Legislation enabling New Jersey’s largest health insurer to take advantage of innovations and medical advances for its members while still retaining its charitable mission along with stabilizing premiums was signed into law Wednesday.
The law (formerly bill A-5119) allows Horizon Blue Cross Blue Shield (BCBS) of New Jersey to form a not-for-profit mutual holding company that can make critical investments while still insuring members under a health insurance subsidiary.
“Right now, the company is limited in the ways it can stay competitive to benefit its 3.6 million members. We must allow this organization to adapt its infrastructure so that it can make the investments it needs to in order to offer stable rates, promote innovative health care services and meet the evolving needs of its members – all while maintaining its charitable mission,” said Assemblyman John McKeon (D-Essex, Morris).
“This is a brilliant way to let Horizon be a part of the cutting-edge healthcare innovations that will improve the well-being of New Jersey residents while preserving the company’s not-for-profit status,” said Assemblywoman Joann Downey (D-Monmouth). “By reorganizing in this manner, Horizon would still be the charitable insurer so many families rely on but would also be free to help promote medical advances that everyone can benefit from. This is a win-win for the entire state.”
If reorganized, Horizon BCBS would continue to be under the supervision of the Department of Banking and Insurance, with expansive oversight by the state Attorney General.
Upon establishment of the not-for-profit mutual holding company, Horizon BCBS would be required to pay a one-time, initial assessment of $600 million to the State Treasury and pay an additional $625 million to the state over seventeen years after its reorganization.
“This carefully thought-out law not only ensures thorough oversight and protections – including a ‘can’t convert clause’ – but it ultimately reinforces Horizon’s mission to empower its members to achieve their best health,” said Assemblyman Benjie Wimberly (D-Bergen, Passaic). “Reorganization will help stabilize premiums at a time when affordable health care is so critical for families throughout our state.”
The act authorizing Horizon BCBS to submit an application for reorganization to the Commissioner of Banking and Insurance takes effect immediately.