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S4415 SCS FISCAL ESTIMATE
LEGISLATIVE FISCAL ESTIMATE
SENATE COMMITTEE
SUBSTITUTE FOR
SENATE, No. 4415
STATE OF NEW JERSEY
222nd LEGISLATURE
DATED: JUNE 29, 2026
SUMMARY
Synopsis:
Strengthens oversight and enforcement of network adequacy
requirements for health insurance carriers; requires health insurance
carriers to make network directory available.
Type of Impact:
Annual State revenue and expenditure increases.
Agencies Affected:
Department of Banking and Insurance; Department of Human
Services.
Office of
Legislative Services Estimate
Fiscal Impact
Annual
State Revenue Increase
Indeterminate
State Expenditure Increase
Indeterminate
�
The Office of Legislative Services (OLS) determines that the bill
will result in an indeterminate increase in State revenue derived from the
enforcement provisions of the bill related to network adequacy requirements for
health insurance carriers.
�
The bill will also result in an indeterminate increase in State
expenditures from increased enforcement and administrative activities.
BILL DESCRIPTION
����� The bill amends P.L.2018, c.32 to strengthen the
oversight and enforcement of network adequacy requirements for health insurance
carriers in this State and require health insurance carriers to make available
their provider directories in a certain format provided by the bill.
����� The bill extends the scope of certain provisions of
P.L.2018, c.32, concerning the submission of an annual audit of a carrier�s
provider network and the enforcement of certain network adequacy laws, to
certain carriers, which includes insurance companies, health service
corporations, hospital service corporations, medical service corporations, or
health maintenance organizations authorized to issue health benefits plans in
this State, and includes the State Health Benefits Program, the School
Employees' Health Benefits Program, the Medicaid program, and a Medicaid
managed care organization.�
����� The bill provides that, at a minimum, any carrier that
fails to meet network adequacy requirements in accordance with applicable
federal or State law will be penalized no less than $5,000 per day until the
carrier has demonstrated full compliance with the network adequacy
requirements.� In addition to such penalty imposed, any resident, who can
demonstrate that the resident suffered harm as a result of a carrier�s failure
to meet its network adequacy requirement, may file a private cause of action
seeking damages for demonstrated harm.
����� The bill requires the Department of Banking and
Insurance and the Department of Human Services to jointly prepare a guidance
document that establishes the format for the submission of the annual audit and
establishes reporting requirements for the departments concerning their
enforcement activities related to the enforcement of network adequacy oversight
requirements provided under current law.
����� The bill also requires that each carrier�s network
directory be made available in a downloadable, machine-readable format to
support independent research, public accountability, and government oversight
and ensure that carriers are meeting statutory and contractual network adequacy
and access requirements.� The bill provides that a carrier will be expressly
prohibited from seeking to protect the noncommercial use, publication, or
dissemination of the carrier�s network directory through copyright or any other
means.
FISCAL ANALYSIS
EXECUTIVE BRANCH
����� None received.
OFFICE OF LEGISLATIVE SERVICES
����� The OLS determines that the bill will result in an
indeterminate increase in State revenue derived from the enforcement provisions
of the bill related to network adequacy requirements for health insurance
carriers.� The factors involved in developing a forecast of these potential
penalties include the frequency of occurrence, the duration of any violation,
and amount of the daily penalty assessed.� The OLS lacks the informational
basis to make an accurate forecast of the potential revenue given the variability
in each of these factors.
����� The OLS finds that the bill will result in an
indeterminate increase in State expenditures from increased enforcement and
administrative activities.� The Department of Banking and Insurance and the Department
of Human Services will jointly create a guidance document establishing the
format for the submission of the annual audit and establishing reporting
requirements for the departments concerning their enforcement activities
related to the enforcement of network adequacy oversight requirements provided
under current law.� Carriers who fail to meet the adequacy standards will be
assessed penalties as determined by the appropriate department.� In addition to
the audit review and penalty assessment determinations, the departments will
also incur an indeterminate increase in expenditures to develop, promulgate,
and maintain rules and regulations related to the bill�s provisions.
����� While the bill contains a provision for a private cause
of action for any resident who can demonstrate that the resident suffered harm
as a result of a carrier�s failure to meet its network adequacy requirement, the
OLS determines that this provision will not result in any additional financial
risk for the State.� Plans offered by the State Health Benefits Program, the
School Employees' Health Benefits Program, and the State Medicaid program have
extensive provider networks which exceed the network adequacy requirements.�
Section:
Commerce, Labor and Industry
Analyst:
John Gaudioso
Associate Fiscal Analyst
Approved:
Thomas Koenig
Legislative Budget and Finance Officer
This legislative fiscal estimate has been produced by the
Office of Legislative Services due to the failure of the Executive Branch to
respond to our request for a fiscal note.
This fiscal estimate has been prepared pursuant to P.L.1980,
c.67 (C.52:13B-6 et seq.).