A 5330

�2
C.52:14-17.46.9a
P.L.
2026, CHAPTER 28, approved June 30, 2026
Assembly, No. 5330
An Act concerning the School Employees� Health Benefits
Program and amending and supplementing P.L.2007, c.103.
���� Be It Enacted by the Senate and General Assembly of the State of New
Jersey:
���� 1.��� Section 39 of P.L.2007, c.103 (C.52:14-17.46.9)
is amended to read as follows:
���� 39. a. For each active covered employee and for the
eligible dependents the employee may have enrolled at the employee's option,
from funds appropriated therefor, the employer shall pay to the commission the
premium or periodic charges for the benefits provided under the contract in
amounts equal to the premium or periodic charges for the benefits provided
under such a contract covering the employee and the employee's enrolled
dependents.
���� b.��� The obligations of any employer to pay the
premium or periodic charges for health benefits coverage provided under the
School Employees' Health Benefits Program Act, sections 31 through 41 of
P.L.2007, c.103 (C.52:14-17.46.1 through C.52:14-17.46.11), may be determined
by means of a binding collective negotiations agreement, including any
agreement in force at the time the employer commences participation in the
School Employees' Health Benefits Program. With respect to employees for whom
there is no majority representative for collective negotiations purposes, the
employer may, in its sole discretion, modify the respective payment obligations
set forth in law for the employer and such employees in a manner consistent
with the terms of any collective negotiations agreement binding on the
employer.
���� Commencing on the effective date of P.L.2010, c.2 and
upon the expiration of any applicable binding collective negotiations agreement
in force on that effective date, employees shall pay 1.5 percent of base
salary, through the withholding of the contribution, for health benefits
coverage provided under P.L.2007, c.103 (C.52:14-17.46.1 et seq.),
notwithstanding any other amount that may be required additionally pursuant to
this subsection by means of a binding collective negotiations agreement or the
modification of payment obligations.
���� c.���� There is hereby established a School Employee
Health Benefits Program fund consisting of all contributions to premiums and
periodic charges remitted to the State treasury by participating employers for
employee coverage. All such contributions shall be deposited in the fund and
the fund shall be used to pay the portion of the premium and periodic charges
attributable to employee and dependent coverage.
���� d.��� The fund shall contain a dedicated subaccount
reserved for payment of claims and other health services fees for covered
health services and prescription drug benefits provided to covered employees
and their enrolled eligible dependents. [No] Except as
permitted pursuant to section 2 of P.L.��� , c.��� (C.������� ) (pending before
the Legislature as this bill), no person shall use or authorize the use of
the assets in the subaccount, or the investment earnings thereon, for any
purpose other than for the provision of benefits in accordance with the terms
of the School Employees' Health Benefits Program and for defraying the
reasonable costs of administering the subaccount.�
���� A third-party medical claims reviewer, procured
pursuant to section 2 of P.L.2019, c.143 (C.52:14-17.30b), shall, in the
performance of services for the program, act in the best interests of the
State, participating employers, and covered employees and their enrolled
eligible dependents. Nothing in this subsection shall be construed as
subjecting the program, its plans, the State, or any participating employer to
the provisions of the "Employee Retirement Income Security Act of
1974" (29 U.S.C. s.1001 et seq.).
���� The third-party medical claims reviewer shall collect,
store and maintain a secure archive of medical and prescription drug claims
data and other health services payment information and provide such data and
other reports in compliance with applicable State and federal laws, including
the "Health Insurance Portability and Accountability Act of 1996,"
Pub.L.104-191, to document the cost and nature of claims incurred, demographic
information on the covered population, emerging utilization and demographic
trends, and such other information as may be available to assist in the
governance of the program and in timely response to any requests from the
Governor, the State Treasurer, the Division of Pensions and Benefits, the
School Employees' Health Benefits Commission, the School Employees' Health
Benefits Plan Design Committee, the President of the Senate, and the Speaker of
the General Assembly. Such claims data shall include, but not be limited to,
for each claim, the claim number, provider information, amount charged, amount
paid, and the Current Procedural Terminology (CPT) code. The School Employees'
Health Benefits Commission, the School Employees' Health Benefits Plan Design
Committee, the State Treasurer, or the Division of Pensions and Benefits may
direct the third-party medical claims reviewer to provide appropriate medical
and prescription drug claims and other health services payment data to a health
care services provider or other authorized entity, in compliance with
applicable State and federal laws, including the "Health Insurance
Portability and Accountability Act of 1996," Pub.L.104-191, for the
specific purpose of improving the quality and value of health care services
delivered to program participants.
���� The State Treasurer shall deposit into the subaccount
the moneys necessary to accomplish the purposes of this subsection, including
moneys paid by employers participating in the program, and contributed by
covered employees and retirees.� Deposits and contributions to the subaccount
shall be applied to the distribution of payments for the costs of health care
services and prescription drug benefits and to fund the reasonable costs of
administering the subaccount. Assets in the subaccount shall be expended or
withdrawn, and deposits and withdrawals shall be reconciled, in accordance with
regulations and procedures adopted pursuant to this subsection.
���� Moneys in the subaccount shall be invested in permitted
investments or shall be held in interest-bearing accounts in such depositories
as the State Treasurer may select, and may be invested and reinvested in
permitted investments or invested and reinvested in the same manner as other
accounts in the custody of the State Treasurer as provided by law. All interest
or other income or earnings derived from the investment or reinvestment of
moneys in the subaccount shall be credited thereto and shall be determined on
an aggregate basis for all participating employers.
���� The State Treasurer shall adopt, pursuant to the
"Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.),
such rules and regulations as may be necessary to implement the provisions of
this act, P.L.2019, c.143 (C.52:14-17.30a et al.).
���� e.���� Notwithstanding any law to the contrary and
except as provided by amendment by P.L.2010, c.2, and by P.L.2011, c.78, the
payment in full of premium or periodic charges for eligible retirees and their
dependents pursuant to 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) shall be continued without alteration or interruption and
there shall be no premium sharing or periodic charges for certain school
employees in retirement once they have met the criteria for vesting for pension
benefits, which criteria for purposes of this subsection only shall mean the
criteria for vesting in the Teachers' Pension and Annuity Fund. For purposes of
this subsection, "premium sharing or periodic charges" shall mean
payments by eligible retirees based upon a proportion of the premiums for
health care benefits.
(cf: P.L.2019, c.143, s.6)
���� 2.��� (New Section)� a.� If the available funds in the
health benefits fund established pursuant to section 39 of P.L.2007, c.103 (C.52:14-17.46.9)
fall to a level that is insufficient to cover 10 days of anticipated payments
from the fund, including, but not limited to, any portion of premiums, claims,
and other periodic charges, provided that claims for medical, prescription, and
dental expenses are based on an average over the past six months, then the Director of the Division of Pensions and Benefits may
initiate a temporary transfer of available funds from the health benefits fund
established pursuant to section 49 of P.L.2007, c.103 (C.52:14-17.46a) to the
health benefits fund established pursuant to section 39 of P.L.2007, c.103 (C.52:14-17.46.9).
�The Director of the Division of Pensions and Benefits shall notify the
commission within 30 days of the transfer. �The amount transferred pursuant to
this subsection shall not exceed the amount necessary to cover 30 days of
anticipated payments from the fund, including, but not limited to, any portion
of premiums, claims, and other periodic charges, provided that claims for
medical, prescription, and dental expenses are based on an average over the
past six months and any other anticipated payment or charge in the next 30
days.  The amount transferred pursuant to this subsection shall be
reimbursed from the health benefits fund established pursuant to section 39 of
P.L.2007, c.103 (C.52:14-17.46.9) on or before the 120th day next following the
date of the transfer unless the Director of the Division of Pensions and
Benefits determines that an extension of the reimbursement date is necessary to
ensure that sufficient funding is available to pay claims incurred by active
covered employees and their eligible dependents; provided, however, in no case
shall the reimbursement date be extended for more than an additional 365 days.
���� b.  The Director of the Division of Pensions and
Benefits shall provide to the State Treasurer a monthly accounting of any
transfers initiated in the prior 30 days pursuant to subsection a. of this
section, the outstanding balances of all transfers initiated pursuant to
subsection a. of this section, any repayments for past transfers received, and
the current balance of the health benefits fund established pursuant to section
39 of P.L.2007, c.103 (C.52:14-17.46.9).
���� 3.��� This act shall take effect immediately.
STATEMENT
���� This bill establishes a mechanism to provide necessary
funds if the available funds in the health benefits fund for active education
employees and their dependents falls to a level that is insufficient to cover
10 days of anticipated payments from the fund. �The bill permits the Director
of the Division of Pensions and Benefits to initiate a temporary transfer of
available funds from the health benefits fund for qualified local education
retirees and their dependents to the health benefits fund for active education
employees and their dependents.� The bill requires the Director of the Division
of Pensions and Benefits to notify the School Employees� Health Benefits
Commission within 30 days of the transfer.
���� Under the bill, the amount transferred must not exceed
the amount necessary to cover 30 days of anticipated payments from the fund. �The
amount transferred is to be reimbursed from the active education employee and
dependent fund on or before the 120th day next following the date of the
transfer unless the Director of the Division of Pensions and Benefits
determines that an extension of the reimbursement date is necessary to ensure
that sufficient funding is available to pay claims incurred by employees of local
education employers and their dependents; provided, however, in no case will
the reimbursement date be extended for more than an additional 365 days.
���� The bill requires the Director of the Division of
Pensions and Benefits to provide to the State Treasurer a monthly accounting of
any transfers initiated in the prior 30 days, the outstanding balances of all
transfers initiated, any repayments for past transfers received, and the
current balance of the active education employee and dependent health benefits
fund.
���� Permits Director of Division of Pensions and Benefits
to initiate temporary transfer of funds in certain circumstances.