Sponsored by:
Senator NELLIE POU
District 35 (Bergen and Passaic)
Senator PAUL A. SARLO
District 36 (Bergen and Passaic)
Senator STEPHEN M. SWEENEY
District 3 (Cumberland, Gloucester and Salem)
SYNOPSIS
Provides for reorganization of health service corporation.
CURRENT VERSION OF TEXT
As introduced.
An Act permitting reorganization of a health service corporation, supplementing P.L.1985, c.286 (C.17:48E-1 et seq.), and amending P.L.2001, c.131 and P.L.1970, c.22.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. (New section) The Legislature finds and declares that:
a. It is in the interest of the subscribers of the health service corporation and the State of New Jersey that the health service corporation be afforded the ability to modernize its corporate structure, subject to appropriate standards, oversight, and approval, in order to meet the evolving health care needs of its subscribers, while continuing its statutory mission, and maintaining its status as a charitable and benevolent institution as declared in section 41 of P.L.1985, c.236 (C.17:48E-41).
b. Ensuring that the health service corporation statutes provide the opportunity for the health service corporation to reorganize itself efficiently and effectively in the form and manner authorized by P.L. , c. (C. )(pending before the Legislature as this bill) will facilitate increased utilization of 21st century technologies and tools to better address current challenges, improving both the State s healthcare infrastructure and its readiness to address future crises such as those resulting from the ongoing COVID-19 pandemic. Such a reorganization, if undertaken, approved, and completed consistent with the provisions of P.L. , c. (C. )(pending before the Legislature as this bill), also will promote vital investments and growth in health services and diversified businesses for the benefit of its members and the State.
c. Current law governing the health service corporation expressly permits the health service corporation to engage in certain actions that effectuate a corporate reorganization, subject to certain conditions, including potential conversion to a for-profit domestic stock insurer or other actions constituting a material change in its form, subject to the approval of the Commissioner of Banking and Insurance in the Commissioner s capacity as regulator of the business of insurance and the Attorney General in furtherance of the Attorney General s statutory and common law responsibilities as protector, supervisor, and enforcer of charitable trusts and charitable corporations. The current statutes do not, however, prescribe a clear path for the health service corporation to update and improve its corporate structure for the benefit of its members and the State while, at the same time, maintaining its non-profit status, continuing to adhere to the statutory mission to provide affordable and accessible health insurance and promote the integration of the health care system to meet the needs of its members, and fulfilling the health care obligations of a health service corporation as they exist prior to the reorganization.
d. Other states have authorized similarly situated nonprofit health insurance carriers to reorganize their corporate forms while maintaining their nonprofit legal status and purposes of the entities for the benefit of their subscribers and respective regional health care marketplaces.
e. Because a reorganization authorized pursuant to P.L. , c. (C. )(pending before the Legislature as this bill) does not constitute a conversion or material change in form as defined pursuant to P.L.2001, c.131 (C.17:48E-49 et seq.), the currently existing statutory mission of the health service corporation to provide affordable and accessible health insurance and promote the integration of the health care system to meet the needs of its members shall continue unabated regardless of whether the health service corporation reorganizes in the manner authorized by P.L. , c. (C. ) (pending before the Legislature as this bill) or not.
f. It is also in the interest of the subscribers of the health service corporation and the State of New Jersey that the important statutory mission of the health service corporation continues to be upheld following any reorganization pursuant to P.L. , c. (C. )(pending before the Legislature as this bill); provided, however, that it is appropriate to expand and modernize that mission to encourage further innovation as well as improvement and diversification of services.
2. (New section) As used in P.L. , c. (C. ) (pending before the Legislature as this bill):
Assessment means an initial and a limited duration assessment made upon the mutual holding company system pursuant to section 13 of P.L. , c. (C. ) (pending before the Legislature as this bill).
Commissioner means the Commissioner of Banking and Insurance.
Control has the meaning set forth in section 1 of P.L.1970, c.22 (C.17:27A-1).
Effective time means the date and time at which the reorganization into a mutual holding company is effective, as provided in subsection d. of section 5 of P.L. , c. (C. )(pending before the Legislature as this bill).
Health service corporation means an entity organized pursuant to P.L.1985, c.236 (C.17:48E-1 et seq.). <