forth in section 4 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).

���� c.� The purpose of the trust
shall be to pool the health risks of beneficiaries and to provide affordable
medical, pharmacy, dental, and vision benefits to those beneficiaries and,
accordingly, the assets of the trust shall be managed in the sole interest of
the beneficiaries.

���� 4.� (New section)� a.� There
is established a board of trustees of the Public School Employees� Health
Benefits Trust, consisting of 10 members, in which employees and employers
shall be equally represented as follows:

���� (1) three members appointed by
the New Jersey Education Association;

���� (2) one member appointed by
the American Federation of Teachers New Jersey;

���� (3) one member appointed by
the majority representative union of the Community Colleges in this State;

���� (4) one member appointed by
the New Jersey School Boards Association;

���� (5) one member appointed by
the New Jersey Association of School Business Officials;

���� (6) one member appointed by
the New Jersey Association of School Administrators;

���� (7) one member appointed by
the New Jersey Principals and Supervisors Association; and

���� (8) one member appointed by
the Governor.

���� b.� Each member of the board
shall possess experience, education, or training in the review, administration,
design, or collective negotiation of employer-sponsored group health insurance
plans or group health insurance plan coverage, but no member of the board shall
be employed by, or have a financial interest in, any entity with which the
board contracts.

���� c.� The terms of the members
of the board shall be as follows:

���� (1) two of the initial members
appointed pursuant to paragraph (1) and the initial members appointed pursuant
to paragraphs (2), (7), and (8) of subsection a. of this section shall serve
three-year terms;

���� (2) one of the initial members
appointed pursuant to paragraph (1) and the initial members appointed pursuant
to paragraphs (3), (4), (5), and (6) of subsection a. of this section shall
serve a two-year term; and

���� (3) all subsequent terms shall
be for three years, except that a newly elected Governor may appoint a member
of the Governor�s choosing to serve the remainder of the term then being served
by the prior Governor�s appointee.

���� d.� A member may be
reappointed for an additional term in the same manner as the original
appointment.� In the event of a vacancy, a new member shall be appointed in the
same manner as the original appointment within 10 days of the vacancy�s
occurrence and shall serve the remainder of the term.

���� e.� A member may be removed by
majority vote of the other members for failure to attend at least 50 percent of
board meetings in a calendar year or other good cause as defined by a board
policy adopted pursuant to section 5 of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill).

���� f.� Members shall serve
without compensation, but shall be reimbursed for all expenses they may incur
in the performance of their service on the board, and any employee, as defined
in section 2 of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill), who serves on the board shall be granted paid time off by their
employers for such service.

���� g.� A majority of the
authorized membership of the board shall constitute a quorum and each member of
the board shall have one vote.

���� h.� The members shall annually
select a chair, vice chair, and treasurer from among the membership of the
board.

���� i.� No member of the
administrative or professional staff shall serve as a voting member of the
board, provided, however, that the executive director shall also serve as an ex
officio non-voting member of the board.

���� j.� There shall be four
standing committees of the board: an audit committee, a plan design committee,
an investment committee, and a beneficiary appeals committee.

���� (1)�� The audit committee
shall be comprised of no fewer than three members and shall be responsible for
assisting in the oversight of the financial reporting and audit processes of
the board.� At least two members of the committee shall be members of the board.�
At least one of member of the committee shall have accounting, governmental
auditing, or related financial expertise.

���� The committee shall assist the
board in retaining an independent auditor to conduct annual audits of trust
financial statements by making a recommendation to the board after engaging in
an auditor selection process.� The auditor selection process shall be based
upon public, competitive bidding principles, as set forth in section 6 of
P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill) and
shall take place no less than once every five years.

���� (2) The plan design committee
shall be comprised of no fewer than three members, and shall be responsible for
assisting in the design, establishment, modification, and termination of health
insurance plans offered through the trust.� At least two members of the
committee shall be members of the board.� At least one member of the committee
shall have demonstrated experience in group health insurance plan design,
administration, or collective negotiation.

���� The committee shall also
assist the board in contracting a third-party administrator should the board,
in its discretion, decide to do so, in which case the third-party administrator
selection process shall be based upon public, competitive bidding principles,
as set forth in section 6 of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) and shall take place no less than once every five
years.

���� (3) The investment committee
shall be comprised of no fewer than three members, and shall be responsible for
assisting in the investment, sale, or purchase of trust assets.� At least two
members of the committee shall be members of the board.� At least one member of
the committee shall have demonstrated experience in institutional investing.

���� (4) The beneficiary appeals
committee shall be comprised of no fewer than three members, and shall be
responsible for hearing beneficiary appeals prior to the hearing thereof by the
full board.� At least two members of the committee shall be members of the
board.� At least one member of the committee shall be a physician, other than a
member of the medical board described in section 5 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).

���� k.� All final decisions of the
board shall be made by a majority vote of the members present and constituting
a quorum.

���� l.� Appointments to the board
shall be made within 90 days of the effective date of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill).� The board shall
organize at its initial meeting and promptly initiate the rulemaking and procurement
necessary to implement the provisions of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill).� The trust shall commence operations and
offer health insurance coverage beginning on January 1, 2028, as shall be
established by board resolution in consultation with participating employers.

���� 5.� a.� The board of trustees
of the Public School Employees� Health Benefits Trust shall have the power and
authority to:

���� (1) adopt bylaws, including
internal board policy and rules regarding the provision of medical, pharmacy,
dental, and vision benefits, including beneficiary appeal procedures;

���� (2) enter into contracts
necessary to effectuate the purposes of the trust;

���� (3) set and revise
contribution rates and premium amounts and collect contributions and premiums,
including, as the board may deem prudent, the establishment of banded rates to
promote equity, and plan stability provided that:

���� (a) the employee contribution
structure set forth in section 2 of P.L.2020, c.44 (C.52:14-17.46.14) and
contribution calculation set forth in section 4 of P.L.2020, c.44
(C.52:14-17.46.16), for the former New Jersey Educators Health Plan shall apply
as the default contribution rates for the plans offered to employees through
the trust; and

���� (b) employee contribution
rates shall remain as provided for by law in effect on the effective date of
P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill)
unless modified by the board as permitted by law on or after January 1, 2028,
except that the employee contribution rates shall remain to be calculated as a
percent of salary.

���� (4) manage and invest the
assets of the trust;

���� (5) incur indebtedness, borrow
money, and authorize and issue negotiable obligations or bonds;

���� (6) design, establish, modify,
or terminate health insurance plans offered through the trust;

���� (7) review, adjudicate, and
issue final decisions regarding beneficiary appeals;

���� (8) calculate and determine
fair allocations for out-of-network charges;

���� (9) at the board�s discretion,
retain legal counsel with demonstrated expertise in the law governing
employer-sponsored group health insurance plans in the public or private
sector, to advise and represent the board on matters within said counsel�s
expertise, including the initiation of litigation to pursue recovery of any
money paid in error or as a result of fraud or abuse;

���� (10) at the board�s
discretion, develop, contract for, and operate a primary care delivery system;
and

���� (11) hire administrative and
professional staff and appoint an executive director thereof, or contract with
a third-party administrator, as the board may deem necessary, to administer the
trust and health insurance plans offered through the trust.

���� b.� The board shall have the
duties to:

���� (1) meet at least once per
calendar month;

���� (2) record minutes for all of
its meetings, and maintain records consistent with state record retention
requirements;

���� (3) publish an annual report
showing the fiscal transactions of the trust for the preceding year, the amount
of the accumulated cash and securities held by the trust and detailing the
performance of each health insurance plan offered through the trust, including
enrollment figures, claims experience, and administrative costs associated
therewith which shall be reported to the Governor, and to the Legislature
pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1);

���� (4) retain an independent
auditor, who shall conduct an annual audit of the trust�s financial records and
statements, and, where deemed necessary by the board, the financial records and
statements of all vendors, contractors, subcontractors and similar third-party
entities providing services to the trust or the board;

���� (5) retain an actuary, who
shall have demonstrated experience providing actuarial services to
employer-sponsored group health insurance plans in the public and private
sector, and who shall be the technical advisor of the board with respect to
questions concerning the operation of the health insurance plans offered
through the trust and perform such other necessary duties required in
connection therewith, including the preparation of an annual report
demonstrating the financial condition of the trust by means of an actuarial
valuation of the assets and liabilities thereof;

���� (6) establish, in consultation
with the actuary, actuarial funding policies for the trust, subject to the
minimum requirement that the trust carry reserves necessary for two months of
projected expenditures;

���� (7) designate a medical board
comprised of a minimum of three physicians who are not employees or dependents
as those terms are defined under section 2 of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill) who shall recommend to the board
final action to be taken on beneficiary and provider appeals;

���� (8) ensure compliance with
applicable federal and state laws, including but not limited to the Health
Insurance Portability and Accountability Act of 1996, 42 U.S.C. � 1320d et
seq., and No Surprises Act of 2022, 26 U.S.C. � 9816;

���� (9) exercise the preceding
powers and duties solely in the interest of the beneficiaries and for the
exclusive purpose of providing benefits to beneficiaries and defraying
reasonable expenses of administering the plan;

���� (10) act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like aims, by
diversifying the investments of the plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so; and

���� (11) act in accordance with
the rules adopted by the board to the extent consistent with the provisions of
P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill).

���� 6.� Notwithstanding any other
provision of law to the contrary, the board may contract for and procure goods
and services necessary to effectuate the purposes of the Public School
Employees� Health Benefits Trust.� The board shall adopt rules which ensure
that any such contracts provide for integrity, competitiveness, and the best
possible value to the greatest extent practicable.

���� 7.� The board shall provide
for an annual independent audit of the trust�s financial statements and
records, and an annual actuarial analysis of the trust�s assets and
liabilities.

���� Contracts with vendors and any
third-party entities providing services to the trust or the board shall require
the provision of de-identified claims and utilization data to the board
sufficient to enable effective administration, auditing, and transparency.

���� The School Employees� Health
Benefits Program and the Division of Pension and Benefits in the Department of
the Treasury shall share relevant information and data with the board as may be
necessary to facilitate transition and continuity of administration consistent
with State and federal law.

���� The board shall promote
expanded use of patient centered medical homes and population health
arrangements designed to manage costs and prevent inappropriate utilization,
and may provide comprehensive wellness services, including biometric screening,
chronic condition coaching, and tobacco cessation.

���� The board may engage brokers
or other health insurance plan representatives to assist with member education,
open enrollment, and outreach, subject to the board�s procurement procedures as
set forth in P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill).

���� 8.� (New section) a.� In
addition to employee contributions, the State shall provide such start‑up
financing as may be necessary to implement the provisions of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill) through appropriation
or other lawful means, which amounts may be structured as repayable advances
from the trust�s revenues under mutually acceptable terms approved by the State
Treasurer.

���� b.� Premiums and other
revenues held in the trust shall be held in the sole interest of beneficiaries
and for the payment of reasonable administrative expenses.� Any excess funds
collected shall remain held in the trust and be used solely in the interest of
beneficiaries.

���� c.� The liabilities of the
School Employees� Health Benefits Program shall remain the property and
responsibility of the State.

���� 9.� (New section) The employee
contribution structure established in section 2 of P.L.2020, c.44
(C.52:14‑17.46.14) and the contribution calculation established in
section 4 of P.L.2020, c.44 (C.52:14‑17.46.16) shall apply to plans
offered through the trust for employees and their dependents, if any, subject
to modification by the board consistent with sound actuarial principles and in
the sole interest of beneficiaries on or after January 1, 2028.

���� 10.� (New section) To ensure
continuity and uniformity of administration, beneficiary eligibility, plan
design references, appeal standards, and other program terms under
P.L. , c. (C. )
(pending before the Legislature as this bill) shall be implemented in a manner
consistent with the provisions of the School Employees� Health Benefits Program
Act, P.L.2007, c.103 (C.52:14‑17.46.1 et seq.) and, where applicable,
with the New Jersey State Health Benefits Program Act, P.L.1961, c.49
(C.52:14‑17.25 et seq.), and the board may adopt by reference School
Employees� Health Benefits Program or State Health Benefits Program
definitions, rules, or guidance to the extent not inconsistent with P.L.��� ,
c.��� (C.������� ) (pending before the Legislature as this bill).

���� Notwithstanding any law, rule,
or regulation to the contrary, the State shall continue to be responsible for
the full payment of health insurance coverage for eligible retired public
school employees and their dependents, as provided by law on the effective date
of P.L.��� , c.��� (C.������� ) (pending before the Legislature as this bill).�
Nothing in P.L.��� , c.��� (C.������� ) (pending before the Legislature as this
bill) shall be construed to alter, diminish, or transfer the State�s statutory
obligation to fund such retired employee health insurance coverage.

���� 11.� (New section) a.�
Beneficiaries shall have the right to appeal denials of their claims for
coverage by the health insurance plan in which they are enrolled through the
trust, and non-beneficiaries shall have the right to appeal the denial of their
status as eligible beneficiaries, pursuant to an internal appeals procedure
that the board shall establish, which shall include consideration of the appeal
by the beneficiary appeals committee as the penultimate step and consideration
by the board as the ultimate step.

���� b.� If all or part of a
beneficiary�s claim for benefits, or any non-beneficiary�s assertion of
eligible beneficiary status, is denied after exhaustion of the internal appeal
procedure established by the board pursuant to subsection a. of this section, such
person may, within 180 days of the denial, institute a civil action against the
trust in the Superior Court of New Jersey to recover benefits due under the�
terms of the health insurance plan in which the beneficiary is enrolled or to
enforce rights provided for under
P.L. , c. (C. )
(pending before the Legislature as this bill) provided, however, that no health
insurance plan offered through the trust shall allow for assignment of coverage
or the right to institute a civil action against the trust by a beneficiary to
a third party.

���� 12.� (New section) If the
trust is dissolved, after the payment of all liabilities, any remaining trust
assets shall be returned proportionally to participating employers and
beneficiaries as determined by the board.� The health insurance plan or plans in
effect at the time of dissolution shall serve as the status quo terms and
conditions, with respect to health insurance coverage, for subsequent
collective negotiations between employers and employee organizations concerning
health insurance coverage.

���� 13.� (New section) The
provisions of P.L.��� , c.��� (C.������� ) (pending before the Legislature as
this bill) shall apply to county colleges and to all other employers as defined
by section 2 of P.L. , c. (C. ) (pending
before the Legislature as this bill) regardless of whether such employers
previously participated in the School Employees� Health Benefits Program prior
to the effective date of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill).

���� 14.� (New section) a.�
Notwithstanding any other law, rule, or regulation to the contrary, on and
after the effective date of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill), employers shall provide statutorily required health insurance
coverage to their employees through the trust and shall not be permitted to
provide any other type of health insurance to their employees.� Enrollment in
the School Employees� Health Benefits Program and Garden State Health Plan
shall not be offered to employees, and any employees already enrolled therein
shall be transitioned to health insurance coverage provided through the trust
in a manner to be prescribed by the board.

���� b.� The School Employees�
Health Benefits Program shall continue to operate for employers and employees
outside the scope of P.L.��� , c.��� (C.������� ) (pending before the
Legislature as this bill) and the Division of Pensions and Benefits shall
cooperate with the board to ensure an orderly transition of covered employees
from coverage by the School Employees� Health Benefits Program to coverage by
health insurance plans through the trust, and to share data as authorized by
law.

���� c.� All employees enrolled in
health insurance coverage provided pursuant to P.L.1983, c.108 (C.18A:18B-1 et
seq.), P.L.1979, c.230 (C.40A:10-16 et seq.), and P.L.1983, c.372 (C.40A:10-36
et seq.) shall be transitioned to health insurance coverage provided through
the trust, and the former coverage shall be terminated upon the expiration of
any contract for such insurance coverage or the applicable collective
negotiations agreements between their employers and employee organizations.

���� d.� On and after the effective
date of P.L.��� , c.��� (C.������� ) (pending before the Legislature as this
bill), employers participating in the School Employees� Health Benefits Program
shall be prohibited from withdrawing from the program.

���� e.� Notwithstanding any law,
rule or regulation to the contrary, children with disabilities who attain the
age of 31 shall be eligible for continued health insurance coverage through the
trust only if the employee submits a form to the board requesting said
continuation no later than January 31 of the year following the calendar year
in which the children attained the age of 31 and the board�s medical advisors
determine that the children are incapable of self-sustaining employment by
reason of mental or physical disabilities.� Children with disabilities who are
age 31 or older at the time of the employee�s enrollment in health insurance
coverage through the trust shall be eligible for coverage only if they were
covered under a different public employer�s group health insurance plan
immediately preceding the employee�s enrollment and the board�s medical
advisors determine that the children are incapable of self-sustaining
employment by reason of mental or physical disabilities.

���� 15.� Section 1 of P.L.2020,
c.44 (C.52:14-17.46.13) is amended to read as follows:

���� 1.��� This section shall apply
to the School Employees' Health Benefits Program (SEHBP) and to those employers
defined pursuant to section 32 of P.L.2007, c.103 (C.52:14-17.46.2) that
participate in the program.

���� a. (1) Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, beginning
with the plan year that commences January 1, 2021 and for each plan year
thereafter, the School Employees' Health Benefits Program shall offer only three
plans that provide medical and prescription drug benefits for employees, and
retirees who are not Medicare-eligible, and their dependents if any.
[
All other
plans offered prior to January 1, 2021 for employees, and retirees who are not
Medicare-eligible, and their dependents if any, shall be terminated.
]
�
For
employers subject to the Public School Employees� Health Benefits Trust Act, P.L.���
, c.���� (C.������� ) (pending before the Legislature as this bill), health
insurance plans required by this section shall be offered through the Public
School Employees� Health Benefits Trust established pursuant to section 3 of P.L.���
, c.���� (C.������� ) (pending before the Legislature as this bill) and
administered by the board of trustees pursuant to section 4 of P.L.��� , c.����
(C.������� ) (pending before the Legislature as this bill) and not through the
School Employees� Health Benefits Program. �The Division of Pensions and
Benefits shall coordinate with the board of the trust to effectuate this
transition.

���� The three plans shall be the
New Jersey Educators Health Plan as developed by the School Employees' Health
Benefits Plan Design Committee in accordance with subsection f. of this section
which sets forth the plan design of the New Jersey Educators Health Plan; the
SEHBP NJ Direct 10 plan as adopted and implemented by the School Employees'
Health Benefits Commission for the plan year that began January 1, 2020; and
the SEHBP NJ Direct 15 plan as adopted and implemented by the School Employees'
Health Benefits Commission for the plan year that began January 1, 2020.

���� Employers that participate in
the School Employees' Health Benefits Program shall retain the ability to enter
the program for medical only plans and may separately purchase pharmacy and
dental benefits outside of the program without limitation or restriction.

���� (2)�� Only the plans set forth
in this section shall be offered by the program regardless of any collective
negotiations agreement between a participating employer and its employees in
effect on the effective date of this act, P.L.2020, c.44, that provides for
enrollment in other plans that were offered by the program prior to January 1,
2021.

���� b.��� Prior to January 1,
2021, the program, through the Division of Pensions and Benefits in the
Department of the Treasury, shall provide for an enrollment period during which
all employees who commenced employment prior to the effective date of this act
shall be required to select affirmatively one of the three plans specified in
subsection a. of this section. If an employee fails to select affirmatively a
plan during this enrollment period, the program shall enroll the employee, and
the employee's dependents if any, in the New Jersey Educators Health Plan for
the plan year beginning January 1, 2021 and ending December 31, 2021.

���� During the enrollment period,
any person who is enrolled in a plan offered by the program and who is paying
the full cost of health care benefits coverage shall also be required to select
affirmatively one of the three plans specified in subsection a. of this
section. If a person fails to select affirmatively a plan during this
enrollment period, the program shall enroll the person, and the person's
dependents if any, in the New Jersey Educators Health Plan for the plan year
beginning January 1, 2021 and ending December 31, 2021. Any such person shall
continue to pay the full cost of coverage and shall not be subject to the
contribution schedule or any mandatory enrollment period as set forth in this
section.

���� c. (1) Beginning on January 1,
2021, an employee commencing employment on or after the effective date of this
act but before January 1, 2028 who does not waive coverage shall be enrolled by
the program, with the employee's dependents if any, in the New Jersey Educators
Health Plan, or the Garden State Health Plan if selected by the employee. The
employee shall remain enrolled in either the New Jersey Educators Health Plan
or the Garden State Health Plan selected by the employee at the annual open
enrollment for each plan year through the plan year that ends December 31,
2027, provided that the employee during this period may waive coverage as an
employee and select and change the type of coverage received under the plan
following a qualifying life event, in accordance with the program regulations.

���� The enrollment required by
this paragraph shall not include an employee who commenced employment prior to
the effective date of P.L.2020, c.44 and who did not enroll, who waived
enrollment, or who was not eligible to enroll prior to that effective date for
health care coverage provided by the employer, including, but not limited to,
an employee who commenced employment as a part-time employee prior to the
effective date of P.L.2020, c.44.� If such an employee was required to enroll
prior to the effective date of P.L.2021, c.163 in accordance with this
paragraph, the employee shall be notified promptly in writing that enrollment
is not mandatory and shall be provided promptly with an opportunity to select
enrollment in another health care benefits plan.For the plan year beginning
January 1, 2028, the employee may select, during any open enrollment period or
at such other times or under such conditions as the program may provide, any
plan offered by the program.

���� (2)�� For the plan year
beginning January 1, 2021, the program shall enroll a retiree who is not
Medicare-eligible, and the retiree's dependents if any, in the New Jersey
Educators Health Plan for health care benefits coverage as a retiree, if the
retiree does not waive coverage. The retiree shall remain enrolled in that plan
for each plan year through the plan year that ends December 31, 2027 or until
the retiree becomes eligible for Medicare, whichever comes first. The retiree
who becomes eligible for Medicare shall no longer be eligible for enrollment in
the New Jersey Educators Health Plan, except that any dependent of the retiree
who is not eligible for Medicare may remain eligible for coverage under the New
Jersey Educators Health Plan. For the plan year beginning January 1, 2028, that
retiree who is not Medicare-eligible may select, during any open enrollment
period or at such other times or under such conditions as the program may
provide, any plan offered by the program.

���� (3)�� Except as otherwise
provided in this subsection or subsection b. of this section, selection of a
plan shall be at the sole discretion of the employee or retiree who is not
Medicare-eligible.

���� d.��� Beginning January 1,
2022 and for each plan year thereafter, the program shall offer a fourth plan
to be called the Garden State Health Plan. The plan shall be developed by the
School Employees' Health Benefits Plan Design Committee. If the committee does
not adopt a design for the Garden State Health Plan by December 31, 2020, the
Division of Pensions and Benefits in the Department of the Treasury may develop
the Garden State Health Plan.� The program shall provide an enrollment period
prior to January 1, 2022.

���� The Garden State Health Plan
shall provide medical and prescription drug benefits that are equivalent to the
level of medical and prescription drug benefits provided by the New Jersey
Educators Health Plan, except that the benefits under the Garden State Health
Plan shall be available only from providers located in the State of New Jersey.

���� Access to a service provider
that is located outside of the State shall be available only under such terms,
conditions, restrictions, and limitations as the plan design committee or the
division, as appropriate, shall provide in the plan governing documents.

���� Employers that participate in
the School Employees' Health Benefits Program shall retain the ability to enter
the program for medical only plans and may separately purchase pharmacy and
dental benefits outside of the program without limitation or restriction.

���� e.���� The plan design of the
New Jersey Educators Health Plan, the Garden State Health Plan, the NJ Direct
10 plan, and the NJ Direct 15 plan as those plan designs are specified in
subsections a., d., and f. of this section shall remain unchanged until December
31, 2027. No change in the plan design of those plans shall be made before that
date unless such a change in plan design is required by federal or State law to
governmental health care benefits plans or to both governmental and
non-governmental health care benefits plans.

���� For the plan year that
commences January 1, 2028 and for each plan year thereafter, the plan design of
the New Jersey Educators Health Plan, the Garden State Health Plan, the NJ
Direct 10 plan, and the NJ Direct 15 plan as those plan designs are specified
in subsections a., d., and f. of this section may be modified by the School
Employees' Health Benefits Plan Design Committee.

���� Modifications to plan design
of the plans set forth in this section made by the School Employees' Health
Benefits Plan Design Committee or the State Treasurer pursuant to section 7 of
this act shall be implemented by the program for the purposes of this section
commencing January 1, 2024.

���� f.���� The plan design of the
New Jersey Educators Health Plan shall be the following:

In Network Benefits

Coverage

Member Coinsurance:10%, Applies
Only to Emergency Transportation Care and Durable Medical Equipment

Deductible:N/A

Out-of-Pocket Maximum:$500 Single/
$1,000 Family (covers all in network copayments, coinsurance, and deductible)

Emergency Room Copayment:$125 (To
be Waived if Admitted)

PCP Office Visit Copayment:$10

Specialist Office Visit
Copayment$15Out-of-Network Benefits

Coverage

Member Coinsurance:30% of the
Out-of-Network Fee Schedule

Deductible:$350 / $700

Out-of-Pocket Maximum:$2,000 Single
/ $5,000 Family Routine Lab:Paid at Out-of-Network Benefit Level

Out-of-Network Fee Schedule:200% of
CMS - MedicarePharmacy

Out-of-Pocket Maximum:$1,600 Single
/ $3,200 Family (Indexed Annually Pursuant to Federal Law)Generic Copayment:$5
Retail 30 Day Supply / $10 Mail 90 Day SupplyBrand Copayment:$10 Retail 30 Day
Supply/ $20 Mail 90 Day SupplyMandatory Generic:Member Pays Difference in Cost
Between Generic and Brand, Plus Brand CopaymentFormulary: Closed Formulary as
contracted with the Pharmacy Benefit Manager and the School Employees' Health
Benefits CommissionOther

Chiropractic, Physical Therapy, and
Acupuncture:

Subject to the same Out-of-Network
Limits as for the State Health Benefits Program as were in effect on June 1,
2020 to take effect as of July 1, 2020, or as soon thereafter as reasonably
practicable.

���� Under a patient centered
medical home model, there shall be no office visit copay for primary care for
participants who select and commit to a patient centered medical home for
primary care in accordance with plan rules and regulations.

���� g.��� Any plan offered by the
School Employees' Health Benefits Program shall require that chiropractic,
physical therapy, and acupuncture benefits shall be subject to the same
out-of-network limits as for the State Health Benefits Program that were in
effect on June 1, 2020 to take effect as of July 1, 2020 or as soon thereafter
as reasonably practicable.

���� h.��� Notwithstanding any
provision of law, rule, or regulation to the contrary, for any period of time
during which the employer does not have to pay a premium or periodic charge for
any health care benefits plan or program provided to its employees through the
School Employees' Health Benefits Program, an employee enrolled in such plan or
program shall not be required to make the employee's contribution toward that
premium or periodic charge during that period of time.� In the event that a
collective negotiations agreement specifically addresses a premium holiday the
collective negotiations agreement shall be controlling.

(cf: P.L.2021, c.163, s.2)

���� 16.� Section 5 of P.L.2020,
c.44 (C.18A:16‑13.2) is amended to read as follows:

���� 5.��� This section shall apply
to local boards of education and employers, as specified in subsection k. of
this section, who do not participate in the School Employees' Health Benefits
Program.

���� Any health insurance company
may provide to local boards of education and to those employers defined
pursuant to section 32 of P.L.2007, c.103 (C.52:14-17.46.2) who do not
participate in the School Employees' Health Benefits Program the equivalent of
the New Jersey Educators Health Plan in the School Employees' Health Benefits
Program as that plan design is described in subsection f. of section 1 of
P.L.2020, c.44 (C.52:14-17.46.13) and the Garden State Health Plan as that plan
design is described in subsection d. of section 1 of P.L.2020, c.44
(C.52:14-17.46.13), notwithstanding the provisions of any other law, rule, or
regulation, including any regulation of the New Jersey Department of Banking
and Insurance, to the contrary.� As used in this subsection, "health
insurance company" means and includes a health, hospital, and medical
service corporation; commercial individual, small employer, and larger group
health insurer; and a health maintenance organization.

���� a. (1) Notwithstanding the
provisions of any other law, rule, or regulation to the contrary, beginning
January 1, 2021 and for each plan year thereafter, a board of education as an
employer providing health care benefits coverage for its employees, and their
dependents if any, in accordance with P.L.1979, c.391 (C.18A:16-12 et seq.)
shall offer to its employees, and their dependents if any, the equivalent of
the New Jersey Educators Health Plan in the School Employees' Health Benefits
Program as that plan design is described in subsection f. of section 1 of
P.L.2020, c.44 (C.52:14-17.46.13).�
On and after the effective date of
P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill), a
board of education or county college shall satisfy the requirement by offering
health insurance coverage through the Public School Employees� Health Benefits
Trust.

���� Beginning January 1, 2022 and
for each plan year thereafter, a board of education as an employer providing
health care benefits coverage for its employees, and their dependents if any,
in accordance with P.L.1979, c.391 (C.18A:16-12 et seq.) shall also offer a
plan for its employees, and their dependents if any, that is the equivalent of
the Garden State Health Plan in the School Employees' Health Benefits Program.�
The board shall provide an enrollment period prior to January 1, 2022.

���� (2)�� The plans under this
section shall be offered by the employer regardless of any collective
negotiations agreement between the employer and its employees in effect on the
effective date of this act, P.L.2020, c.44, that provides for enrollment in
other plans offered by the employer.

���� No new health care benefits
plans, other than those specified in paragraph (1) of this subsection, shall be
added by the employer from January 1, 2021 through December 31, 2027 unless the
provisions of any collective negotiations agreement entered into before or
after the effective date of this act, P.L.2020, c.44, results in additional
premium cost reductions. Nothing in this section shall prohibit an employer
from offering health care benefits plans that existed prior to the effective
date of this act.

���� (3)�� Commencing January 1,
2028, the employer may offer such other plans as may be required in accordance
with any collective negotiations agreement between the employer and its
employees.

���� b.��� Prior to January 1,
2021, each employer shall provide an enrollment period during which all
employees who commenced employment prior to the effective date of this act
shall be required to select affirmatively a plan provided by the employer. If
an employee fails to select affirmatively a plan during this enrollment period,
the employer shall enroll the employee, and the employee's dependents if any,
in the equivalent New Jersey Educators Health Plan offered pursuant to
subsection a. of this section for the year January 1, 2021 until December 31,
2021.

���� During the enrollment period,
each person who is enrolled in a plan offered by the employer and who is paying
the full cost of coverage shall also be required to select affirmatively a plan
provided by the employer. If a person fails to select affirmatively a plan
during this enrollment period, the employer shall enroll the person, and the
person's dependents if any, in the equivalent New Jersey Educators Health Plan
offered pursuant to subsection a. of this section for the year January 1, 2021
until December 31, 2021. Any such person shall continue to pay the full cost of
coverage and shall not be subject to the contribution schedule or any mandatory
enrollment period as set forth in this section.

���� c. (1) Beginning on January 1,
2021, an employee commencing employment on or after the effective date of this
act but before January 1, 2028 who does not waive coverage, shall be enrolled
by the employer in the equivalent New Jersey Educators Health Plan, or the
equivalent Garden State Health Plan if selected by the employee, as those plans
are offered pursuant to subsection a. of this section. The employee shall
remain enrolled in either the equivalent New Jersey Educators Health Plan or
the equivalent Garden State Health Plan selected by the employee at the annual
open enrollment for each plan year until December 31, 2027, provided that the
employee during this period may waive coverage as an employee and select and
change the type of coverage received under the plan following a qualifying life
event, in accordance with the plan regulations. Beginning January 1, 2028, the
employee may select, during any open enrollment period or at such other times
or under such conditions as the employer may provide, any plan offered by the
employer.

���� (2)�� Except as otherwise
provided in this subsection or subsection b. of this section, selection of a
plan shall be at the sole discretion of the employee.

���� (3)�� The enrollment required
by paragraph (1) of this subsection shall not include an employee who commenced
employment prior to the effective date of P.L.2020, c.44 and who did not
enroll, who waived enrollment, or who was not eligible to enroll prior to that
effective date for health care coverage provided by the employer, including,
but not limited to, an employee who commenced employment as a part-time
employee prior to the effective date of P.L.2020, c.44.� If such an employee
was required to enroll prior to the effective date of P.L.2021, c.163 in
accordance with paragraph (1), the employee shall be notified promptly in
writing that enrollment is not mandatory and shall be provided promptly with an
opportunity to select enrollment in another health care benefits plan.

���� d.��� An employee shall
contribute annually toward the cost of health care benefits coverage for the
employee, and employee's dependents if any, the amount specified, in the manner
specified, in subsection a. or b. of section 2 of this act, P.L.2020, c.44 (C.52:14-17.46.14)
if the employee, and the employee's dependents if any, are enrolled in the
equivalent New Jersey Educators Health Plan or the equivalent Garden State
Health Plan offered pursuant to subsection a. of this section. An employee's
contribution toward the cost of coverage under the equivalent Garden State
Health Plan offered pursuant to subsection a. of this section shall be the
amount required in subsection b. of section 2 of this act, except that the
contribution specified in that subsection shall not be less than the minimum
annual contribution for health care benefits coverage of 1.5% of salary as
required by law.

���� e. (1) An employee enrolled in
the equivalent New Jersey Educators Health Plan or the equivalent Garden State
Health Plan offered pursuant to subsection a. of this section shall be required
to pay only the contribution specified in subsections a. and b. of section 2 of
this act, notwithstanding any other provision of law, rule, or regulation to
the contrary requiring contributions by employees toward the cost of health
care benefits coverage provided by an employer, except as provided in
subsection d. of this section. No other contribution may be required by
collective negotiations agreement, except as set forth in subsection i. of this
section.

���� (2)�� Employees who are not
enrolled in the equivalent New Jersey Educators Health Plan or the equivalent
Garden State Health Plan offered pursuant to subsection a. of this section
shall continue, after the effective date of this act, P.L.2020, c.44, to contribute
to health care benefits coverage and those contributions shall be determined in
accordance with what is permitted or required by provisions of law.

���� An employee who is enrolled in
a plan other than the equivalent New Jersey Educators Health Plan or the
equivalent Garden State Health Plan offered pursuant to subsection a. of this
section shall be required to contribute toward the cost of health care benefits
coverage offered by the employer (a) in accordance with a collective
negotiations agreement applicable to that employee as negotiated prior to or
after the effective date of this act pursuant to the requirements that were set
forth in law on the day next preceding that effective date; (b) as may be
required at the discretion of the employer; or (c) as required by a provision
of law, whichever is applicable to that employee.

���� With regard to contributions
by an employee who is enrolled in a plan other than the equivalent New Jersey
Educators Health Plan or the equivalent Garden State Health Plan offered
pursuant to subsection a. of this section, no provision in this section shall
be deemed to modify, alter, impair, or terminate the requirement in sections 77
and 78 of P.L.2011, c.78 (C.18A:16-17.2 and C.52:14-17.28e), as applicable,
that a public employer and employees who are in negotiations for the collective
negotiations agreement to be executed after the employees in that unit had
reached full implementation of the premium share set forth in section 39 of
P.L.2011, c.78 (C.52:14-17.28c) shall conduct negotiations concerning
contributions for health care benefits as if the full premium share was
included in the prior contract. Nothing in this act shall be deemed to modify,
alter, impair, or terminate the continued compliance after the effective date
of this act with that requirement for negotiations for any collective negotiations
agreement for employee contributions for plans other than the equivalent New
Jersey Educators Health Plan or the equivalent Garden State Health Plan offered
pursuant to subsection a. of this section.

���� (3)�� For an employee, the
annual base salary paid by the employer for the position held by the employee
shall be used to identify the percentage to be used to calculate the annual
contribution required under subsections a. and b. of section 2 of this act.

���� f.���� The annual contribution
by an employee as calculated in accordance with subsection a. or b. of section
2 of this act shall not exceed the amount as calculated in accordance with
section 4 of this act.

���� g.��� The contributions
required by this section shall apply to employees for whom the employer has
assumed a health care benefits payment obligation, to require that such
employees pay the amount of contribution specified in this section for health
care benefits coverage.

���� h.��� The level of benefits in
the equivalent New Jersey Educators Health Plan and the equivalent Garden State
Health Plan offered by the employer shall remain unchanged until December 31,
2027. No change in the level of benefits in those plans shall be made before
that date unless such a change is required by federal or State law to
governmental health care benefits plans or to both governmental and
non-governmental health care benefits plans.

���� Commencing January 1, 2028 and
for each plan year thereafter, the level of benefits in the equivalent New
Jersey Educators Health Plan and the equivalent Garden State Health Plan
offered by the employer may be modified by the employer in accordance with collective
negotiations agreements entered into between the employers who do not
participate in the School Employees' Health Benefits Program and their
employees, or as otherwise permitted by law.

���� i.���� Commencing January 1,
2028 and for each plan year thereafter, the contributions required pursuant to
subsections a. and b. of section 2 of this act for employees enrolled in the
equivalent New Jersey Educators Health Plan or the equivalent Garden State Health
Plan offered pursuant to subsection a. of this section may be modified in
accordance with collective negotiations agreements entered into between the
employers who do not participate in the School Employees' Health Benefits
Program and their employees. The contributions required pursuant to subsections
a. and b. of section 2 of this act shall become part of the parties' collective
negotiations and shall then be subject to collective negotiations in a manner
similar to other negotiable items between the parties. Negotiations concerning
contributions for health care benefits shall be conducted as if the
contributions required pursuant to subsections a. and b. of section 2 of this
act were included in the prior contract. The contribution scheme of the percentage
of base salary set forth in those subsections may be modified or a new
contribution scheme or method other than a percentage of salary may be provided
for in accordance with a collective negotiations agreement.�

���� j.���� Modifications to plan
design of the plans set forth in section 1 of this act, P.L.2020, c.44
(C.52:14-17.46.13), or adjustments to the employee contribution rates set forth
in subsections a. and b. of section 2 of this act, made by the School
Employees' Health Benefits Plan Design Committee or the State Treasurer
pursuant to section 7 of this act shall be implemented for the purposes of this
section by the employer commencing January 1, 2024.

���� k.��� This section shall also
apply when health care benefits coverage is provided though an insurance fund
or joint insurance fund or any other manner. This section shall apply to any
employer, as that term is defined in section 32 of P.L.2007, c.103 (C.52:14-17.46.2),
that is not a participating employer in the School Employees' Health Benefits
Program.� This section shall not apply to charter school or renaissance school
employers unless they have a collective negotiations agreement with any of
their employees in effect on or after the effective date of P.L.2020, c.44.

���� l.���� Notwithstanding any
provision of law, rule, or regulation to the contrary, for any period of time
during which the employer does not have to pay a premium or periodic charge for
any health care benefits plan or program provided to its employees pursuant to
this section, pursuant to another law, or pursuant to a collective bargaining
agreement, an employee enrolled in such plan or program shall not be required
to make the employee's contribution toward that premium or periodic charge
during that period of time.� In the event that a collective negotiations
agreement specifically addresses a premium holiday the collective negotiations
agreement shall be controlling.

(cf: P.L.2021, c.163, s.1)

���� 17.� Section 2 of P.L.2020,
c.44 (C.52:14‑17.46.14) is amended to read as follows:

���� 2.� a.� Each employee, and
retiree who is not Medicare-eligible and who is required by another provision
of law to contribute in retirement toward the cost of health care benefits
coverage under the program, shall contribute annually toward the cost of health
care benefits coverage for the employee and retiree, and dependents if any,
under the New Jersey Educators Health Plan offered by the School Employees'
Health Benefits Program
or through the Public School Employees Health
Benefits Trust,
an amount equal to a percentage of the employee's annual
base salary or retiree's annual retirement allowance, including any cost of
living adjustments to that allowance. The contribution shall be withheld by the
employer from the salary of the employee or by the retirement system from the
retirement allowance, including any cost of living adjustments to that
allowance, of the retiree who is not Medicare-eligible. The percent to be
contributed shall be as follows with the retirement allowance including any
cost of living adjustments to that allowance:

���� For Base Salary or Retirement
Allowance of $40,000 or Less: 1.7% for Single Coverage; 2.2% for Parent and
Child(ren) Coverage; 2.8% for Employee and Spouse Coverage; and 3.3% for Family
Coverage

���� For Base Salary or Retirement
Allowance of more than $40,000 to $50,000: 1.9% for Single Coverage; 2.5% for
Parent and Child(ren) Coverage; 3.3% for Employee and Spouse Coverage; and 3.9%
for Family Coverage

For Base Salary or Retirement
Allowance of more than $50,000 to $60,000: 2.2% for Single Coverage; 2.8% for
Parent and Child(ren) Coverage; 3.9% for Employee and Spouse Coverage; and 4.4%
for Family Coverage

For Base Salary or Retirement
Allowance of more than $60,000 to $70,000: 2.5% for Single Coverage; 3% for
Parent and Child(ren) Coverage; 4.4% for Employee and Spouse Coverage; and 5%
for Family Coverage

For Base Salary or Retirement
Allowance of more than $70,000 to $80,000: 2.8% for Single Coverage; 3.3% for
Parent and Child(ren) Coverage; 5% for Employee and Spouse Coverage; and 5.5%
for Family Coverage

For Base Salary or Retirement
Allowance of more than $80,000 to $90,000: 3% for Single Coverage; 3.6% for
Parent and Child(ren) Coverage; 5.5% for Employee and Spouse Coverage; and 6%
for Family Coverage

For Base Salary or Retirement
Allowance of more than $90,000 to $100,000: 3.3% for Single Coverage; 3.9% for
Parent and Child(ren) Coverage; 6% for Employee and Spouse Coverage; and 6.6%
for Family Coverage

For Base Salary or Retirement
Allowance of more than $100,000 to $125,000: 3.6% for Single Coverage; 4.4% for
Parent and Child(ren) Coverage; 6.6% for Employee and Spouse Coverage; and 7.2%
for Family Coverage

���� When the base salary or
retirement allowance is more than $125,000, the amount to be contributed shall
be the same as for a base salary or retirement allowance of $125,000.

���� b.��� Each employee, and
retiree who is not Medicare-eligible and who is required by another provision
of law to contribute in retirement toward the cost of health care benefits
coverage under the program, shall contribute annually toward the cost of health
care benefits coverage for the employee and retiree, and dependents if any,
under the Garden State Health Plan offered by the School Employees' Health
Benefits Program
or through the Public School Employees Health Benefits
Trust,
an amount equal to a percentage of the employee's annual salary or
retiree's annual retirement allowance, including any cost of living adjustments
to that allowance. The contribution shall be withheld by the employer from the
salary of the employee or by the retirement system from the retirement
allowance, including any cost of living adjustments to that allowance, of the
retiree who is not Medicare-eligible. The percent to be contributed shall be
one-half of the percentage set forth in subsection a. of this section for the
salary or retirement allowance range and type of coverage, except that the
contribution specified in this subsection shall not be less than the minimum
annual contribution for health care benefits coverage of 1.5% of salary or
retirement allowance, including any cost of living adjustments to that
allowance, as required by law.

���� c. (1) An employee enrolled in
the New Jersey Educators Health Plan or the Garden State Health Plan shall be
required to pay only the contribution specified in subsection a. or b. of this
section, notwithstanding any other provision of law, rule, or regulation to the
contrary requiring contributions by employees toward the cost of health care
benefits coverage under the program, except as provided in subsection b. of
this section. No other contribution may be required by collective negotiations
agreement, except as set forth in subsection h. of this section.

���� (2)�� Only those retirees who
are not Medicare-eligible and who are required by another provision of law to
contribute in retirement toward the cost of health care coverage under the
program shall be required to pay the contribution specified in subsection a. or
b. of this section for coverage under the New Jersey Educators Health Plan or
the Garden State Health Plan.

���� A retiree who is not
Medicare-eligible, who is enrolled in the New Jersey Educators Health Plan or
the Garden State Health Plan, and who is required by another provision of law
to contribute in retirement toward the cost of health care coverage under the
program shall be required to pay only the contribution specified in subsection
a. or b. of this section, notwithstanding the provisions of section 77 of
P.L.2011, c.78 (C.52:14-17.28e), section 3 of P.L.1987, c.384 (C.52:14-17.32f),
section 2 of P.L.1992, c.126 (C.52:14-17.32f1), or section 1 of P.L.1995, c.357
(C.52:14-17.32f2) to the contrary requiring contributions by retirees toward
the cost of health care benefits coverage under the program, except as provided
in subsection b. of this section.

���� d.��� Employees who are not
enrolled in the New Jersey Educators Health Plan or the Garden State Health
Plan shall continue, after the effective date of this act, P.L.2020, c.44, to
contribute to health care benefits coverage and those contributions shall be determined
in accordance with what is permitted or required by provisions of law.

���� An employee who is enrolled in
a plan other than the New Jersey Educators Health Plan or the Garden State
Health Plan shall be required to contribute toward the cost of health care
benefits coverage under the program (a) in accordance with a collective negotiations
agreement applicable to that employee as negotiated prior to or after the
effective date of this act, P.L.2020, c.44, pursuant to the requirements that
were set forth in law on the day next preceding that effective date; (b) as may
be required at the discretion of the employer; or (c) as required by a
provision of law, whichever is applicable to that employee.

���� With regard to contributions
by an employee who is enrolled in a plan other than the New Jersey Educators
Health Plan or the Garden State Health Plan, no provision in this section shall
be deemed to modify, alter, impair, or terminate the requirement in sections 77
and 78 of P.L.2011, c.78 (C.18A:16-17.2 and C.52:14-17.28e), as applicable,
that a public employer and employees who were in negotiations for the
collective negotiations agreement to be executed after the employees in that
unit had reached full implementation of the premium share set forth in section
39 of P.L.2011, c.78 (C.52:14-17.28c) shall conduct negotiations concerning
contributions for health care benefits as if the full premium share was
included in the prior contract. Nothing in this act shall be deemed to modify,
alter, impair, or terminate the continued compliance after the effective date
of this act with that requirement for negotiations for any collective
negotiations agreement for employee contributions for plans other than the New
Jersey Educators Health Plan or the Garden State Health Plan.

���� e.���� For an employee, the
annual base salary paid by the employer for the position held by the employee
shall be used to identify the percentage to be used to calculate the annual
contribution required under subsections a. and b. of section 2 of this act. For
a retiree who is not Medicare-eligible, the annual retirement allowance,
including any cost of living adjustments to that allowance, received by the
retiree shall be used to identify the percentage to be used to calculate the
annual contribution required under subsections a. and b. of section 2 of this
act.

���� f.���� The annual contribution
by an employee or a retiree who is not Medicare-eligible as calculated in
accordance with subsection a. or b. of this section shall not exceed the amount
as calculated in accordance with section 4 of this act, P.L.2020, c.44 (C.52:14-17.46.16).

���� g.��� The contributions
required by this section shall apply to employees for whom the employer has
assumed a health care benefits payment obligation, to require that such
employees pay the amount of contribution specified in this section for health
care benefits coverage. The contributions required by this section shall apply
to retirees for whom the State has assumed a health care benefits payment
obligation but who are required by law to contribute toward the cost of health
care benefits coverage under the program, to require that such retirees pay the
amount of contribution specified in this section for health care benefits
coverage.

���� h.���
[
For
]

Except as
otherwise provided by
P.L. , c. (C. )
(pending before the Legislature as this bill), for
the plan year that
commences on January 1, 2028 and for each plan year thereafter, the
contributions required pursuant to subsections a. and b. of this section for
employees enrolled in the New Jersey Educators Health Plan or the Garden State
Health Plan may be modified through collective negotiations agreements entered
into between the employers who participate in the School Employees' Health Benefits
Program and their employees. The contributions required pursuant to subsections
a. and b. of this section shall become part of the parties' collective
negotiations and shall then be subject to collective negotiations in a manner
similar to other negotiable items between the parties. Negotiations concerning
contributions for health care benefits shall be conducted as if the
contributions required pursuant to subsections a. and b. of this section were
included in the prior contract. The contribution scheme of percentage of base
salary set forth in those subsections may be modified or a new contribution
scheme or method other than a percentage of salary may be provided for in
accordance with a collective negotiations agreement.

���� i.���� Modifications to the
contribution rates set forth in this section made by the School Employees'
Health Benefits Plan Design Committee or the State Treasurer pursuant to
section 7 of this act shall be implemented by the program for the purposes of
this section commencing January 1, 2024.

(cf: P.L.2020, c.137, s.1)

���� 18.� Section 4 of P.L.2020,
c.44 (C.52:14-17.46.16) is amended to read as follows:

���� 4.��� For employees and
retirees who are not Medicare-eligible who are required to make a contribution
pursuant to subsection a. or b. of section 2, or subsection d. of section 5, of
this act, P.L.2020, c.44 (C.18A:16-13.2), due to enrollment in the New Jersey
Educators Health Plan or the Garden State Health Plan, or the equivalent plan,
as appropriate, a calculation shall be made in accordance with this section.
For
employers offering health insurance coverage through the Public School
Employees Health Benefits Trust, references in this section to the School
Employees� Health Benefits Program shall be deemed to also refer to the trust.
�
The employee or retiree shall be required to contribute the lesser of: the
amount calculated for that employee or retiree in accordance with subsection a.
or b. of section 2, or in accordance with subsection d. of section 5, of this
act, as appropriate; or the amount calculated for that employee or retiree in
accordance with this section.

���� for family coverage or its
equivalent -

���� an employee or retiree who
earns less than $25,000 shall pay 3 percent of the cost of coverage;

���� an employee or retiree who
earns $25,000 or more but less than $30,000 shall pay 4 percent of the cost of
coverage;

���� an employee or retiree who
earns $30,000 or more but less than $35,000 shall pay 5 percent of the cost of
coverage;

���� an employee or retiree who
earns $35,000 or more but less than $40,000 shall pay 6 percent of the cost of
coverage;

���� an employee or retiree who
earns $40,000 or more but less than $45,000 shall pay 7 percent of the cost of
coverage;

���� an employee or retiree who
earns $45,000 or more but less than $50,000 shall pay 9 percent of the cost of
coverage;

���� an employee or retiree who
earns $50,000 or more but less than $55,000 shall pay 12 percent of the cost of
coverage;

���� an employee or retiree who
earns $55,000 or more but less than $60,000 shall pay 14 percent of the cost of
coverage;

���� an employee or retiree who
earns $60,000 or more but less than $65,000 shall pay 17 percent of the cost of
coverage;

���� an employee or retiree who
earns $65,000 or more but less than $70,000 shall pay 19 percent of the cost of
coverage;

���� an employee or retiree who
earns $70,000 or more but less than $75,000 shall pay 22 percent of the cost of
coverage;

���� an employee or retiree who
earns $75,000 or more but less than $80,000 shall pay 23 percent of the cost of
coverage;

���� an employee or retiree who
earns $80,000 or more but less than $85,000 shall pay 24 percent of the cost of
coverage;

���� an employee or retiree who
earns $85,000 or more but less than $90,000 shall pay 26 percent of the cost of
coverage;

���� an employee or retiree who
earns $90,000 or more but less than $95,000 shall pay 28 percent of the cost of
coverage;

���� an employee or retiree who
earns $95,000 or more but less than $100,000 shall pay 29 percent of the cost
of coverage;

���� an employee or retiree who
earns $100,000 or more but less than $110,000 shall pay 32 percent of the cost
of coverage;

���� an employee or retiree who
earns $110,000 or more shall pay 35 percent of the cost of coverage

���� for individual coverage or its
equivalent -

���� an employee or retiree who
earns less than $20,000 shall pay 4.5 percent of the cost of coverage;

���� an employee or retiree who
earns $20,000 or more but less than $25,000 shall pay 5.5 percent of the cost
of coverage;

���� an employee or retiree who
earns $25,000 or more but less than $30,000 shall pay 7.5 percent of the cost
of coverage;

���� an employee or retiree who
earns $30,000 or more but less than $35,000 shall pay 10 percent of the cost of
coverage;

���� an employee or retiree who
earns $35,000 or more but less than $40,000 shall pay 11 percent of the cost of
coverage;

���� an employee or retiree who
earns $40,000 or more but less than $45,000 shall pay 12 percent of the cost of
coverage;

���� an employee or retiree who
earns $45,000 or more but less than $50,000 shall pay 14 percent of the cost of
coverage;

���� an employee or retiree who
earns $50,000 or more but less than $55,000 shall pay 20 percent of the cost of
coverage;

���� an employee or retiree who
earns $55,000 or more but less than $60,000 shall pay 23 percent of the cost of
coverage;

���� an employee or retiree who
earns $60,000 or more but less than $65,000 shall pay 27 percent of the cost of
coverage;

���� an employee or retiree who
earns $65,000 or more but less than $70,000 shall pay 29 percent of the cost of
coverage;

���� an employee or retiree who
earns $70,000 or more but less than $75,000 shall pay 32 percent of the cost of
coverage;

���� an employee or retiree who
earns $75,000 or more but less than $80,000 shall pay 33 percent of the cost of
coverage;

���� an employee or retiree who
earns $80,000 or more but less than $95,000 shall pay 34 percent of the cost of
coverage;

���� an employee or retiree who
earns $95,000 or more shall pay 35 percent of the cost of coverage;

���� for member with child or
spouse coverage or its equivalent -

���� an employee or retiree who
earns less than $25,000 shall pay 3.5 percent of the cost of coverage;

���� an employee or retiree who
earns $25,000 or more but less than $30,000 shall pay 4.5 percent of the cost
of coverage;

���� an employee or retiree who
earns $30,000 or more but less than $35,000 shall pay 6 percent of the cost of
coverage;

���� an employee or retiree who
earns $35,000 or more but less than $40,000 shall pay 7 percent of the cost of
coverage;

���� an employee or retiree who
earns $40,000 or more but less than $45,000 shall pay 8 percent of the cost of
coverage;

���� an employee or retiree who
earns $45,000 or more but less than $50,000 shall pay 10 percent of the cost of
coverage;

���� an employee or retiree who
earns $50,000 or more but less than $55,000 shall pay 15 percent of the cost of
coverage;

���� an employee or retiree who
earns $55,000 or more but less than $60,000 shall pay 17 percent of the cost of
coverage;

���� an employee or retiree who
earns $60,000 or more but less than $65,000 shall pay 21 percent of the cost of
coverage;

���� an employee or retiree who
earns $65,000 or more but less than $70,000 shall pay 23 percent of the cost of
coverage;

���� an employee or retiree who
earns $70,000 or more but less than $75,000 shall pay 26 percent of the cost of
coverage;

���� an employee or retiree who
earns $75,000 or more but less than $80,000 shall pay 27 percent of the cost of
coverage;

���� an employee or retiree who
earns $80,000 or more but less than $85,000 shall pay 28 percent of the cost of
coverage;

���� an employee or retiree who
earns $85,000 or more but less than $100,000 shall pay 30 percent of the cost
of coverage.

���� an employee or retiree who
earns $100,000 or more shall pay 35 percent of the cost of coverage.

���� The annual base salary of an
employee shall be used to determine what the employee earns for the purpose of
determining the percent of the cost of coverage. The annual retirement
allowance, including any cost of living adjustments to that allowance, of a
retiree who is not Medicare-eligible shall be used to determine what the
retiree earns for the purpose of determining the percent of the cost of
coverage.

���� As used in this section,
"cost of coverage" means the premium or periodic charges for medical
and prescription drug plan coverage, but not for dental, vision, or other
health care, provided: (1) under the New Jersey Educators Health Plan or the
Garden State Health Plan offered by the School Employees' Health Benefits
Program pursuant to section 1 of P.L.2020, c.44 (C.52:14-17.46.13); or (2)
under the equivalent New Jersey Educators Health Plan or the equivalent Garden
State Health Plan offered by an employer pursuant to section 5 of P.L.2020,
c.44 (C.18A:16-13.2) when that employer is not a participant in the School
Employees' Health Benefits Program.

(cf: P.L.2020, c.44, s.4)

���� 19.� If any provision of
P.L.��� , c.���� (C.������� ) (pending before the Legislature as this bill) or
its application to any person or circumstance is held invalid, the invalidity
shall not affect other provisions or applications of this act which can be
given effect without the invalid provision or application, and to this end the
provisions of P.L.��� , c.���� (C.������� ) (pending before the Legislature as
this bill) are severable.

���� 20.� There is appropriated
from the General Fund to the Department of the Treasury such amounts as may be
necessary to provide start‑up financing to the Public School Employees�
Health Benefits Trust, to remain available until expended, subject to the
approval of the Director of the Division of Budget and Accounting. The board
may repay such start‑up financing from trust revenues, pursuant to
mutually acceptable terms approved by the State Treasurer.

���� 21.� This act shall take
effect on the 180th day following the date of enactment.

STATEMENT

���� This bill, designated as the
�Public School Employees� Health Benefits Trust Act,� establishes, in but not
of, the Department of the Treasury the Public School Employees� Health Benefits
Trust.� The trust will consist of appropriations made by the State, and
contributions made by employers and employees.� The purpose of the trust shall
be to pool the health risks of beneficiaries and to provide affordable medical,
pharmacy, dental, and vision benefits to those beneficiaries and, accordingly,
the assets of the trust shall be managed in the sole interest of the
beneficiaries.

Governance of the Trust

���� The trust will be managed by a
board of trustees consisting of ten members as follows:

���� (1) three members appointed by
the New Jersey Education Association;

���� (2) one member appointed by
the American Federation of Teachers New Jersey;

���� (3) one member appointed by
the majority representative union of the Community Colleges in this State;

���� (4) one member appointed by
the New Jersey School Boards Association;

���� (5) one member appointed by
the New Jersey Association of School Business Officials;

���� (6) one member appointed by
the New Jersey Association of School Administrators;

���� (7) one member appointed by
the New Jersey Principals and Supervisors Association; and

���� (8) one member appointed by
the Governor.

���� Each member of the board must
possess experience, education, or training in the review, administration,
design, or collective negotiation of employer-sponsored group health insurance
plans or group health insurance plan coverage, but no member of the board will
be employed by, or have a financial interest in, any entity with which the
board contracts.

���� The board will have four
standing committees: an audit committee, a plan design committee, an investment
committee, and a beneficiary appeals committee.�

���� The audit committee will be
comprised of no fewer than three members. and will be responsible for assisting
in the oversight of the financial reporting and audit processes of the board.�
At least two members of the committee will be members of the board.� At least
one of member of the committee will have accounting, governmental auditing, or
related financial expertise.� The committee will assist the board in retaining
an independent auditor to conduct annual audits of trust financial statements
by making a recommendation to the board after engaging in an auditor selection
process.� The auditor selection process will be based upon public, competitive
bidding principles and will take place no less than once every five years.

���� The plan design committee will
be comprised of no fewer than three members, and will be responsible for
assisting in the design, establishment, modification, and termination of health
insurance plans offered through the trust.� At least two members of the
committee will be members of the board.� At least one member of the committee
will have demonstrated experience in group health insurance plan design,
administration, or collective negotiation.� The committee will also assist the
board in contracting a third-party administrator should the board, in its
discretion, decide to do so, in which case the third-party administrator
selection process will be based upon public, competitive bidding principles,
and will take place no less than once every five years.

���� The investment committee will
be comprised of no fewer than three members, and will be responsible for
assisting in the investment, sale, or purchase of trust assets.� At least two
members of the committee will be members of the board.� At least one member of
the committee will have demonstrated experience in institutional investing.

���� The beneficiary appeals
committee will be comprised of no fewer than three members, and will be
responsible for hearing beneficiary appeals prior to the hearing thereof by the
full board.� At least two members of the committee will be members of the board.�
At least one member of the committee will be a physician, other than a member
of the medical board.

Powers and Authorities of the Trust

���� The board will have the power
and authority to:

���� (1) adopt bylaws, including
internal board policy and rules regarding the provision of medical, pharmacy,
dental and vision benefits, including beneficiary appeal procedures;

���� (2) enter into contracts
necessary to effectuate the purposes of the trust;

���� (3) set and revise
contribution rates and premium amounts and collect contributions and premiums,
including, as the board may deem prudent, the establishment of banded rates to
promote equity, and plan stability;

���� (4) manage and invest the
assets of the trust;

���� (5) incur indebtedness, borrow
money, and authorize and issue negotiable obligations or bonds;

���� (6) design, establish, modify,
or terminate health insurance plans offered through the trust;

���� (7) review, adjudicate, and
issue final decisions regarding beneficiary appeals;

���� (8) calculate and determine
fair allocations for out-of-network charges;

���� (9) at the board�s discretion,
retain legal counsel with demonstrated expertise in the law governing
employer-sponsored group health insurance plans in the public and private
sector, to advise and represent the board on matters within said counsel�s expertise,
including the initiation of litigation to pursue recovery of any money paid in
error or as a result of fraud or abuse;

���� (10) at the board�s
discretion, develop, contract for, and operate a primary care delivery system;
and

���� (11) hire administrative and
professional staff and appoint an executive director thereof, or contract with
a third-party administrator, as the board may deems necessary, to administer
the trust and health insurance plans offered through the trust.

Duties of the Board

���� The board will have the duties
to:

���� (1) meet at least once per
calendar month;

���� (2) record minutes for all of
its meetings, and maintain records consisted with state record retention
requirements;

���� (3) publish an annual report
showing the fiscal transactions of the trust for the preceding year, the amount
of the accumulated cash and securities held by the trust and detailing the
performance of each health insurance plan offered through the trust, including
enrollment figures, claims experience, and administrative costs associated
therewith which will be reported to the Governor, and to the Legislature;

���� (4) retain an independent
auditor, who will conduct an annual audit of the trust�s financial records and
statements, and, where deemed necessary by the board, the financial records and
statements of all vendors, contractors, subcontractors and similar third-party
entities providing services to the trust or the board;

���� (5) retain an actuary, who
will have demonstrated experience providing actuarial services to
employer-sponsored group health insurance plans in the public and private
sector, and who will be the technical advisor of the board with respect to
questions concerning the operation of the health insurance plans offered
through the trust and perform such other necessary duties required in
connection therewith, including the preparation of an annual report
demonstrating the financial condition of the trust by means of an actuarial
valuation of the assets and liabilities thereof;

���� (6) establish, in consultation
with the actuary, actuarial funding policies for the trust, subject to the
minimum requirement that the trust carry reserves necessary for two months of
projected expenditures;

���� (7) designate a medical board
comprised of a minimum of three physicians who are not employees or dependents,
as those terms are defined under the bill, who will recommend to the board
final action to be taken on beneficiary and provider appeals;

���� (8) ensure compliance with
applicable federal and state laws, including but not limited to the Health
Insurance Portability and Accountability Act of 1996, 42 U.S.C. � 1320d et
seq., and No Surprises Act of 2022, 26 U.S.C. � 9816;

���� (9) exercise the preceding
powers and duties solely in the interest of the beneficiaries and for the
exclusive purpose of providing benefits to beneficiaries and defraying
reasonable expenses of administering the plan;

���� (10) act with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
person acting in a like capacity and familiar with such matters would use in
the conduct of an enterprise of a like character and with like aims, by
diversifying the investments of the plan so as to minimize the risk of large
losses, unless under the circumstances it is clearly prudent not to do so; and

���� (11) act in accordance with
the rules adopted by the board.

���� Under the bill, appointments
to the board will be made within 90 days of the bill�s effective date� The
board will organize at its initial meeting and promptly initiate rulemaking and
procurement necessary to implement the bill�s provisions.� The trust will
commence operations and offer health insurance coverage beginning on January 1,
2028, as will be established by board resolution in consultation with
participating employers.

���� Under the bill, premiums and
other revenues held in the trust will be held in the sole interest of
beneficiaries and for the payment of reasonable administrative expenses.� Any
excess funds collected will remain held in the trust and be used solely in the
interest of beneficiaries.

Beneficiary Rights to Appeal

���� Under the bill, beneficiaries
will have the right to appeal denials of their claims for coverage by the
health insurance plan in which they are enrolled through the trust, and
non-beneficiaries will have the right to appeal the denial of their status as eligible
beneficiaries, pursuant to an internal appeals procedure that the board will
establish, which will include consideration of the appeal by the beneficiary
appeals committee as the penultimate step and consideration by the board as the
ultimate step. �If all or part of a beneficiary�s claim for benefits, or any
non-beneficiary�s assertion of eligible beneficiary status, is denied after
exhaustion of the internal appeal procedure established by the board, such
person may, within 180 days of the denial, institute a civil action against the
trust in the Superior Court of New Jersey to recover benefits due under the�
terms of the health insurance plan in which the beneficiary is enrolled or to
enforce rights provided for.

Health Coverage Provided by the
Trust

���� Under the bill, employers will
provide health coverage to their employees through the trust and will not be
permitted to provide any other type of insurance to their employees.�
Enrollment in the SEHBP and Garden State Health Plan will not be offered to employees,
and any employees already enrolled in those programs will be transitioned to
health insurance coverage provided through the trust in a manner to be
prescribed by the board.

���� Under the bill, each employee
will contribute annually toward the cost of health care benefits for the
employee and dependents if any, under the New Jersey Educators Health Plan
offered by the SEHBP or through the Public School Employees� Health Benefits
Trust, an amount equal to a percentage of the employee�s annual base salary,
including any cost of living adjustments to that allowance.

���� The SEHBP will continue to
operate for employers and employees outside the scope of this bill and the
Division of Pensions and Benefits will cooperate with the board to ensure an
orderly transition of covered employees from coverage by the SEHBP to coverage
by health insurance plans through the trust, and to share data as authorized by
law.

���� All employees enrolled in
health insurance coverage provided pursuant to certain existing laws will be
transitioned to health insurance coverage provided through the trust, and the
former coverage will be terminated upon the expiration of any contract for such
insurance coverage or the applicable collective negotiations agreements between
their employers and employee organizations.

���� On and after the effective
date of the bill, employers participating in the SEHBP will be prohibited from
withdrawing from the program.�